“THE New Digital Age” is a startlingly clear and provocative blueprint for technocratic imperialism, from two of its leading witch
doctors, Eric Schmidt and Jared Cohen, who construct a new idiom for United States global power in the 21st century. This idiom reflects
the ever closer union between the State Department and Silicon Valley, as personified by Mr. Schmidt, the executive chairman of
Google,
and Mr. Cohen, a former adviser to Condoleezza Rice and Hillary Clinton who is now director of Google Ideas.
The authors met in occupied Baghdad in 2009, when the book was conceived. Strolling among the ruins, the two became excited that
consumer technology was transforming a society flattened by United States military occupation. They decided the tech industry could
be a powerful agent of American foreign policy.
The book proselytizes the role of technology in reshaping the world’s people and nations into likenesses of the world’s dominant
superpower, whether they want to be reshaped or not. The prose is terse, the argument confident and the wisdom — banal. But this
isn’t a book designed to be read. It is a major declaration designed to foster alliances.
“The New Digital Age” is, beyond anything else, an attempt by Google to position itself as America’s geopolitical visionary —
the one company that can answer the question “Where should America go?” It is not surprising that a respectable cast of the world’s
most famous warmongers has been trotted out to give its stamp of approval to this enticement to Western soft power. The acknowledgments
give pride of place to Henry Kissinger, who along with Tony Blair and the former C.I.A. director Michael Hayden provided advance
praise for the book.
In the book the authors happily take up the white geek’s burden. A liberal sprinkling of convenient, hypothetical dark-skinned
worthies appear: Congolese fisherwomen, graphic designers in Botswana, anticorruption activists in San Salvador and illiterate Masai
cattle herders in the Serengeti are all obediently summoned to demonstrate the progressive properties of Google phones jacked into
the informational supply chain of the Western empire.
The authors offer an expertly banalized version of tomorrow’s world: the gadgetry of decades hence is predicted to be much like
what we have right now — only cooler. “Progress” is driven by the inexorable spread of American consumer technology over the surface
of the earth. Already, every day, another million or so Google-run mobile devices are activated. Google will interpose itself, and
hence the United States government, between the communications of every human being not in China (naughty China). Commodities just
become more marvelous; young, urban professionals sleep, work and shop with greater ease and comfort; democracy is insidiously subverted
by technologies of surveillance, and control is enthusiastically rebranded as “participation”; and our present world order of systematized
domination, intimidation and oppression continues, unmentioned, unafflicted or only faintly perturbed.
The authors are sour about the Egyptian triumph of 2011. They dismiss the Egyptian youth witheringly, claiming that “the mix of
activism and arrogance in young people is universal.” Digitally inspired mobs mean revolutions will be “easier to start” but “harder
to finish.” Because of the absence of strong leaders, the result, or so Mr. Kissinger tells the authors, will be coalition governments
that descend into autocracies. They say there will be “no more springs” (but China is on the ropes).
The authors fantasize about the future of “well resourced” revolutionary groups. A new “crop of consultants” will “use data to
build and fine-tune a political figure.”
“His” speeches (the future isn’t all that different) and writing will be fed “through complex feature-extraction and trend-analysis
software suites” while “mapping his brain function,” and other “sophisticated diagnostics” will be used to “assess the weak parts
of his political repertoire.”
The book mirrors State Department institutional taboos and obsessions. It avoids meaningful criticism of Israel and Saudi Arabia.
It pretends, quite extraordinarily, that the Latin American sovereignty movement, which has liberated so many from United States-backed
plutocracies and dictatorships over the last 30 years, never happened. Referring instead to the region’s “aging leaders,” the book
can’t see Latin America for Cuba. And, of course, the book frets theatrically over Washington’s favorite boogeymen: North Korea and
Iran.
Google, which started out as an expression of independent Californian graduate student culture — a decent, humane and playful
culture — has, as it encountered the big, bad world, thrown its lot in with traditional Washington power elements, from the State
Department to the National Security Agency.
Despite accounting for an infinitesimal fraction of violent deaths globally, terrorism is a favorite brand in United States policy
circles. This is a fetish that must also be catered to, and so “The Future of Terrorism” gets a whole chapter. The future of terrorism,
we learn, is cyberterrorism. A session of indulgent scaremongering follows, including a breathless disaster-movie scenario, wherein
cyberterrorists take control of American air-traffic control systems and send planes crashing into buildings, shutting down power
grids and launching nuclear weapons. The authors then tar activists who engage in digital sit-ins with the same brush.
I have a very different perspective. The advance of information technology epitomized by Google heralds the death of privacy
for most people and shifts the world toward authoritarianism. This is the principal thesis in my book, “Cypherpunks.” But while
Mr. Schmidt and Mr. Cohen tell us that the death of privacy will aid governments in “repressive autocracies” in “targeting their
citizens,” they also say governments in “open” democracies will see it as “a gift” enabling them to “better respond to citizen and
customer concerns.” In reality, the erosion of individual privacy in the West and the attendant centralization of power make
abuses inevitable, moving the “good” societies closer to the “bad” ones.
The section on “repressive autocracies” describes, disapprovingly, various repressive surveillance measures: legislation to insert
back doors into software to enable spying on citizens, monitoring of social networks and the collection of intelligence on entire
populations. All of these are already in widespread use in the United States. In fact, some of those measures — like the
push to require every social-network profile to be linked to a real name — were spearheaded by Google itself.
THE writing is on the wall, but the authors cannot see it. They borrow from William Dobson the idea that the media, in an autocracy,
“allows for an opposition press as long as regime opponents understand where the unspoken limits are.” But these trends
are beginning to emerge in the United States. No one doubts the chilling effects of the investigations into The Associated Press
and Fox’s James Rosen. But there has been little analysis of Google’s role in complying with the Rosen subpoena. I have personal
experience of these trends.
The Department of Justice admitted in March that it was in its third year of a continuing
criminal investigation of WikiLeaks. Court testimony
states that its targets include “the founders, owners, or managers of WikiLeaks.” One alleged source, Bradley Manning, faces a 12-week
trial beginning tomorrow, with 24 prosecution witnesses expected to testify in secret.
This book is a balefully seminal work in which neither author has the language to see, much less to express, the titanic centralizing
evil they are constructing. “What Lockheed Martin was to the 20th century,” they tell us, “technology and cybersecurity companies
will be to the 21st.” Without even understanding how, they have updated and seamlessly implemented George Orwell’s prophecy.
If you want a vision of the future, imagine Washington-backed Google Glasses strapped onto vacant human faces — forever.
Zealots of the cult of consumer technology will find little to inspire them here, not that they ever seem to need it. But
this is essential reading for anyone caught up in the struggle for the future, in view of one simple imperative: Know your enemy.
Julian Assange is the editor in chief of WikiLeaks and author of “Cypherpunks: Freedom and the Future of the Internet.”
Michael Hudson appeared
again on Moderate Rebels in an examination of Biden's policy direction, some of
which are clearly a continuity from Trump and others Neoliberal Obaman. This observation and
the following discussion reveals the modus behind what was initially Trumpian:
"So if you look at the sanctions against Russia and China as a way to split Europe and
make Europe increasingly dependent on the United States, not only for gas, and energy, but
also for vaccines."
Hudson calls it "the intellectual property monopoly" which was a major point in the
rationale he produced for his Trade War with China. But as we've seen, the global reaction
isn't as it was during the previous era from 1970-2000:
"So what we're seeing is an intensification of economic warfare against almost all the
other countries in the world, hoping that somehow this will divide and conquer them,
instead of driving them all together ." [My Emphasis]
And what we're seeing is the latter occurring as the Outlaw US Empire's Soft Power rapidly
erodes. As with their initial program, the discussion is long and involved.
And since I've been absent, I should suggest reading Escobar's latest bit of
historical review , which I found quite profound and an interesting gap filler in the
historical narrative of Western Colonialism.
"China and the US are two major world powers. No matter how many disputes they have, the
two countries should not impulsively break their relations. Coexistence and cooperation are
the only options for China and the US. Whether we like it or not, the two countries should
learn to patiently explore mutual compromises and pursue strategic win-win cooperation ."
[My Emphasis]
The big question: Does the Outlaw US Empire possess enough wisdom to act in that
manner.
Trump is engaging in the declassification of documents, one of which is the 2018
US Strategic
Framework for the Indo-Pacific that's provided at the top of Pepe Escobar's essay,
"Trump's not-so-secret plan for containing China," that was published yesterday:
"These are the Top 5 items – with no euphemistic softening:
•Maintain as sacrosanct US 'primacy,' code for uncontested military power
•Promote the Quad (US, Japan, India, Australia)
•Fully support the (failed) Hong Kong color revolution
•Demonize everything connected to Belt & Road
•Invest in 'the rise of India'
"On the military front, things get way trickier: The imperative is to prevent Beijing, by
all means necessary, from 'dominating the first island chain' – that is, the island
ring from the Japanese archipelago to Taiwan all the way to the northern Philippines and
Borneo. Moreover, 'primacy' should also be maintained in the 'area beyond.'
"So once again this is all about naval containment."
That's followed by an excellent graphic showing the first and second Island Chains. Of
course, China isn't really worried:
"The 100th anniversary of the Chinese Communist Party falls next July 23. The day before
the declassification of Indo-Pacific, President Xi Jinping outlined his – and the CCP's
– vision for the almost three decades culminating in 2049, the hundredth anniversary of
the People's Republic of China.
"Here are Xi's Top Three – in a nutshell:
•Keep calm and carry on, despite the ravaging effects of Covid-19, unrelenting
Western – especially American – hostility, and the trials and tribulations of the
crumbling US Empire
•Focus on domestic development, in all areas
•Focus on China's priorities; then, whatever happens, the world outside will not be able
to interfere.
•Solidify its own 'primacy' in the South China Sea while diversifying trade and
development strategic options all along Belt and Road"
I tried to locate where Xi made this statement Pepe cites, but was unsuccessful, and Pepe
provided no link. The essay closes with an economic forecast for China that Biden won't be
able to do much about. Indeed, this article details how much
damage Trump's Trade War did to the US economy and how it would benefit from Biden's ending
it:
"The multi-year trade war with China under the Trump administration resulted in a peak
loss of 245,000 US jobs, Reuters reported Friday, citing a study commissioned by the US-China
Business Council, a business group representing major US firms with operations in China.
"In an escalated scenario, meaning a significant China-US decoupling, the US GDP could
shrink by $1.6 trillion over the next five years, resulting in up to 732,000 job losses in
the US by 2022 and 320,000 fewer jobs by 2025, according to the study. A gradual scaling back
of tariffs, however, is likely to boost growth, resulting in an additional 145,000 jobs by
2025."
As I wrote when Trump announced his Trade War, the Outlaw US Empire would be much better
off if it joined with China rather than trying to fight it, and now the results are in. Too
bad this report will likely be suppressed. The article looks at Biden's position and
concludes with an infographic detailing trade flows between China and the Outlaw US
Empire.
"Diesen takes on and brings together two large phenomena, namely the revolution in
technology and the change in global power relations."
My continual question: Will the Western world's morality evolve quickly enough to keep
pace with technological progress? I have no worries about Eurasian morality. Rather, it's the
West's loss of its 500 years of domination and what it will do to recoup that immoral
position that's most troublesome.
@anarchyst hen made
public utilities available for all (obviously without compensation to the owners). No more of
the sad "private company" excuse, and no more billions into the pockets of criminals who hate
us.
Also, make Dorsey, Zuckerberg, Pichai et al. serve serious jail time for election
tampering if nothing else. Both to send out a clear warning to others, and for the simple
decency to see justice served.
Of course this will not happen short of a French Revolution-style regime shift. But since
(sadly) the same is equally true even for your extremely generous and modest proposal, I see
no harm in dreaming a little bigger.
It seems even more relevant today than it did then. It's longish, so hang in there if you're
able. In these post-'Capitol' social media de-platforming days, remember that (Chrome) Google
algorithms suppress websites from the conservative and religious right to the 'subversive left
(wsws and popular resistance, for instance). And Google bought Youtube in Oct. of 2006 for a
paltry $1.65 billion.
If you haven't read it and seen the captioned photos, you'll love ' Google Is Not What It
Seems' by Julian Assange, an extract from his new book When Google Met Wikileaks,
wikileaks.org
Also see Scott Ritter's 'By banning Trump and his supporters, Google and Twitter are turning
the US into a facsimile of the regimes we once condemned', RT.com, Jan. 9, 2021 Two excerpts:
"Digital democracy became privatized when its primary architect, Jared Cohen, left the State
Department in September 2010 to take a new position with internet giant Google as the head of
'Google Ideas' now known as 'Jigsaw'. Jigsaw is a global initiative 'think tank' intended to
"spearhead initiatives to apply technology solutions to problems faced by the developing
world." This was the same job Cohen was doing while at the State Department.
Cohen promoted the notion of a "digital democracy contagion" based upon his belief
that the "young people in the Middle East are just a mouse click away, they're just a
Facebook connection away, they're just an instant message away, they're just a text message
away" from sufficiently organizing to effect regime change. Cohen and Google were heavily
involved the January 2011 demonstrations in Egypt, using social networking sites to call for
demonstrations and political reform; the "Egyptian contagion" version of 'digital democracy'
phenomena was fueled by social networking internet sites run by Egyptian youth groups which
took a very public stance opposing the Mubarak regime and calling for political reform."
*************************************
On Sept. 18 , Julian Assange's new book of that name was published. The material was largely
fashioned by conversations he'd had with Google's Eric Schmidt in 2011 at Ellingham Hall in
Norfolk, England where Assange was living under house arrest. The ostensible purpose of the
requested meeting was to discuss idea for a book that Schmidt and Jared Cohen (advisor to both
Susan Rice and Hillary Clinton) were going to write, and in fact did: ' The New Digital
Age ' (2013). They were accompanied by the book's editor Scott Malcomson, former senior
advisor for the UN and member of the Council on Foreign Relations, who eventually worked at the
US State Department, plus Lisa Shields, vice president of the Council on Foreign Relations,
closely tied to the State Department, who was Schmidt's partner at the time. Hmmm. The plot, as
they say, thickens. From the book's blurb :
'For several hours the besieged leader of the world's most famous insurgent publishing
organization and the billionaire head of the world's largest information empire locked horns.
The two men debated the political problems faced by society, and the technological solutions
engendered by the global network -- from the Arab Spring to Bitcoin. They outlined radically
opposing perspectives: for Assange, the liberating power of the Internet is based on its
freedom and statelessness. For Schmidt, emancipation is at one with US foreign policy
objectives and is driven by connecting non-Western countries to American companies and markets.
These differences embodied a tug-of-war over the Internet's future that has only gathered force
subsequently.'
Some background that will hopefully entice you to listen to the 42-minute Telesur video
(sorry, no transcript) I'll embed below; this is the short version: ' Assange claims Google is
in bed with US government'
Note that in other interviews Assange names 'other private and public security agencies' as
well, and names the figures showing how deep Google is into smartphones and almost every nation
on the planet. 'Do not be evil'.
If your appetite hasn't been sufficiently whetted to watch the 38-minute Telesur interview,
you might at a minimum read 'When Google Met WikiLeaks: Battle for a New Digital Age' by
Nozomi Hayase . An excerpt or three, after reminding us that in his earlier 2012 book
Cypherpunks, Assange had said that " the internet, our greatest tool for emancipation,
has been transformed into the most dangerous facilitator of totalitarianism we have ever seen
":
'Assange unveils how, contrary to Google's efforts to create a positive public image by
giving away free storage, making it appear not like a corporation driven solely by profit
motives, this seemingly philanthropic company is a willing participant in its own government
co-optation. Indeed, he argues, Google Ideas was birthed as a brainchild of a Washington
think-tank.
Assange described how "Google's bosses
genuinely believe in the civilizing power of enlightened multinational corporations, and they
see this mission as continuous with the shaping of the world according to the better judgment
of the 'benevolent superpower.'" (p. 35). This process is so gradual and discrete that it is
hardly conscious on the part of the actors. This digital mega-corporation, through getting too
close to the US State Department and NSA, began to incorporate their ambitions and come to see
no evil. This internalization of imperial values created what Assange called " the impenetrable
banality of 'don't be evil' " (p. 35). It appears that bosses at Google genuinely think they
are doing good, while they are quickly becoming part of a power structure that Assange
described as a " capricious
global system of secret loyalties , owed favors, and false consensus, of saying one thing in
public and the opposite in private" (p. 7). Allegiance creates obedience and an unspoken
alliance creates a web of self-deception through which one comes to believe one's own lies and
becomes entangled in them. [snip]
' Assange pointed to how "the hidden fist
that keeps the world safe for Silicon Valley's technologies to flourish is called the US Army,
Air Force, Navy and Marine Corps" (p. 43).
Google does not see evil in itself. By embedding with U.S. central authority, this global
tech company not only fails to see the invisible fist of "American strategic and economic
hegemony" that dictates the market, but moreover aspires "to adorn the hidden
fist like a velvet glove" (p. 43). By advancing the force of monopoly, they subordinate civic
values to economic and U.S. hegemonic interests and escape any real accountability. They no
longer recognize the unmediated market that responds to people's demands, a true market that
functions as a space of democratic accountability. This normalization of control leads to a
subversion of law, creating a rogue state where a ripple effect of corruption is created, as
individuals, companies and the state each betray their own stated principles.'
'In a sense, one might conclude that Assange's new book is in itself another leak . In
publishing what one might call the "GoogleFiles", Assange conducts his usual job of publishing
in the public interest with due diligence by providing the verbatim transcript and audio of the
secret meeting. This time, the source of the material was Google themselves who sought out
Assange for their publication.'
How wonderful it is that he's rocking Google's Very Large Boat. Hayase also writes that
Cohen and Schmidt engage in their own 'statist' version of the 'good whistleblower/bad
whistleblower meme we're familiar with. Pfffft.
Google used its front page to back
the US government's campaign to bomb Syria: snapshot
More if you'd like it:
From HuffPo's : Julian Assange Fires Back At Eric Schmidt and Google's 'Digital
Colonialism', one exchange that's significant:
' HP : What about the substance of Schmidt's defense, that Google is pretty much at war with
the U.S. government and that they don't cooperate? He claims that they're working to encrypt
everything so that neither the NSA nor anyone else can get in. What would you say to that?
JA : It's a duplicitous statement. It's a lawyerly statement. Eric Schmidt did not say that
Google encrypts everything so that the US government can't get at them. He said quite
deliberately that Google has started to encrypt exchanges of information -- and that's hardly
true, but it has increased amount of encrypted exchanges. But Google has not been encrypting
their storage information. Google's whole business model is predicated on Google being able to
access the vast reservoir of private information collected from billions of people each day.
And if Google can access it, then of course the U.S. government has the legal right to access
it, and that's what's been going on.
As a result of the Snowden revelation, Google was caught out. It tried to pretend that those
revelations were not valid, and when that failed, it started to engage in a public relations
campaign to try and say that it wasn't happy with what the National Security Agency was doing,
and was fighting against it. Now, I'm sure that many people in Google are not happy with what
has been occurring. But that doesn't stop it happening, because Google's business model is to
collect as much information as possible and people store it, index and turn it into predictive
profiles. Similarly, at Eric Schmidt's level, Google is very closely related to the U.S.
government and there's a revolving door between the State Department and Google . '
For the Pffft factor plus some history of WikiLeaks' betrayal by both Daniel
Domscheit-Berg ( his Wiki ), and the Guardian,
the
Daily Dot's : ' When WikiLeaks cold-called Hillary Clinton',
including:
'Within hours, Harrison's call was answered via State Department backchannels. Lisa Shields,
then- Google Executive Eric
Schmidt's girlfriend and vice president at the Council on Foreign Relations, reached out
through one of WikiLeak's own, Joseph Farrell, to confirm it was indeed WikiLeaks calling to
speak with Clinton. [snip]
'But in an act of gross negligence the Guardian newspaper -- our former partner -- had
published the confidential decryption
password to all 251,000 cables in a chapter heading in its book, rushed out hastily in
February 2011.(1) By mid-August we discovered that a former German employee -- whom I had
suspended in 2010 -- was cultivating business relationships with a variety of organizations and
individuals by shopping around the location of the encrypted file, paired with the password's
whereabouts in the book. At the rate the information was spreading, we estimated that within
two weeks most intelligence agencies, contractors, and middlemen would have all the cables, but
the public would not.'
Background on
the Rassmussen story to make sure he was elected head of NATO by shutting down Roj TV:
Interview: Roj TV, ECHR and Wikileaks by Naila Bozo
Note: Easy Copying from the Café to the Café didn't go well. Everything
doubled up, and not in the same order, and none of the quotation font colors hopped aboard. But
it is what it is, and trying to repair it further seems Quixotic.
@84:
As sometimes said: don't sweat the small stuff.
This "We are all Taiwanese now" stunt is Pompeo's act of petty spite for getting outfoxed in
the Hong Kong colour revolution play.
Empire's useful idiots were let loose to trash the hapless city, fired up by the Western
propaganda machinery.
Now Beijing is putting the stock on those pompous minions with the National Security Law, and
their foreign masters can't do nuffin' except squeal human rights and apply some nuisance
sanctions.
The West fails because it looks at China through ideological lenses and sees Communists, who
can fall back on 5000 years of statecraft to push back at interlopers.
Beijing's moves can be likened to two classic strategies.
1. Zhuge Liang fools the enemy to fire all their arrows at straw men, which become ammunition
against them.
2. The Empty City strategy. Invaders take over an ostensibly abandoned city, only to be
trapped inside.
Global Times is cantankerous and sometimes risible, but even a broken clock is right, twice a
day.
So when it says that crossing Beijing's red line on the Taiwan issue is not in the island's
best interests, the incoming BiMala administration should take note.
"... The Biden administration, staffed with Obama veterans , may be in effect a third Obama term. Biden may seek a détente with China on some issues. But Democratic foreign policy elites as well as Republicans view China more harshly than they did four years ago. The most likely scenario, then, is an attempt to restore Obama's trilateral strategy of building the biggest possible coalition of allies against China. ..."
"... Democratic foreign policy elites are much more Europhile and Russophobic than their Republican counterparts. ..."
Under Barack Obama, the containment of
China -- the "pivot to Asia" -- took the form of what might be called trilateralism, after
the old Trilateral Commission of the 1970s. According to this strategy, while balancing China
militarily, the United States would create trans-Pacific and trans-Atlantic trade blocs with
rules favorable to the United States that China would be forced to beg to join in the future.
The Trans-Pacific Partnership (TPP) was intended as an anti-Chinese, American-dominated Pacific
trade bloc, while the Transatlantic Trade and Investment Partnership (TTIP) sought to create a
NATO for trade from which China would be excluded.
Obama's grand strategy collapsed even before the election of 2016. TTIP died, chiefly
because of hostility from European economic interests. In the United States, the fact that the
TPP treaty was little more than a wish-list of giveaways to U.S. finance and pharma interests
and other special-interest lobbies made it so unpopular that both Hillary Clinton and
Trump
renounced it during the 2016 presidential election season.
Trump, like Obama,
sought to contain China , but by unilateral rather than trilateral measures. The Trump
administration emphasized reshoring strategic supply chains like that of steel in the United
States, unwilling to offshore critical supplies even to allies in Asia and Europe and North
America. This break with prior tradition would have been difficult to pull off even under a
popular president who was a good bureaucratic operator, unlike the
erratic and inconsistent Trump.
The Biden administration,
staffed with Obama veterans , may be in effect a third Obama term. Biden may seek a
détente with China on some issues. But Democratic foreign policy elites as well as
Republicans view China more harshly than they did four years ago. The most likely scenario,
then, is an attempt to restore Obama's trilateral strategy of building the biggest possible
coalition of allies against China.
An emphasis by the Biden administration on alliances may succeed in the case of the
U.S.-Japan-Australia-India "Quad" (Quadrilateral alliance). The UK may support America's East
Asian policy as well. But Germany and France, the dominant powers in Europe, view China as a
vast market, not a threat, so Biden will fail if he seeks to repeat Obama's grand strategy of
trilateral containment of China.
Democratic foreign policy elites are much more Europhile and Russophobic than their
Republican counterparts. In part this is a projection of domestic politics. In the
demonology of the Democratic Party, Putin stands for nationalism, social conservatism, and
everything that elite Democrats despise about the "deplorables" in the United States who live
outside of major metro areas and vote for Republicans. The irrational hostility of America's
Democratic establishment extends beyond Russia to socially-conservative democratic governments
in Poland and Hungary, two countries that Biden has denounced as "totalitarian."
In the Middle East, unlike Eastern Europe, a Biden administration is likely to sacrifice
left-liberal ideology to the project of
maximizing American power and consolidating the U.S. military presence, with the help of
autocracies like Egypt and Saudi Arabia. Any hint of retrenchment will be denounced by the
bipartisan foreign policy establishment that lined up behind Biden, so do not expect an end to
any of the forever wars under Biden. Quite the contrary.
Michael Lind is Professor of Practice at the Lyndon B. Johnson School of the University of
Texas at Austin and the author of The American Way of Strategy. His most recent book is The New
Class War: Saving Democracy from the Managerial Elite.
That's wishful thinking. While Chinese are making progress, the USA still is the only
technological superpower and can cut oxygen to China companies in one minute.
Increasingly America does not compete with China, but strongarms it because it cannot
compete. For example, in Five G China is ahead in technology, manufacturing capacity, and
turnkey systems. Unable to produce an equivalent product, Washington banned Huawei Five G in
the US and has twisted arms to keep countries that it controls from using Huawei. Seeing that
Huawei had very attractive smartphones that would have competed with Apple, it banned these
also. What America can't do, it seeks to keep anybody else from doing.
WSJ:
"US vs. China in Five G: The Battle Isn't Even Close
HONG KONG -- By most measures, China is no longer just leading the U.S. when it comes to
5G. It is running away with the game. China has more 5G subscribers than the U.S., not just
in total but per capita. It has more 5G smartphones for sale, and at lower prices, and it has
more-widespread 5G coverage. Connections in China are, on average, faster than in the U.S.,
too By year's end, China will have an estimated 690,000 5G base stations -- boxes that blast
5G signals to consumers -- up and running across the country ."
Techies can argue C band versus millimeter waves but I will bet that the Chinese, nothing if
not commercially agile, will have Five G up and running in factories and the IoT and everywhere
else while American pols rattle on about how China is an Existential Threat and the Pentagon
needs more money for Space Command and diversity is more important than schooling anyway.
The shifting balance may already be visible. For example, America used to make superb
aircraft such as the SR-71 and the F-16. Now it has the F-35, an engineering horror. The Boeing
737 MAX, its flagship product, has been grounded internationally because of poor engineering,
second-rate software, and corporate lying about both.
America invented the microcircuit, and once dominated its manufacture. Today, American
companies cannot make the seven nanometer chips now used in high-end telephones, and certainly
not the five nanometer chips now coming online. Neither can China. Both countries buy them from
Taiwan Semiconductor Manufacturing Company, TSMC, Interestingly, the Taiwanese are genetically
and culturally Chinese. Washington has strongarmed TSMC into ceasing to sell to Huawei -- the
US still can't make high end chips. Recently it strongarmed TSMC into agreeing to build a
semiconductor fab in Arizona. Because America can't.
Then there is TikTok, a hugely popular Chinese video app that threatened to break America's
lock on social media. Unable to compete, Washington decided simply to confiscate it on grounds
that it might be used to spy on Americans. (Chinese intelligence is deeply interested in your
daughter's video of her cat.)
Parenthetically, technology seems to be shifting toward East Asia, with America being less
ahead in things in which it is ahead and behind in others. Did I mention demographics?
You can't argue with the real engineering going on over there, especially the Civil
Engineering. When you don't have a thousand tax-payer-supported bureaucrats from a hundred
different agencies and even "Non-Governmental Organizations" blocking every thought you have,
it's hard to get things done. There's no doubt that the huge military spending on "democracy
for the world" and the squandering of the huge amount of goodwill and power accumulated at
the end of the Cold War is part of America's problem (thanks NotSoFast). Mr. Reed never
mentioned the increase in regulation and taxation by the Feral Beast that has turned America
into a Can't-Do country.
It's a great photo essay on the amazing engineering advances out of China, but, as usual,
Fred gets major things wrong.
I don't know what the deal is with Mr. Reed's repetitive harping on Americans' concern for
intellectual property rights. The Chinese will do fine without our help now, but it's the
theft of the IP of American engineering that has gotten them this far so fast. Why would you
not be concerned with your ideas being stolen? Not giving your stuff away for free is not the
same as trying to "cripple development. That's water under the bridge now but stupidity by
Mr. Reed nonetheless.
I guess it's mission accomplished. Trump can loosen his witch hunt of Huawei and end the
tech/trade war now. Or maybe he won't. Maybe the eventual goal is still the toppling of a
government that the Chosenites have no hand in electing through "democracy".
Meanwhile, I'm sure more corrupt CCP elites will take full advantage of the selling out of
their country, sleep(invest) with the enemy, get rich/richer, emigrate to the US, push their
kids into our elite high schools and colleges, and turn us more and more like the
dog-eat-dog, corrupt hellhole from whence they came.
So much for a government that looks out for its people. The CCP is as self-serving as the
US Congress critters or the EU. The only difference is they don't need the charade of
elections to install themselves in power.
" A US District judge has made an 11th hour intervention to block a federal government
order prohibiting downloads of TikTok from app stores by American users.
US District Judge Carl Nichols issued a preliminary injunction, which would allow the
popular app to still be on offer in Apple and Google stores, shortly before the ban was
supposed to come into force on Sunday midnight. Earlier in the day, Nichols allowed a
90-minute hearing, where a lawyer representing TikTok made the case for it remaining
available to users in the US.
Last week, a judge in California blocked a similar order ousting the WeChat app from
American stores hours before it was supposed to take effect."
What a bummer. Looks like your neocon handlers took a couple of hits, whitney. No doubt
those judges were agents of The B.L.M.
It was a week ago that Beijing made clear it won't be signing off on the messy and mired in
confusion proposed Oracle-TikTok deal, citing that it would harm its "national security
interests," which is exactly the same reason given by Trump for trying to shut TikTok down in
the first place.
China's state-run Global Times is out with a new editorial Saturday indicating that Beijing
will stick to protecting TikTok "at all costs" . The theme of "compromised" national security
is still being presented as the crux of the matter.
" China is prepared to prevent Chinese firm TikTok and its advanced technologies from
falling into US hands at all cost ," Global Times introduces.
This even if that should mean the hugely popular app "risks being shut
down in the US, because allowing the US to seize the firm and its technology will not only set
a dangerous precedent for other Chinese firms, but also pose a direct threat to China's
national security , Chinese experts said on Saturday, a day ahead of a court battle in the US
over a ban of the app."
Again, interestingly this seems to be the mirror image argument the Trump administration has
harped on for much of the past year, especially on Huawei. GT's argument continues:
More importantly, for Beijing, the case goes way beyond just a mafia-style robbery of a
lucrative Chinese business and cutting-edge technologies , but a threat to its national
security, because the US could find loopholes in those technologies to launch cyber and other
attacks on China and other countries to preserve its hegemony, the experts added.
Voicing the communist government's rationale further, GT cites an expert at the China
Electronics Standardization Institute Liu Chang, who says "What the US wants, we definitely
cannot give."
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"From the perspective of both the company and the Chinese government, this cannot be allowed
to happen ," he said. y_arrow 1 Pliskin , 18 hours ago
American Pirates looking for more stuff to steal..no surprises there!
Go and make your own stuff，piss-ant Yanks!
...And get the message into your thick skulls，the whole World hates you!
Srbutterfly , 13 hours ago
Except for Israel.
TheRapture , 19 hours ago
The USA has abandoned Ronald Reagan and free trade, and morphed into an incompetent rogue
state that behaves like the Mafia. Tik Tok, Huawei, etc. The U.S. can't compete fairly, so it
cheats, steals and launches "regime-change" wars.
R.I.P, America.
LEEPERMAX , 20 hours ago
The CCP is nothing but A CRIMINAL ORGANIZATION with that pompous clown Xi JinPig as their
despicable ringleader.
Criminals, all of them.
HoyeruNew , 18 hours ago
its called projection.
Srbutterfly , 13 hours ago
The ccp is an extension of the imperial system, they are no better off than when the
emperors were calling the shots.
kleptomistic , 19 hours ago
TikTok is "cutting edge technology"? Exactly what is this app capable of? It must really
be something since it's worth billions and everyone is fighting over it.
kleptomistic , 19 hours ago
Installing TikTok is literally like handing your phone to the CCP.
You give them total control of your phone...to listen/watch...to track you...to upload
your address book so they know everyone you know...you also allow them to upload stuff to
your phone.
HoyeruNew , 18 hours ago
prove it. BTW< I hear USA is STILL looking for Saddam's weapons of mass
distraction.
Suey Cidal , 18 hours ago
It is valuable as a distraction, keeping the sheep believing the lie that China and USA
are independent countries and that they are not both owned by the same rich fuktards.
Yen Cross , 18 hours ago
Lets look realistically at the situation. China is not cheap for manufacturing, has zero
interest honoring 'favored nation' trade status, and is definitely NOT a developing third
world country.
The Chinese love to gamble, yet call themselves, "long game" players?
Tic Tok is a fad. Just an information gathering scheme.
Ex-Kalifornian , 12 hours ago
Our society would be better off if we had no social media, so just ban it and make
everyone that more productive.....
halcyon , 15 hours ago
Good for them
**** Silicon Valley/NSA spy monopoly.
At least this way we'll have a spy duopoly, with one of them free of Israel's UNIT 8200
backdoor crap, and we can make them compete against each other.
Monopoly and no choice is the worst possible choice.
Tom Fowdy is a British writer and analyst of politics and international relations
with a primary focus on East Asia. The battle over TikTok is all because the US finds the idea
of a Chinese social media app gaining global acclaim as intolerable and a threat to its own
monopolies in Silicon Valley.
Did I miss the announcement that The Apprentice has got a new episode out? You know,
the one where Donald Trump shouts " You're fired! " to TikTok's owners in Beijing? Oh,
wait, that's not a reality TV show – it is reality. At least in his mind.
Were it not so serious, you would have to laugh at this week's flip-flopping antics of the
former TV show host turned president of the USA.
On Sunday, he stated he was giving his " blessing " to a deal between US giants
Oracle and Walmart and ByteDance, TikTok's Chinese owner. ' TikTok-Oracle Deal Wins Trump's
Approval ,' read
the headline on Bloomberg.
By Monday, he had made a U-turn, demanding that the Chinese firm cede control of its US
operations completely, or he would ban the popular platform. ' Trump Says ByteDance Can't
Keep Control of TikTok in Oracle Deal ,'
said Bloomberg.
Initially, the deal reported by the media involved the two US companies taking a 20 percent
stake in the creation of a new venture, TikTok Global, which would see its data managed by the
American stakeholders. But now the White House has seemingly reverted to its old position of
demanding that ByteDance, or as it puts it, " China ," cedes " complete control" of
the application in the US, including the handover of its technology and algorithm. Under the
headline 'Say 'No!' to US robbery of Tik Tok,' China's Global Times stated the country will
"not accept an unequal treaty that targets Chinese companies. "
Trump's actions concerning this app, irrespective of the eventual outcome, should be
understood not as legitimate " national security concerns, " but a clear attempt to
subjugate and humiliate China for his own political and electoral gain, as well as to maintain
American primacy over technology and global social media.
His approach has been infused with his classical ' Art of the Deal ' approach so
beloved of fans of The Apprentice . It essentially involves pushing a given target to
the brink in an attempt to extort an outcome on terms favorable to him. Beijing, however, sees
painful historical parallels in Trump's conduct, and is prepared to rise to the
challenge.
There is a period in China's history, roughly dating from 1830 to the 1950s, which is
popularly referred to as the " century of humiliation. " It describes an era when the
country was subjugated to political and economic exploitation by Western powers and forced to
accept agreements on unequal terms, particularly by Britain, France, Germany and Japan, amongst
others.
The era is commonly defined to have begun with the commencement of the opium wars, whereby
the British Empire waged war against the Qing Dynasty in order to open up its markets by force
to export opium, resulting in the Treaty of Nanking, which forced China to accept British
demands and the subsequent annexation of Hong Kong.
The legacy of the century of humiliation has a deep influence on how China perceives its
relations with the rest of the world today, particularly the West. To Beijing, the Trump
administration has sought to forcefully confront and contain China on multiple fronts,
especially in the field of technology and trade, in ways reminiscent of the bad old days.
The US evidently does not accept China on equal terms, and once having believed trade and
engagement would " reform " the country towards America's image and preferences, the
impetus has now shifted to Washington attempting to stifle the country's rise and force changes
to its political-economic system.
This is where TikTok comes into the picture. The claim that the popular video application is
a threat to US national security should not be taken seriously – it's a platform used by
young people to post videos, mostly of them doing silly dances.
Washington has a way of whipping up fear and hysteria in order to manufacture consent for
its aggressive foreign policies. There is no serious evidence TikTok has engaged in any
wrongdoing. Instead the impetus is geopolitical: the US finds the idea of a Chinese social
media application gaining global acclaim as intolerable and a threat to its own monopolies in
Silicon Valley. The Trump administration's response to any Chinese initiative which challenges
or outgrows US capabilities is simply to attempt to crush it by coercive force.
In this case, however, an outright ban on an application as popular as TikTok (it has around
80 million users in the US) would be politically damaging for Trump. Which is why he has sought
to utilize state force with the view to extorting the app into American ownership. The fact
that the proposed venture is called TikTok Global is an obvious indicator that the new "
US " version of the platform would quickly aim to compete with and make obsolete
ByteDance's market in the rest of the world.
Little wonder then that, in line with the rest of the administration's policies, China
perceives the attempt by Trump to extort TikTok as an attempt to start a new century of
humiliation. Their judgement is correct. Once again, a Western power believes that China ought
only to exist on terms which are tolerable to the West, and that the way to "handle" the
country involves attempting to subjugate it into accepting unequal agreements.
But this is 2020, not 1920. China will no longer be treated in this way or approve any deal
which extorts ByteDance's business. Beijing would rather see TikTok banned in America than have
it stolen from them through Trumpian coercion.
Like this story? Share it with a friend!
The statements, views and opinions expressed in this column are solely those of the author
and do not necessarily represent those of RT.
In what is perhaps the most compelling sign yet that Beijing has put the kibosh on the
Oracle-TikTok deal, the Global Times on Tuesday published a scathing editorial attacking
President Trump for attempting a "robbery" of TikTok and violate China's "dignity."
The paper's editorial writers echoed claims made in an editorial published more than six
weeks ago by
the People's Daily - that Beijing would never tolerate Trump transferring majority
ownership of TikTok to the US. Furthermore, as
Kyle Bass explained earlier, anything that would require the company to fork over its
content-recommendation algorithm is an instant deal breaker. Beijing has previously said it
would rather shut down TikTok US than hand the business to the Americans.
Writers explained that by turning over source code from TikTok to Oracle, Americans would
also gain insight into the operations of Douyin, TikTok's counterpart built for the Chinese
market (which, remember, runs on an entirely separate, cordoned-off internet).
Throwing Trump's words back in his face, the writers insisted Beijing didn't appreciate the
president's characterization that the new TikTok would have "nothing" to do with China.
Because even more than money, China must have the credit. Like
Bass explained, the CCP is fighting a narrative war against the US.
And in case the point wasn't clear, the Global Times editor, Hu Xijin, drives it home with a
tweet.
It was reported Sunday, Beijing time, that US President Donald Trump approved a deal in
principle between TikTok's parent company ByteDance, and Oracle and Walmart. The main content
of the deal was later disclosed. From the information provided by the US, the deal was unfair.
It caters to the unreasonable demands of Washington. It's hard for us to believe that Beijing
will approve such an agreement.
Although people can have various interpretations, some articles in the agreement show what
the problems are.
For instance, American citizens will take up four of the five board seats for TikTok Global
and only one can be Chinese. The board of TikTok Global would include a national security
director, who will have to be approved by the US.
Oracle will have the authority to check the source code of TikTok USA and updates. As the
TikTok and Douyin should have the same source code , this means the US can get to know the
operations of Douyin, t he Chinese version of TikTok.
TikTok Global will control the business of TikTok around the world except China. It will
block IP from the Chinese mainland to access it. This means the Americans can take control of
the global business of TikTok and reject Chinese to access it.
It is clear that these articles extensively show Washington's bullying style and hooligan
logic. They hurt China's national security, interests and dignity. ByteDance is an ordinary
company in China. The US suppresses it with all its national strength and forces it to sign a
deal under coercion. China, also a major country, will not yield to US intimidation and will
not accept an unequal treaty that targets Chinese companies.
When Trump said he had approved the new TikTok deal, he noted the new company would have
"nothing to do" with China and would be fully controlled by the US. On Monday, he said Oracle
and Walmart would have total control of the service; otherwise, "we're not going to approve the
deal."
It seems this is not his campaign language, but the Trump administration's real attitude
toward restructuring TikTok. Washington is way too confident and has underestimated China's
determination to defend its basic rights and dignity.
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The US is a big market. If the reorganization of TikTok under US manipulation becomes a
model, it means once any successful Chinese company expands its business to the US and becomes
competitive, it will be targeted by the US and turned into a US-controlled company via trickery
and coercion, which eventually serves only US interests.
If China surrenders, which country in the world can resist? The US encirclement of TikTok
and the global huntdown of Huawei are stifling the hopes of high-tech companies around the
world for having world-class technologies and independent development. Once Washington
succeeds, the US will enjoy global technological hegemony forever.
China will not accept this kind of bullying arrangement of the US. The US is taking
discriminatory action to squeeze TikTok. In an era when countries have concerns about network
data security, US internet giants set up branches around the world. But does any one of them
hand over its control to companies of the host country? Which company's board members must be
approved by the government of the host country?
Washington's huntdown on TikTok is creating problems for US internet companies worldwide.
With cyber security increasingly becoming a common issue, there must be countries that will
imitate the US to take action against American companies. The precedent set by the US will
eventually hurt its own companies.
Issues concerning global internet data security should be addressed in a fair, reasonable
and effective manner. China has put forward an eight-point proposal for this. The US seeks its
own interests in a hegemonic way, and attempts to maintain its technological hegemony under the
guise of cyber security. This cannot be accepted by international society, including China.
It's hoped the US returns to globalization from "America First," and retake the universal
commercial values that will not only benefit itself but also others.
Starting Sunday, downloads of the massively popular video app TikTok and the messaging app
WeChat will be banned in the United States, the U.S. Department of Commerce announced Friday
morning.
The department said in a statement that the move was necessary to "safeguard the national
security of the United States."
President Donald Trump issued twin executive orders in August, saying the apps would shut
down by Sept. 20 if they were not sold to U.S. owners. The admin claimed the Chinese Communist
Party was using data collected through these apps to "threaten the national security, foreign
policy and the economy of the U.S."
Commerce Secretary Wilbur Ross said in an interview on Fox Business News Friday morning that
these new rules announced this morning were in connection with the executive orders issued in
August and are "separate" from the ongoing negotiations between TikTok and tentative U.S.
buyers including Oracle and Walmart.
Ross said that "for all practical purposes" WeChat will be shut down in the U.S. as of
midnight Monday with the new Commerce Department ruling.
MORE: For Chinese Americans, WeChat ban threatens to upend business and community "TikTok is
more complicated," Ross added, saying that essentially a deadline for a deal with a U.S. buyer
has been extended until Nov. 12. In the meantime, updates will be barred in the app.
"Basic TikTok will stay intact until November 12," he said. "If there is not a deal by
November 12 under the provisions of the old order then TikTok also will be, for all practical
purposes, shut down."
Secretary of State Mike Pompeo separately weighed in on the news while traveling in Guyana
on Friday.
A little over a week ago, we shared how President Trump's decision to expand the scope of
his crackdown on Chinese tech firms to include WeChat, Tencent's ubiquitous platform for
everything from payments, to messaging to e-commerce sent a wave of panic through American
multinationals like Apple who depend on the Chinese market for growth, and feared being
essentially shut out due to an oversight by the administration.
The backlash has been just as intense as could be expected. In
a quintuple-byline story published Friday afternoon, Bloomberg reported that an army of
corporate lobbyists are working with Team Trump to try and find a way to restrict WeChat's use
in the US without hamstringing every American company that depends on the app to connect with
Chinese consumers.
According to sources from within the West Wing, the administration is still "working through
the technicals" of how they're going to restrict WeChat in the US while allowing American
companies to liaise with it in foreign markets.
The Trump administration is signaling that U.S. companies can continue to use the WeChat
messaging app in China, according to several people familiar with the matter, two weeks after
President Donald Trump ordered a U.S. ban on the Chinese-owned service.
The administration is still working through the technical implications of how to enforce
such a partial ban on the app , which is owned by Tencent Holdings Ltd., one of China's
biggest companies. A key question is whether the White House would allow Apple Inc. and
Alphabet Inc.'s Google to carry the app in its global app stores outside of the U.S.,
according to the people, who spoke on condition of anonymity.
Over the past week, lobbyists went into "overdrive" and started harassing White House and
Commerce Department staffers about Trump's order, and the "logistics and intention of the
WeChat executive order." Now they're pushing to "narrow" the scope of the looming ban.
"We are talking to everyone who will listen to us," said Craig Allen, president of the
US-China Business Council, whose group represents companies including Walmart Inc. and General
Motors Co. "WeChat is a little like electricity. You use it everywhere" in China, Allen
said.
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All Comments 18
YesWeKahn , 3 hours ago
Wechat is just junk, people used to do a lot more business in china without it, I think
these tech firms are bought by the ccp
aberfoyle_crumplehausen , 1 hour ago
America is turning Fascist under Trump right in front of our eyes. Fascism: merging of
State and Corporates. Full stop. You can't argue this, don't even try.
LetThemEatRand , 3 hours ago
Big tech depends on a communist country for growth. Let that sink in.
hoytmonger , 2 hours ago
A communist country is better at business than the US.
Let that sink in.
holyvanguard , 3 hours ago
Xi and Trump should stage a photograph to reinact a classic Winne the Pooh scene.
NIRP_BTFD , 3 hours ago
Riddle me this. How the hell does the USA want to ban apps? I can install every possible
apk on my device. If google takes apps out of their store i just install them with an
alternative app store or just download them somewhere else.
inhibi , 3 hours ago
That's you and me and the few tech minded folks out there.
99% of the users get what the store bought phone gives them. This is just trying to rattle
China's market.
Lets be honest: the real issue, as you have touched upon, is the complete monopoly of OS
and app stores by Google and Apple.
philipat , 2 hours ago
You expect Gubmin to understand that?
Or that these things work both ways and China will surely tit-for-tat with restrictions on
US Companies, probably starting with Apple?
Still, there's an election coming.............
HedgeJunkie , 3 hours ago
**** 'em all, ban it totally, let their vastly inflated values inflate more.
cr1stal , 3 hours ago
you have no idea how globalism works. they dont go oh i have 1000 billion so ill let a few
beady eyed devil worshippers who just dropped out of harvard cooking school accrue a few
hundred million. a disruptive autistic clown is about as welcome as he would be in the opium
fields of the golden triangle
BeePee , 3 hours ago
This is what I will miss about the exiting of the Trump administration. Standing up to CCP
China.
After Biden's inauguration, all this will roll back, money goes into Hunter Biden's
account. China will roll over us. Yes, there will be some agreements, none of which will be
honored by CCP China.
Kamala will be jocking one of the young male interns at the VP mansion. Apparently she is
very adept at penis stimulation.
I guess we'll get what we want, or at least deserve. Trans bathrooms everywhere. There are
no longer male or female identities. To heck with science, sexuality and gender is just a
perspective. Crime really doesn't go up if you don't consider it a crime.
DeathMerchant , 14 minutes ago
Who gives a rats about Chinese consumers ?? Lobbyists should not even be permitted to be
in or communicate with anyone in DC.
Experts familiar with law enforcement requests say that what TikTok collects and hands over
is not significantly more than what companies like Amazon, Facebook, or Google regularly
provide, but that's because U.S. tech companies collect and hand over a lot of information.
The documents also reveal that two representatives with bytedance.com email addresses
registered on the website of the Northern California Regional Intelligence Center, a fusion
center that covers the Silicon Valley area.
And they show that the Federal Bureau of Investigation and Department of Homeland
Security actively monitored TikTok for signs of unrest during the George Floyd
protests.
The number of requests for subscriber information that TikTok says it receives from law
enforcement is significantly lower than what U.S. tech giants reportedly field, likely
because police are more accustomed to using data from U.S. companies and apps in
investigations. TikTok enumerates its requests from law enforcement in a biannual
transparency report, the most recent of which says that for the last half of 2019, the
company received 100 requests covering 107 accounts. It handed over information in 82
percent of cases. Facebook, by contrast, says it received a whopping 51,121 requests over
the same period, and handed over at least some data in 88 percent of cases.
That last sentence... That's *why* Facebook exists. As does Google and Twitter and the
rest of the social media giants.
Home / Articles / Economy
/ All About The Chips: Taiwan Is Next Battleground For Trade Fight ECONOMY , WORLDAll
About The Chips: Taiwan Is Next Battleground For Trade Fight
The media likes to dabble in war-game fantasies between the 21st-century great powers China
and the U.S., but it's a distraction from the hybrid economic warfare that is underway -- from
Trump's tariff hikes to the shores of the advanced economy.
Here in a nutshell is the problem facing the United States. The country that used to be a
world leader in all forms of high tech, especially semiconductor chips, now spends its time
redesigning chocolate chips. By contrast, Taiwan, officially a "rogue province of China,"
but in reality operating as an independent nation of 23 million people, ranked 20th as a
world economy (right behind Switzerland), is now a leading global player in the production of
semiconductor chips. As such it has emerged as the key supply link to a multiplicity of
American and Chinese high-tech companies at a time when the Trump administration is working
hard to cut China's access to Taiwan's semiconductors.
For all of China's significant technological advancements, the country still lags in the
production of semiconductor chips.
Memory chips are principally made by Samsung, SK Hynix (South Korea), and Micron (USA).
Intel also makes some memory chips for its own use. Memory chips are a big issue for China.
Beijing has deployed considerable fiscal resources into producing them and last year set a goal
of producing 5 percent
of the world's total production by the end of 2020.
That's ambitious. It's one thing to produce memory chips, another to get a usable "yield,"
i.e., the percentage of output that actually works. It is a singularly challenging industry in
which to attain industrial self-sufficiency.
Taiwan Semiconductor Manufacturing Company (TSMC) is a "
fabless chip maker " that produces customized semiconductor chips for use in various types
of electronics, such as digital cameras, smartphones, and the new technologically sophisticated
"smart" cars. They also produce chips for the military, and for 5G base stations. China's
leading telecom equipment manufacturer, Huawei, was a large customer, but the Trump
administration has now
mandated that all semiconductor chip manufacturers using U.S. equipment, IP, or design
software will require a license before shipping to Huawei, which has forced TSMC to stop taking
fresh orders from Huawei, as it uses U.S. equipment in its own manufacturing processes,
such as LAM research and Applied Materials.
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The wisdom of so many companies relying on manufacturing facilities located in Taiwan is
debatable. Intel and Micron locate fabs around the world, in part to diversify risk
(earthquake, weather, politics) and to access skilled labor pools. Intel has long had
production facilities in Ireland, Israel, and China itself; it has also purchased Israeli
companies for their research and development. But it also has retained significant production
facilities still in the United States. Similarly, Micron has fabs in Boise Idaho, Utah, and
Manassas, Virginia (right near the CIA and Pentagon.)
TSMC is important because it is pretty much the only place to get processor chips
fabricated, unless you're Intel. In that regard, Intel's recent 2nd quarter
earnings announcement that its planned launch of the company's next generation of chips
will be delayed by six months is most concerning. News of the production delay (which now
pushes the production of the company's latest central processing unit (CPU) -- aka the "brains"
of the laptop -- out to early 2023) generated considerable market anxiety, as evidenced by the
17 percent fall in the share price in the wake of the disclosure. From a long-term perspective,
however, the more alarming aspect is Intel's decision to consider
outsourcing its manufacturing capacity, a sharp break from the company's historic practice.
Intel has been one of the few leading American high-tech companies that has hitherto largely
resisted the panacea of offshoring its production. Much of this is a product of the corporate
culture established by former CEO Andy Grove, who had warned that Silicon Valley risked
"squandering its competitive edge in innovation by failing to propel strong job growth in the
United States," according to a New York Times op-ed by Teresa Tritch written shortly after his
death. Tritch explains
that:
in [Grove's] view, those lower Asian costs masked the high price of offshoring as measured
by lost jobs and lost expertise
Mr. Grove contrasted the start-up phase of a business, when uses for new technologies are
identified, with the scale-up phase, when technology goes from prototype to mass production.
Both are important. But only scale-up is an engine for job growth -- and scale-up, in
general, no longer occurs in the United States. "Without scaling," he wrote, "we don't just
lose jobs -- we lose our hold on new technologies" and "ultimately damage our capacity to
innovate."
Intel's decision comes at a time when American policymakers are finally beginning to
appreciate the adverse economic and strategic consequences of such moves. Were Intel to
follow through on its outsourcing threat, it too would further exacerbate America's strategic
reliance on Taiwan for customized semiconductor manufacturing, as well as undermining the
impact of recent legislative attempts to
rebuild the country's semiconductor manufacturing capacity.
By contrast, economic competition that degenerates into out-and-out war would be a disaster
for all sides. As David Arase, resident professor of International Politics at the
Hopkins-Nanjing Center of the Johns Hopkins University School of Advanced International
Studies, recently contended in
the Asia Times, "Even an unsuccessful invasion of Taiwan would cause a supply chain
disruption." By the same token, actively upgrading
diplomatic relations with Taiwan to something akin to the old
mutual defense treaty that existed prior to Washington's recognition of Beijing in 1979 as
the one sovereign government representing China, would almost certainly provoke a more
aggressive response from Beijing.
U.S. goals should be far more modest: not to underwrite the freedom aspirations of another
country (even a vibrant multi-party democracy such as Taiwan) but, rather, to fix a key
vulnerability in the global supply chain that currently renders the U.S. so reliant on Taiwan.
Even TSMC has implicitly acknowledged its own geographical shortcomings, as it has recently
announced plans to build a new $12 billion chip manufacturing facility in Arizona. Consider
this a form of political risk insurance.
A full-scale defense of Taiwan would cost thousands of lives, and potentially entrench the
U.S. military in a long-term quagmire; it would also represent a logistical nightmare in terms
of supplying such a force over so many thousands of miles (versus an opposing Chinese army a
mere
100 miles away .) To say nothing of the risks posed to numerous substantial American
multinationals already operating in China.
A key conceptual problem that our policymakers and business leaders have today is an
addiction to 19th-century concepts that are anomalous in the context of a 21st-century economy.
David Ricardo's " comparative advantage " --
that "refers to an economy's ability to produce goods and services at a lower opportunity cost
than that of trade partners" -- has less relevance at a time when such advantage can be largely
created as a byproduct of state policy. Countries such as Taiwan, South Korea, and now China
itself, can dominate targeted industries by subsidizing them aggressively. Because of
increasing returns to scale, there is a winner-take-all pattern in which, at any given time,
one nation tends to dominate a huge global market share of the underlying product -- since the
1970s, Japan, South Korea and China in that order. It also creates huge employment
opportunities in high-quality jobs for the countries as they scale up production. This was also
a key insight of Andy Grove .
None of these countries had a natural "comparative advantage" in semiconductor production;
they just followed the
classic pattern of subsidizing their growth via substantial government support,
relentlessly driving down cost inputs to push other marginal manufacturers out of the
industry.
The incessant focus on market share usually comes at a cost of short-term profitability (a
no-no for Wall Street, which focuses on quarterly earnings as intently as an audience waiting
for the white smoke to emerge from a papal election). However, businesses usually recoup these
costs later once they've established dominant market share.
Semiconductors are a high value-added manufacturing platform industry that has a significant
multiplier effect on the domestic economy. It represents an area that should be prioritized by
the U.S., not de-emphasized (as Intel's proposed move threatens to do). The road back to
manufacturing relevance is a long one, but the perpetuation of the current policy risks
exacerbating longstanding pathologies in the U.S. economy, while simultaneously creating new
national security vulnerabilities.
Taiwan is a vibrant multiparty democracy that constitutes a model of economic development.
But those virtues could be threatened if we try, shortsightedly, to turn it into a U.S.
protectorate to address problems that should be resolved much closer to home.
Marshall Auerback is a market analyst and contributor to the Independent Media
Institute .
TSMC's Arizona fab is tiny compared to its 12 Taiwan ones, and more of a sop to the Trump
administration than a serious effort to diversify. The jugular vein of the semiconductor
industry is within easy reach of China's missile arsenal, and indeed the Chinese military can
be said to have been designed specifically for the task of retaking Taiwan.
China might not even need to invade. If they blockade Taiwan--air and sea--and threaten to
destroy ships and aircraft trying to enter or leave Taiwan, they can stop chip export.
It's similar to Iran saying, "Either everybody can export oil from the Gulf or no one
can." China would say, "Either everyone can import chips from Taiwan or no one can. And China
is in a much better position to enforce its will than Iran.
The reaction to Auberback's refutation of comparative advantage would be extreme depending
on who was reacting. The field of economics is like a cult, with a lot of groupthink and
academic homogeneity. In this way failed consensuses are continued and alternatives, even if
they have a good historical track record, are railed against as heterodox and fringe.
Its amazing how in just two or three decades we forgot about basically all of US economic
history and policy history up to that point.
I completely agree that a supply chains including those for memory chips in Taiwan must be
diversified but it is of paramount importance that Taiwan not be left weakened and vulnerable
to mainland China by these shifting supply chains because any weakness in Taiwan will be an
invitation for Beijing to exploit...and if Beijing exploits that invitation then they could
take that invitation all the way to an invasion which will be a detriment of all other
nations in the Pacific. Right now China is focused on Hong Kong, Taiwan and India....with
Hong Kong and Taiwan gone the China will push its aggressive hegemony to Indonesia, Malaysia,
Philippines, etc.
I also complete agree that we (the US, Japan and any other asian nation that will join)
need a treaty protecting Taiwan's independence from mainland China but the very first thing
the US should do prior to such a new treaty is to get other nations to start using the name
Taiwan again on their maps, plane flights, UN, etc because as you know Beijing has been doing
everything possible to not just get nations and businesses to stop recognizing Taiwan and to
even stop using its name in an attempt to erase both the existence of Taiwan and any
distinction that Taiwan is separate from mainland China. The recognition of Taiwan and the
use of its name must be reinforced everywhere in the world as part of the first step in
negotiating a security treaty for Taiwan.
The USA has a one China policy and recognises the Chinese Government as the Government of
China. It's true that it once recognised the Government of Taiwan as the Government of China.
It's a completely new policy you're proposing of splitting China into 2 (or more?) states.
That needs war, as it would if China was proposing to break up the USA, and the USA would
lose a non-nuclear war.
The USA could win a nuclear war but would lose a lot of its population. I don't know how
seriously we should take the US estimate of 90% within a year by starvation and disease with
just an EMP attack. Mexico, Canada and Cuba might accept many US refugees even though they
would also suffer damage. Not all of the area of those countries would suffer EMP damage.
Other countries might also provide some charity.
Mexico, Canada and Cuba could be rewarded for their charity by dividing the USA between
them. That would be a powerful incentive and remove a country fond of wars of aggression. A
USA that poses no threat to anybody could continue to exist and be called Hawaii.
[email protected]
TSMC's Arizona fab is tiny compared to its 12 Taiwan ones, and more of a sop to the Trump
administration than a serious effort to diversify. The jugular vein of the semiconductor
industry is within easy reach of China's missile arsenal, and indeed the Chinese military can
be said to have been designed specifically for the task of retaking Taiwan.
China might not even need to invade. If they blockade Taiwan--air and sea--and threaten to
destroy ships and aircraft trying to enter or leave Taiwan, they can stop chip export.
It's similar to Iran saying, "Either everybody can export oil from the Gulf or no one
can." China would say, "Either everyone can import chips from Taiwan or no one can. And China
is in a much better position to enforce its will than Iran.
The reaction to Auberback's refutation of comparative advantage would be extreme depending
on who was reacting. The field of economics is like a cult, with a lot of groupthink and
academic homogeneity. In this way failed consensuses are continued and alternatives, even if
they have a good historical track record, are railed against as heterodox and fringe.
Its amazing how in just two or three decades we forgot about basically all of US economic
history and policy history up to that point.
I completely agree that a supply chains including those for memory chips in Taiwan must be
diversified but it is of paramount importance that Taiwan not be left weakened and vulnerable
to mainland China by these shifting supply chains because any weakness in Taiwan will be an
invitation for Beijing to exploit...and if Beijing exploits that invitation then they could
take that invitation all the way to an invasion which will be a detriment of all other
nations in the Pacific. Right now China is focused on Hong Kong, Taiwan and India....with
Hong Kong and Taiwan gone the China will push its aggressive hegemony to Indonesia, Malaysia,
Philippines, etc.
I also complete agree that we (the US, Japan and any other asian nation that will join)
need a treaty protecting Taiwan's independence from mainland China but the very first thing
the US should do prior to such a new treaty is to get other nations to start using the name
Taiwan again on their maps, plane flights, UN, etc because as you know Beijing has been doing
everything possible to not just get nations and businesses to stop recognizing Taiwan and to
even stop using its name in an attempt to erase both the existence of Taiwan and any
distinction that Taiwan is separate from mainland China. The recognition of Taiwan and the
use of its name must be reinforced everywhere in the world as part of the first step in
negotiating a security treaty for Taiwan.
The USA has a one China policy and recognises the Chinese Government as the Government of
China. It's true that it once recognised the Government of Taiwan as the Government of China.
It's a completely new policy you're proposing of splitting China into 2 (or more?) states.
That needs war, as it would if China was proposing to break up the USA, and the USA would
lose a non-nuclear war.
The USA could win a nuclear war but would lose a lot of its population. I don't know how
seriously we should take the US estimate of 90% within a year by starvation and disease with
just an EMP attack. Mexico, Canada and Cuba might accept many US refugees even though they
would also suffer damage. Not all of the area of those countries would suffer EMP damage.
Other countries might also provide some charity.
Mexico, Canada and Cuba could be rewarded for their charity by dividing the USA between
them. That would be a powerful incentive and remove a country fond of wars of aggression. A
USA that poses no threat to anybody could continue to exist and be called Hawaii.
[email protected]
The Trump administration is
working to dispossess the Chinese company ByteDance by blackmailing it to sell its
valuable TikTok business to a U.S. company for a bargain price. This to the benefit of yet
unknown people.
False allegation over the security of TikTok user data were used to threaten the
prohibition of the video app in its U.S. market. In the U.S. alone the app is used by more
than 80 million people. It plays an important
part in the youth culture and music business. Faced with a potential close down of its
prime business in one of its most profitable markets ByteDance had no choice but to agree to
negotiate about a sale.
ByteDance declined an offer by two of its U.S. based minority investors to buy the
business for $50 billion as that price was far below its presumed value. The White House
stepped in to find a new buyer with enough change to pay for a deal. As the largest social
media companies - Facebook, Apple, Google and Twitter - are already
under congressional investigations for their monopoly positions in U.S. markets none of
them could be the potential buyer. Facebook has in fact just launched a rip-off of the TikTok
product under the name Reels. It is
trying to poach TikTok 'creators' for its own service. Facebook owner Mark Zuckerberg has
warned
of Chinese competition. He would be the biggest winner should TikTok be thrown out of the
U.S. market.
The White House finally came up with Microsoft as a potential buyer. But Microsoft has
historically been unsuccessful in the social media business. It also does other business with
China and is reluctant to get involved in a move that could damage that business.
Despite Microsoft's lack of interest President Trump personally pressed for a shotgun
marriage. The Democrats are supporting him
in this. But neither ByteDance nor Microsoft really want to make the deal.
TikTok could become totally independent from its Chinese owner ByteDance to continue
operating overseas, according to a source who has been briefed on the discussions.
But the source said that despite reports that the video-sharing platform would be taken
over by Microsoft, ByteDance founder Zhang Yiming and investors were reluctant to sell to
the US company.
...
[I]f it is able to continue operating in the US, the board of ByteDance will agree to a
complete spin-off for the overseas version of the app, which operates under the name Douyin
in China.
The new entity would keep the TikTok name, but will have different management and will
no longer answer to ByteDance.
"Except for Zhang Yiming, almost all those in the room favour such a spin-off," the
source said. "The mood is kind of: 'the founder will be out and the house will be
ours'.
"But even for Zhang himself, there's really no other option because the app will be
killed if you don't let it go."
The spin-off would cover all markets except China where a ByteDance owned app similar to
TikTok is run under the name Douyin. A sale to Microsoft would only include the markets in
the U.S., Canada, New Zealand and Australia. (Note that Britain is the only member of the
5-eyes club missing here.)
That Microsoft is not really wanting the deal can be gleaned for the convoluted statement
it issued yesterday. This is clearly unprecedented language in a public company's
communication:
Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump,
Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United
States.
Microsoft fully appreciates the importance of addressing the President's concerns. It is
committed to acquiring TikTok subject to a complete security review and providing proper
economic benefits to the United States, including the United States Treasury .
Microsoft will move quickly to pursue discussions with TikTok's parent company,
ByteDance, in a matter of weeks, and in any event completing these discussions no later
than September 15, 2020. During this process, Microsoft looks forward to continuing
dialogue with the United States Government, including with the President.
The discussions with ByteDance will build upon a notification made by Microsoft and
ByteDance to the Committee on Foreign Investment in the United States (CFIUS).
...
Microsoft may invite other American investors to participate on a minority basis in this
purchase.
...
Microsoft appreciates the U.S. Government's and President Trump's personal involvement as
it continues to develop strong security protections for the country.
This ass kissing of Trump is not what Microsoft is used to do. Satva Nadella was clearly
pressed into publishing this. Such a statement would usually include language about
increasing shareholder value or better user experience. This statement has none of that
standard sweet talk.
The stock market seems to believe that a takeover of TikTok would be profitable for
Microsoft :
I have my doubts that Microsoft can successfully run a social network business. This one
would be restricted to just four countries and it would likely lose access to the continuing
development of the app. Where is the potential growth for such a restricted application?
And how will China react if Microsoft takes part in the U.S. raid of ByteDance's business?
While China is only contributing some 2% to Microsoft's overall revenue the company's biggest
R&D center outside of the U.S. is in China . It
contributes to its global success:
"[There has been an] explosion of innovation in China," [Microsoft President Brad] Smith
said. "One of the things that we at Microsoft have long appreciated is the enormous
ingenuity of the engineering population of China."
Microsoft's X-Box game station as well as other hardware it sells is at least partially
developed and produced
in China . Some of Microsoft's Chinese engineers might have there own ideas on how China
should retaliate to the attack on a successful Chinese company. The Trump administration sees
that danger and it is pressing
Microsoft to get rid of all its relations with China:
White House trade adviser Peter Navarro suggested on Monday that Microsoft could divest its
holdings in China if it were to buy TikTok.
"So the question is, is Microsoft going to be compromised?" Navarro said in an interview
with CNN. "Maybe Microsoft could divest its Chinese holdings?"
Leaving China would surely damage Microsoft's long term business. For a global company
that country is a too big potential market to be left at the wayside.
But the real question about the mafia raid on ByteDance is who is destined to profit from
it.
Today Trump said (vid) that if Microsoft
closes the deal a substantial amount should be paid to the Treasury because his
administration 'enabled the deal'. He likely didn't consult a lawyer before making that
wrongheaded statement.
But who are the "other American investors" who are invited "to participate on a minority
basis in this purchase". Reuters had already reported
that 'minority investor' clause. Is the wider Trump family involved in this?
Why is that term so important for Trump that Microsoft has felt a need to repeat it in
what is essentially a public terms letter addressed to Trump?
Posted by b on August 3, 2020 at 17:47 UTC |
Permalink
I know B says this is about stealing, but maybe this is about sending China a message
about how it does business in general. As you should know by now, China disallows many
American apps in China. Is this a message to China about how America and maybe American
allies will do business with them from now on? First Huawei and now Tik Tok and next who
knows what? It looks to me like the message to China is: Follow the Golden Rule, which is not
"whoever has the most gold rules" but is instead "Do unto others as you would have them do
unto you."
Hey Kali, China DOES NOT need the US but what you are seeing is a violation of business
norms. You say China doesn't allow many apps from entering its market is not the same as the
US trying to blackmail a successful Chinese app that have already entered the US market.
Since you mentioned Huawei; they own almost the entire 5G technology so either you pay
directly or indirectly irregardless if the US bans them or not
Facebook at one time was operating in China. In 2008-2009 terrorists were using Facebook
to coordinate attacks in Xinjiang province. When the Chinese government demanded the
information Facebook declined to provide citing privacy issues. After that Facebook was
banned.
"For example Facebook, Youtube, Twitter, Google--maybe they want complete control over
what their populations hear or says online?"
If that's the case why is it not illegal in China to have a VPN? How many strawmen are in
that diatribe you just posted? I can only knock down one at a time.
Is the dispute over Tik-Tok really about protecting American citizens?
Non-US companies collect a lot of info about US citizens and citizens of other Western
countries via internet apps and other means. And much info is available for sale as well.
Seems more likely that the forced sale is really about protecting the Western
establishment and US power-elite. A massive social network is a threat to their control
because it could be used to spread anti-US govt messages. Mostly to younger people who are
already very cynical (as we can see from the protesting) and thus more willing to accept it
as true or reflecting a truth.
Although Sarah's comedy is not a threat to the US power-elite, one can easily imagine
messaging that would be:
USA threatens war against a country and suddenly everyone in USA gets messages that
depict Trump/USA as a bully and that create sympathy for the good people of the target
country.
Messaging that decries the harsh and unfair treatment of political prisoners
(Assange?);
Messaging that calls into question the legitimacy of a US Presidential election.
Messages that mock Trump's blaming China for the pandemic by describing the Trump
Administration's inept response to the pandemic.
<> <> <> <> <>
PS Where's the libertarian mob complaining about government control? Those astro-turfed
bullsh*ters are not really interested in issues that they are not paid to be interested
in.
"As TikTok's global market influence was skyrocketing, the company was suppressed by the
US government. Again, this shows how difficult it is for companies from China to go global.
ByteDance said in a statement that it is "committed to becoming a global company." But
Washington will not easily let the company off just because of its good wishes.
"The US' decoupling from China starts from killing China's most competitive companies. In
the process, Washington ignores rules and is unreasonable. Although suppressing Huawei and
TikTok also incurs losses to the US, the suppression can still be implemented in the US. This
is because such suppression echoes the sense of crisis instigated by some US elites when
facing China's rise.
"Huawei and ByteDance can only provide limited protection to themselves via legal means.
But we should not overestimate the US' sense of justice. The country has shown us too many
examples of politics overwhelming everything else....
"Huawei has advanced equipment, and ByteDance sells services to the world through unique
concepts and technologies. The two companies are pioneers worldwide. They have brought a
sense of crisis to US elites, which shows that China's top companies have the ability to move
to the forefront of the world in technology. It reflects the power of China as an emerging
market. As long as such power continues to expand, these top Chinese companies can eventually
break through US suppression.
"By banning Huawei, the US would lag behind in 5G technology. By banning TikTok, the US
would harm its own internet diversity and its belief in freedom and democracy. When similar
things happen time and again, the US will take steps closer to its decline. The US is a
pioneer in global internet and has created Google, Facebook, Twitter and YouTube. But in
recent years, the US' internet structure has been rigid.
"Rising stars such as ByteDance continue to emerge in Chinese internet sector, showing
huge vitality. China knows its deficiencies, strives to become stronger, and adheres to
opening-up to the world. The US, however, is gradually being shrouded in arrogance, seclusion
and a negative attitude. Chinese people should not be discouraged by temporary setbacks, or
our weaker position in the China-US confrontation. What's important is that China's trend of
faster-pace progress has not changed....
"The COVID-19 pandemic is an important issue, clearly showing us that the US has fallen
into a type of systematic chaos. This will severely limit its ability to indefinitely upgrade
and exert pressure on China. Many of the US practices, including banning TikTok, show the
country's weakening competitiveness. Can't Facebook just come up with a more powerful app and
beat TikTok in the market? The problem is Facebook cannot do it. It can only resort to the
brute force of US politics."
As you read, China takes this very differently. It sees the inability of Outlaw US Empire
firms to compete and thus seek protection as suggested here :
"Western countries' social media platforms have long dominated, and only a handful of
Chinese firms that have entered the arena in recent years have won popularity. TikTok has
seen record-high downloads across the world. Per data from an industry analysis platform
Sensor Tower in April, TikTok had been downloaded more than 2 billion times globally
.
"The US' plan to ban TikTok follows the same logic as its crackdown on Chinese tech firm
Huawei. The US has been limiting the 5G frontrunner for years, essentially the result of
evolving relations between China and the US-led Western world.
" TikTok and Huawei are not isolated cases. Chinese high-tech firms that expand
overseas will encounter different levels of barriers as China develops into a new tech power,
giving rise to concerns from countries that feel threatened by Chinese technology .
"The US will not allow a social media platform that enjoys high popularity among younger
generations to be operated by a foreign company, especially when the countdown to its
presidential election ticks on. Banning TikTok now is, to some extent, also a move by Trump
to control public voices after groups of young American TikTok users reportedly upstaged his
first large-scale public rally amid the COVID-19 pandemic by registering for tickets and
failing to attend.
"With the election drawing near, a plunging second-quarter GDP at negative 32.9 percent,
and the world's largest number of coronavirus infections, it is likely the Trump
administration will continue rolling out new and even harsher measures to antagonize China
and attempt to block it economically." [My Emphasis]
How much revenge and the election play into the drama are unknown, but we know Trump is
soft-skinned and very vindictive; Tulsa was a huge embarrassment. Can't compete; erect a
tariff wall to protect your weak companies--the Outlaw US Empire demands China "open up"
while it closes up instead. As the headline of the first item screamed, "Banning TikTok
reflects Washington's cowardice."
Gotta love the stupid Western capitalists.
First, it was "Let's all invest in China, do a lot of business and move all our factories
there because we'll make a shit-ton of $$".
Then, it's "Oh, they're too big and powerful, we need to stop trading and making any kind of
business with them".
As some clever guy said about these short-sighted idiots more than a century ago, they're
selling the rope with which to hang them.
The mafia methods used are often packaged as monopoly powers such copyrights, patents,
transformation of public goods into for profit private enterprizes (privatization), takeovers and
bankruptcy, private ownership of the highest levels of nearly all governments, and just 6 own 92%
of all media.
Takeover of Tik Toc by Microsoft is just one demonstrating of a wider trend -- the tend
toward gangster capitalism. BTW Chinese proposes complete divestment. That spells big trouble for
US heavyweights such as Amazon, Google and Facebook.
"We lie to deceive ourselves, we lie to comfort others, we lie out of pity, we lie out of
shame, to encourage, to hide our misery, we lie out of honesty. We lie for freedom."
Trump blames China every chance he can and the Democrats either agree or offer mealy-mouthed
protest.
Notable quotes:
"... It comes to light that at least 125 US companies owned or invested in by Chinese entities, including Chinese SOE, received hundreds of millions in PPP loans backed by the US SBS. ..."
"... This level of capitalust interconnection between elite investors and governments belies all the heated talk of cold war by politicians on both sides as well as useful idiots the world over. ..."
"... "If this is also national security, then US national security is synonymous with hegemony." ..."
China has never banned US high-tech companies from doing business in the country. What the
Chinese government demands is that what they do in China should comply with Chinese law.
That's all . It was some US companies that refused to comply with Chinese laws.
Google used to have a position in the Chinese market. It itself pulled out of China a
decade ago, while other companies were accused in the US of kowtowing to China when they
tried to design their specific versions for the Chinese market. This leaves no US internet
giant currently operating in China.
TikTok operates in the US in full compliance with US laws and is completely cut off from
Douyin, its Chinese equivalent. Users in the Chinese mainland cannot register for TikTok
even if they bypass the so-called great firewall . TikTok does not violate any US
law but fully cooperates with the US administration.
The US claim that TikTok threatens its own national security is a purely hypothetical
and unwarranted charge - just like the groundless accusation that Huawei gathers
intelligence for the Chinese government. This is fundamentally different from China's
refusal to allow the original versions of Facebook and Twitter to enter China and require
them to operate in accordance with Chinese laws.
In just three paragraphs, the Global Times killed two myths: that a "great firewall"
exists and that China censorship things from the West (i.e. that the Chinese people is
"living in the darkness").
I had a teacher who traveled to China recently. He went to a local bar (100% Mainland
Chinese) as soon as he landed. He was having difficulty accessing Google (I think it was
either Gmail or Google Drive). He tried, tried, tried but couldn't do it. When the locals
there realized he was trying to access Google products, they promptly and calmly told him he
should use VPN because Google didn't operate in China. No drama, no fear of a local police
officer suddenly coming to the place to arrest them.
They know what Apple, Google and Facebook are. It's just that China has better local
options for the same product.
Not that globalization is a one way street by any means.
It comes to light that at least 125 US companies owned or invested in by Chinese entities,
including Chinese SOE, received hundreds of millions in PPP loans backed by the US SBS.
This level of capitalust interconnection between elite investors and governments belies
all the heated talk of cold war by politicians on both sides as well as useful idiots the
world over.
Why even favorite Chinese PR flack Pepe Escobar recently characterized the Stupidity Trap
aka Thucydides Trap as childish nonsense.
"If this is also national security, then US national security is synonymous with
hegemony."
That is precisely the problem. Unfortunately, the current US economy has become dependent on
advantages arising from unrivaled geopolitical power. Take it away too suddenly, and there
would be a painful economic transition to become a normal nation again.
While concern might be legitimate, Trump administration actions looks more and more like
extortion. They really open the door for king US financial companies and accounting firms from
China and Russia. The latter also represent "national security" threat.
Secretary of State Mike Pompeo said Sunday that President Trump would soon take action
against Chinese software companies that the administration believes present a national security
risk for Americans.
"President Trump has said, 'enough,' and we're going to fix it," Pompeo said on Fox News's
"Sunday Morning Futures." "And so he will take action in the coming days with respect to a
broad array of national security risks that are presented by software connected to the Chinese
Communist Party."
The comments come on the heels of Trump's announcement on Friday that he was prepared to
sign an executive order to ban TikTok, a Chinese-owned short-form video app, from operating in
the U.S.
Pompeo on Sunday asserted that Chinese-owned software companies doing business in America
were "feeding data directly" to the government in Beijing and that the practices amounted to
"true national security issues." He specifically named TikTok and WeChat, a Chinese-owned
messaging and social media app.
"They are true privacy issues for the American people. And for a long time, a long time, the
United States just said, well, goodness, if we're having fun with it, or if a company can make
money off of it, we're going to permit that to happen," Pompeo added, noting that officials
have been deliberating on a decision for months now.
TikTok, which has become especially popular among teens in recent years, has gained
relentless scrutiny from the Trump administration and members of Congress overs its
relationship with ByteDance, a Chinese firm. Lawmakers have voiced concerns that Americans'
information is not secure in the hands of TikTok, considering Chinese laws that require
disclosures of sensitive data upon request by the government.
TikTok has strongly pushed back against allegations about its handling of user data in
recent days, with the company's CEO releasing a statement rebuking "rumors and misinformation."
The company also sent a letter to leaders on the House Judiciary Committee last Wednesday
rebutting allegations about its data practices.
"TikTok is not available in China," the letter said. "We store Americans' user data in the
US, with back-up in Singapore, with strict access controls for employees. We have never
provided any US user data to the Chinese government, nor would we do so if asked. Any
allegations to the contrary are unfounded."
TikTok has not directly commented on Trump's stated plans to bar the app's use in the U.S.
Though TikTok's U.S. general manager, Vanessa Pappas, said in a video on Saturday that the
company is "here for the long run." The company has also highlighted the 1,000 people in the
U.S. it has hired, noting that it plans on adding another 10,000 employees in the country in
the future.
After Trump's comments on Friday, reports surfaced that Microsoft was in talks to purchase
the short-form video app, which boasts roughly 100 million American users.
Asked about that possibility and whether it would end any opportunity for Chinese
surveillance, Pompeo said on Fox News that the administration "will make sure that everything
we have done drives us as close to zero risk for the American people."
Multiple GOP Senators have voiced support of the prospect of a U.S. company purchasing
TikTok to avoid an outright ban. Sen. Marco Rubio (R-Fla.) said in a tweet Sunday that a
"trusted" U.S. company buying the app would be a "positive and acceptable outcome."
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Curtis also stuck close to the main theme of US Secretary of State Mike Pompeo's
high-profile
China policy speech last week by arguing that the India border clash and sovereign debt
financing used for Belt and Road Initiative projects
"fits with a larger pattern of PRC aggression in other parts of the world". Pompeo called for
"a new grouping of like-minded nations" to counter China.
Accusing Beijing of "selling cheap armaments and building a base for the 1970s-era
submarines that it sold to the Bangladesh Navy in 2016", Curtis also committed to stronger
relations with Dhaka.
"We're committed to Bangladesh's long-term success because US interests in the Indo-Pacific
depends on a Bangladesh that is peaceful, secure, prosperous healthy and democratic," Curtis
said. "We continue to encourage the Bangladeshi government to renew its commitment to
democratic values as it prepares to celebrate its 50th anniversary of independence, next year."
Big Tech tangles with US lawmakers in antitrust showdown 30 Jul 2020
While the India-China border clash, pressing of maritime claims in the South China Sea, and
increasing military and economic pressure on Taiwan may have helped to push countries in the
region to cooperate more, Washington will not necessarily benefit, said Ali Wyne, a
non-resident senior fellow at the Atlantic Council and a non-resident fellow at the Modern War
Institute.
"China's actions in recent months have compelled many of its neighbours to try and bolster
their military capabilities on an accelerated timeline and to intensify their security
cooperation with one another," Wyne said.
"For at least two reasons, though, it is unclear that those neighbours would be full
participants in a US-led effort to counterbalance China.
"First, geographical proximity and economic dependence constrain the extent to which they
can push back against Beijing's assertiveness without undercutting their own national
interests," he said. "Second, many of them are reluctant to make common cause with the United
States in view of the transactional diplomacy that it has pursued in recent years."
China's foreign minister calls on other nations to resist US and stop a new cold war 29 Jul
2020
China's embassy in Washington did not respond to a request for comment.
However, Chinese Foreign Minister Wang Yi on Tuesday called Washington's increasingly hard
line against the Chinese government "naked power politics". In a phone
call with his French counterpart Jean-Yves Le Drian on Tuesday, Wang said the Trump
administration's strategy was to "constantly provoke China's core interests, attack the social
system chosen by the Chinese people and slander the ruling party that is closely connected with
the Chinese people," according to state news agency Xinhua.
"These actions have lost the most basic etiquette for state-to-state exchanges and have
broken through the most basic bottom line of international norms," he said, warning that "the
world will fall into a crisis of division, and the future and destiny of mankind will also be
in danger".
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US House of Representatives sends Uygur Human Rights Policy Act to Trump's desk for
approval
US House of Representatives sends Uygur Human Rights Policy Act to Trump's desk for
approval
Curtis was less sanguine about how much Kazakhstan, Kyrgyzstan and other Central Asian
republics were resisting China's influence, citing an emphasis by governments in the region on
the economic consequences of strained ties with Beijing by protesting the treatment of Muslim
minorities in China's far northwest.
China's internment of Muslim Uygurs in the Xinjiang region has drawn international
condemnation. The UN has estimated that more than a million Muslims have been detained in camps
there for political re-education, but Beijing claims they are vocational training centres aimed
at countering religious extremism.
"With regard to the Central Asian countries, I think they're concerned about China's
economic influence in their countries, and therefore they very much hedge their comments about
the repression of Muslims in Xinjiang province," Curtis said, but added that she expected
public condemnation of China in Pakistan and Bangladesh to mount over the issue.
"There has been reticence, which has been disheartening, but I think as these countries see
China trying to trying to increase disinformation campaigns you'll start to see pushback from
the South Central Asian countries and more speaking out about the treatment of Muslims in
Xinjiang," she said. Join the Singapore
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"... The problem for the US is that China is the world's biggest semiconductor market and biggest chip importer on the world ..."
"... these bans are lose lose situation for both the US and China ..."
"... I do not think that Pompeo is smelling blood and moving for the jugular, its not such a situation as China is not that vulnerable, it is more likely to be US elite anger due to the US weakening and China gains during the Covid-19 crisis. ..."
"... Trump strategy of bullying works many times. Supposedly there should be costs for the US in soft power and world opinion, but we are not seeing them. ..."
"... I guess most of the world is too cowardly and prefers to go with the flow. They will abandon the US only after the US lost anyway. Well, it is not an easy situation. Still, the US reactions are very strong and hateful precisely because things are still not good for it and its decline is continuing, regardless of some tactical victories, where in some cases it is a lose lose situation anyway. ..."
A Significant Decline Is Coming For The U.S.james , Jul 27 2020 18:10 utc |
1
by Passer by
In response to several comments in the last
open thread (slightly edited).
Actually there is even some real, and not only relative, decline for the US, for example
US life expectancy is dropping. This is a pretty bad sign for a developed country. Same for
the UK by the way.
On the issue of China gaining during the Covid crisis, they gained in raw power, for
example gained in GDP relatively to the US. And they gained in debt levels too, relatively,
as US debt levels exploded due to the crisis. Now you have V-shaped recovery in China and
poor, W-shaped double dip recovery in the US. With far more debt added.
Of course there is the issue of public relations and soft power. On the one hand the US
blamed China for the pandemic, but on the other hand it embarrassed itself due to its poor
performance in containing the pandemic, compared to other countries. And the US lost points
around the world due to rejecting WHO right in the middle of the pandemic. Europe and
developing countries did not like that at all. Don't forget that Covid also weakened the US
military, they have problems with it, including on ships and overseas bases, and even broke
the biggest US exercise planned in Europe for the last 30 years. And the pandemic in the US
is still raging, its not fixed at all and death rates are increasing again.
Here for example, the futurologists from Pardee Canter that that China gained during the
crisis, in raw capabilities. Future research and relative power between countries is
their specialty :
Research Associate Collin Meisel and Pardee Center Director Jonathan Moyer use IFs
(International Futures) to explore the long-term impact of COVID-19 in China in this Duck
Of Minerva blog post" "Where broad measures of material capabilities are concerned, the
picture is clear: COVID-19 is closing the gap in relative capabilities for the U.S. and
China and accelerating the U.S.-China transition. Through multiple long-term forecast
scenarios using the International Futures tool,
Research Associate Collin Meisel and Pardee Center Director Jonathan Moyer explain on the
Duck of Minerva blog that China is likely to gain approximately one percent of global
power relative to the U.S. by 2030 due to the economic and mortality impacts of COVID-19.
This share of global power is similar to the relative capabilities of Turkey today.
On the issue of the USD, Stephen Roach
also says that there will be a significant decline in the medium term. And the argument
is pretty logical - if the US share in the global economy is declining (and it will be
declining at least up to year 2060), and if the level of US debts is reaching all time high
levels, then the USD will decline. I agree with that argument. It is fully logical.
On the chip/semiconductor issue. David Goldman is skeptical that the US will be able
to stop
China on this :
The chip ban gives the world an enormous incentive to circumvent the US
Basically Huawei still has advanced suppliers, from South Korea and Japan. And
some of them are refusing to yield. The problem for the US is that China is the world's
biggest semiconductor market and biggest chip importer on the world , which gives
enormous initiative for private businesses to circumvent US made equipment in order to export
to China. Then also China is stashing large quantities of chips. By 2025, it should be able
to replace foreign production with homegrown. So these bans are lose lose situation for
both the US and China - yes, this will cause come costs to China up to 2025. But it will
also lead to US companies, such as Qualcomm, to lose the Chinese chip market, which is the
largest in the world, and there is nothing to replace it.
These are hundreds of billions of losses for the US due to gradually losing the most
lucrative market. Thus, in relative terms, China does not lose from these games, as the US
will pay a large price just as China. It is lose-lose situation, but in relative terms the
same. US loses just as China loses. And do not forget that China warned that a full US attack
on Huawei will lead to Boeing being kicked from the country, which is becoming the biggest
aviation market in the world, and will lead to hundreds of billions of losses for that
company too, and will probably burry it under Airbus. China needs lots of planes up to 2028,
when they will replace them with their own, worth hundreds of billions of dollars. Elevating
Airbus over Boeing, which already has big troubles, will be a significant hit for the US
aerospace industry.
So China has cards to play too. On the issue of the US getting some countries to ban
Huawei, it is again lose - lose situation - that is both the US and some of its allies will
lose due to using more expensive 5G equipment and will lose more time to build their
networks. So China loses, and US and some allies lose, but in relative terms things remain
the same between them power-wise, as they both lose. Do not forget that Germany said that
it will continue to use Huawei equipment, and this is the biggest economy in Europe:
Germany's three major telecommunications operators Deutsche Telekom, Vodafone and
Telefonica have been actively promoting 5G in recent years. They implement the "supplier
diversification" strategy and use Huawei equipment in their networks among other vendors.
Peter Altmaier, German minister of economy, told the Frankfurter Allgemeine Zeitung on July
11 that Germany would not exclude Huawei from the country's 5G network rollout. "There can
only be an exclusion if national security is demonstrably at risk. However, we will
strengthen our security measures, regardless of which country the products come from," said
Altmaier. "There is no change in Germany's position," a spokesperson of the country's
Interior Ministry told local broadcaster ARD on July 16.
So we can say that probably half of Europe will be using Huawei. Still, as you said, a
large part of the world will exclude it. Maybe half of world's GDP. Unfortunately things are
not perfect. One bright spot in that is that Huawei is betting on emerging markets, and
emerging markets have higher growth rates than western markets - that is, they will matter
more in the future.
I would agree that the US is harming China, but the damage is not large IMO, as these are
mostly lose lose situations where relative power stays the same. And with time, there will be
significant damages for the US too, such as losing the biggest chip and aviation markets and
the empowerment of Boeing competitors such as Airbus.
So its not too bad in China. Thus, after mentioning all of this, I do not think that
Pompeo is smelling blood and moving for the jugular, its not such a situation as China is not
that vulnerable, it is more likely to be US elite anger due to the US weakening and China
gains during the Covid-19 crisis.
On Hong Kong China had no options. It was a lose-lose situation. If they allowed
everything to stay as it is there would be constant color revolution there and they will be
constantly in the media. Maybe it is better to stop this once and for all. They hoped that
the Covid crisis will give them cover to do this. It did not work very well.
Unfortunately it is right that the Trump strategy of bullying works many times.
Supposedly there should be costs for the US in soft power and world opinion, but we are not
seeing them.
I guess most of the world is too cowardly and prefers to go with the flow. They will
abandon the US only after the US lost anyway. Well, it is not an easy situation. Still, the
US reactions are very strong and hateful precisely because things are still not good for it
and its decline is continuing, regardless of some tactical victories, where in some cases it
is a lose lose situation anyway.
The data shows a
significant decline incoming for the US.
2019 China 1,27 times bigger in GDP/PPP
2030 China 1,8 times bigger in GDP/PPP
US debt to GDP 2019 80%
US debt to GDP 2030 125%
US debt to GDP 2050 230 %
The Highway Trust Fund (HTF) will be depleted by 2021, the Medicare Hospital Insurance (HI)
trust fund by the beginning of 2024, the Social Security Disability Insurance (SSDI) trust
fund in the 2020s, the Pension Benefit Guarantee Corporation (PBGC) Multi-Employer fund at
some point in the mid-2020s, and the Social Security Old-Age and Survivors Insurance (OASI)
trust fund by 2031. We estimate the theoretically combined Social Security OASDI Trust fund
will run out of reserves by 2031.
Military budget (before Covid estimates, Trump budget) 2019 3,2 % of GDP - 2030 2,5 %
of GDP (Could drop to 2,3 % of GDP due to Covid)
Civilian discretionary spending (before Covid estimates) 2019 3,2 % of GDP - 2030 1.8 %
of GDP (drop to all time low) (Could drop further due to Covid)
That is not to mention the big divide in US society, and the ongoing Covid crisis, which
is still not fixed in the US. But is largely fixed in China. Do you see the decline now? They
have a big, big reason to be worried. A significant decline is coming for the US.
Posted by b on July 27, 2020 at 17:53 UTC | Permalink
thanks for highlighting 'passer by's post b... i agree with them for the most part... it
reminds me of a game of chess where pieces are being removed from the board.. it is a lose-
lose, but ultimately, it is a bigger loss for the usa down the road... for whatever reason
the usa can't see that the financial sanctions, bullying and etc, only go so far and others
work around this as we see with russia, iran, venezuala and china in particular...
the one comment i would view differently then passer by is this one - "Unfortunately it is
right that the Trump strategy of bullying works many times. Supposedly there should be costs
for the US in soft power and world opinion, but we are not seeing them." i think the usa is
losing it's position in terms of soft power and world opinion but you won't be reading about
it in the western msm.. that is going to come out later after the emergence of a new reality
is very clear for all to see... the trump strategy is really more of the same and it is like
a medicine that loses it's power over time and becomes ineffective - sort of like
antibiotics...
In other words the western oligarchs will lose out to the eastern oligarchs in the Great
Trade War under the cover of a fake pandemic.
Or perhaps the global oligarchs in general just want the world to follow more in the
Chinese model where the population is more agreeable to total surveillance, social credit
scores and even more out right fascistic government/corp model under the cover of a fake
pandemic.
With respect to "bullying works", in international diplomacy it usually does since weaker
powers have more to lose in a direct diplomatic crisis with a larger power. This is not to
say that they won't push back, but they will be far more strategic in where they do. In
essence, weaker powers have fewer "red lines" but they will still enforce those, while
greater powers have more "red lines", because they have more power to squander on
fundamentally insignificant issues. However, weaker states will still remember being abused
and oppressed, so when the worms turns while they won't be the first to jump ship, they will
be more than eager to pile on and extract some juicy retribution once it is clear they will
not be singled out. I suspect the Germany will be the bellwether, when (if) Germany breaks
from the US on a key aspect on the transatlantic relationship that will be the signal for
others to start jumping ship. If Nordstream 2 go through, then there will be a break within 5
years; if Nordstream is killed, then the break might be delayed for 5 years or more but there
will still be a break when the US pushes Germany to support the next major US regime change
war in the Middle East.
The engineered collapse is being called the "Great Reset" by many outlets already. The
covid nonsense is just a cover for it. Instead of Saudi Arabian terrorist it is a basically a
harmless coronavirus. Just in the days immediately following 911 the "terrorist'' threat was
so overhyped that security theater was employed everywhere. Now sanitation theater is the new
act in town.
Where does anyone get these numbers about military spend as a % of gdp? Have you listened
to Katherine Austin Fitts on Corbett Report?
Posted by: oglalla | Jul 27 2020 18:27 utc | 4
Good to see your comment. Lots of anecdotal evidence nationwide about store closures and
many vacancies in business centers, particularly within economic engines of NYC and elsewhere
along the East Coast. IMO, lots of self-censorship by business media while the reality
reported by Shadowstats goes ignored. As for losing the status of #1 economy, that was always
going to occur once China or India became a moderately developed economy. It just happened
that China is far more efficient politically which allowed it to become #1. And until India
improves politically, it will continue to lag behind numerous smaller nations. Too bad there
isn't a place where one can bet on the great likelihood that the Outlaw US Empire will
outperform all nations in the production of Bullshit and Lies.
I also disagree with the comparison between USA and China gdp and other statistics.
China is not simply competing against USA but against the Empire: 5 eyes, NATO, Euro
poodles, Israel and the Gulf States and others like Mexico, Columbia, Brazil, India.
Anyone that is minimizing the conflict and the advantages of one side vs another is doing
a disservice.
CitizenX @ 26
Agree with your tone and content.
Particularly the third from last paragraph. I think people are missing by choice the growing
ground-swell of public opinion US wide as this blog shows, a multi-faceted detereation of US
political morals and legality.
Combined with a world wide growing awareness of how deranged American leaders now are.
Haterd consumes itself as dose greed.
My ear to the ground tells me, the protests at present are growing some in full sight some
not.
This is not buseness as usual. Then return to normal. The mood now is -- -- - let's settle
this thing once and for all, let's get the job done.
So my personal opinion ? we will see a US regime chainge faster than a lot here predict. Much
faster.
Passer by is correct, no doubt, thanks to incompetent leadership in the US, but this
economic horse race doesn't matter.
What matters above all is that nations should hold it together, "it" being sustainable,
survivable support systems capable of providing for mass populations.We have failed that test
here in our encounter with this pandemic. We have failed to develop a sustainable financial
system. We have failed to meet any sort of environmental goals. We don't even have
environmental goals! Our electoral system doesn't work, either, proof being the election of
this idiot atavistic rich boy. If anyone thinks the election of Trump reflects the will of
the majority of Americans, they are part of the problem.
China is in deep trouble. The CCP's greatest challenge is simply to hold "it" together.
The Party has to perform economic miracles or the country will collapse. Those groups not
satisfied with life in the PRC have no outlet for their voices to be heard. They cannot
protest. They are under the strict control of an increasingly sophisticated but tiny elitist
clique that is only 6.5% of the total population. This clique will not relinquish power and
permit more democratic expression. On the contrary, more and more suppression of dissidence
of any sort will happen. The social scoring system is an especially insidious program of
social control. China's collectivism has turned the country into an ant hill. It is extremely
productive, but people are not ants.
Passer by is looking at the world through a keyhole.
Nightmare' conditions at Chinese factories where Hasbro and Disney toys are made
Investigators found there were serious violations at the factories which were endangering
workers.
In peak production season, employees were working up to 175 overtime hours per month.
Chinese labour law restricts monthly overtime to 36 hours per month, but the report alleged
factories would often ask local governments to implement a "comprehensive working hour
scheme" to override existing legislation.
One wonders if China will run into the same problems of the US in the not too distant
future?
"The End of Sweatshops? Robotisation and the Making of New Skilled Workers in China"
Over the past four decades China has undergone a process of massive industrialisation that
has allowed the country to achieve remarkable economic growth. Because of its large
manufacturing capacity based on a seemingly unlimited supply of cheap migrant labour in light
industries, China has come to be known as the 'workshop of the world'. However, since the
early 2000s the country's labour market has experienced a remarkable transition from labour
surplus to a shortage of labour, which has led to sustained increases in the wages of
ordinary workers. In such a context, since 2015 robotisation has become a driving policy for
industrial upgrading for manufacturing in China, with the slogan 'replacing human workers
with industrial robots' (机器换人) frequently appearing in media
reports and official policy documents.
The early date of "full spectrum dominance" (1996 not 2010) suggests to me that the
doctrine was related the "end of history" thinking of that time. USA Deep State believed its
own propaganda.
It also strengthens my case for the proximate cause for the current conflict originating
in 2014 when the US Deep State suddenly realized the threat that Russia and China Alliance
posed to their plans for global domination.
Not only had they believed their own propaganda but they had overreached with their
attempt to force Russia to capitulate and had been distracted by Israel interests that wanted
to use USA for the greater Israel project.
When I wrote my economic analysis paper on China in 1999, it was quite clear that the 21st
Century was going to become the Asian Century as the Outlaw US Empire would be eclipsed by
Asia's economic dynamism. 20+ years later, my prediction holds true, and it's even stronger
now than then with Russia's resurgence. Both outcomes clearly go against the 500+ years of
Western Global Hegemony and goads numerous people. For students of history like myself,
what's occurring isn't a surprise thanks to the West's adoption of--or should I write forced
indoctrination into--the Neoliberal political-economic philosophy, which is akin to that of
Feudalism since it benefits the same class as that of the Feudal Era. China too was once
Feudal and suffered a massive Civil War that destroyed much of its structure, a conflict
known to the West as The Taiping Rebellion that lasted
almost 14 years, from 1850-1864. One might say that was the first half of China's overall
effort to overthrow Feudalism and Western Imperialism, as the second half began in 1927 and
finally concluded in 1949. That amounts to a large % of years for a newbie nation like the
USA; but for a nation like China inhabited by humans for over 1.3 million years and with
4,500 years of recorded history, it's really just another Dynastic Rollover--something
inconceivable to non-Asians.
In reality, China's a conservative nation, culture and society with a several thousand
year ethos of Collectivism, although that allowed a significant divergence in social
stratification due to the ruling Feudal ways. Those who have read The Good Earth have
an excellent grasp on the nature of Chinese Feudalism, which was embodied by the Kuomintang
or KMT--as with Feudal lords, KMT leaders were deemed "Gangsters" by US Generals and
diplomats during and after WW2. General Marshall wrote in 1947 it was clear to him that the
KMT would lose to the CPC, that there was no good reason to throw good money after bad, and
it would be best for the USA and the West to accept the fact of a Communist China (all noted
by Kolko in his Politics of War ). Contemporary China when compared to China as
depicted in 1931 by Pearl Buck is one of the most amazing human achievements of all time, and
the conservative Chinese government intends to keep it that way through a series of well
thought-out plans. That's the reality. It can be accepted and worked with as numerous nations
realize, or it be somehow seen as unacceptable and fought against in what will prove to be a
losing effort since all China need do is parry the blows and reflect them back upon its
opponent using skills it developed over several thousand years. It would be much easier to
join China than fight.
It's misleading to assess the National Military Capability of various countries in $US terms.
The West's M-IC is privately owned and puts shareholder profit before all else. And the
owners of the Western M-IC also own the politicians who facilitate and approve the rip-offs.
China and Russia's M-IC are owned and controlled by The People via the government and can
therefore get $2+ of value for every $1 invested. For example, one can buy some very nifty
twin-engine bizjets for less than half the price USG pays for a flying Batmobile (F-35) - a
glorified hot-rod with guns.
There is definitely a decline in the USA. Deaths of despair and from the coronavirus are
too great to ignore anymore. 150,000 dead and counting are not nothing. The Western Empire
has fallen. The U.S. federal government failed. The Imperialists are quarantined at home.
The question is if the 19th century North American Empire from Hawaii to Puerto Rico
survives. The Elite have bet it all on a vaccine or patentable treatment to give the
Pharmaceutical Industry billions of dollars. However, quick cheap paper monoclonal antigen
tests would make testing at home before going to work or school practical.
This would end viral transmission and the pandemic. No drug jackpot for the 10%. Instead
public health is ignored as Americans die. The silence is deafening. The protests in the
Pacific Northwest are not about slavery. They are about the 90% of Americans being treated as
disposable trash.
150,000 dead and counting are not nothing. The Western Empire has fallen.
No offense VV but I can't help thinking that you (and maybe some others) are talking past the
issue.
To be clear, the issue is this: Will the West's decline play a role in the US/Empire's
ability and willingness to confront Russia-China? Or is the oft-heard refrain that US/Empire
can not 'win' against China (implying that they shouldn't/won't bother trying!)
because of its decline (usually attributed to 'late-state capitalism') just wishful
thinking?
Virtually everyone here has agreed that the West - especially USA - hasn't fought the
virus correctly and with vigor. And virtually everyone agrees that there has been a relative
decline in USA/West and in some areas an absolute decline.
IMO what is ignored is that:
from the perspective of the US 'Deep State' or Western power-elite the failure to fight
the virus is a net positive if the repercussions are blamed on China (in addition to
other 'positives' from their perspective: saving on cost of care to elderly, boosting Big
Pharma profits, etc.) -
In fact, deliberate mistakes and mounting only a token effort (as we've seen)
is exactly what we should expect from a craven power-elite that want to further their
interests;
the overall decline, while troublesome - especially to the ordinary blokes who get the
short end of that decline - is not yet significant enough to prevent USA/Empire from
countering the Russia-China 'upstarts' aggressively.
I likened the hopefulness of the anti-Empire crowd about Western decline to their hopefulness
they previously expressed regarding Turkey. "Erdogan is turning east!" proved to be wrong.
Posted by: Andrei Martyanov | Jul 27 2020 19:01 utc | 14 Within last 10 years China built
surface fleet which in terms of hulls (and "freshness") rivals that of the US. US economy
would have it bottom falling off if it tried to accomplish a similar task.
Nice to see you here again. Yes, I mentioned the relative navy building in the previous
open thread. China's navy will exceed US capability by 2050 and be on parity by 2030-2040
according to reports I've read. That's just ten years to twenty years from now.
Result: US gets kicked out of the South China Sea and has to share the Pacific, Indian
Ocean (as will India with gnashing of teeth) and even the Med with China. China will
undoubtedly project naval power all the way to the Med in support of BRI in the Middle
East.
Posted by: Jackrabbit | Jul 27 2020 20:43 utc | 27 There is decline, and while it has been
mostly relative it is also accelerating - but that hasn't significantly constrained
USA/Empire's response to the upstarts.
I agree. US military power isn't going away in ten years or twenty. China may achieve
parity at some point (and can do serious damage now). But that doesn't obviate the fact that,
short of nuclear war, the US is still in a position to throw its weight around and will
continue to do so until forced back by a (hopefully conventional) military defeat of serious
proportions, i.e., not just "give up and go home". And economic woes won't change that as
long as the taxpayer can be fleeced - and they will be, for at least a few more decades.
@ 62 A.L. "Would it be a surprise to you than there are many many protests in China at the
grass root level everyday?"
There are indeed protests all the time, which is the fire under the local Party leaders
that keeps them dancing. Usually the protests are against local corruption or mismanagement
and are not serious. People can get what they want this way. Each year at the general Party
gathering, however, special note is taken of "mass incidents", that is, protests on a larger
scale, and overtly political events such as those in the Uighur province of Xinjiang and in
Hong Kong. Any protest that challenges the control of the Party is not permitted. The current
protests in the US could not happen in China because they challenge political orthodoxy. The
Chinese don't just roll over on command for the CCP to scratch their bellies and the Party
knows just how volatile the political situation could be if mishandled. China is developing
into the ultimate surveillance state. There are lots of Chinese like that little guy that
stood down the tank at Tienanmen in 1989. Eventually that guy is going to say: "There is some
shit I will not eat!" The Party knows this.
Several years ago (close to 10) I noted that the US would be bringing back US companies
from China, that it would actually subsidize their relocation. It's only logical. I saw China
as becoming hostile to US corporations: in light of how things are going today it's the US
govt becoming hostile toward US companies in China. Make huge profits and then get free money
to return back to the US: and be welcomed as victorious troops arriving back from some
glorious war.
It's Musical Chairs. As the music plays more and more chairs are being removed. Capitalism
has been the most efficient economic system in which to trigger an economic collapse. WTF did
people think would happen with basing economic systems on the impossible, basing on perpetual
growth on a finite planet. All of this was readily foreseeable using SIMPLE MATH.
China is in deep trouble. The CCP's greatest challenge is simply to hold "it" together.
The Party has to perform economic miracles or the country will collapse.
How do you square your dire prediction of China's collapse with the
Edelman trust barometer of 2019 (warning: PDF file), where China scores 88 on the trust
index and the US scores 60?
The COVID-19 pandemic revealed that all the "leading" western countries are unable
to handle even a relatively moderate public health crisis. The neoliberal economic model
considers any aspect of society that isn't generating a profit as ideologically unsound and
targets these areas for "reform" (i.e. privatization).
Sometimes this is done outright, as when a public utility or service is sold to a private,
for-profit operator (e.g. British Rail in the UK). But when the government thinks the public
will resist and push back it is done by stealth, usually by starving the targeted
service/organization of funds and then farming out parts of it to for-profit companies in the
name of "efficiency", "innovation", "resilience" or some other neoliberal doublespeak concept
(they all mean only one thing of course: PROFIT). This is currently happening to the US
Postal Service.
Every public healthcare system in the so-called "advanced" nations encompassed by the
EU/NATO and Five Spies has been underfunded and subjected to stealth privatization for
decades. Furthermore, people in neoliberal societies exist to serve as fodder and raw
material for "the economy" (i.e. the plutocrat or oligarch class) and there is no mechanism
to deal with emergencies that can't be milked for a profit. Hence, the half arsed,
incompetent, making-it up-as-they-go-along response to COVID-19 that simply writes off older
and sick people as expendable.
Neoliberalism began as a US/UK project, that's why poverty, crime, inadequate health care
and social services etc. and governmental and societal dysfunction generally is more advanced
there than in, say, Canada and Germany.
So, yes, the US is in decline, maybe even collapsing, but that doesn't mean the imperial
lackey countries are immune to the forces tearing apart the United States. They are just
proceeding down that road at a slower pace. If the US falls, the west falls...globalization
takes no prisoners.
I live in Canada where sometimes people get a bit smug about how great everything is here
compared to the US. In British Columbia, for example, opiate overdose deaths are at a record
high and have killed many many more people than COVID-19 since the pandemic began. Housing in
cities like Vancouver is increasingly unaffordable, there aren't enough jobs that pay a
living wage, permanent homeless camps exist in city parks, there are entire blocks where
people who live in their vehicles park etc.etc.
The reality is that it's the west that is in decline, not only the United States.
China is developing into the ultimate surveillance state.
Posted by: jadan | Jul 28 2020 1:30 utc | 95
But don't you see, dear jadan, it is for the good of the people, if only the rest of the
world could see the benevolence of Big Brother we would all be much happier at least that is
what the thought police has told me to think. One government, one heart, one mind. Long Live
the PRC revolution./s
Amidst all of the nonsense in the discussion section of the following link, I believe
there are some germane comments from individuals that work in the semiconductor space that
touch on some of the challenges China's chip industry faces. link
I hope their hiring of 3,000 experienced chip engineers accelerates their learning curve.
Developing a chip industry on a moment's notice, let alone competing with Samsung and TSMC,
is no small chore.
One item not mentioned in the above article is whether China could build many consumer
components based on domestic 14nm (or larger) technology. Given China used to spend more
importing chips than oil, I assume that even less advanced chips used for TVs, etc. as
opposed to cellphones, would be very helpful for China's consumer electronics
manufacturing.
They are also making some strides in the flash memory and CPU space, but production
quantities are still very low.
Health, education, infrastructure, research and development. The backbone of prosperity.
These will all continue no matter trade war or cold war but barring hot war. There must be a
doubling time for this - something like an R0. Cold war and sanctions will only serve to
increase R&D
US mistakes, hubris ect move in the opposite direction, mistakes multiplying
mistakes.
@Schmoe 105
thanks, interesting. Here is a complementary tho less detailed article on some of the same
topics I ran across recently: China Speeds Up
Advanced Chip Development [semiconductorengineering.com]
One important point, clearly visible in the tables in the seekingalpha article linked by
Schmoe, is that the ultra-small 14nm/7nm stuff is for specialized (but strategically
important) applications. Most consumer electronics, industry, and everything else is 40-60nm
and up, although of course smaller has benefits to older applications in improve power (i.e.
mobile applications and servers) and cost (higher density/wafer)
US as an one excuse for its current hostilities against China is 'intellectual property'
theft. Makes me think of ninja Chinese sneaking around removing peoples brains.
But back to semiconductors. One of China's biggest imports is chips, mostly made by machines
using US tech. Many industries are highly specialized and it often makes sense from small
community level to national and global level to by a product from those that specialist in
that product.
China has been content to buy chips, but that will now change due to necessity. Yankistan can
now expect to get its brains hacked, but I am also reminded of the Scientists in the
Manhattan Project being the ones to pass on much information to the Soviet Union.
Yankistan will be leaking like a sieve. I guess that's why both oz and the poms are beefing
up their secret police laws. Wont be long before we are getting shot trying to run through
checkpoint charlie to the free east.
It is clear that the US is in decline. It is clear the US military is bloated and
overpriced but it can still turn most countries into rubble (even without using nuclear
weapons) and has done a few recently. Mostly the US uses its reserve currency status and
control of financial networks to punish countries that do not go along with its program. Can
you say sanctions. but as Hemingway said about bankruptcy - it happens slowly and then all at
once - is probably how it will continue to go. It is even losing its technological advantage.
Boeing used to be the leader and made reliable planes. Now they sometimes fall out of the
air. Things like high speed railways used to be the kind of thing the US did well. Now
California can't get one built. China has built thousands of miles of them. Russia built a 19
kilometer bridge to Crimea in 2 years after 2 years of planning. It appears to be competently
built on time and on budget. Do you really think this could happen in the USA now? In the 70s
the US was the leader in environmental actions. I wonder if the present day Congress could
even pass bills comparable to the Clean Air ACT or the Clean water bill. US national politics
are a mean joke. Our choice this year for President - two 70+ old white men with mental
issues. Our health system is overpriced. Medical bills are one of the main reasons for
personal bankruptcies. As others mentioned the US life expectancy is falling. As Dmitri Orlov
who watched the Soviet Empire fail said - Empire hollowed out the Soviet Union till it
failed, I see it doing the same thing in the US.
The current 'adjustment' in the USD & living standards is just what the doctor ordered
to allow elites to roll out "tech wave 2" - there is precious little gain to be had from
further staffing & wages cuts to the average shit-kicker, so now the bourgeoisie,
medicos, architects, academics, writers plus all the rest of the tertiary educated types who
blew hundreds of thousands on an education guaranteed to keep them employed, are about to be
tossed on the scrap heap.
We already know from previous stunts such as 911 & the 2008 'global financial
meltdown' that those most disadvantaged by this entirely predictable destruction of lives
will be easily diverted into time-wasting and pointless arguments about the real cause
of the mess.
This will allow the elites to use that diversion to funnel all federal funds into
subsidising the capital costs of the retooling, as both parties have begun to with the
despicable CARES Act, supported by the mad christian right in the senate, as well as the
so-called socialists in the Congress squad.
All the Cares Act does is inject capital into big corporations, boosting their stock price
& leaving citizens to lose most of their unemployment benefit. Citizens get evicted from
their homes. This time it will be tenants as well as home owners.
Both of those factions of elite enablers are going to create a great deal of noise and
crass finger pointing. The squad will jump up and down about this being a deliberate attack
on citizens by the elite while senate fundies will claim that this 'retooling' is the result
of unreasonable pay & working conditions demands by the communist unions.
What should be a universal expression of disgust will be reduced to just another culture
war.
Neither will ever admit that it is far too late to be worrying about cause, it is time to
concern themselves with effect, because to do so would create focus back on where the money
was going at time when it is important to be saying "everyone is hurting, including the
elites". Fools.
Eventually when the deed has been done assorted scummy senators & creepy congress
people will announce "It is time to move on" That will be a signal that treasury tanks are
dry, the elites have gotten everything which wasn't nailed down so now the citizens can roll
clawing & scratching in the mud.
I have no doubt that will be the direction of discussion here as well, it is much easier
to sit at a keyboard digging out obscure 'facts' that 'prove' one point of view or another,
than it is to leave the keyboard behind and put work into resisting the elites and in doing
so forcing a change that is more citizen friendly.
With the return of Russia to the geo-political arena, US can no longer destroy counties at
will through conventional weapons nor color revolutions and AQ freedom fighters.
Trump decided to go nuclear, so Russia placed its nuclear umbrella over it allies.
US can no longer destroy countries at will. It can attack a country and risk ensuring its own
destruction.
So back to hybrid war and proxie war ... but now the field is narrowed down to five-eyes and
in the case of China - India.
So to keep Russia out, yankistan has to rely on conventional war and hybrid war, though we
are looking at a country where the lunatics are in charge of the asylum so anything could
happen.
The MNCs producing it, the MSS, NSA and GCHQ, the IoT idiots and all authoritarians on the
globe. Consumers are happy with 3G: many don't even have 4G reception - give that to
them.
With IoT more unemployment, more electricity and Internet dependency, more chance of hacks
or natural disruptions (solar flares), more 1984.
The Chinese Communist Party wants a tributary international system where smaller countries
are deferential to larger powers, instead of a rules-based international order where
small countries enjoy equal rights.
The US/UK declining won't bother most billionaires with those passports: they just buy any
other. Stuck are the millions of others.
Equally "China" ascending brings joy for all billionaires around the globe holding stock
depending on Chinese near monopolies, including Anglo-es.
Some middle class Chinese are beginning to see that dying "rich" is is very limited goal,
as zero can be taken to the Here After and the price for this Now is too high. Money is not
everything. Welcome to this select club, Chinese brothers and sisters. Sure, a bit is good to
live but amassing is a waste of precious time and attention.
The US lacks the capacity to erect an "economic wall" that can stop China's
development. Trump's "trade war" was an attempt to do just that, and America got
steamrolled.
To be sure, the US can attempt even more irrational and desperate acts such as trying to
seize assets owned by Chinese people and organizations in the US, but that would be America
shooting itself in the head rather than just the foot.
The US simply does not posses the ability to "take the wind out of China's sails" .
That is not something that is within America's power to accomplish without going kinetic by,
for instance, trying to enforce a naval blockade of China's maritime transport routes. At
this point there are no economic measures America can take that will not do vastly more
damage to America than to China. Both trade war and bio attack were the best options America
had, and America has suffered grievously from those efforts with relatively minimal impact on
China. China's economy remains fundamentally strong while America's economy is
devastated.
As for disrupting China's international development efforts, America has been trying its
hardest for years now with the only impact being minor delays in China's plans. The only way
to truly disrupt China's international development efforts would be to offer a better deal,
but America no longer has anything to offer that is better. The only option left to America
to delay the BRI for longer would be a kinetic one, and the door is closing on that.
from the perspective of the US 'Deep State' or Western power-elite the failure to fight the
virus is a net positive if the repercussions are blamed on China (in addition to other
'positives' from their perspective: saving on cost of care to elderly, boosting Big Pharma
profits, etc.) -
It will not be possible to blame China, simply because no one believes the US press any
longer, and there is no convincing the woman or man on the street that US handling of the
virus has been in any way competent. We may not understand its virulence, and we perhaps
don't understand yet how to cope with it, but the example of China has been clear from the
earliest moments, and that speaks louder than any false rhetoric can claim.
We know what we have been experiencing in comparison with others who acted with celerity,
and that basically was what was needed. The US chose to go it alone, at its peril. It stuck
by a set of rules it had made for itself in these last years - rules which have not benefited
the people at large. It all comes down to that.
I would not quote a Zionist dominated source like Wikipedia on anything politically
sensitive and the article you refer to is in any case 10 years out of date. However if you
read it it refers to two foreign-owned firms, and it mentions that there are (In 2010)plans
to double wages in the next ten years which has happened. The article also states"
Strikes are not new in China. Chinese authorities have long tolerated limited, local
protests by workers unhappy over wages or other issues.[40] The Pearl River Delta alone has
up to 10,000 labor disputes each year. In the spring of 2008, a local union official
described strikes as "as natural as arguments between a husband and wife".[41] The Chinese
government sought balance on the issue; while it has recently repeated calls for increased
domestic consumption through wage increases and regulations, it is also aware that labour
unrest could cause political instability.[42][43]
In response to the string of employee suicides at Foxconn, Guangdong CPC chief Wang Yang
called on companies to improve their treatment of workers. Wang said that "economic growth
should be people-oriented".[44] As the strikes intensified, Wang went further by calling
for more effective negotiations mechanisms, particularly the reform of existing trade
unions. At the same time, authorities began shutting down some websites reporting on the
labour incidents, and have restricted reporting, particularly on strikes occurring at
domestic-owned factories.[46][47] Guangdong province also announced plans to
"professionalize union staff" by taking union representatives off of company payroll to
ensure their independence from management influence.
Which indicates to me that the suicides alerted the government to the fact that
these firms were making the lives of their workers miserable and took steps to improve the
control of them. They obviously realized that the Union officials had been bought by the
management. I wonder how the British government or the USG would have reacted? What I am
certain about is that the MSM would have been much less enthusiastic about reporting it.
IMO, taking a good look at Brazil's situation provides close to a mirror image for those
within the Outlaw US Empire having trouble seeing clearly. Too often we forget to look
South at the great sewer and its misery US Imperialism's created. It may be getting
defeated in Eurasia, but it's winning in Latin America.
That sewer of misery was running full flush during Susan Rice's rise through the
ranks.
National Security Adviser to Obummer 2013 - 2017,
US Ambassador to the UN 2009 - 2013
Do read the rest:
And well beyond South America.
Now she is close to seizing the prize of VP to Biden. She is a iron war horse of
formidable capacity and mendacity given her past roles. She has few redeeming features. She
will conform exactly to the dictats of the permanent state and she will easily step right
over Joe Biden as he either falls or is taken down at the most opportune time.
What drole sense of humour thought of this - the hapless Trump squeezed between two black
American presidents. Seems like something the Clintons dreamed up.
"It was asked upthread if the US citizenry would trade its no-longer existing Superpower
status for decent living standards.... There're only two forces keeping the American people
from attaining freedom from the above fundamental fear and having lifelong security: The
Duopoly and its Donor Class, the Rentier Class of Feudalistic Parasites that are the enemy of
virtually all humanity."
The US citizenry will choose decent living standards in a heartbeat, but the present
arrangement for eating off the labour of deplorables is just too profitable for the Duopoly
& Donor Class to be permitted to change for a couple decades more.
Perhaps they will move on when there is no more meat on the American corpse, or when they
have built up a sufficiently large group of useful idiots in China to begin eating off the
backs of deplorables with Chinese characteristics.
Anything is possible, with the right amount of moolah, even overcoming Confucian morals.
Joshua Wong comes to mind, who not only does idiotic, but actually looks idiotic.
"... Attempting to neutralise a global competitor is the main goal of Americans. Neutralising China's rapid, dynamic development is the essence of the American strategy ..."
Recap from today's Global Times where the argument is to continue to stay the
course and counterpunch in the typical martial arts fashion, as this op/ed from today's Global
Times says :
"Chinese analysts said Sunday the key for China to handle the US offensive is to focus on
its own development and insist on continued reform and opening-up to meet the increasing
needs of Chinese people for better lives. In the upcoming three months, before the November
US presidential election, the China-US relationship is in extreme danger as the Trump
administration is likely to launch more aggressions to force China to retaliate, they
said."
Stay the course; Trump's shit is just an election ploy. However,
"The US' posturing is serving to distract from domestic pressure over President Trump's
failure in handling the pandemic when Trump is seeking reelection this year, Chinese
observers said. However, the Trump administration's China stance still reflects bipartisan
consensus among US elites, so China should not expect significant change in US policy toward
China even if there is a power transition in November, which means China should prepare
itself for a long fight."
Don't stray from the Long Game. An international conference was held that I'll try to get
a link for. Here's GT's summation:
"According to the Xinhua News Agency on Saturday, international scholars said at a virtual
meeting on the international campaign against a new cold war on China on Saturday that
'aggressive statements and actions by the US government toward China poses a threat to world
peace and a potential new cold war on China goes against the interests of humanity.'
"The meeting gathered experts from a number of countries including the US, China, Britain,
India, Russia and Canada.
"Experts attending the meeting issued a statement calling upon the US to step back from
this threat of a cold war and also from other dangerous threats to world peace it is engaged
in.
"The reason why international scholars are criticizing the US rather than China is that
they can see how restrained China remains and the sincerity of China to settle the tension by
dialogue, even though the US is getting unreasonably aggressive, said Chinese experts.
"Washington has made a huge mistake as it has chosen the wrong target - China - to be 'the
common enemy or common fear' to reshape its declining leadership among the West. Right now,
the common enemy of humanity is COVID-19, and this is why its new cold war declaration
received almost no positive responses from other major powers and even raised concern, said
Lü Xiang, a research fellow at the Chinese Academy of Social Sciences in Beijing, on
Sunday."
Today's Global Timeslead editorial asked most of the
questions everyone else's asking:
"People are asking: How far will the current China-US confrontation keep going? Will a new
cold war take shape? Will there be military conflicts and will the possible clashes evolve
into large-scale military confrontation between the two?
"Perhaps everyone believes that China does not want a new cold war, let alone a hot war.
But the above-mentioned questions have become disturbing suspense because no one knows how
wild the ambitions the US ruling team has now, and whether American and international
societies are capable of restraining their ambitions."
IMO, the editor's conclusions are quite correct:
"The world must start to act and do whatever it can to stop Washington's hysteria in its
relations with China.
"Right now, it is no longer a matter of whether China-US ties are in freefall, but whether
the line of defense on world peace is being broken through by Washington. The world must
not be hijacked by a group of political madmen. The tragedies in 1910s and 1930s must not be
repeated again ."
Trump is elevated to the same plane as Hitler and Mussolini, and the Outlaw US Empire is
now the equivalent of Nazi Germany and the Fascist drive to rule the world--a well
illustrated trend that's been ongoing since 1991 that only those blinded by propaganda aren't
capable of seeing. I think it absolutely correct for China to focus its rhetoric on the
Outlaw US Empire's utter failure to control COVID, which prompts some probing questions made
from the first article:
"Shen Yi, a professor at the School of International Relations and Public Affairs of Fudan
University, told the Global Times on Sunday that there is wide consensus among the
international community that the COVID-19 pandemic is the most urgent challenge that the
world should deal with. Whether on domestic epidemic control or international cooperation,
the US has done almost nothing right compared to China's efforts to assist others and its
successful control measures for domestic outbreaks .
"In response to US Secretary of State Mike Pompeo's 'new Iron Curtain speech' at the
Richard Nixon Presidential Library on Thursday declaring a new cold war against China, Shen
said, ' We can also ask 'is Pompeo an ally of coronavirus?' Because he wants to confuse
the world to target the wrong enemy amid the tough fight against the pandemic, so that the
virus can kill more people, especially US people, since his country is in the worst
situation .'
Shen said, 'In 2018, US Vice President Mike Pence already made a speech which the media
saw as a new 'Iron Curtain speech,' and in 2020, Pompeo made a similar speech again, which
means their cold war idea is not popular and brings no positive responses from its allies, so
they need to try time and again. Of course, they will fail again.'" [My Emphasis]
Wow! The suggestion that Trump, Pompeo, Pence, and company want to "kill more people,
especially US people" seems to be proven via their behavior which some of us barflies
recognize and have discussed. Now that notion is out in the public, internationally. You
don't need Concentration Camps and ovens when the work can be done via the dysfunctional
structure of your economy and doing nothing about the situation.
Shen provides the clincher, what Gruff, myself, and others have said here:
"'So if we want to win this competition that was forced by the US, we must focus on our
own development and not get distracted. The US is not afraid of a cold war with us, it is
afraid of our development .'" [My Emphasis]
My synopsis of both articles omitted some additional info, so do please click the links to
read them fully.
Sputnik offers
this analysis of the China/Outlaw US Empire issue , where I found this bit quite apt from
"Alexey Biryukov, senior adviser at the Centre for International Information Security,
Science and Technology Policy (CIIS) MGIMO-University":
"'The US is fighting with a country that is developing very rapidly, gaining power,
increasing its competitiveness in areas where previously there was undeniably US leadership.
Attempting to neutralise a global competitor is the main goal of Americans. Neutralising
China's rapid, dynamic development is the essence of the American strategy .
Meanwhile, China is interested in developing friendly relations with all countries.
Recently, it presented the idea of building a community of common destiny for humanity.
That's what Sino-American relations should be built around . It would seem that the
pandemic should have brought people together around the idea of building a prosperous world
for all, not just someone. But the Americans didn't understand that: they started looking for
the guilty ones. This is the favourite strategy of Anglo-Saxons, Americans including, to
look for the guilty . As a result, they found their main competitor – China'". [My
Emphasis]
That is the "guilty ones" that aren't within the Outlaw US Empire. Many more opinions are
provided in the article, but they all revolve around the one theme of Trump's actions being
motivated by the election and his morbidly poor attempts to corral COVID.
French authorities have told telecoms operators planning to buy Huawei 5G equipment that
they won't be able to renew licences for the gear once they expire, effectively phasing the
Chinese firm out of mobile networks, three sources close to the matter said.
####
Quelle surprise that they fall in to line too. No doubt €µ will say something
different to Beijing that France values 'friendly ties' with China, but the die is cast. It
must be tempting for Beijing to kill two birds with one stone by pulling the plug on UK NPPs
as France's EDF is also the project lead. The anti-China crowd want it out of any European
NPPs likewise. We'll see
What a triumph for the global bully. Well, as I have said before – marry in haste,
repent at leisure. European countries which commit to an inferior network just for the
privilege of having Uncle Sam spy on their every move instead of the Chinese will have many
years to ponder their gutlessness. The USA knows now that is in a fight to the finish, and
will want to consolidate as much of the globe as possible under its solid control. But those
who are in thrall will regularly be reminded who is the boss, with forced concessions to
American objectives, so let's have no more of this 'sovereignty' pap. If you're in, you're
ALL in.
It will mess up Huawei's plans and give the iPhone a new lease on life, but it will also
sharpen the division between East and West in terms of networks and smartphones. iPhones will
be bigger in the west as Huawei fades from competition, but iPhones should all but vanish
from the shelves in Asia, which was the growth market, especially China. Loyal American ally
Japan might become a bit of an outlier in its own region. Washington will have a much harder
time spying on China as the demand for American electronics dries up. What goes around comes
around, and the search will be on for neutral companies from whom you can buy a cheap
smartphone to use while you're going from one side to the other, which can draw on the
networks of both. America has been successful to a significant degree in excluding a
competitor who makes a superior product – which, by the bye, goes completely against
the blabber America spouts about a level playing field and trade based on merit – but I
am confident it will not go unanswered by China and American products in China will suffer as
a consequence.
Closing consulates is far from the best foreign policy and fat Pompeo known it. It just
starts the unnecessary and counter productive spiral of retaliation and Chinese have more
leverage over the USA as more the USA diplomatic personnel woks in China than the china
diplomatic personnel in the USA. They were always burned in Russia and now they stepped on the
same rake again.
Maybe fat Pompeo knows he's on his way out and desperate to make a lasting mark on the
geopolitical stage on behalf of the West Point mafia and his brothers-in-arm at the Jweish
mafia.
QABubba , 8 hours ago
Quit stealing Russian consulates, Chinese consulates, etc.
It serves no purpose.
Haboob , 7 hours ago
Closing diplomacy with nations as USA shrinks on the world stage shows America's juvenile
behavior.
Salisarsims , 7 hours ago
We are a young twenty something nation what do you expect but drama.
Haboob , 7 hours ago
It is funny how the young and arrogant always think they are right and have manifest
destiny over the old and wise. The young never listen to the old and as the story goes they
are defeated everytime. China is older than America, older than the west, they understand
this world we are living in far more than we do.
me or you , 9 hours ago
He is right!
The world has witnessed the US is not more than a banana Republic with a banana healthcare
system
To Hell In A Handbasket , 9 hours ago
I love seeing how gullible the USSA dunces are susceptible to hating an imaginary enemy.
Go on dunces wave the star spangled banner, and place the hand over the heart, you
non-critical thinking imbeciles. I told you fools years ago we are going to invoke the Yellow
Peril 2.0, and now we are living it. China bad, is just as stupid as Russia bad, while the
state stenographers at the MSM netowrks do all in their power to hide our rotten
behaviour.
Who falls for this ****? The poorly educated, and the inherently stupid.
To Hell In A Handbasket , 8 hours ago
No, it's called nationalism or self preservation.
What are the citizens of the US suppose to do,
You are wrong on so many levels, but ultimately the Chinese have beaten us at our own
rigged game. When I was riling against unfettered free-markets, and the movement of capital,
that allowed the west for centuries to move into undeveloped foreign markets and gain a
stranglehold, I was called a communist, and a protectionist.
While the USSA money printing b@stards was roaming around the planet like imperialists,
and their companies was not only raping the planet, but gouging foreign markets, the average
USSA dunce was brainwashed into believing USSA companies were the best.
Now these same market and economic rules we the west have set for the last several hundred
years no longer work for us, we want to change the rules. Again, my point is "where was you
on this position 5-10-20-30 years ago?" I've always seen this outcome, because logic said so.
To reject our own status quo, and return to mercantilism, makes us look like the biggest
hypocrites ever.
"Much of the focus of the Trump administration's trade dispute with China has centered on
the size of the U.S. bilateral trade deficit. Most economists agree that this focus is
misdirected, and that the existence or size of bilateral trade deficits should not generally
be a matter of concern or a target of public policy. Instead, there is bipartisan agreement
regarding a different problem at the core of trade issues with China: China's persistent
misappropriation of foreign technology. Forced technology transfer occurs when foreign
multinational companies have to provide strategically significant technology to an indigenous
entity they do not control in order to gain access to the massive Chinese market." https://econofact.org/what-is-the-problem-of-forced-technology-transfer-in-china
The western oligarchs want the Chinese oligarchs to be more fair, in particular Huawei to
transfer their tech the other way in order to play in western markets.
"The global business community would generally prefer that business with Huawei could just go
on as usual. Huawei and its affiliates are the acclaimed leaders in 5G technology, and the
rest of the commercial world wants to have access to that technology, and also to be able to
interoperate with it. In other words, to the extent that western companies agree with the US
administration the risks, they have decided that the rewards outweigh those risks and are
willing to accept them -- as most recently evidenced by the news yesterday relating to how
many US components are finding their way into Chinese handsets." https://www.zdnet.com/article/huawei-changes-its-patent-story/
Furthermore, Houston is one the main cities where total 5g tech is being implemented first
along with L.A and Chicago.
Forced Tech Transfers Are on the Rise in China, European Firms Say
The practice has become more widespread despite official assurances from Beijing it would be
stopped
Is the US right to cry foul about forced technology transfer to do business in China
– and what is Beijing's position?
Foreign companies' concerns about having to share their tech secrets are among the matters
being discussed in ongoing US-China trade talks
Beijing's draft foreign investment law could legislate against the practice, but businesses
are sceptical about enforcement
That's the question DB's new tech strategist Apjit Walia asks in a new research report, in
which he looks at the interplay between the Post Covid Tech Rally and the Tech Cold War, which
have emerged as two of the most salient aspects of the current market dynamic. And with
tensions between US and China continuing to rise and spread to other parts of the world, the
strategist conducts a top-down analysis of the impact on the Global Information &
Communications Technology sector from a full-blown cold war.
The report finds that the ensuing demand disruption, supply chain upheaval and resultant
"Tech Wall" that would delineate the world into rivaling tech standards could cost the sector
more than $3.5 Trillion over the next five years .
But before getting into the details, we update on the current state of the DB Tech Cold War
Index. As Walia writes, a nuanced observation of the tariff and geopolitical issues between the
US and China over the past few year suggest they are primarily a smaller strategy that is part
of a larger Global Tech Cold War. To reduce the noise from the subjective geopolitical
commentaries, DB created a systematic measure using machine learning to quantify the intensity
of the cold war at any given point of time. It quantitatively analyzes and tracks the sentiment
of the Tech Cold War globally. Not surprisingly, the DB Tech Cold War Index has been trending
higher since 2016 with peaks coinciding with tit-for-tat measures by US and China on technology
IP protection and counter measures. It made an all-time high in April 2020 with the Covid
crisis fueling tensions and has spiraled higher since then. The political headlines are
matching the sentiment among the populace. Recurrent surveys from April to June show that post
Covid tempers remain at elevated levels with 41%+ of Americans and 35%+ of Chinese stating they
will not buy each other's products. An election year in the US further complicates this
geopolitical dynamic.
US and China have been engaging in an increasing capacity since the 1970s and the level of
integration between the two global tech regimes is unprecedented. The integration is a complex
demand and labyrinthine supply chain network that has taken 40 years to develop. DB uses a top
down approach to ascertain the level of revenues and supply chain links across the global ICT
industries to China. To analyze and quantify this complex co-dependent Tech relationship
between the two countries is a challenging task, the bank surveyed Tech managements, CTOs,
Industry associations and supply chain experts globally. The estimate on the total impact is by
no means a solid target but a reference point that should provide context if the cold war
escalates significantly and decoupling picks up momentum. The bank's strategist quantifies the
downside impact on the sector from a material escalation of the tech cold war, categorized
under the following three broad categories:
Loss of domestic Chinese demand
Costs of shifting global supply chain currently located in China
Higher operating costs due to emergence of two divergent tech standards (the "Tech
Wall")
DB looks at a range of downside scenarios including one of a full-fledged tech cold war and
estimate the total impact on the ICT sector from the three factors over a 5-year period to be
around $3.5 trillion. And while the bank thinks that 5-8 years is an appropriate time period
some supply chain experts believe the time to relocate the cluster of supply chain networks
could take as long as 10 years.
Globally, China has about 13% of revenues of the ICT sector amounting to around $730 Billion
per annum. However, a significant part of this is demand from the Chinese tech sector that is
re-exported after some value-add, assembly and packaging ("re-export demand") - this
constitutes supply chain risk . To analyze domestic end demand from China that could be at risk
if tensions escalate leading to IP restrictions, product bans and export-restrictions, DB looks
at the underlying ICT industry groups and their varied re-export mixes from China. The range
varies widely with Telecom services sectors that have minimal revenue exposure all the way to
software services that have pure domestic Chinese consumption (low or no re-export). For
majority of the ICT sector, the range falls between 25%-75% in re-export mix (semiconductors,
electronic components, computer hardware, computer peripherals, electronic equipment sectors).
The weighted average of the re-export demand mix for the whole ICT sector comes to 45%.
Stripping that out of the total ICT revenues, one gets 55% in current organic Chinese
end-demand or $400 Billion in revenues. In the worst case scenario of a full-fledged tech cold
war, the ICT sector would stand to lose these revenues.
Supply Chain Risk
A transition out of Mainland China could take 5-8 years to achieve successfully. Lack of
infrastructure, clustered networks and skilled labor in other countries versus China are major
obstacles. Vietnam, India, Malaysia, Indonesia and Philippines are the primary targets for this
transition but most of them would need significant infrastructure upgrades to catch up with the
Chinese supply chain cluster strength.
In most categories, exports outstrip imports, except for electronic components, where
imports are 3x of exports. Electronic components, such as semiconductors are imported and used
as inputs in consumer goods and communication equipment and exported out of China. While
Electronic component manufacturers have the risk of end demand from China declining –
e.g. semis used in communication equipment, majority of the supply chain costs would fall on
the final goods manufacturers who use China as a manufacturing base. When they shift the supply
chain outside, component manufacturers would simply shift the destination of where they ship
components.
The supply chain risk of the ICT sector is estimated to be the built-up book value that is
exposed to China that would require relocation in the event of disengagement. Although book
value provides a decent lower bound measure for the capital
deployed in hard assets, it does not fully account for the economic value of the supply chain
network, which may be quite costly to rebuild. To arrive at an estimate of the book value that
is exposed to supply chain facilities in China, DB analyzed the revenues and Export/Import
ratio of various categories of Tech goods. The book value of the ICT sector tied to China comes
to approximately $500 billion.
The average cost of rebuilding the supply chain will be approximately 1.5 to 2x of the book
value based on feedback from Tech managements and supply chain experts. Using a sustainable
capex rate, it would take 5-8 years to relocate the supply chains. The cost of a transition
over a five year period would come to around $1 Trillion.
Tech Wall Risk
On top of the demand disruption and supply chain upheaval, it would be unavoidable for Tech
companies to operate efficiently in a large part of the "Non Aligned" world without complying
with the two rivaling global standards that would come up as the cold war heats up. The Tech
Wall would entail rival internet platforms, satellite communication networks, telecom
infrastructure regimes, CPU architectures, operating systems, IOT networks and payment systems
with very little inter-operability or interaction. It would mean having to deploy two different
communication and networking standards across several geographies to ensure inter-operability.
In this new world order, these non-aligned countries would require companies to have dual
standard compliance to operate there.
A divergence in standards could increase costs in multiple ways. Increased R&D, design,
product development and related costs for manufacturers. Increased costs of compliance to
different IP, networking, data privacy/localization regimes for corporates. Loss of
interoperability of devices across geographies for consumer. For example, a high-end smartphone
networking gear makes up ~10%-15% of the bill of materials. If phones had to support dual
standards that cost could increase by ~30-70% and can add close to $100 for the end consumer.
For lower end handsets costs would be high enough that manufacturers would probably choose to
cater to a single standard based on geography. Corporations' compliance to different data
localization, privacy rules as well as supporting multiple networking standards would increase
costs by 2-3%.
The Tech Wall's impact on ICT sector could range between 2-3% in incremental costs (capex,
labor) or $100-$150 Billion per year. After some time, these costs would get absorbed as
economies of scale kick in, but that would take about 5 years to average out.
Second and third order effects:
There are also going to be cross effects and second order effects.
One Belt One Road - Loss of market share for ICT would not only be limited to China but
can extend to China allied OBOR markets. However there is a cross effect here - in markets
adopting US standards, western ICT firms would gain share lost by Chinese firms. The net
effect may be relatively small but would be marginally incremental.
Economic downturn - These potential second order effects with substantial uncertainty and
the actual impact would depend to a large extent on policy response - direct government
spending, sector specific policy incentives and tax policy. While we estimate the potential
impact of a full blown tech cold war at $3.5 Trillion over a five year period, the actual
outcome will obviously be path dependent on how both countries approach the economic and
geopolitical trade-offs.
Second and third order effects : There are also going to be cross effects and second
order effects. One Belt One Road - Loss of market share for ICT would not only be limited to
China but can extend to China allied OBOR markets. However there is a cross effect here - in
markets adopting US standards, western ICT firms would gain share lost by Chinese firms. The
net effect may be relatively small but would be marginally incremental. Economic downturn -
These potential second order effects with substantial uncertainty and the actual impact would
depend to a large extent on policy response - direct government spending, sector specific
policy incentives and tax policy.
In summary, while DB estimates the potential impact of a full blown tech cold war at $3.5
Trillion over a five year period, the actual outcome will obviously be path dependent on how
both countries approach the economic and geopolitical trade-offs.
ICT Sector Correlations to Tech Cold War
The following chart shows ICT industry group's revenues to China, this includes sales of
goods that are re-exported out of China after assembly for end consumption
elsewhere.
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DB measured sensitivities of these industry groups to escalations between US and China.
Using the DB Tech Cold War Index, the bank identified 15 major periods of sustained escalation
in news intensity. These are periods where the geopolitical tech dispute news flow picks up
from low initial levels and continues to grow in intensity until it reaches a peak, often
coinciding with major news events or steps on either side. DB then computed the correlations of
these global ICT industry stock returns with the DB Tech Cold War index over these
episodes.
As the chart shows, the market is quite efficient. Industries in the right bottom quadrant
are the ones with the higher revenue exposure to China and have the most sensitivity or
negative stock price correlation to rising tensions. The hardware industries which
predominantly have both revenue and supply chain dependence on China respond sharply to
escalations. Industries with lower revenue exposure to China display defensive characteristics
during rising tensions, and fall in the top left quadrant. Software and service display
defensive characteristics as they have very limited revenue exposure to China. Telecom service
providers have limited revenue exposure and their returns appear to be uncorrelated to
escalation events.
The one surprising exception to this trend is the Semiconductor sector, standing out in the
top right hand quadrant. Contrary to consensus opinion, the analysis shows that semiconductor
stocks are reacting positively to rising cold war tensions despite the sector being the biggest
point of contention in the conflict and high sales exposure to the Chinese market.
This could be driven by several factors. One of the explanations is inventory build that
occurs when tensions rise and companies over order as they are concerned about supply chains
clogging up . These orders could be viewed by the market as incremental demand.
Another factor could be the market considering the sector as defensive given its long term
secular potential and the structural growth becoming less sensitive to business cycles. With
digitization ramping up globally in the post Covid tech ramp, this structural dynamic of the
sector starts to become self-reinforcing.
Anticipated policy support from governments given the centrality of the sector to nation
states in geopolitical tech relevance is also touted as a driving factor in multiples. Clearly,
Semis are key to retaining tech supremacy and form the backbone of any AI or Software
enhancements to institutions and countries.
However, there remains one tail case scenario and that is in the event of disengagement and
escalation of the cold war, Semiconductors will see significant market share and supply chain
disruption that will be too big to be offset by government policy support and central bank
liquidity. This scenario does not seem to have been factored in the current market.
That is correct. Backdoors were baked into every piece of equipment and random number
generator the US and friends are able to influence. Hardware and software.
Read up on how cisco networking equipments were/are intercepted enroute for 'extra'
attention by US Intel depending on where they're going to. With full assistance from cisco.
Other manufacturer also play the same game.
This was the genesis of Huawei, to cut reliance on US network gear and it is also why
China is doing its own silicon. Huawei with the Kirin which is an ARM based processor and
also x86 via the AMD JV and VIA/Cyrix.
Fabs aside the Kirin can cut it with the best and the x86 are about 2-6 years behind but
rapidly improving depending on who you ask.
Their achilles heel is the Fabs where China is about 2-3 generations behind. Today Huawei
is relying on Taiwanese Fabs to produce its cutting edge chips to Huawei's design.
However, these are just a function of investment in research and time, China is well past
the tipping point for self reliance and they'll get to parity and beyond soon enough. So the
west's game is already lost.
Reading between the lines, when China is cut out of the west's networks who then could the
5 peeping Tom's look at? Yup, the serfs, and that's the game plan all along.
Again, probably not an urgent problem unless some existing Chinese aircraft in service are
on their last legs and urgently must be replaced. In which case they could go with Airbus if
the situation could not wait. China has options. Boeing does not.
The west loves to portray the Chinese as totally without ethics, and if you have a product
they can't make for themselves, they will buy it from you only until they have figured out
how to make it themselves, and then fuck you, Jack. I don't see any reason to believe the
Chinese value alliances less than the west does, or are any more incapable of grasping the
value of a give-and-take trade policy. The west – especially the United States –
favours establishing a monopoly on markets and then using your inability to get the product
anywhere else as leverage to force concessions you don't want to make; is that ethical? China
must surely see the advantages of a mutually-respectful relationship with Russia, considering
that country not only safeguards a significant length of its border from western probing, but
supplies most of its energy. There remain many unexplored avenues for technical, engineering
and technological cooperation. At the same time, Russia is not in a subordinate position
where it has to endure being taken advantage of.
Trade is hard work, and any partner will maneuver for advantage, because everyone in
commerce likes market share and money. But Washington has essentially forgotten how to
negotiate on mutually-respectful terms, and favours maneuvering its 'partners' into
relationships in which the USA has an overwhelmingly dominant position, and then announcing
it is 'leveling the playing field'. Which means putting its thumb on the scale.
Must. Pass. Foreign. Relations. Policy. Past. USDoS. First. Well that is
unforgiveable for the Masters of the Universe(TM). No-one knows exactly what's in it except
that it is substantial. Still, the USDoS is having a public aneurism tells us that they care
a lot.
Every time you "impose costs" on another country, you make more enemies and inspire more
end-around plays which take you as an economic player out of that loop. And by and by what
you do is of no great consequence, and your ability – your LEGAL ability, I should
interject – to 'impose costs' is gone.
Sooner or later America's allies are going to
refuse to recognize its extraterritorial sanctions, which it has no legal right to impose; it
gets away with it by threatening costs in trade with the USA, which is a huge economy and is
something under its control.
But that practice causes other countries to gradually insulate
themselves against exposure, and one day the cost of obeying will be greater than the
cost of saying "Go fuck yourself".
"... The US is too indulged in using geopolitical means to cope with challenges and pursuing its own interests. Following the disintegration of the former Soviet Union, Russia hoped to integrate into the Western world, but the US pulled geopolitical levers and imposed the most intense strategic pressure on Russia. As NATO expanded eastward, it not only incorporated all countries of the Warsaw Pact and the Baltic states, but also extended its hand to the Commonwealth of Independent States, such as Georgia and Ukraine, eventually prompting Russia to have no other options but to take countermeasures. ..."
"... The world has to pay for Washington's ambition to strengthen its hegemony. What the US advocates is not simply decoupling from China, but urging the Western world and more countries to side with the US amid its clashes with China, and to contain China. China is the largest trading partner of more than 100 countries, and has a market almost as big as that of the US. The US not only stabbed China, but the current global cooperative system as well. ..."
"... Unfortunately, those geopolitical maniacs in the US are ending the "good old days" since the end of the Cold War. We are likely to enter a new era with more hatred and the menace of war. Major countries would become more nervous, and the prosperity of small countries would become fragile. The US political elite behind such changes are bound to be shamed by history. ..."
Washington has almost destroyed the cooperation-centered major-power relations and is
pushing the world back to confrontation between major powers.
The global geopolitical struggle has apparently become an irreversible trend. This will have
a profound influence on the nature of international relations, fundamentally disturb
globalization, and lead to undesirable consequences.
The US is too indulged in using geopolitical means to cope with challenges and pursuing its
own interests. Following the disintegration of the former Soviet Union, Russia hoped to
integrate into the Western world, but the US pulled geopolitical levers and imposed the most
intense strategic pressure on Russia. As NATO expanded eastward, it not only incorporated all
countries of the Warsaw Pact and the Baltic states, but also extended its hand to the
Commonwealth of Independent States, such as Georgia and Ukraine, eventually prompting Russia to
have no other options but to take countermeasures.
Now, the US is using its extreme geopolitical tools on China. It is making the ideological
conflict with China more extreme, because it is the cheapest means to mobilize its allies
against China. It supports all countries that have territorial disputes with China, incites
them to adopt a hard-line approach toward China, and smears China's foreign cooperation to
overthrow the world order. It aims to worsen China's external environment, and make people in
other countries less willing to cooperate with China.
The world has to pay for Washington's ambition to strengthen its hegemony. What the US
advocates is not simply decoupling from China, but urging the Western world and more countries
to side with the US amid its clashes with China, and to contain China. China is the largest
trading partner of more than 100 countries, and has a market almost as big as that of the US.
The US not only stabbed China, but the current global cooperative system as well.
The world will suffer long-lasting costs. The ongoing COVID-19 pandemic is just the first
wave. In the face of the raging pandemic, the US has blocked international cooperation. It has
only two perspectives on the anti-virus fight - one from the upcoming presidential elections,
and the other from international geopolitics. Its lack of a scientific perspective has become
the biggest obstacle to international cooperation.
It is not hard to imagine that if China and the US, together with all major powers, join
hands and coordinate strategies, the COVID-19 pandemic could have been much less severe than it
is now, and the global economy could resume in a more orderly manner.
The US policy that favors major-power confrontation will surely drag down global economic
growth, which will force countries to consume their own resources. Coupled with the destructive
impact of the pandemic, global economic prosperity after the Cold War is, perhaps, coming to an
end. The world will lose huge employment. The global economy will become politicized, and the
concept of national security would play a leading role in irrelevant sectors such as the
economy.
An arms race and intimidation will return to international relations. Age-old contradictions
will be reinforced in the loss of a world order. Favorable opinions toward each other's society
will be reduced. The passion for studying and traveling abroad will cool down. The lives of
many people will change.
Unfortunately, those geopolitical maniacs in the US are ending the "good old days" since the
end of the Cold War. We are likely to enter a new era with more hatred and the menace of war.
Major countries would become more nervous, and the prosperity of small countries would become
fragile. The US political elite behind such changes are bound to be shamed by history.
China's economic shutdown at the onset of the coronavirus pandemic disrupted many global supply
chains, prompting a number of countries and corporations to accelerate their strategy of
reducing their dependency on China for components.
...the trade war between Washington and Beijing had contributed to the
U.S. fashion industry and tech firms
like Apple rethinking their own supply chains. Japan, heavily dependent on Chinese trade,
is
using $2 billion in economic stimulus funds to subsidize the move of Japanese firms out of
China.
The Trump administration is thus swimming with the current in its effort to isolate China.
It has imposed sanctions because of China's violations of Uyghur human rights. It has levied
penalties against China for its cooperation with Iranian firms. And it has threatened to add
another set of tariffs on top of the existing ones for China's handling of the coronavirus.
Its latest initiative has been to tighten the screws on the Chinese technology firm, Huawei.
Last week, the administration announced sanctions against any firms using U.S.-made equipment
that supply the Chinese tech giant. The chief victim of these new restrictions will be the
Taiwanese firm TSMC, which supplies 90 percent of Huawei's smartphone chips.
In other words, the Trump administration is committed not only to severing U.S. economic
connections with China. It wants to put as much pressure on other countries as well to
disentangle themselves from Chinese manufacturing. Taiwan, of course, has no particular love
for Mainland China. It battles Beijing on a daily basis to get international recognition --
from other countries and from global organizations like the World Health Organization.
But the Taiwanese economy is also heavily dependent on its cross-strait neighbor. As Eleanor
Albert points
out :
China is Taiwan's largest trading partner, accounting for nearly 30 percent of the
island's total trade, and trade between the two reached $150.5 billion in 2018 (up from $35
billion in 1999). China and Taiwan have also agreed to allow banks, insurers, and other
financial service providers to work in both markets.
And it probably won't be Huawei but Taiwan that suffers from the U.S. move. As Michael
Reilly notes
, "Huawei's size in the global market means its Taiwanese suppliers cannot easily find an
alternative customer of comparable standing to replace it." China, meanwhile, will either find
another source of chips outside the U.S. sphere, or it will do what the United States has been
threatening to do: bring production of critical components back closer to home.
Another key player in the containment of China is India. Trump's friendship with Indian
Prime Minister Narendra Modi, a right-wing Hindu nationalist, is more than simply an
ideological affection. Trump sealed
a $3 billion in military sales deal with India in February, with a trade deal still on the
horizon.
Modi, in turn, is hoping to be the biggest beneficiary of the falling out between Washington
and Beijing. "The government in April reached out to more than 1,000 companies in the U.S. and
through overseas missions to offer incentives for manufacturers seeking to move out of China,"
reports Bloomberg . "India is prioritizing medical equipment suppliers, food processing
units, textiles, leather, and auto part makers among more than 550 products covered in the
discussions."
Vietnam is another regional competitor that the United States is supporting in its
containment strategy. With only a couple hundred reported coronavirus cases and zero deaths,
Vietnam is
poised to emerge from the current crisis virtually unscathed. With low labor costs and an
authoritarian government that can enforce deals, it is already a favored alternative for
corporations looking for alternatives to China. But wildcat strikes have been happening in
greater numbers in the country, and the Vietnamese government recently
approved the country's first independent trade union.
Yet with a more technologically sophisticated infrastructure, China will continue to look
more attractive to investors than India or Vietnam.
... ... ...
Trump administration is, frankly, at a huge disadvantage when it tries to
pressure companies to relocate their operations. Writes
Manisha Mirchandani:
The global technology and consumer electronics sectors are especially reliant on China's
infrastructure and specialized labor pool, neither of which will be easy to replicate. The
Chinese government is already mobilizing resources to convince producers of China's unique
merits as a manufacturing location. Zhengzhou, within Henan Province, has appointed officials
to support Apple's partner Foxconn in mitigating the disruptions caused by the coronavirus,
while the Ministry of Finance is increasing credit support to the manufacturing sector.
Further, the Chinese government is likely to channel stimulus efforts to develop the
country's high-tech manufacturing infrastructure, moving away from its low-value
manufacturing base and accelerating its vision for a technology-driven services economy.
The Trump administration is playing the short game, trying to use tariffs and anti-Chinese
sentiment to hobble a rising power. China, on the other hand, is playing the long game,
translating its trade surpluses into structural advantages in a fast-evolving global
economy.
Will the Conflict Turn Hot?
Despite the economic ravages of the pandemic, the Pentagon continues to demand the lion's
share of the U.S. budget. It wants another $705 billion for 2021, after increasing its budget
by 20 percent between 2016 and 2020.
This appalling waste of government resources has already caused long-term damage to the
economic competitiveness of the United States. But it's all the money the Pentagon is spending
on "deterring China" that might prove more devastating in the short term.
John Feffer is the director of Foreign
Policy In Focus , where this article originally appeared.
The administration also took off the gloves with China over U.S. listings by mainland
companies that fail to follow U.S. securities laws. This came after the Commerce Department
finally moved to limit access by Huawei Technologies to high-end silicon chips made with U.S.
lithography machines. The trade war with China is heating up, but a conflict was inevitable and
particularly when it comes to technology.
At the bleeding edge of 7 and 5 nanometer feature size, American tech still rules the world
of semiconductors. In 2018, Qualcomm confirmed its next-generation Snapdragon SoC would be
built at 7 nm. Huawei has already officially announced its first 7nm chip -- the Kirin 980. But
now Huawei is effectively shut out of the best in class of custom-made chips, giving Samsung
and Apple a built-in advantage in handsets and network equipment.
It was no secret that Washington allowed Huawei to use loopholes in last year's blacklist
rules to continue to buy U.S. sourced chips. Now the door is closed, however, as the major
Taiwan foundries led by TSMC will be forced to stop custom production for Huawei, which is
basically out of business in about 90 days when its inventory of chips runs out. But even as
Huawei spirals down, the White House is declaring financial war on dozens of other listed
Chinese firms.
President Donald Trump said
in an interview with Fox Business News that forcing Chinese companies to follow U.S.
accounting norms would likely push them to list in non-U.S. exchanges. Chinese companies that
list their shares in the U.S. have long refused to allow American regulators to inspect their
accounting audits, citing direction from their government -- a practice that market authorities
here have been unwilling or unable to stop.
The attack by the Trump Administration on shoddy financial disclosure at Chinese firms is
long overdue, but comes at a time when the political evolution in China is turning decidedly
authoritarian in nature and against any pretense of market-oriented development. The rising
power of state companies in China parallels the accumulation of power in the hands of Xi
Jinping, who is increasingly seen as a threat to western-oriented business leaders. The trade
tensions with Washington provide a perfect foil to crack down on popular unrest in Hong Kong
and discipline wayward oligarchs.
The latest moves by Beijing to take full control in Hong Kong are part of the more general
retrenchment visible in China. "[P]rivate entrepreneurs are increasingly nervous about their
future," writes Henny Sender in the Financial Times . "In many cases, these
entrepreneurs have U.S. passports or green cards and both children and property in America. To
be paid in U.S. dollars outside China for their companies must look more tempting by the day."
A torrent of western oriented Chinese business leaders is exiting before the door is shut
completely.
The fact is that China's position in U.S. trade has retreated as nations like Mexico and
Vietnam have gained. Mexico is now America's largest trading partner and Vietnam has risen to
11th, reports Qian Wang of Bloomberg News . Meanwhile, China has dropped from 21 percent
of U.S. trade in 2018 to just 18 percent last year. A big part of the shift is due to the
U.S.-Mexico-Canada trade pact, which is expected to accelerate a return of production to North
America. Sourcing for everything from autos to semiconductors is expected to rotate away from
China in coming years.
China abandoned its decades-old practice of
setting a target for annual economic growth , claiming that it was prioritizing goals such
as stabilizing employment, alleviating poverty and preventing risks in 2020. Many observers
accept the official communist party line that the impact of the Covid-19 pandemic made it
almost impossible to fix an expansion rate this year, but in fact the lasting effects of the
2008 financial crisis and the aggressive policies of President Trump have rocked China back on
its heels.
As China becomes increasingly focused inward and with an eye on public security, the
economic situation is likely to deteriorate further. While many observers viewed China's "Belt
& Road" initiative as a sign of confidence and strength, in fact it was Beijing's attempt
to deal with an economic realignment that followed the 2008 crisis. The arrival of President
Trump on the scene further weakened China's already unstable mercantilist economic model, where
non-existent internal demand was supposed to make up for falling global trade flows. Or at
least this was the plan until COVID-19.
"Before the Covid-19 outbreak, many economists were expecting China to set a GDP growth
target of 6% to 6.5% to reflect the gradual slowdown in the pace of expansion over the past few
years," reports Caixin Global . "Growth slid to 6.1% in 2019 from 6.7% in 2018. But the
devastation caused by the coronavirus epidemic -- which saw the economy contract 6.8%
year-on-year in the first quarter -- has thrown those forecasts out of the window."
Out of the window indeed. Instead of presiding over a glorious expansion of the Chinese
sphere of influence in Asia, Xi Jinping is instead left to fight a defensive action
economically and financially. The prospective end of the special status of Hong Kong is
unlikely to have any economic benefits and may actually cause China's problems with massive
internal debt and economic malaise to intensify. Beijing's proposed security law would reduce
Hong Kong's separate legal status and likely bring an end to the separate currency and business
environment.
I honestly don't know if this article is or is not correct... But I wonder...
AmConMag publishes a major anti-China article on most days now. What is happening? What is
the mechanics of this... "phenomenon"?
A place where where Americans opposed to U.S. hegemony because it's harm on everyone
without being overwhelmed by the Neocon acolytes where can we go, anyone ever try to get a
word in on foxnews ?
If you try to reach out to twitter on Tom Cotton or Mike Waltz dismisses you as a
'Chinese govt / Iranian / Russian bot'
You know what, God will judge us and we will all be equal in he eyes of Him
Why should I be afraid. Why should I be silent. And thank you TAC for the opportunity to
post.
I too came here for interesting commentary, - and even better comments... five years ago or
so?
I found the original articles mostly okay, often too verbose, meandering for my taste but
the different point of view made them worthwhile. The readers' comments, now that is
priceless. That brings the real value. That's where we learn. That's where I learn, anyway.
:)
It never occurred to me to message to any politician, I think my voice would be lost in the
cacophony.
The target of my curiosity is that when all these articles start to point in one direction
(like belligerence toward China) how does it happen? Is there a chain of command? It seems
coordinated.
It's possible to be anti-neocon, for their being too ideological, and not pacifist. That is
basically my position.
I agree with most here on Russia and Iran. They are not threats, and in specific cases
should be partners instead. Agree on American imperialism being foolish and often evil. I
believe in a multipolar world as a practical matter. I don't take a soft view of China
however. I believe they do intend to replace nefarious American hegemony with their own
relevant, but equally nefarious, flavor of hegemony. There are few countries in the world
with such a pathological distrust of their own people. I truly believe that country is a
threat that needs to be checked at least for a couple of decades by the rest of the
world.
As to the editorial direction, I think it is merely capitalism. China's perception in
the world is extremely bad lately. I would fully expect the always somewhat Russophile
environment here to seize the moment to say 'see! Russia is not a true threat! It's China!'
RT itself soon after Trump's election I recall posted an article complaining about total
disregard for Chinese election meddling.
You can see when the people holding the leash give a tug on the collar. And it's clear that
the GOP is feeling the need for a warlike political environment.
The most blatant presstitution example, of course, was the National Review, going from
'Never Trump' to full time servicing.
Of all the options in the Western arsenal against China, arresting Huawei's heir apparent
on blatantly forged charges is easily one of the worst.
Chinese or not Chinese, fact is Meng is a member of the bourgeoisie. She is one of them.
It doesn't matter if Huawei only became big and prosperous thanks to the CCP: bourgeoisie is
bourgeoisie, and having a strong one within communist China's belly is essential for the long
term success of capitalism in its war against communism.
By arresting Meng, the capitalists (i.e. Americans) are just driving a hedge between
inside the "Capitalist International". The Chinese capitalist class - who was certainly very
interested in ganging up with their western counterparts to, in the long term, topple the CCP
- is now completely at the mercy of the CCP, as the CCP is now the only guarantor of their
own class status.
The correct strategy would be for the Western bourgeoisie to woo the Chinese bourgeoisie
with as many tax breaks, green cards and other kinds of flattery, so that, withing the course
of some generations, the Chinese bourgeoisie become fully liberal (westernized). It would
then make the infamous "middle class insurgence" theory feasible.
But (and there's always a "but" in the real world), it seems that capitalism itself is in
crisis. It seems that, all of a sudden, the pot became too small to make every alpha male
happy. The international bourgeoisie is now devouring its children (the petite-bourgeoisie,
the "small business owners") and is beginning to devour itself.
Meng is a high profile scalp but won't change anything. it'll just up the ante in this
game of chicken.
in regards to HK's special trading rights, it's horseshit really. HK hasn't made anything
anyone needed for decades. the biggest use of this special relationship (cough cough) is to
move mainland product through Hong Kong to skirt quota and tariff restrictions. as an
inhabitant I won't be sorry to see it go. it hasn't and doesn't benefit the people here
anyway.
as to it's status as a financial hub, do you really think the bankers will leave if there
are money to be made? c'mon who are we kidding here. actually, if it means driving away a few
expat bankers who does nothing except creating glass ceilings and hanging out in various golf
and aristocratic clubs in hk, I'm all for it too.
as to visa free travel, again it's a non issue as well. I remember before the 1997
handover having to get visas to go pretty much anywhere with my HK British passport it was an
utterly useless 3nd class citizen passport. so nothing changes. ironically all of the visa
free agreement came after the handover with no thanks to the Brits.
if USA start freezing assets of individuals and businesses it'll be a sloppily slope for
Trumpville. For one freezing individuals assets won't hurt China on the whole one iota,
second, China can play that game too. US businesses and assets can all be nationalised.
I'm still waiting for China to cancel all Boeing and GE orders because they're defense
suppliers of USA, just as USA is claiming huawei to be as the reason for sanctions.
"The Chinese capitalist class - who was certainly very interested in ganging up with their
western counterparts to, in the long term, topple the CCP - is now completely at the mercy of
the CCP, as the CCP is now the only guarantor of their own class status."
I think you nailed it on the head there. it's not just capitalists, a lot of party
officials shipped their families to the 5 eye countries thinking it's their plan B (often
with obscene, questionable wealth and under fake identities as dual citizenship is not
allowed in China). now it's becoming clear to them they're now in the pocket of uncle Sam,
their loved ones to be sacrificed and used against them in any moment.
I agree, stripping HK of its' special trading agreement isn't going to hurt China in any
meaningful way and I don't think the financial elite of HK are going to flee from China over
this. However, the way in which the US is doing this is an insult to the Chinese (not just
the government, but the Chinese people themselves). The US claiming to have the right to
adjudicate over the domestic policies of other countries is not just an insult but also an
implied threat. In international politics claiming that you have a right of approval over
another nation's internal policies is in effect a claim of superior authority over that
country than that country's own government and it logically brings up all sorts of questions
about what happens if they refuse to accept your claim, do you impose sanctions or go to war
over it?
The bigger threats are coming over Taiwan and Tibet, the US suggesting that it might pass
legislation recognizing them as independent countries means that the US feels it has the
right to unilaterally impose new boarders on countries - that only happens if you win a war,
so the US feels it is at war with China and that it has already won or is so certain to win
that it can announce what it wants the new boarders to look like. That is crazy. What's next,
will the US do what they did with Venezuela and declare some random oligarch the new Chinese
President then sign agreements with him and insist that they are real legal documents (that
might very well be the plan for the leader of the HK protests Joshua Wong).
The US was stupid or crazy or both to try this path with Venezuela to try this with China
means war.
@ 25 kadath... isn't this what the usa is doing with the huawei case in canada? they are
essentially saying - our rules 'trump' all of yours... this is how exceptional nations work
ya know... either that or the bullying tactics are wearing thin with me...
Since the subject of Meng Wanzhou's court case came up, I thought I'd post more detail.
"Meng's lawyers argued that the fact Canada does not have economic sanctions against Iran
meant her alleged actions would not have been considered a crime in Canada because no bank
would have suffered a loss in an identical set of circumstances.
But the judge said Meng's lawyers were trying to make the scope of her analysis too
narrow.
"Canada's law of fraud looks beyond international boundaries to encompass all the relevant
details that make up the factual matrix, including foreign laws that may give meaning to some
of the facts," Holmes said.
____
OK, so that's settled but there is a lot more to come:
"The judge still has to hold hearings to determine whether there is sufficient evidence to
warrant extradition, and Meng has also claimed that her rights were violated at the time of
her arrest.
Holmes pointed out that Canada's minister of justice will also have a chance to weigh in
on whether a decision to commit Meng for extradition would be contrary to Canadian
values.
The ministry confirmed in a statement that extradition proceedings will go ahead "as
expeditiously as possible."
The extraterritoriality the US is claiming over everything related to international
finance and sanctions (not just Iran, but also Cuba, Russia, roughly 1/3 of the world is
under some form of US sanctions) is a constant crime which kills thousands of people per
year. But what the US has been doing over the past few years, changing boarders unilaterally
without evening going to war is a step towards pure insanity. The US "declares" that the
"Golan heights" belong to Israel, the US hates the current President of Venezuela so they
declare some random guy the new President and bully other countries into pretending his is as
well. Ultimately, this is a sign of growing weakness, when the US wanted to change the
government of Iraq they invaded (and failed), when they wanted to breakup Syria they
bankrolled a bunch of mercenaries (and failed again). Now the US isn't even confident enough
to invade Venezuela and impose a new government, so instead they play make-believe with
Guaido. Despite this, Venezula isn't strong enough to punish the US for its' delusions but if
the US insists on playing make-believe with China they will learn some very painful lessons
because China is strong enough to push back.
The Meng case has always been part of the Trump campaign to put pressure on China. The
Judge's ruling today is quite ludicrous but wholly consistent with Canada's historic
tradition of carrying out instructions from the Imperial capital, whether that be in London
or Washington.
It is sad to see a national ruling class prostituting itself and sadder still when it does so
out of fear rather than for profit.
It is all about China, which is in an invulnerable position thanks to Washington having spent
the last twenty years forcing Russia and Iran into Beijing's arms. Having given up diplomacy
in order to concentrate on gangster bullying tactics the US has ended up, the way all
declining empires do, with no friends except those countries so weak that they still crave
the Emperor's favour.
An important ruling in the Canada-US extradition case of Huawei CFO Meng Wanzhou will be
announced shortly. A Canadian court will rule if the case has suitable "double-criminality"
- i.e. an act illegal in both countries - and Men will either be free or one step closer to
being delivered to the Americans. While it is claimed the arrest was political in nature
due to an off-the-cuff comment by Trump, the politicized nature of the charge and
extradition request goes back ten years as revealed in the New York Times in December 2018
(How A National Security Investigation of Huawei Set Off an International Incident Dec 14,
2018):
"The details of the criminal charges against Ms. Meng, filed under seal, remain murky. But
court filings in Canada and interviews with people familiar with the Huawei investigation
show that the events leading to her arrest were set in motion years ago.
How a National Security Investigation of Huawei Set Off an International Incident - The
New York Times 2018-12-15, 4*50 PM
They grew out of an Obama administration national security investigation into Chinese
companies -- including Huawei -- that act as extensions of the country's government,
according to the people familiar with the investigation. The focus only recently shifted to
whether Huawei, and specifically Ms. Meng, deceived HSBC and other banks to get them to
keep facilitating business in Iran. Former federal prosecutors said pursuing Ms. Meng, 46,
for alleged bank fraud proved to be a better line of attack than trying to build a case on
national security grounds...
Counterintelligence agents and federal prosecutors began exploring possible cases
against Huawei's leadership in 2010, according to a former federal law enforcement
official. The effort was led by United States attorney's offices in places where Huawei has
facilities, including Massachusetts, Alabama, California, New York and Texas."
In other words, the Americans had decided to use its courts against Huawei many years
before any charges directed at Meng came to pass. They were literally in search of a
crime.
Some of the uglier features of the Canadian political establishment and media have been
pounding the drums for expanded hostilities directed at China, in concert with other Five
Eyes partners.
Well now that it's 95% sure that Meng will be extradited to the US by the Canadian poodle
courts, we should now consider how China will respond as the full court press against China
has really heated up in the past month. If Meng is extradited to the US, she'll almost
certainly be kept in a high security prison, as I can't imagine the US allowing her to
remain free on bail during the trial and then given a 10-15yr prison sentence which will be
used as a bargaining chip in the US-China trade war. US intelligence agencies will
constantly interrogate/torture/bribe her in efforts to get her to flip against the Chinese
government or provide them some intelligence. Given her high status I think China may want
to consider the following options
1. Arrest some more Canadian "diplomats" (i.e. spies) and perhaps even up the ante by
arresting a US spy.
2. Pull an Assange and have Meng flee to the Chinese Consulate in Vancouver, I've seen the
Consulate and it is much roomier than the Ecuadorian embassy that Julian was stuck in. This
would ensure her protection and bypass the corrupt Courts, making it purely a question of
diplomacy between states (not that Canada has good diplomacy skills, but if China was also
holding a bunch of Canadian spies it would make sense to make this problem go away).
6 months ago, I think the Chinese would have allowed her to be extradited to the US and
then fought it out in backdown diplomacy with the US. But will all of the crazy things the
US has done in the past 2 months I think China has had enough and will start pushing back.
Heck, in the past 48 hours a congressman put forth a motion to declare Tibet an independent
country illegally occupied by China and the Whitehouse is threatening to strip Hong Kong of
special trading rights.
Of all the options in the Western arsenal against China, arresting Huawei's heir
apparent on blatantly forged charges is easily one of the worst.
Chinese or not Chinese, fact is Meng is a member of the bourgeoisie. She is one of them.
It doesn't matter if Huawei only became big and prosperous thanks to the CCP: bourgeoisie
is bourgeoisie, and having a strong one within communist China's belly is essential for the
long term success of capitalism in its war against communism.
By arresting Meng, the capitalists (i.e. Americans) are just driving a hedge between
inside the "Capitalist International". The Chinese capitalist class - who was certainly
very interested in ganging up with their western counterparts to, in the long term, topple
the CCP - is now completely at the mercy of the CCP, as the CCP is now the only guarantor
of their own class status.
The correct strategy would be for the Western bourgeoisie to woo the Chinese bourgeoisie
with as many tax breaks, green cards and other kinds of flattery, so that, withing the
course of some generations, the Chinese bourgeoisie become fully liberal (westernized). It
would then make the infamous "middle class insurgence" theory feasible.
But (and there's always a "but" in the real world), it seems that capitalism itself is
in crisis. It seems that, all of a sudden, the pot became too small to make every alpha
male happy. The international bourgeoisie is now devouring its children (the
petite-bourgeoisie, the "small business owners") and is beginning to devour itself.
"... Guo was far less vocal than colleague Richard Yu, who runs the consumer division responsible for smartphones. The outspoken executive said the restrictions that ostensibly aim to allay U.S. cybersecurity concerns are really designed to safeguard American dominance of global tech. ..."
"... "The so-called cybersecurity reasons are merely an excuse," Yu, head of the Chinese tech giant's consumer electronics unit, wrote in a post to his account on messaging app WeChat earlier on Monday. "The key is the threat to the technology hegemony of the U.S." posed by Huawei, he added. ..."
Trump's economic war on China comes in the shadow of an even deadlier military escalation.
And it may not stop after November, no matter who wins the election.
Economists like to
think of the wreckage caused by stock market downturns, widespread bankruptcies, and corporate
downsizing as "creative destruction." As it destroys the old and the dysfunctional, the
capitalist system continually spurs innovation, much as a forest fire prepares the ground for
new growth.
Or so the representatives of the dismal science argue.
Donald Trump, who is neither economist nor scientist, has his own version of creative
destruction. He is determined to destroy the Affordable Care Act and replace it with his own
health insurance alternative. He has torn up the Iran nuclear deal in favor of negotiating
something brand new with Tehran. He has withdrawn from the Paris climate accord and argues that the United
States is reducing carbon emissions in its own superior manner.
The problem, of course, is that Trump is very good at destruction but, despite his previous
job as a real estate mogul, exceedingly bad at construction. Indeed, there's abundant evidence
that he never intended to replace what he is destroying with anything at all. Trump has never
offered any viable alternative to Obamacare or any new negotiating framework with Iran. And
prior to the recent economic downturn, U.S. carbon emissions were increasing after several
years of decline.
Perhaps the most dangerous example of Trump's uncreative destruction is his approach to
China.
Previously, Trump said that he simply wanted to level the playing field by placing trade
with China on a fairer and more reciprocal basis, strengthening the regime of intellectual
property rights, and stopping Beijing from manipulating its currency.
He was willing to go to great lengths to accomplish this goal. The tariffs that Trump
imposed on Chinese products precipitated a trade war that jeopardized the livelihoods of
millions of American farmers and workers. The initial trade deal that the United States and
China signed in January, even though many of the U.S. tariffs remain in place, was supposed to
be the grand alternative to the old and dysfunctional trade relationship.
But here again, Trump is not telling the truth. He and his team have a very different set of
objectives. As with so many other elements of his domestic and foreign policy, Trump wants to
tear apart the current system -- in this case, the network of economic ties between the United
States and China -- and replace it with absolutely nothing at all.
Oh sure, Trump believes that U.S. manufacturers can step up to take the place of Chinese
suppliers. More recently, as the administration "turbocharges" its efforts to isolate China in
response to its purported pandemic mistakes , it has
talked of creating
an Economic Prosperity Network of trusted allies like South Korea, Australia, India, and
Vietnam. But this is all whistling in the dark, because the administration doesn't really
understand the consequences -- for the world economy, for the U.S. economy -- of tearing apart
the global supply chain in this way.
Just how poorly Trump understands all this is reflected in
his statement last week that "we could cut off the whole relationship" with China and "save
$500 billion." This from the president who erroneously believes that China
is paying the United States "billions and billions of dollars of tariffs a month." What else do
you expect from a man who received a BS in economics from Wharton?
Unlike many of the administration's other policies, however, its hardline approach to China
has some bipartisan support. Engagement with China has virtually
disappeared as a policy option in the Democratic Party. Joe Biden, the Democrats'
presumptive presidential candidate, has attempted to present himself as the tougher alternative
when it comes to China, a misguided
effort to fend off charges of his bedding down with Beijing.
Finger to the wind, Biden is crafting policies in response not just to Trump but to public
opinion. In 2017, 44 percent of Americans had a favorable view of China, compared to 47 percent
who held an unfavorable opinion of the country, according to Pew. In
this year's survey , only 26 percent looked at China positively versus 66 percent who
viewed it negatively. The latter category includes 62 percent of Democrats.
Writing for the Atlantic Council, Michael Greenwald
sums up the new conventional wisdom of the centrists:
The United States can no longer remain content with the notion of a Chinese economic
threat arising in the distant future. The advent of COVID-19 has made it more apparent than
any other time including the US-China trade war that now is the moment for the United States,
European Union, and other like-minded countries to diversify supply chains away from
China.
That's what makes Trump's uncreative destruction vis a vis China so dangerous. It may not
stop after November, no matter who wins the election.
The Great Disentanglement
China's economic shutdown at the onset of the coronavirus pandemic disrupted many global supply
chains, prompting a number of countries and corporations to accelerate their strategy of
reducing their dependency on China for components.
Rising labor costs in China, concerns over human rights abuses there, but especially the
trade war between Washington and Beijing had contributed to the
U.S. fashion industry and tech firms
like Apple rethinking their own supply chains. Japan, heavily dependent on Chinese trade,
is
using $2 billion in economic stimulus funds to subsidize the move of Japanese firms out of
China.
The Trump administration is thus swimming with the current in its effort to isolate China.
It has imposed sanctions because of China's violations of Uyghur human rights. It has levied
penalties against China for its cooperation with Iranian firms. And it has threatened to add
another set of tariffs on top of the existing ones for China's handling of the coronavirus.
Its latest initiative has been to tighten the screws on the Chinese technology firm, Huawei.
Last week, the administration announced sanctions against any firms using U.S.-made equipment
that supply the Chinese tech giant. The chief victim of these new restrictions will be the
Taiwanese firm TSMC, which supplies 90 percent of Huawei's smartphone chips.
In other words, the Trump administration is committed not only to severing U.S. economic
connections with China. It wants to put as much pressure on other countries as well to
disentangle themselves from Chinese manufacturing. Taiwan, of course, has no particular love
for Mainland China. It battles Beijing on a daily basis to get international recognition --
from other countries and from global organizations like the World Health Organization.
But the Taiwanese economy is also heavily dependent on its cross-strait neighbor. As Eleanor
Albert points
out :
China is Taiwan's largest trading partner, accounting for nearly 30 percent of
the island's total trade, and trade between the two reached $150.5 billion in 2018 (up from
$35 billion in 1999). China and Taiwan have also agreed to allow banks, insurers, and other
financial service providers to work in both markets.
And it probably won't be Huawei but Taiwan that suffers from the U.S. move. As Michael
Reilly notes
, "Huawei's size in the global market means its Taiwanese suppliers cannot easily find an
alternative customer of comparable standing to replace it." China, meanwhile, will either find
another source of chips outside the U.S. sphere, or it will do what the United States has been
threatening to do: bring production of critical components back closer to home.
Another key player in the containment of China is India. Trump's friendship with Indian
Prime Minister Narendra Modi, a right-wing Hindu nationalist, is more than simply an
ideological affection. Trump sealed
a $3 billion in military sales deal with India in February, with a trade deal still on the
horizon.
Modi, in turn, is hoping to be the biggest beneficiary of the falling out between Washington
and Beijing. "The government in April reached out to more than 1,000 companies in the U.S. and
through overseas missions to offer incentives for manufacturers seeking to move out of China,"
reports Bloomberg . "India is prioritizing medical equipment suppliers, food processing
units, textiles, leather, and auto part makers among more than 550 products covered in the
discussions."
Vietnam is another regional competitor that the United States is supporting in its
containment strategy. With only a couple hundred reported coronavirus cases and zero deaths,
Vietnam is
poised to emerge from the current crisis virtually unscathed. With low labor costs and an
authoritarian government that can enforce deals, it is already a favored alternative for
corporations looking for alternatives to China. But wildcat strikes have been happening in
greater numbers in the country, and the Vietnamese government recently
approved the country's first independent trade union.
Yet with a more technologically sophisticated infrastructure, China will continue to look
more attractive to investors than India or Vietnam.
Don't Count Out China
If your image of the Chinese economy is stuck in the 1980s -- cheap toys and mass-produced
baubles -- then you probably think that severing economic ties with the country is no big deal.
America can produce its own plastic junk, right?
But China is no longer hurrying to catch up to the West. In some ways, the West is already
in China's rearview mirror.
Huawei is well-known for the part it's playing in the rollout of 5G networks worldwide.
China is not only ahead of the curve in upgrading to 5G domestically, it is busy manufacturing
all the new tech that will run on these high-speed networks, like virtual reality and
augmented reality and AI-driven devices.
Perhaps more to the point, China is not simply part of the global supply chain. It is using
these new technologies to revolutionize the global supply chain.
For instance, it's using 3-D modeling to shorten product development. It has long integrated
drones into its distribution networks. "Chinese supply chain companies are incorporating
groundbreaking technologies like cloud-based systems, data analytics, and artificial
intelligence (AI) and using them to redesign supply chain operations," writes Adina-Laura
Achim.
And don't discount the role of a well-financed, centralized, authoritarian government. The
Trump administration is, frankly, at a huge disadvantage when it tries to pressure companies to
relocate their operations. Writes
Manisha Mirchandani:
The global technology and consumer electronics sectors are especially reliant on
China's infrastructure and specialized labor pool, neither of which will be easy to
replicate. The Chinese government is already mobilizing resources to convince producers of
China's unique merits as a manufacturing location. Zhengzhou, within Henan Province, has
appointed officials to support Apple's partner Foxconn in mitigating the disruptions caused
by the coronavirus, while the Ministry of Finance is increasing credit support to the
manufacturing sector. Further, the Chinese government is likely to channel stimulus efforts
to develop the country's high-tech manufacturing infrastructure, moving away from its
low-value manufacturing base and accelerating its vision for a technology-driven services
economy.
The Trump administration is playing the short game, trying to use tariffs and anti-Chinese
sentiment to hobble a rising power. China, on the other hand, is playing the long game,
translating its trade surpluses into structural advantages in a fast-evolving global
economy.
Will the Conflict Turn Hot?
Despite the economic ravages of the pandemic, the Pentagon continues to demand the lion's
share of the U.S. budget. It wants another $705 billion for 2021, after increasing its budget
by 20 percent between 2016 and 2020.
This appalling waste of government resources has already caused long-term damage to the
economic competitiveness of the United States. But it's all the money the Pentagon is spending
on "deterring China" that might prove more devastating in the short term.
The U.S. Navy announced
this month that it was sending its entire forward-deployed sub fleet on "contingency
response operations" as a warning to China. Last month, the U.S. Navy Expeditionary Strike
Group
sailed into the South China Sea to support Malaysia's oil exploration in an area that China
claims. Aside from the reality that oil exploration makes no economic sense at a time of record
low oil prices, the United States should be helping the countries bordering the South China Sea
come to a fair resolution of their disputes, not throwing more armaments at the problem.
There's also heightened risk of confrontation in the Taiwan Strait, the East China Sea, and
even in outer space . A huge portion of the Pentagon's budget goes toward preparing for war
with China -- and, frankly, provoking war as well.
What does this all have to do with the Great Disentanglement?
The close economic ties between the United States and China have always represented a
significant constraint on military confrontation. Surely the two countries would not risk
grievous economic harm by coming to blows. Economic cooperation also provides multiple channels
for resolving conflicts and communicating discontent. The United States and Soviet Union never
had that kind of buffer.
If the Great Disentanglement goes forward, however, then the two countries have less to lose
economically in a military confrontation. Trading partners, of course, sometimes go to war with
one another. But as the data
demonstrates , more trade generally
translates into less war.
There are lots and lots of problems in the U.S.-China economic relationship. But they pale
in comparison to World War III. Share this:
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So, yes, the West still has a realistic chance of destroying China and inaugurating a new
cycle of capitalist prosperity.
What happens with the "decoupling"/"Pivot to Asia" is that, in the West, there's
a scatological theory [go to 10th paragraph] - of Keynesian origin - that socialism can
only play "catch up" with capitalism, but never surpass it when a "toyotist phase" of
technological innovation comes (this is obviously based on the USSR's case). This theory
states that, if there's innovation in socialism, it is residual and by accident, and that
only in capitalism is significant technological advancement possible. From this, they posit
that, if China is blocked out of Western IP, it will soon "go back to its place" - which is
probably to Brazil or India level.
If China will be able to get out of the "Toyotist Trap" that destroyed the USSR, only time
will tell. Regardless, decoupling is clearly not working, and China is not showing any signs
so far of slowing down. Hence Trump is now embracing a more direct approach.
As for the USA, I've put my big picture opinion about it some days ago, so I won't repeat
myself. Here, it suffices to say that, yes, I believe the USA can continue to survive as an
empire - even if, worst case scenario, in a "byzantine" form. To its favor, it has: 1) the
third largest world population 2) huge territory, with excellent proportion of high-quality
arable land (35%), that basically guarantees food security indefinitely (for comparison, the
USSR only had 10% of arable land, and of worse quality) 3) two coasts, to the two main Oceans
(Pacific and Atlantic), plus a direct exit to the Arctic (Alaska and, de facto, Greenland and
Canada) 4) excellent, very defensive territory, protected by both oceans (sea-to-sea),
bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if
the situation asks to 4) still the financial superpower 5) still a robust "real" economy -
specially if compared to the micro-nations of Western Europe and East-Asia 6) a big fucking
Navy, which gives it thalassocratic power.
I don't see the USA losing its territorial integrity anytime soon. There are separatist
movements in places like Texas and, more recently, the Western Coast. Most of them exist only
for fiscal reasons and are not taken seriously by anyone else. The Star-and-Stripes is still
a very strong ideal to the average American, and nobody takes the idea of territory loss for
real. If that happens, though, it would change my equation on the survival of the American
Empire completely.
As for Hong Kong. I watched a video by the chief of the PLA last year (unfortunately, I
watched it on Twitter and don't have the link with me anymore). He was very clear: Hong Kong
does not present an existential threat to China. The greatest existential threat to China
are, by far, Xinjiang and Tibet, followed by Taiwan and the South China Sea. Hong Kong is a
distant fourth place.
One problem with your scenario is that the US navy may be over-extended in parts of the
world where all the enemy has to do is to cut off supply lines to battleship groups and then
those ships would be completely helpless. US warships in the Persian Gulf with the Strait of
Hormuz sealed off by Iran come to mind.
Incidents involving US naval ship collisions with slow-moving oil tankers in SE Asian
waters and some other parts of of the the world, resulting in the loss of sailors, hardly
instill the notion that the US is a mighty thalassocratic force.
It's my understanding also that Russia, China and maybe some other countries have invested
hugely in long-range missiles capable of hitting US coastal cities and areas where the bulk
of the US population lives.
And if long-range missiles don't put paid to the notion that projecting power through
sending naval warships all over the planet works, maybe the fact that many of these ships are
sitting ducks for COVID-19 infection clusters might, where the US public is concerned.
I agree the new anti-ship missile technology may have changed the rules of naval
warfare.
However, it's important to highlight that, contrary to the US Army, the USN has a stellar
record. It fought wonderfully against the Japanese Empire in 1941-1945, and successfully
converted both the Pacific and the Atlantic into "American lakes" for the next 75 years. All
the Americans have nowadays it owes its Navy.
But you may be right. Maybe the USN is also susceptible to degeneration.
Of the existing 30 or so high-tech productive chains, China only enjoys superiority at 2
or 3 (see 6:48). It is still greatly dependent on the West to development and still is a
developing country.
Based on what I've read, China is on a fast track to develop technology on their own. In
addition, technology development is world-wide these days. What China can not develop itself
- quickly enough, time is the only real problem - it can buy with its economic power.
"if China is blocked out of Western IP, it will soon "go back to its place" - which is
probably to Brazil or India level."
Ah, but that's where hackers come in. China can *not* be blocked out of Western IP. First,
as I said, China can *buy* it. Unless there is a general prohibition across the entire
Western world, and by extension sanctions against any other nation from selling to China -
which is an unenforceable policy, as Iran has shown - China can buy what it doesn't have and
then reverse-engineer it. Russia will sell it if no one else will.
Second, China can continue to simply acquire technology through industrial espionage.
Every country and every industry engages in this sort of thing. Ever watch the movie
"Duplicity"? That shit actually happens. I read about industrial espionage years ago and it's
only gotten fancier since the old days of paper files. I would be happy to breach any US or
EU industrial sector and sell what I find to the Chinese, the Malaysians or anyone else
interested. It's called "leveling the playing field" and that is advantageous for everyone.
If the US industrial sector employees can't keep up, that's their problem. No one is
guaranteed a job for life - and shouldn't be.
"1) the third largest world population"
Which is mostly engaged in unproductive activities like finance, law, etc. I've read that
if you visit the main US universities teaching science and technology, who are the students?
Chinese. Indians. Not Americans. Americans only want to "make money" in law and finance, not
"make things."
"2) huge territory, with excellent proportion of high-quality arable land (35%), that
basically guarantees food security indefinitely"
In military terms, given current military technology, territory doesn't matter. China has
enough nuclear missiles to destroy the 50 Major Metropolitan Areas in this country. Losing
100-200 millions citizens kinda puts a damper on US productivity. Losing the same number in
China merely means more for the rest.
"3) two coasts, to the two main Oceans (Pacific and Atlantic)"
Which submarines can make irrelevant. Good for economic matters - *if* your economy can
continue competing. China has one coast - but its Belt and Road Initiative gives it economic
clout on the back-end and the front-end. I don't see the US successfully countering that
Initiative.
"4) excellent, very defensive territory, protected by both oceans (sea-to-sea)"
Which only means the US can't be "invaded". That's WWI and WWII thinking the US is mired
in. Today, you destroy an opponent's military and, if necessary, his civilian population, or
at least its ability to "project" force against you. You don't "invade" unless it's some weak
Third World country. And if the US can't "project" its power via its navy or air force,
having a lot of territory doesn't mean much. This is where Russia is right now. Very
defensible but limited in force projection (but getting better fast.) The problem for the US
is China and Russia are developing military technology that can prevent US force projection
around *their* borders.
"bordered only by two very feeble neighbors (Mexico and Canada) that can be easily
absorbed if the situation asks"
LOL I can just see the US "absorbing" Mexico. Canada, maybe - they're allies anyway.
Mexico, not so much. You want a "quagmire", send the US troops to take on the Mexican drug
gangs. They aren't Pancho Villa.
"4) still the financial superpower"
Uhm, what part of "Depression" did you miss? And even if that doesn't happen now,
continued financial success is unlikely. Like pandemics, shit happens in economics and
monetary policy.
"a big fucking Navy, which gives it thalassocratic power."
That can be sunk in a heartbeat and is virtually a colossal money pit with limited
strategic value given current military technology which both China and Russia are as advanced
as the US is, if not more so. Plus China is developing its own navy quickly. I read somewhere
a description of one Chinese naval shipyard. There were several advanced destroyers being
developed. Then the article noted that China has several more large shipyards. That Chinese
long coast comes in handy for that sort of thing.
China Now Has More Warships Than the U.S.
But sometimes quantity doesn't trump quality. [My note: But sometimes it does.] https://tinyurl.com/y7numhef
That's just the first article I found, from a crappy source. There are better analyses, of
course.
"I don't see the USA losing its territorial integrity anytime soon. There are separatist
movements in places like Texas and, more recently, the Western Coast. Most of them exist only
for fiscal reasons and are not taken seriously by anyone else."
I'd agree with that. I hear this "California secession" crap periodically and never
believe it. However, for state politicians, the notion of being "President" of your own
country versus a "Governor" probably is tempting to these morons. State populations are
frequently idiots as well, as the current lockdown response is demonstrating. All in all,
though, if there are perceived external military threats, that is likely to make the states
prefer to remain under US central control.
"Britain had to agree to the pact because it had lost the capability to defend the
colony.".."
That was the excuse. I believe HK was offered to China in return for Deng to open up and
turn China capitalist. Deng was not the one who
demanded HK return. Britain initiated the discussions. Deng gladly accepted although he
insisted on maintaining their authoritarian form of undemocratic government and left HK's
fate ambiguous so Britain could get support from their people and the HK elite. The party
elites were happy to be able to join the Western Elites in accumulating an unequal share of
the wealth. The Soviet elites led by the US Globalist puppet Gorbachev chose the same path
although they chose Fake Democracy and rule of the oligarchs as in the US rather than party
control of China
HK is protected against US tarrifs imposed on China goods. China exports a good chunk of
goods through HK. If Trump were really serious he would remove HK's protected status.
The timing doesn't add up. China opened up in 1972 (the famous Nixon-Mao handshake), while
the UK's agreement to give HK back was from 1984 - well into the Thatcher Era.
The most likely reason for the UK to decide to obey the lease deal was of military nature:
the valuable land necessary to defend HK was the flatland adjacent to the city proper, where
potable water comes from. It already part of the Mainland, thus rendering the defense of HK
virtually impossible without an outright invasion of the Mainland itself.
Margaret Thatcher probably didn't want to obey the treaty (99-year lease), as a good
neoliberal she was, but her military advisors probably warned her of the practical
difficulties, and, since it was a 99-year lease anyway, she must've agreed to simply allow
the treaty to be followed.
It is important to highlight that, in 1984, there were a lot of reasons the capitalist
world should be optimist about China becoming capitalist. After all, it really got off the
Soviet sphere after 1972, and Deng's reforms were - from the point of view of a vulgar
(bourgeois) economist - indeed a clear path to a capitalist restoration. It didn't cross
Thatcher's mind that China could stand its ground and remain socialist - at least not in
1984. If you read the sources of the time, you will easily see the Western elites treated
China's return to capitalism as a given.
It is still greatly dependent on the West to development and still is a developing
country.
So, yes, the West still has a realistic chance of destroying China and inaugurating a new
cycle of capitalist prosperity.
What happens with the "decoupling"/"Pivot to Asia" is that, in the West, there's
a scatological theory [go to 10th paragraph] - of Keynesian origin - that socialism can
only play "catch up" with capitalism, but never surpass it when a "toyotist phase" of
technological innovation comes (this is obviously based on the USSR's case). This theory
states that, if there's innovation in socialism, it is residual and by accident, and that
only in capitalism is significant technological advancement possible. From this, they posit
that, if China is blocked out of Western IP, it will soon "go back to its place" - which is
probably to Brazil or India level.
If China will be able to get out of the "Toyotist Trap" that destroyed the USSR, only time
will tell. Regardless, decoupling is clearly not working, and China is not showing any signs
so far of slowing down. Hence Trump is now embracing a more direct approach.
As for the USA, I've put my big picture opinion about it some days ago, so I won't repeat
myself. Here, it suffices to say that, yes, I believe the USA can continue to survive as an
empire - even if, worst case scenario, in a "byzantine" form. To its favor, it has: 1) the
third largest world population 2) huge territory, with excellent proportion of high-quality
arable land (35%), that basically guarantees food security indefinitely (for comparison, the
USSR only had 10% of arable land, and of worse quality) 3) two coasts, to the two main Oceans
(Pacific and Atlantic), plus a direct exit to the Arctic (Alaska and, de facto, Greenland and
Canada) 4) excellent, very defensive territory, protected by both oceans (sea-to-sea),
bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if
the situation asks to 4) still the financial superpower 5) still a robust "real" economy -
specially if compared to the micro-nations of Western Europe and East-Asia 6) a big fucking
Navy, which gives it thalassocratic power.
I don't see the USA losing its territorial integrity anytime soon. There are separatist
movements in places like Texas and, more recently, the Western Coast. Most of them exist only
for fiscal reasons and are not taken seriously by anyone else. The Star-and-Stripes is still
a very strong ideal to the average American, and nobody takes the idea of territory loss for
real. If that happens, though, it would change my equation on the survival of the American
Empire completely.
As for Hong Kong. I watched a video by the chief of the PLA last year (unfortunately, I
watched it on Twitter and don't have the link with me anymore). He was very clear: Hong Kong
does not present an existential threat to China. The greatest existential threat to China
are, by far, Xinjiang and Tibet, followed by Taiwan and the South China Sea. Hong Kong is a
distant fourth place.
"They Saw This Day Coming" - Huawei Forges Alliances With Rival Chipmakers As
Washington's Crackdown Intensifies by Tyler Durden Fri, 05/22/2020 - 18:05 The US
Commerce Department's latest move to block companies from selling products to Huawei that were
created with American technology, equipment or software has undoubtedly hurt the Chinese
telecoms giant. But it won't be nearly enough to take it down.
Since Washington launched its campaign against Huawei two years ago (when the trade tensions
between the US and China started to heat up, as President Trump started slapping more tariffs
on foreign goods) the company has been strengthening ties with contract chipmakers in Taiwan
and elsewhere, while ramping up its own microchip-technology arm, known as HiSilicon
Technologies.
On Friday,
Nikkei reported that Huawei had initiated conversations with other mobile chipmakers to try
and figure out where it might source certain essential components for its handsets (remember,
Huawei is the second-largest cellphone maker by sales volume) and other products.
Of course, the crackdown cuts both ways, as several American companies relied heavily on
Huawei's business (they can still apply for licenses to continue selling to Huawei...so long as
Commerce approves).
As
we reported earlier this week , it's not just American chipmakers that are distancing
themselves from Huawei: some Taiwan-based chipmakers are also dropping the telecoms giant for
fear of being targeted by Treasury sanctions, including TSMC, the world's largest contract
chipmaker.
Now, Huawei is reportedly in talks with MediaTek, the world's second-largest contract chip
producer.
Huawei Technologies is seeking help from rival mobile-chip makers to withstand a U.S.
clampdown aimed at crippling the Chinese company, sources familiar with the matter told the
Nikkei Asian Review.
Huawei is in talks with MediaTek, the world's second-largest mobile chip developer after
Qualcomm of the U.S., and UNISOC, China's second-largest mobile chip designer after Huawei's
HiSilicon Technologies unit, to buy more chips as alternatives to keep its consumer
electronics business afloat, the sources said.
To work with a contract chipmaker, Huawei would still need to design its own chips. Over the
past two years, Huawei has expanded its team of engineers working on chip design to more than
10,000, Nikkei said.
To be sure, MediaTek already makes low- and medium-end chips for Huawei, evidence that the
company, which was founded by a veteran of China's PLA, and purportedly maintains strong links
to the Chinese military, has been bracing for the other shoe to drop. MediaTek, meanwhile, is
still trying to figure out if it can meet Huawei's latest bid.
"Huawei has foreseen this day coming. It started to allocate more mid- to low-end mobile
chip projects to MediaTek last year amid its de-Americanization efforts," one of the sources
said. "Huawei has also become one of the key clients for the Taiwanese mobile chip
developer's mid-end 5G mobile chip for this year."
MediaTek is evaluating whether it has sufficient human resources to fully support Huawei's
aggressive bid, as the Chinese company is asking for volume 300% above its usual procurement in
the past few years, another source familiar with the talks said.
The situation has also created an opportunity for small Chinese chipmakers (working, we
imagine, mostly with technology stolen from American and Taiwanese companies) to expand.
Huawei also seeks to deepen its collaboration with UNISOC, a Beijing-backed mobile chip
developer that relies mostly on smaller device makers as customers and mainly supports
entry-level products and devices for emerging markets. Previously, Huawei used only very few
UNISOC chips for its low-end smartphone and tablet offerings, sources said.
"The new procurement deals would be a great boost to help UNISOC further upgrade its chip
design capability," said a chip industry executive. "In the past, UNISOC was struggling quite
a bit, because it could not really secure big contracts with global leading smartphone makers
as these top smartphone makers could find better offerings elsewhere. This time could be an
opportunity that it could really seek to match the international standard."
UNISOC last year accelerated its 5G chip development to catch up with Qualcomm and
MediaTek, Nikkei has reported. More recently, the company received 4.5 billion yuan ($630
million) from China's national integrated circuit fund, the so-called Big Fund.
UNISOC is preparing to list on the Shanghai STAR tech board, the Chinese version of
Nasdaq, later this year. Qualcomm has needed a license from the U.S. Department of Commerce
to supply Huawei since mid-May of 2019.
Huawei has already expanded production of in-house mobile processors for its smartphone
business to 75%, up from 69% in 2018 and 45% in 2016, according to to data from GF Securities
cited by Nikkei. Huawei shipped 240 million smartphones in 2019. And with China now throwing
caution to the wind and cracking down on Hong Kong, we wouldn't be surprised to see more Huawei
drama in the headlines next week, with serious market repercussions for the US semiconductor
industry.
That will be an interesting chess party. The USA moved way to many plants to Chine to get out
of this conflict without major losses
Notable quotes:
"... Secretary of State Mike Pompeo slammed China as “hostile to free nations,” portraying Beijing as fundamentally opposed to the United States, on Wednesday. ..."
"... But the Secretary of State pointed to deeper issues in the relationship, claiming that “the nature of the regime is not new.” “For several decades, we thought the regime would become more like us through trade, scientific exchanges, diplomatic outreach, letting them in the [World Trade Organization] as a developing nation,” he said. “That didn’t happen.” ..."
'The regime is ideologically and politically hostile to free nations.'
Secretary of State Mike Pompeo slammed China as “hostile to free nations,”
portraying Beijing as fundamentally opposed to the United States, on Wednesday.
Tensions between the United States and China have reached a fever pitch during the
coronavirus pandemic. Pompeo’s speech at a Wednesday morning press conference laid out a
vision of a global clash between two fundamentally different societies.
“China’s been ruled by a brutal, authoritarian regime, a communist regime since
1949,” he said. “We greatly underestimated the degree to which Beijing is
ideologically and politically hostile to free nations. The whole world is waking up to that
fact.”
He added that a focus on the coronavirus pandemic “risks missing the bigger picture of
the challenge that’s presented by the Chinese Communist Party.”
The pandemic has accelerated U.S.-China tensions.
Last week, a Chinese Communist Party news threatened sanctions against U.S. lawmakers for
attempting to sue the Chinese government for the pandemic, and U.S. law enforcement accused
Chinese hackers of cyberattacks against U.S. researchers.
But the Secretary of State pointed to deeper issues in the relationship, claiming that
“the nature of the regime is not new.” “For several decades, we thought the
regime would become more like us through trade, scientific exchanges, diplomatic outreach,
letting them in the [World Trade Organization] as a developing nation,” he said.
“That didn’t happen.”
Pompeo accused the World Health Organization’s director-general Dr. Tedros Adhanom
Ghebreyesus of “unusually close ties to Beijing” that “started long before
this current pandemic.”
The Trump administration has accused China of covering up information about the novel
coronavirus—even implying that the virus emerged from a lab accident in Wuhan,
China—and pointed the finger at the World Health Organization for aiding China’s
coverup.
The Secretary of State slammed the public health group for excluding Taiwan in his Wednesday
speech, touching on a sensitive topic for Beijing.
Taiwan, an island that was once ruled by China, has ruled itself since the end of the
Chinese Civil War in 1950. Beijing considers the island a breakaway Chinese province that must
be reunited with the mainland, while Taiwan’s ruling Pan-Green Alliance leans towards
independence.
“The democratic process in Taiwan has matured into a model for the world,”
Pompeo said, congratulating President Tsai Ing-wen on her re-election. “Despite great
pressure from the outside, Taiwan has demonstrated the wisdom of giving people a voice and a
choice.”
But he shied away from changing U..S. policy towards Taiwan..
Pompeo said that work that “comports with the history of the agreements between the
United States and China is the right solution to maximize the stability there in the
straits.”
The United States acknowledged the Chinese position that “there is but one China and
Taiwan is part of China” as part of a 1979 joint communique with Beijing, and does not
officially recognize Taiwan as a state, but maintains close informal ties with the Taiwanese
government and opposes attempts to change the island’s government by force.
“The President talked about how we’re going to respond [to China], how
he’s beginning to think about responding to the calamity that has befallen the world as a
result of the actions of the Chinese Communist Party,” Pompeo said. “I don’t
want to get ahead of him in terms of talking about how the administration will respond to that,
but you can already begin to see the outlines of it.”
Matthew Petti is a national security reporter at the National Interest. Follow him on
Twitter: @matthew_petti. This article initially stated that the United States “recognized
that ‘there is but one China and Taiwan is a part of China’ in a 1979 joint
communique.” The communique actually states that the United States
“acknowledges” this as the Chinese position. The article has been updated to more
correctly reflect the communique. Image: Reuters.
"... The Chinese will not start a shooting war and the US has no guts for one. Its industry has been hollowed out not just by outsourcing but by corruption as well. The campaign of demonization against China is very obvious, how far it is working I have no way of telling. Among the 5-eyes probably quite well, in the rest of the World rather less well, I would imagine. Notably, the British economy has been hollowed out in exactly the same manner as the US's. Canada's, Australia's, NewZealand's? Could they, would they support a war? ..."
"... Right now, China is leading the vaccine race and has developed an antibody treatment for Covid-19 that should be ready this year. ..."
"... Interesting article by Escobar. If one cares to notice, this anti-China cold war is a neocon based aggression. The primary movers of it are mostly neocons or the sorts who follow the neocon lead. ..."
"... "Again! Trump is talking nonsense." Trump seems to be losing his mind right now. Even he has such crazy ideas of cutting ties with China, US politicians, businessmen and Americans would not allow him to do so, Xin Qiang, deputy director of the Center for US Studies at Fudan University, told the Global Times. ..."
"... Jin Canrong, the associate dean of Renmin University of China's School of International Studies in Beijing, told the Global Times on Thursday that Trump made very irresponsible and emotional remarks in the interview. ..."
"... "For Trump, fantasy is power; bluffing is power, so he might use the future of his country to gamble with China. Although China always believes cooperation is the only right choice for the two countries to solve the problems together, if the US unilaterally and irrationally chooses all-out confrontation, China also needs to be prepared." ..."
Washington wants to prevent Russia and China supplanting US interests. Moscow and Beijing
pursue what they see as their own legitimate interests. What we face is not a "hybrid" war or
"New Cold War" but a world war. https://www.ghostsofhistory.wordpress.com/
What we face is not a "hybrid" war or "New Cold War" but a world war.
Honestly, I don't see it. My reasoning is simple, maybe too simple. The Chinese will
not start a shooting war and the US has no guts for one. Its industry has been hollowed out
not just by outsourcing but by corruption as well. The campaign of demonization against China
is very obvious, how far it is working I have no way of telling. Among the 5-eyes probably
quite well, in the rest of the World rather less well, I would imagine. Notably, the British
economy has been hollowed out in exactly the same manner as the US's. Canada's, Australia's,
NewZealand's? Could they, would they support a war?
The other reason I think a shooting war is less likely than might appear, is that the the
MIC is doing so well with the current cold war; that it would seem stupid to allow the
massive disruption and uncertainty that a shooting war would cause to interrupt the torrent
of cash being shoveled its way at the moment.
[Hide MORE]
1990. China's economy has come to a halt. The Economist
1996. China's economy will face a hard landing. The Economist
1998. China's economy's dangerous period of sluggish growth. The Economist
1999. Likelihood of a hard landing for the Chinese economy. Bank of Canada
2000. China currency move nails hard landing risk coffin. Chicago Tribune
2001. A hard landing in China. Wilbanks, Smith & Thomas
2002. China Seeks a Soft Economic Landing. Westchester University
2003. Banking crisis imperils China. New York Times
2004. The great fall of China? The Economist
2005. The Risk of a Hard Landing in China. Nouriel Roubini
2006. Can China Achieve a Soft Landing? International Economy
2007. Can China avoid a hard landing? TIME
2008. Hard Landing In China? Forbes
2009. China's hard landing. China must find a way to recover. Fortune
2010: Hard landing coming in China. Nouriel Roubini
2011: Chinese Hard Landing Closer Than You Think. Business Insider
2012: Economic News from China: Hard Landing. American Interest
2013: A Hard Landing In China. Zero Hedge
2014. A hard landing in China. CNBC
2015. Congratulations, You Got Yourself A Chinese Hard Landing. Forbes
2016. Hard landing looms for China. The Economist
2017. Is China's Economy Going To Crash? National Interest
2018. China's Coming Financial Meltdown. The Daily Reckoning.
2019 China's Economic Slowdown: How worried should we be? BBC
2020. Coronavirus Could End China's Decades-Long Economic Growth Streak. NY Times
Forbes – May 15 2012 – Meghan Casserly The American Dream Is Alive And Well In New Jersey
American Express – November 6 2012 – Rieva Lesonsky The American Dream is Alive and Well -- and Transformed
The Telegraph – August 4 2014 – Jeremy Warner The American Dream is alive and well, if you are trained for the jobs of the future
Forbes – September 30 2015 – John Tamny – FreedomWorks Ignore The Left And Right, The American Dream Is Alive And Well
FOX Business – August 22 2016 – Steve Tobak The American Dream Is Alive and Well
Forbes India – November 1 2016 – Monte Burke The American dream is alive and well
Washington Times – June 19 2017 – Ed Feulner – Heritage Foundation The American Dream, alive and well
KEDM – July 4 2018 – Byron Moore, Argent Advisors, Inc. The American Dream is Alive and Well
New York Times – February 2 2019 – Samuel J. Abrams – American
Enterprise Institute The American Dream Is Alive and Well
Daily Caller – February 6 2019 – Steve Sanetti – NSSF Firearm Industry
Trade Association The American Dream Is Alive And Well
FOX Business – September 30 2019 – Julia Limitone Eric Trump: The American Dream is alive and well
Mail Online – October 2019 – Lauren Fruen The American Dream is still alive! Children of poor immigrants still beat US-born kids up the
ladder – just as they did 100 years ago – but now Chinese and Indian migrants
have replaced Italian and Irish as the most successful
CNBC – November 14 2019 Billionaire Bob Parsons: The American Dream is alive and well
FOX News – November 26 2019 – Carol Ross Carol Roth: The American Dream is alive and well -- Let's be thankful for it
Clarion Ledger – December 10 2019 – Lynn Evans The American Dream is alive and well, but redefined
Wall Street Journal – January 31, 2020 – Michael R. Strain, American
Enterprise Institute The American Dream Is Alive and Well
Newsweek – February 27 2020 – Lee Habeeb The American Dream Is Alive and Well. Just Ask District Taco's Osiris Hoil
The Independent Voice – May 7 2020 – Barbara Ball The American Dream is alive and well
eKenyan – May 8 2020 Opinion | The American Dream Is Alive and Well
New York Times – May 18 2020 – Michael R. Strain – American Enterprise
Institute The American Dream Is Alive and Well
Chinese strategists like Liu He publicly acknowledge that epidemics can catalyze geopolitical
changes.
Right now, China is leading the vaccine race and has developed an antibody treatment
for Covid-19 that should be ready this year.
If development is successful and if it donates the cure to the world as Xi promised
and if WHO's investigation shows China is not the source of the virus, and if
China's economy is firing on all cylinders in November, it's game over: 3-0 China.
Interesting article by Escobar. If one cares to notice, this anti-China cold war is a
neocon based aggression. The primary movers of it are mostly neocons or the sorts who follow
the neocon lead. China is one country the zionazi-gays have not been able to dominate.
Coupled with China's economic rise and appeal to developing countries, these zionazi
oligarchs are going apeshit trying to bring China down. In addition to other articles
referenced in the article, see also this Global Time report:
[MORE] "Again! Trump is talking nonsense." Trump seems to be losing his mind right now. Even he
has such crazy ideas of cutting ties with China, US politicians, businessmen and Americans
would not allow him to do so, Xin Qiang, deputy director of the Center for US Studies at
Fudan University, told the Global Times.
He noted that Trump is bluffing and acting tough toward China to win more support. Fox
News, which has been regarded as Trump's defender and is notorious for a lack of
professionalism, is also making eye-catching news to draw attention.
Jin Canrong, the associate dean of Renmin University of China's School of
International Studies in Beijing, told the Global Times on Thursday that Trump made very
irresponsible and emotional remarks in the interview.
"The China-US relationship is the most important bilateral relationship in the world and
involves huge interests of the two countries, as well as the rest of the world. Therefore, it
is not something he can cut off emotionally," Jin said.
"If the US unilaterally cuts off ties, the American people will pay a heavier price than
us, because China's domestic market is huge and 75-80 percent of Chinese manufacturers are
supplying China's market, and the 2 to 5 percent that supply the US can also be absorbed by
the domestic market," he noted.
China has nothing to be afraid of as "in the past, we didn't solve the Taiwan question
because we wanted to maintain the China-US relationship, and if the US unilaterally cuts it
off, we can just reunify Taiwan immediately since the Chinese mainland has an overwhelming
advantage to solve this long-standing problem."
"Trump is like a giant baby on the brink of a meltdown as he faces tremendous pressure due
to massive failures that caused such a high death toll," Shen Yi, an expert from Fudan
University, told the Global Times. "It's like someone who wants to show his guts when he
passes by a cemetery in midnight. He needs to shout to give himself the courage," he
said.
Shen also noted that the American companies and industries would suffer the most severe
consequences, because the supply chain has been integrated with China.
"The Chinese public would only take such bluffing as a joke," Shen said, adding that there
has been no US president in the history who has made such a ridiculous statement against
China, not even during the Cold War.
Yuan Zheng, a research fellow at the Chinese Academy of Social Sciences (CASS), said he
could not even remember any US leader who took a similar action. "His flip-flop rhetoric is
unprecedented, but we need to take a look at whether Trump will take real action," he said,
noting that there is no need to pay attention to claims that are unrealistic and
meaningless.
"For Trump, fantasy is power; bluffing is power, so he might use the future of his country
to gamble with China. Although China always believes cooperation is the only right choice for
the two countries to solve the problems together, if the US unilaterally and irrationally
chooses all-out confrontation, China also needs to be prepared."
@Godfree
Roberts China's economy won't be firing on all cylinders by November, but the important
parts of it will be. The manufacturers I talk to have weathered the worst of it, and their
order books for Q4 are more or less back to what they were in January (or at least healthy
enough to prevent soft skill losses). Many are upbeat about the future. (Not all of them will
survive, and the ones that die probably should have done so years ago.)
Compare this to the rest of Asia (Bangladesh, Pakistan, India, Cambodia, Myanmar, and
others): they are a mess. Bangladesh put all its eggs in the huge volume low quality basket
and will now pay a fatal price. Pakistan was dead before corona, and is now in a
manufacturing death spiral. India has the capacity to succeed, but is hamstrung by a
caste-based barbarism that has jettisoned all pretense of decency by throwing migrant workers
in the informal economy to their deaths. This will not be forgotten and I predict years of
trouble. The others only have a manufacturing sector because the Chinese moved their
factories there. Vietnam has some chance, and should be a big winner as China moves out of
low- to middle-end manufacturing.
Countries in South America have lost their opportunity. China passed them by years ago.
It's a tragedy, but they really have themselves to blame for it. And Africa, the last
frontier, is already dominated by China (15 years ago I'd bump into Chinese businessmen who'd
ship a 40-foot container of – 'insert any product you can think of' – to some
back of beyond place in Africa and refuse to come home until everything was sold). They've
moved up the ladder since then. Ethiopia, the fastest-growing economy on the continent, is
essentially an industrial zone for Chinese manufacturing.
Australia has become a mine/farm for China. New Zealand and Canada likewise, and a nice
place to send your teenagers to get educated and perhaps for retirement.
The EU, led by Germany, will be back on track soon. The winners here should be the former
USSR countries, with low labor costs and strong soft skills. With EU companies wanting to
bring the supply chain closer to home, this is their moment. If they screw it up, they will
spend another 30 years wondering what went wrong. I hope they won't, but if you spend any
time working with these people you know they often fail at the final hurdle (as though on
purpose – the psychology of self-destruction is their Achilles heel).
It's China's game to lose. And quite frankly, at this point, I don't see how. This has
been in the making since the late 70s. Perhaps earlier. I admire them for their intelligence,
their work ethic, their organizational capacity, their can-do spirit, and – yes –
their creativity (if you think China is Japan in the 60s, you need to spend some serious time
with younger Chinese in China).
The Chinese problem is, of course, its culture of responsibility avoidance. But even with
this issue, they are on track for a knockout victory. Most people in the West have no idea
what going on, which is exactly how You Know Who likes it.
I have no intention of letting my tribe be overrun by Chinese. But I have enough
experience to know they're smarter than my tribe, and it would be a wise thing to start
thinking more strategically and tactically about how to carve out a space in a new world most
people are unable to imagine (which is less than 10 years away).
The center of gravity of global economic power keeps moving, inexorably, toward
Asia.
it's game over
While the U.S. spent recent decades policing the world in pointless wars, China was about
the business of building an infrastructure in which all roads lead to Beijing, railroad cars
and boatloads of wealth. Just keep it coming, folks. Those roads and railroads and shipping
are linking nothing less than Eurasia, Sir Halford's World Island. It took this coronavirus
to show the imperial subjects that the Empire is naked and that China had already surpassed
it economically several years ago. It seems like it really is game over. I'm sad in a way,
but I would rather have a normal country than a hegemon; that is, if normalcy is still a
possibility.
What about the biggest hybrid war going on since centuries ago: jews (including crypto-jews,
hybrids and minions) versus everybody else?
The chinese had the full cooperation of diaspora jews (and their sayanim network) and
israelis. Specially the Chabad Lubavich.
From the referenced Global Times article, the US attack on Huawei (with its 5G leadership +
NSA proof encryption ) is at the heart of the story:
Based on Global Times sources, if the US further pinches Chinese telecommunication giant
Huawei by blocking companies such as TSMC from providing chips to the company, China will
carry out countermeasures, such as including certain US companies into its list of
"unreliable entities," imposing restrictions on or investigating US companies such as
Qualcomm, Cisco and Apple, and suspending purchases of Boeing aircraft.
The US would lose this fight. Apple for example manufactures in China with only a small
percentage of the sales price staying in China. If Apple manufacturing is shut down then
Apple is the big loser. They're already trying to move manufacturing to India but that's not
going to work.
We must be clear that coping with US suppression will be the key focus of China's
national strategy. We should enhance cooperation with most countries. The US is expected to
contain China's international frontlines, and we must knock out this US plot and make
China-US rivalry a process of US self-isolation.
China has plenty of alternative markets. US corporations mostly only sell to the US using
(now very sophisticated) Chinese manufacturing. Take this away, and Apple for example, have
no alternative supplier for the volumes, quality, sub-contractor network and export
infrastructure required.
General Qiao dismisses the possibility that Vietnam, the Philippines, Bangladesh, India
and other Asian nations may replace China's cheap workforce: "Think about which of these
countries has more skilled workers than China. What quantity of medium and high level human
resources was produced in China in these past 30 years? Which country is educating over 100
million students at secondary and university levels? The energy of all these people is
still far from being liberated for China's economic development."
True.
This will imply a concerted offensive, trying to enforce embargoes and trying to block
regional markets to Chinese companies. Lawfare will be the norm. Even freezing Chinese
assets in the US is not a far-fetched proposition anymore.
If the US steals the $ trillions China has invested in US treasuries, then the US dollar
also forfeits its claim to be the world reserve currency (safe place to hold international
trade balances).
Still, scores of nations are being asked, bluntly, by the hegemon to position themselves
once again in a "you're with us or against us" global war on terror imperative.
9/11 was fakery pumped up by the MSM to target Iraq/Iran and Covid-19 is more of the same
– this time targeting China. European states are getting tired of this game. For
example they were all dragged into supporting the Venezuela CIA coup that fizzled, and are
now trying to disentangle from it.
General Qiao counsels, "Don't think that only territorial sovereignty is linked to the
fundamental interests of a nation. Other kinds of sovereignty – economic, financial,
defense, food, resources, biological and cultural sovereignty – are all linked to the
interests and survival of nations and are components of national sovereignty."
If the US public look carefully at General Qiao's list they will realize that they have
already lost more than 50% of these sovereignties.
" General Qiao dismisses the possibility .. India and other Asian nations may replace China's
c: "Think about which of these countries has more skilled "
Everyday US. news are amplifying the bipartisan chorus against China . India is begging
for favors from USA while serenading USA with reinforcing American position.
India is stealing land from Nepal and Indian media thinks that ultranationalist of Nepal
are to blame for questioning Indian stance .
China is under a real threat of concerted attacks by the US 's opportunistic vassals.
There will be a seismic change affecting the alliances and the future .
Can China persuade Nepal Bangladesh Pakistan Sri Lanka Afghanistan Iran and Myanmar to work
together and persuade them move out of India's hegemony ?.
It's always astounding to read a geopolitical analysis by a journalist who completely ignores
the climate pollution crisis with it's impending effects overhanging every strategy any state
may envision to dominate the planet. It's as if the writer lives in an imaginary world devoid
of nature, along with his supposed expert sources and well placed powerful state movers and
shakers. This is delusional. China's cheap forced labor, making more crap for the planet's
shrinking population of affluent consumers, competing with other countries with equally
desperate workers. Countries competing to build the most dangerous bio-weapons in their
unsafe, leaky level 4 labs. All the while the atmosphere is being polluted to the point of
melting all the ice on the planet, the air is being degraded to the point of being disgusting
to see and carcinogenic to breath, the fresh water supply is being depleted and polluted, the
oceans degraded into radioactive chemical cesspools (soon to be a brown sludge inhabited by
only bacteria, viruses and fungus), the land ceded with thousands of chemicals that have no
purpose other than to kill. The existential threshold is within a few years. The geopolitical
strategy of the US and China can be summarized as a strategy to kill all sentient life on the
planet in order to have a some sort of imaginary strategic dominance. It is mass psychosis.
@foolisholdman
Old man, don't be foolish, they all hate us human scum, and will gladly go to war, are at
war. Remember how, in Catch 22, the opposing sides eventually saved a crap load of money by
geting Milo de Milo to bomb their own airfields using his supply planes? Its already
happening, us plebs are just in the way. In the end, the Protocols calls for one government
ruling what's left of mankind "with an iron staff." I cannot tell you (yet) what Zion's hold
on Beijing is, but be assured, "bring on the war" is the swill of Zion being lapped up by
little globalist piggies trying to get to the trough.
People think 'hybrid warfare" is some kind of technological term. Zion chooses its words very
carefully, and your first defence is your dictionary. The USAGE of words change with time,
the MEANING is constant. Now let's go find them hybrids, before Bill Gates can create enough
microcephalics to man his man/machine interfaced battle 'droids armed with depleted uranium
bullets and virally-delivered vaccines.
@carlusjr
Pollution sure is an important issue, one of the most important of our time, yes. The subject
matter at hand though, is mostly military, with economics as a condiment to explain the sour
taste. China might be the one manufacturing plastic turds, but it is the so-called western
media that is teaching your children the dire need to own the latest version of plastic poop.
China would not bother with plastic poop, but you voted for people who decided China makes
the best poo at the lowest cost and highest profit. Don't blame China for taking advantage of
YOUR leadership's desire to disown YOU and hand your habitat over to those who "know how to
make a profit" from your suffering, while dangling a piece of plastic poop in front of you,
calling it ambition, and deplatforming you if you refuse their offer of improved
turdiness.
But yah, now we know you hate pollution. Soon we will close down all the factories, and ban
all cars, and only those on "official business" will be alowed on aeroplanes, and then you
can breathe freely, as you stand in line, so the Special Agents can see if you have the Bill
Gates vaccine licence to visit the plastic poop and soylent green depository that we used to
call a supermarket.
A toxic racism-meets-anti-communism matrix is responsible for the predominant
anti-Chinese sentiment across the US, encompassing at least 66% of the whole
population.
No it isn't.
A hint of what is responsible is this from the same article:
"They have state of the art technology, but not the methods and production capacity. So
they have to rely on Chinese production."
Our jobs, our industry, our hard-earned intellectual property, and our money have all gone
to China. Our own leaders of industry and government are to blame for our predicament, but
our anger at China is the result.
Funny this from the Chinese General Qiao:
"as a producing country, we still cannot satisfy our manufacturing industry with our own
resources and rely on our own markets to consume our products."
No kidding, General. Your country built itself up by selling to us! We made you into our
own rival. Thanks are in order, but instead you plot to weaken us.
@Godfree
Roberts Sounds like a man who has no understanding of the science regarding the matter,
but so doesn't most of the world. Vaccine? Anti-body treatment? Does anybody know what they
are and how they work (or doesn't) or mean? From those tests to those invasive ventilators,
it shows me how people can easily be herded towards slaughter, for their safety, ofc, because
"science." And just over a mild cold no less.
So much for China's brilliance; they are as dumb or brainwashed by 'accepted science' as the
next moronic authority figure.
But exploiting the situation, that's something else that should be appreciated.
This will be China's contribution to ensuring vaccine accessibility and affordability in
developing countries." The Global South is paying attention.
Do the underdeveloped (hate the PC term "developing") countries even want a vaccine? They
have too many people anyway, any moderate dying will be an advantage to their societies. And
another point is that the anti-vaxxer movement there might be on the rise, just as it is in
America – remember how the Philippines government was watching a conspiracy video about
evil Bill Gates? I have talked to anti-vaxxer people in my Ukrainian university!
"Containment" will go into overdrive. A neat example is Admiral Philip Davidson –
head of the Indo-Pacific Command – asking for $20 billion for a "robust military
cordon" from California to Japan and down the Pacific Rim, complete with "highly
survivable, precision-strike networks" along the Pacific Rim and "forward-based, rotational
joint forces" to counteract the "renewed threat we face from great power competition."
My prediction is the US goes into a civil war > the liberals start losing > the
liberals invite the Chinese into California > the Chinese exterminate all Americans and
get a large Lebensraum in the East.
a Korea War pictorial. Nice.
It's long long ago since China made the last movie about Korea War. Too long ago that they
are in black and white.
Recently someone is preparing for a new movie: The Chosin Lake.
I really hope it will be well made. I love war movies, especially the ones on historical big
wars.
@Buzz
Mohawk I think the Western globalists though that China would be subservient to them and
not get any funny ideas, this virus is just a cover for antipathy that was building up for
years, similar to how the poor Jews being persecuted in Germany was used by propagandists to
whip up Germany sentiment, because of German economic prowess.
Western thinking is dominated by this balance of power mentality, the same mentality such
caused it to enter into two fratricidal wars not too long ago.
One can only hope this is good news for us, but I fear the globalists will just use this
time to move manufacturing to other Third World countries instead of bringing it back
home.
I agree that it was a huge mistake transferring our IP to China, they would simply have
not got to this point if we hadn't. This is also why the Chinese are not taking any chances
in their BRI, and are using Chinese labour instead of doing the more sustainable thing and
training up local workers, that would mean a destruction of their market! Sadly this will
continue, on top of the terrible policy of mass Third World immigration, we let Chinese into
out top companies and research facilities, some of whom no doubt pass this information back
home.
So the Global South is going to be "grateful" to China for coming up with vaccination after
innudating it with the Chinese virus in the first place Pepe, lay of the Mezcal because is
clouding your opaque thinking!
Let me make this clear. America is self-destructing. A malignant narcissist in charge and a
man who cannot construct a sentence is an alternative. A stock market devoid of reality and a
1 percent devoid of conscience. Any remote consideration of the other 99 percent is soley
based on profit. Any civilization that cannot reverse itself is doomed. China maybe a
shortterm factor yet not a factor in the longer considerations.
{ .. and the US has no guts for one. Its industry has been hollowed out not just by
outsourcing but by corruption as well.}
Even in the 50s when US industry was not hollowed out ( ran supreme) and China had no
nukes, US was unable to defeat China in a ground war in Korea. Of course there was talk in US
of using nukes against China (Gen. MacArthur), but cooler heads prevailed, arguing that, that
would trigger USSR to use nukes too, resulting in world wide nuclear conflagration.
Now China has nukes, and delivery systems, and US cannot possible defeat China
conventionally, so US will huff-and-puff, try to damage China financially, or steal its
holdings in US*, but nothing will come out of it.
Sad that US screwed itself over the years so badly that it is in this predicament now.
_____________________________
* There has been semi-serious talk in US of just taking $ hundreds of billions of Chinese
holdings in US as payment for ' damages' China has supposedly caused US by
Covid-19.
All this big nation state fluff stinks today as it did when the first two Western ones,
England and France had a 100 Years War and it has stunk throughout history.
We humans are born naked, helpless, and totally ignorant. We also have an evil streak in
us; vide Adam and Eve. And as Shakespeare stated we must consign ourselves to a willing death
each eve or we die. We are so haughty yet the first thing we must do upon wakening from our
nightly death is evacuate waste.
We have never respected Nature. Now we spray aluminum and plastic microns in the upper
atmosphere which we all breathe as they fall and have virtually destroyed the ozone layer and
the biosphere. We live in 1984 right now!
True libertarianism which is no aggression against person or property and backed up by
cheap, Natural Law arbitration courts works. It is that or sayonara humans.
My reasoning is simple, maybe too simple. The Chinese will not start a shooting war and
the US has no guts for one.
You may be right about the Chinese (their government looks after 1,3 billion people) and
that the US has no guts. But what is the "US"? If you mean the (mostly Jewish) ruling cabal
and their goyim political clowns and puppets, you have no reason to be so sanguine about the
"no guts". It's not their guts that will be on the line, for they will be quite happy so
sacrifice millions of the plebes for the greater good of Israel and rebooting the "economy".
War devastations (and pandemics) are the greatest source for immiserating and culling the
masses and channeling wealth to the banksters.
Facing the demise of the Jewish-led hegemony through its PNAC's "full-spectrum dominance"
– and what that could do to the SHITIS (shit-state of Israel) – it is reasonable
(in their twisted minds) to step to the brink and beyond. Besides, the most recent great wars
(the greatest carnages in the world's history) were not intended to end the way the warhawks
wanted (neither Hitler not Chamberlain wished the destruction of country or empire) but the
power dynamics unleashed by geopolitical gamesmanship suppresses reason.
@paranoid
goy Non-CO2 pollution is a non-issue. It was far worse in the USA and China 50 years ago
(air and water), and in Europe/East coast USA over 200 years ago. Wildlife populations are
also rebounding. Every time I hear some retard complaining about pollution on the internet, I
want to reach through the monitor and pepper spray them.
The zionists are in control of China and the ZUS and Russia and Europe and India and
everywhere in central and South America, and the fact is the zionist control was proven by
every country that forced their people into the forced lockdown, using this scam of a
coronavirus as an excuse.
These wars are a deversion, as the zionist install their global prison.
General Qiao dismisses the possibility that Vietnam, the Philippines, Bangladesh, India
and other Asian nations may replace China's cheap workforce: "Think about which of these
countries has more skilled workers than China. What quantity of medium and high level human
resources was produced in China in these past 30 years? Which country is educating over 100
million students at secondary and university levels? The energy of all these people is
still far from being liberated for China's economic development."
Once again, I must caveat this with the proclamation I was not and I am not an advocate
for Obama's TPP. The reason I'm not an advocate is for environmental purposes. I believe
growth is killing the living planet and soon enough will extinct humans as well as many, most
even, other species on the planet. The TPP did nothing to address growth and instead enabled
it further by enhancing global trade versus diminishing it.
That being said, the TPP was a strategy to contain China's growing influence. It was
intended to put global trade eggs in many baskets and not just in the basket labeled China.
What does Trump do? He puts all the trade eggs in China's basket under the aegis/rubric of
repatriating manufacturing to America. He put a knife in TPP and killed it but he never
brought manufacturing back to America. Now America is truly good and fucked. Over a barrel.
No options. Can you believe this moron and the cabal that's using him as a foil? Like I said
before, if Trump didn't exist, the CCP would have to invent him because more than any other
power player, be it Russia or Saudi Arabia or Israel, Trump has been extremely beneficial to
China. Under Trump's watch, China is now the most powerful country in the world. Because of
Trump, China is now the leader of the world. America, finally, has been knocked from its
perch just as England was over 100 years prior. Once knocked from the perch, there is no
regaining the status you once enjoyed. I suspect that within five years the dollar will no
longer be the world's currency. When that happens, it's lights out for America FOR REAL. All
this banter is whistling past the graveyard. What's done is done.
House Democrats who've been interfering with President Barack Obama's ability to
negotiate the Trans-Pacific Partnership are missing something very important: The trade
deal isn't primarily significant because of the economy. It matters because it's part of
the broader American geostrategic goal of containing China -- which pointedly hasn't been
invited to join the TPP.
In the new cool war, China's rising economic influence is giving it greater geopolitical
power in Asia. The TPP is, above all, an effort to push back on China's powerful trade
relationships to reduce its political clout. By weakening Obama's ability to pursue it,
congressional Democrats had been unintentionally weakening the U.S. side in the cool
war.
In all this, China is using its close economic relationship with its neighbors as
leverage to build its geopolitical position. Its ultimate goal is to displace the U.S. as
the regional hegemon. President Xi Jinping's slogan of the "Chinese dream" requires nothing
less.
The TPP aims to reduce some of China's geopolitical resurgence by damping down the
extent of China's regional trade dominance. China itself has a proposed regional trade
alliance, the Regional Comprehensive Economic Partnership, that would include 16 members
and exclude the U.S. Australia, Japan and South Korea are all involved in negotiations to
become members. The TPP is a direct, competitive counterpart to the RCEP.
Fyi, the following cartoon is per China Daily , a publication owned and run by the
CCP. It's favorable to Trump. It's clear by virtue of Trump's cozy relationship with Putin
and Xi that Trump is a communist in capitalist clothing. He is a communist trojan horse in
the oval office. But he's even more than that. He has many hats. He's a tool, a
self-promoting front man, for any tyrant or tyranny that expands his brand masquerading as a
man of the people. As if. He's a man, albeit an insane moron, of the extractive elite and the
extractive elite are transnational and transcultural. The extractive elite are a nation and
culture unto themselves and the rest of us are their slaves on this global plantation.
@Weston
Waroda Once reserved currency status of dollar is over n done with, there would be zero
need for the huge military budget. That is the silver lining of this whole thing. The wars
might finally stop. But living standards will take a hit from the devaluation of the dollar.
But but, Jobs would return through that weakened dollar as off shoring jobs would no longer
make sense. And just maybe, our political class might finally focus on domestic issues and
improve the country after 4 decades of stagnation.
@Miro23
Apple follows every single law in China. Apple makes a lot of money in China, but also pays
alot of taxes. I highly doubt it would be a target of retaliation. But other companies are
fair game. Just something I noticed.
@carlusjr
Spot on. Humans are drowning in their own filth. There's an adage, "don't shit where you
eat." Humans invented the saying but apparently don't abide by it and in fact zealously defy
it. Here we are. It will be one pandemic after another from now until human is no more. Rapid
pace, like automatic weapon fire. The center cannot hold and is not holding. Civilization is
going down. Will the Samson Option be utilized? Man's last act? Destroy the planet
entirely if he can't have it entirely? My bet is this is how it will go down. All you have to
do is extrapolate the curve.
@bigduke6
It is quite obvious why they are doing, they are using Europeans' own liberal ideology
against them. In today's Western world, nothing is worse than being a "racist" (except maybe,
just maybe a paedophile necrophiliac, but even that is a close one) as such they will use
these terms to beat down Europeans. Erdogan recently likened Greece to "Nazis", due to their
brave defiance to Third World invaders.
As if they genuinely give a shit about Nazis, a particularly European obsession due to
decades of brainwashing by the Jewish media elite. Even if one believes the textbooks in
relation to Nazi atrocities, the fact is that such things are normal for history. No other
people's beat themselves down over bad stuff they've done, hell, the Mongolians have erected
a big statue of Genghis Khan, one of the greatest mass murderers in history!
Extremely misleading headline. Since the Asia Times story is actually about economic
and political sovereignity – always a big issue for China ever since the Eight Powers
carved up the nation in the past: Germany, Japan, Russia, Britain, France, Italy,
Austria-Hungary, and the U.S.
It doesn't speak about warfare against the U.S. It speaks about meeting a threat from the
U.S. It does speak of taking Taiwan, though by avoiding outright warfare. This is not
something we should desire, but it is not war against the U.S., as the misleading headline is
intended to make people believe.
As usual most of the rubes will only read the headline and look at the pictures, maybe
skim through the text a bit, before typing out an angry post based on whether they like or
dislike whatever nation is mentioned. Much like cruzbots and Bush lovers use Breitbart
comments to screech against Iran and praise Israel. No facts needed.
"... An example, referring to Covid-19, is the capacity to produce ventilators: "Out of over 1,400 pieces necessary for a ventilator, over 1,100 must be produced in China, including final assembly. That's the US problem today. They have state of the art technology, but not the methods and production capacity. So they have to rely on Chinese production." ..."
"... The gold standard expression has come in a no-holds barred Global Times editorial : "We must be clear that coping with US suppression will be the key focus of China's national strategy. We should enhance cooperation with most countries. The US is expected to contain China's international front lines, and we must knock out this US plot and make China-US rivalry a process of US self-isolation." ..."
"... An inevitable corollary is that the all-out offensive to cripple Huawei will be counterpunched in kind, targeting Apple, Qualcom, Cisco and Boeing, even including "investigations or suspensions of their right to do business in China." ..."
"... So, for all practical purposes, Beijing has now publicly unveiled its strategy to counteract U.S. President Donald Trump's "We could cut off the whole relationship" kind of assertions. ..."
"... The politicians controlling US foreign policy are leading us straight into the 19th century, with their updated gunboat diplomacy ..."
The bulk of his argument concentrates on the shortcomings of U.S. manufacturing: "How can
the US today want to wage war against the biggest manufacturing power in the world while its
own industry is hollowed out?"
An example, referring to Covid-19, is the capacity to produce ventilators: "Out of over
1,400 pieces necessary for a ventilator, over 1,100 must be produced in China, including final
assembly. That's the US problem today. They have state of the art technology, but not the
methods and production capacity. So they have to rely on Chinese production."
... ... ...
Gloves Are Off
Now compare General Qiao's analysis with the by-now-obvious geopolitical and geo-economic
fact that Beijing will respond tit for tat to any hybrid war tactics deployed by the United
States government. The gloves are definitely off.
The gold standard expression has come in a no-holds barred Global Times editorial : "We must be
clear that coping with US suppression will be the key focus of China's national strategy. We
should enhance cooperation with most countries. The US is expected to contain China's
international front lines, and we must knock out this US plot and make China-US rivalry a
process of US self-isolation."
An inevitable corollary is that the all-out offensive
to cripple Huawei will be counterpunched in kind, targeting Apple,
Qualcom, Cisco and Boeing, even including "investigations or suspensions of their right to do
business in China."
So, for all practical purposes, Beijing has now publicly unveiled its strategy to counteract
U.S. President Donald Trump's "We could cut off the whole relationship" kind of assertions.
A toxic racism-meets-anti-communism matrix is responsible for the predominant anti-Chinese
sentiment across the U.S., encompassing at least 66 percent of the whole population. Trump
instinctively seized it – and repackaged it as his re-election campaign theme, fully
approved by Steve Bannon.
The strategic objective is to go after China across the full spectrum. The tactical
objective is to forge an anti-China front across the West: another instance of encirclement,
hybrid war-style, focused on economic war.
This will imply a concerted offensive, trying to enforce embargoes and trying to block
regional markets to Chinese companies. Lawfare will be the norm. Even freezing Chinese assets
in the U.S. is not a far-fetched proposition anymore.
Every possible Silk Road branch-out – on the energy front, ports, the Health Silk
Road, digital interconnection – will be strategically targeted. Those who were dreaming
that Covid-19 could be the ideal pretext for a new Yalta – uniting Trump, Xi and Putin
– may rest in peace.
"Containment" will go into overdrive. A neat example is Admiral Philip Davidson – head
of the Indo-Pacific Command – asking for $20 billion for a
"robust military cordon" from California to Japan and down the Pacific Rim, complete with
"highly survivable, precision-strike networks" along the Pacific Rim and "forward-based,
rotational joint forces" to counteract the "renewed threat we face from great power
competition."
Davidson argues that, "without a valid and convincing conventional deterrent, China and
Russia will be emboldened to take action in the region to supplant U.S. interests."
... ... ...
From the point of view of large swathes of the Global South, the current, extremely
dangerous incandescence, or New Cold War, is mostly interpreted as the progressive ending of
the Western coalition's hegemony over the whole planet.
Still, scores of nations are being asked, bluntly, by the hegemon to position themselves
once again in a "you're with us or against us" global war on terror imperative.
... ... ...
For the first time in 35 years, Beijing will be forced to relinquish its economic growth
targets. This also means that the objective of doubling GDP and per capita income by 2020
compared with 2010 will also be postponed.
What we should expect is absolute emphasis on domestic spending – and social stability
– over a struggle to become a global leader, even if that's not totally overlooked.
... ... ...
Internally, Beijing will boost support for state-owned enterprises that are strong in
innovation and risk-taking. China always defies predictions by Western "experts." For instance,
exports rose 3.5 percent in April, when the experts were forecasting a decline of 15.7 percent.
The trade surplus was $45.3 billion, when experts were forecasting only $6.3 billion.
Beijing seems to identify clearly the extending gap between a West, especially the U.S.,
that's plunging into de facto New Great Depression territory with a China that's about to
rekindle economic growth
Zhu , May 20, 2020 at 00:34
"A toxic mixture of racism and anti-communism" sounds about right. The Chinese government
is not submissive and the "Chinks" are getting too prosperous. That's bound to infuriate both
elite and grass-roots Americans.
Drew Hunkins , May 20, 2020 at 00:34
"For the first time in 35 years, Beijing will be forced to relinquish its economic growth
targets. This also means that the objective of doubling GDP and per capita income by 2020
compared with 2010 will also be postponed. "
Good, good, just wonderful. This will really endear the United States to the Chinese
people.
All that the Chinese govt did for its people over the last 30 years is totally eliminate
poverty, that's all. Gotta love how our Western mass media won't shut their mouths about this
small achievement.
Drew Hunkins , May 20, 2020 at 00:15
"Those who were dreaming that Covid-19 could be the ideal pretext for a new Yalta –
uniting Trump, Xi and Putin – may rest in peace."
Rest in peace, no doubt. Washington is all about unilateralism, period. This is the crux
of the issue, the rapacious capitalist-imperialists who infest Wall St, the military
contractors and corporate mass media want nothing to do with a multi-polar world. This could
lead to putting the far east on a dangerous path with U.S. warships provocatively traversing
the area.
gcw , May 19, 2020 at 21:08
The politicians controlling US foreign policy are leading us straight into the 19th
century, with their updated gunboat diplomacy . Never a thought to the impending
disaster of climate change and unparalleled social and environmental chaos, they dream
instead of yet another Cold War (Yellow-Peril 2.0), all the time sustaining a gargantuan
military establishment which is draining the life-blood from American society. The Covid-19
virus is just a warning to us: we have about 5% of the world's population, yet lead the pack
in deaths from the virus. If this monumental display of incompetence doesn't wake us up, what
will?
@utu ... He produces evidence, evidence in response to highly-coordinated anti-China
propaganda, the mountains of belligerent lies that are all that remain today of the failed
state the USA. Those lies plus its military killing millions all over the world, incessantly
destroying or attempting to destroy states simply for being independent.
The best argument I have read from the anti China camp has been that if China succeeds, US
dollar will be kaput, living standard in the USA will tanked to shit levels compare to right
now.
Why would China succeeding reduce our living standard?
@Realist If China succeeds, that means dollar as reserve currency is kaput. Without the
reserved currency status, dollar will devalue by 50% or more. Living standard auto lowers by
50% or more.
Just a thought: what if people like Gordon Guthrie Chang, Jennifer Zeng, Peter Navarro or
even Maria Bartiromo suggest to the two dude Trump and Pompeo sending FBI, CIA agents
or even national guard to American's rural areas, small isolate farming communities in
Pennsylvania, Oregon ripping off every Huawei and ZTE hardwares 2G, 3G, 4G and maybe 5G if
any, cell towers and replaced it with Ericsson and Nokia. Would it make America great again
?
Almost every freaking day Trump and Pompeo bashing China including Huawei.. Not a day of
peace without china bashing.
Days earlier ZeroHedge, SCMP and other media reported freaking Trump and Pompeo... no
companies inside or outside USA can sell American software or technology items or chips made
with USA properties or machines to Huawei.
Meaning TSMC a Taiwan chip's foundry not permitted to sell any chips to Huawei, TSMC has
been the world's dedicated semiconductor foundry. "curtailing its chip supply, an
escalation of its campaign against the Chinese company that may also hurt Taiwan
Semiconductor Manufacturing Co."
"China has the most fab projects in the world.... 30 facilities planned, including
10/7nm processes, but trade war and economic factors could slow progress...... SMIC 's
move would put it on par with some of its foreign rivals. In addition, SMIC has
obtained $10 billion in funding to develop 10nm and 7nm. Semiconductor Manufacturing
International Corporation (SMIC) is a publicly held semiconductor foundry company, and the
largest in China.
"Wuhan Hongxin Semiconductor Manufacturing (HSMC), a logic IC foundry founded in late
2017, is gearing up for 14nm and 7nm process manufacturing eyeing to be China's most advanced
contract chipmaker.....Shang-yi Chiang, the former executive VP and co-chief operating
officer overseeing R&D for Taiwan Semiconductor Manufacturing Company (TSMC), will join a
Wuhan-headquartered foundry in China. "<
Gone are the "good 'ole days" of BRICS bonhomie when the Alt-Media Community used to sing the
praises of this nascent trade bloc and portray it as a game-changing development in
International Relations. Although promising on paper, BRICS was always destined
to be disappointing due to the irreparable differences between India and China that were
either downplayed or outright ignored by this organization's loudest advocates. The author has
been consistently warning for over the past four years that " India Is Now An American Ally " after it
clinched the Logistics Exchange Memorandum Of Agreement (LEMOA) with the US to allow the latter
to use its military infrastructure on a case-by-case "logistical" bases. Since then, India has
fully submitted to the Pentagon's "Indo-Pacific"
strategy of empowering the South Asian state as a "counterweight" China, with even Russian
Foreign Minister Lavrov loudly warning his
country's strategic partner of
the pitfalls of this scenario as recently as early January of this year while speaking at a
conference in their country.
Modi's Military Madness
Alas, whether due to long-lasting ignorance of the situation, unchecked professional
incompetence, and/or shadowy motives that can only be speculated upon, the majority of the
Alt-Media Community still refuses to recognize these facts, though the latest developments
pertaining to Indian-Chinese relations might finally cause them to reconsider their
inexplicable stance of always "covering up" for New Delhi. India has recently clashed with
China
along the Line of Actual Control (LAC) in
Indian-Occupied Kashmir 's Ladakh region and close to the Donglang Plateau (described as
"Doklam" by India and thus widely reported upon with this name in the Western Mainstream Media
and among the members of the Alt-Media Community sympathetic to New Delhi) near Sikkim where
they had their infamous three-month-long standoff
in summer 2017 (which threatened
to repeat itself in 2018). So tense has the situation become in Ladakh that China
reportedly flew several helicopters near the scene while India flew a few fighter jets,
significantly upping the ante.
India's Attempt To "Poach" Chinese-Based Companies
The backdrop against which these clashes are transpiring is India's aggressive attempt to
"poach" foreign companies from the People's Republic, which the author analyzed last month in
his piece about how " India's Selective Embrace
Of Economic Nationalism Has Anti-Chinese Motivations ". Of relevance, India has also set
aside land
twice the size of Luxembourg for such companies to exploit in the event that they decide to
re-offshore from the East Asian state to the South Asian one.
This perfectly dovetails with Trump's " trade
war " plans to encourage foreign companies to leave his country's rival and either return
home or set up shop in a friendly pro-American country instead. Of note, India is also
vehemently opposed to China's Belt & Road Initiative ( BRI ) behind the US on
the basis that its flagship project of the China-Pakistan Economic Corridor ( CPEC
) traverses through territory that New Delhi claims as its own per its maximalist approach to
the Kashmir Conflict .
Obviously, the US couldn't have found a better ally than India to thwart China's economic
plans.
The US Might Rule The WHO Via Its Indian Proxy
On the soft power front, India is
slated to assume leadership of the World Health Assembly (WHA, the governing body of the
World Health Organization, WHO) from Japan later this month, and it's already being widely
speculated in Indian media that the country might be
seriously considering taking the US' side in respect to investigating the WHO for its
alleged pro-Chinese
bias . Not only that, but India might even be receptive towards Taiwan's request to
participate in the organization's meetings, the scenario of which has already concerned China
so much that its embassy in New Delhi
felt compelled to remind the Indian leadership that doing so would violate the One China
principle. From the American perspective, this is an unprecedented opportunity for Washington
to exercise proxy leadership of the WHO through its "junior partner" of India, which could add
a speciously convincing degree of credibility to its anti-Chinese claims in an attempt to win
back the many hearts and minds that it's lost to its rival throughout the course of World War
C .
The Indo-American Hybrid War On China
Taken together, India is indisputably intensifying its American-backed Hybrid
War against China as a sign of fealty to its new ally, especially considering that it's
only officially been the US' " comprehensive global
strategic partner " since Trump's landmark visit to the country a few months back in
February and thus feels like it has something to prove. Both countries share the grand
strategic goal of "containing" China, to which end they're working hand-in-glove with one
another to carry out this concerted campaign against the People's Republic.
Building off of the idiom, the American hand is unquestionably controlling the Indian
glove after Trump cracked the whip on
Modi by forcing him to export hydroxychloroquine to
the US last month, which asserted his country's dominance as India's neo-imperial master.
Whether across the military, economic, or soft power domains, the US-Indian alliance is
doing its utmost to create serious difficulties for China. With India now suspecting China of
building an island off of its coast, ties will likely continue to worsen to the US'
benefit.
An anonymous reader shares a report: China is ready to take a series of countermeasures against
a US plan to
block shipments of semiconductors to Chinese telecom firm Huawei , including putting US
companies on an "unreliable entity list," launching investigations and imposing restrictions on
US companies such as Apple and suspending the purchase of Boeing airplanes, a source close to
the Chinese government told the Global Times. The Trump administration on Friday moved to block
shipments of semiconductors to Huawei from global chipmakers. The US Commerce Department said
it was amending an export rule and the Entity List to "strategically target Huawei's
acquisition of semiconductors that are the direct product of certain US software and
technology," according to a statement on its website. "China will take forceful countermeasures
to protect its own legitimate rights," if the US moves forward with the plan to bar essential
suppliers of chips, including Taiwan-based TSMC, from selling chips to the Chinese tech giant,
the source told the Global Times in an exclusive interview.
China will also put a lot of money into making things that it has, up to now, obtained
from the USA. It might take a few years, but China's government set up (ie one party always
in power) means that it does not have to do things to an electoral cycle.
"... Sad but true. We are all given our illusions. In US its the illusion of democracy which is a fake democracy cloaking our totalitarian reality. In China they give the people the illusion of moving towards socialism, a fake socialism to be sure, never mind all the billionaire party members (and they don't have universal health care either, its insurance based) .The people have long accepted the reality of totalitarianism so they are one step ahead. ..."
Sad but true. We are all given our illusions. In US its the illusion of democracy which
is a fake democracy cloaking our totalitarian reality. In China they give the people the
illusion of moving towards socialism, a fake socialism to be sure, never mind all the
billionaire party members (and they don't have universal health care either, its insurance
based) .The people have long accepted the reality of totalitarianism so they are one step
ahead.
Since China doesn't have another party to blame they must blame external enemies like the
US and we happily play along with tarrifs paid for by us dumb sheep who cry out in
satisfaction "take that". Lol
A fake Cold War works for us too. Trump says we are in a race for 5G and AI/Robotics with
China. We must win or all is lost to China. Social credit scores, digital ID and digital
currency along with Total Information Awareness and Full Spectrum Dominance over the
herd.
Health effects of 5G will be blamed on CoVID. Fake Science is a great tool. Scientists
never lie, they can be trusted, just like Priests . They are the Priests of the New
Technocratic World Order. Global Warming and COVID- We must believe. They say Vaccines and 5G
are good for you, just like DDT and Tobacco were said to be Good by Scientists of another
time. We must believe. Have Faith and you will earn social credit bonus points.
Reality is Fake Wrestling. Kayfabe all the way baby. Who is the face and who is the heel?
We are free to choose. So who says we don't have freedom?
But it was natural target of offshoring manufacturing during neoliberal globalization frenzy.
Now the USA needs to pay the price for the betryal of its elite.
Notable quotes:
"... China is not a natural ally of the US. It was helped for decades as a counterweight to the USSR and that policy continued after the Cold War ended because the Western elite reaped vast profits from the entry of a billion Chinese into the world labour markets. We have created a monster of arrogance and economic dynamism that refuses to take measures against novel coronaviruses springing out of their peculiar eating and aphrodisiac medicine habits. ..."
The USA is under no obligation whatsoever to be friendly to Russia, and especially not to
China which rather owes America for everything and has repaid it in death. Capital and
technology has flowed to China from America for decades. In return they sent profit to Wall
St, Wuhan made Fentanyl the death of choice for whites desperate as a result of the policies
that made China did so well out of, and now they send us a deadly epidemic.
China is not a natural ally of the US. It was helped for decades as a counterweight to
the USSR and that policy continued after the Cold War ended because the Western elite reaped
vast profits from the entry of a billion Chinese into the world labour markets. We have
created a monster of arrogance and economic dynamism that refuses to take measures against
novel coronaviruses springing out of their peculiar eating and aphrodisiac medicine
habits.
It was coffee made from beans taken from civet faeces that led to the SARS-CoV bat/ civet
recombination virus and the 2002 Sars outbreak, during which China lied about what was
happening as they subsequently admitted. The SARS-CoV 2 receptor-binding domain from
pangolins ( world's most trafficked animal, is in demand by Chinese as a male enhancer) and
it recombined with a bat virus was hundreds of times more effective a pathogen in humans than
the one from bat–civet recombination of eighteen years ago.
But that is not what the Chinese said. Researchers in Wuhan on December 31st told the
world about the Wuhan disease having been identifies as a coronavirus but said, 'It's not
highly transmissible'. As late as the the 24th of January, Doctor Fauci w gave a briefing for
senators in which he said there was very little danger to the US from the Wuhan disease.
Later that day he repeated that opinion at a press conference.
So China said it was not infectious between people and there was nothing much to worry
about. When Trump began to restrict travel into the US from China on the 31st January there
was uproar about this supposed further evidence of his xenophobia,.
President Trump has used his executive power to take a hatchet to 40 years of America's
China policy. His administration has called for a
"whole-of-government" approach to counter Beijing's unfair economic practices, initiated a
damaging trade war, banned Chinese telecommunication equipment from domestic networks, and
implemented stringent regulations to vet Chinese investments in sensitive industries.
In a novel development, the administration has begun coaxing individual states to aid the
federal government in its anti-China fervor. Speaking to the National Governors Association in
early February, Secretary of State Mike Pompeo warned that "competition with
China is not just a federal issue It's happening in your states with consequences for our
foreign policy, for the citizens that reside in your states, and indeed, for each of you."
The administration's enlisting of states in the broader U.S.-China competition has
significant economic implications for subnational actors. Increasingly hawkish incumbents, as
well as congressional candidates, could provoke economic pushback from Beijing. Many of these
officials have bought into the Republican Party's strategy of carrying out an " anti-China
assault " on the campaign trail, scapegoating Beijing for the coronavirus outbreak in the
United States instead of acknowledging the Trump administration's central role in the country's
failure to prepare itself properly.
While Washington is correct to scrutinize Chinese investments in sensitive technologies
and pursue reciprocal trade and economic relations, politically motivated, opportunistic
anti-China rhetoric could threaten individual states' cooperation with China, one of the few
remaining productive aspects of the bilateral relationship. Indeed, as Hu Xijin, editor of
Chinese tabloid Global Times, tweeted , "Beijing is already
preparing to take necessary punishment measures against some members of the US Congress, the
state of Missouri, and relevant individuals and entities."
China-skeptic sentiment in the U.S. government and on the campaign trail is not a new
phenomenon , but the
coronavirus pandemic and resultant economic crisis have afforded many politicians the cover to
push hawkish policies. Some of their proposals would benefit the United States, including
reducing
U.S. reliance on Chinese-made pharmaceutical products , a motion broadly backed by both
Republicans and Democrats. But many of their arguments are politically motivated and risk
further inflaming U.S.-China tensions and painting Beijing as an enemy, à la the Soviet
Union during the Cold War, rather than a competitor.
Senator Tom Cotton made waves last month by arguing that U.S. universities should not
accept Chinese STEM students given the chance they might return home and use their training
to drive China's scientific advances. Senators Josh Hawley and Marco Rubio have also joined the
fray, advocating that the United States reduce its reliance on China and punish the country for
failing to contain the COVID-19 outbreak. The attorneys general of Missouri and
Mississippi have filed lawsuits seeking damages from Beijing for the coronavirus.
Incumbents, however, are not the only ones wagering their political futures on China. Senate
candidates in Tennessee , Arizona , and
Alabama , among other states,
have adopted overtly hawkish stances toward Beijing, blaming China for the pandemic, painting
their opponents as soft on the country, and using the China threat to push anti-immigration
policies .
Amid Washington's anti-China turn, preserving cooperation at the state level will be
critical to maintaining any semblance of productive bilateral ties going forward. As Los
Angeles Deputy Mayor of International Affairs Nina Hachigian said at a Brookings panel
last year, "cities and states can take advantage of the trade, investment, students, climate
change cooperation, culture, and tourism China offers without really having to balance the
broader national security, geopolitical, and human rights questions."
It is no coincidence that three of the past four U.S. Ambassadors to Beijing previously
served as governors of states with deep links to China: Terry Branstad (Iowa), Gary Locke
(Washington), and John Huntsman (Utah).
The aforementioned politicians may be fighting to relocate supply chains outside of mainland
China and decouple vast sections of the two countries' economies, but their rhetoric may also
lead Beijing to move Chinese-owned businesses out of the United States or cut imports from the
country. Despite bilateral tensions, there is clear evidence that Chinese investments in the
United States can be beneficial. In the midst of the trade war, a Chinese takeover of a failing
paper mill in Maine helped revitalize a local community. In Tennessee, Chinese investments in
automotive
parts ,
mattresses , and porcelain manufacturing have benefited the state's economy. There is a
real risk that Chinese companies, seeing both politicians' and the American public's growing
distaste for China, could simply up and leave.
A more likely outcome of the growing antagonism, however, is for Beijing to engage in
economic coercion , which it uses to try to force nations, companies, and officials into
doing its bidding and punish those who do not. The Chinese Communist Party (CCP) has developed
a wide-ranging and flexible toolkit of coercive measures that it has used strategically
throughout the world.
When South Korea agreed to host the United States' Terminal High Altitude Area Defense
(THAAD) missile defense system, Beijing did not impose tariffs on Seoul despite its
displeasure. China instead
restricted flights to South Korea, drummed up nationalist sentiment among the Chinese public to
boycott South Korean goods, and even shut down China-based outlets of Lotte Group, the Korean
company on whose land THAAD was installed.
China took a similar approach with the
Philippines following a 2012 dispute over claims in the South China Sea. In order to cause
significant economic pain, Beijing tightened quality controls on agriculture exports from
Manila while stemming the flow of Chinese tourists to the Philippines. And most recently,
Beijing
threatened and then
followed through on a boycott of Australian beef after Canberra called for an independent
investigation into the origins of the coronavirus.
Beijing coerces not only countries but also private companies for perceived transgressions.
Marriott, Delta Airlines, and Zara all faced the prospect of losing business in China after
listing Taiwan, Hong Kong, or Tibet as sovereign nations. Last fall, Beijing suspended
broadcasts of NBA games after Houston Rockets general manager Daryl Morey tweeted his support for pro-democracy
protestors in Hong Kong.
If public sentiment across the United States continues to turn against China, Beijing may
begin adapting its methods of economic coercion to retaliate against states and politicians it
perceives as hostile to its interests.
Indeed, China is clearly paying attention to U.S. domestic politics and state officials'
views of China. A think tank in Beijing recently ranked
all 50 governors on their attitudes toward China, information the CCP values as it attempts to
mold the views of officials outside of Washington. As Dan Blumenthal has noted ,
Beijing "split[s] Americans into 'friends of China' who might lobby on their behalf and others
who refuse to do so [and] will not be granted access to China's massive market."
In recent years, Beijing has provided glimpses of what economic coercion in the United
States might look like. During the initial stages of the trade war, China's retaliatory tariffs
disproportionally targeted Red
states critical to Trump's 2016 election victory. Furthermore, China
identified key officials able to influence U.S. policy, such as then-Wisconsin
Representative Paul Ryan and Senate Majority Leader Mitch McConnell, and levied tariffs that
threatened jobs in and exports from their states in a bid to pressure the politicians to split
with Trump.
These actions are possible harbingers of economic pressures to come. Beijing may be tempted
to pressure local officials to influence policy from the bottom up. As the aforementioned think
tank report explicitly notes
, Beijing believes that "State-level officials 'enjoy a certain degree of diplomatic
independence,'" and that "Governors can ignore orders from the White House."
Recent downturns in public opinion in both countries, the result of several years of
increasing competition, and an emerging view that the other views the pandemic as a strategic
opportunity, could even see Beijing move beyond tariffs and drum up anti-U.S. sentiment. It
could even encourage citizens to boycott American products, the political and economic effects
of which could be devastating.
While the United States imports more from China than it exports, China-bound exports
supported around
one million U.S. jobs in 2018. According to the U.S.-China Business Council, 42 states counted
China among their top five export destinations in 2019. Chinese FDI, which peaked
at $46.5 billion in 2016, dropped to just over $3 billion in 2019 -- a decline of over 90
percent. Industries ranging from energy, agriculture, and manufacturing could be negatively
affected by an exodus of Chinese investment, a freeze on new Chinese FDI into the United
States, or increased tariffs on or bans of imports.
Given the astronomically high
unemployment rate and ballooning federal and state debt levels, U.S. states are in no
position to lose more investments or export-supporting jobs. Senator McConnell's recent call
for states to file
bankruptcy highlights their increasingly gloomy economic prospects, and already over 25
percent of state revenues have
disappeared due to the coronavirus.
The United States certainly needs to diversify its supply chains so as not to depend so much
on China. Washington has already rolled out several measures to better screen Chinese
investments in the country and limit sensitive technology exports. The increasingly prevalent
and politically expedient one-size-fits-all anti-China position espoused by many state-level
politicians, however, could endanger China-state ties, the locus of the two countries' economic
relationship, and threaten China-owned U.S.-based companies that pose no national security
threats and provide hundreds of thousands of jobs.
I recently came across a Facebook comment
from a Hongkonger, arguing that the Chinese Communist Party (CCP) is nothing communist
given China's prosperous private sector after 1979's reform . He then linked
a video to mock
the western electoral democracy that put Trump and Hitler into the office, leading to the
conclusion that the West has no credential to criticize the one-party system of China for
the lack of democracy. His comment represents the contemporary Chinese sentiment and is
quite understandable given the ongoing color revolution in Hong Kong
2019 , which is still lukewarm to this day, and the unrelenting
blame of COVID19 on China . Although the hybrid war waged on
China is unjust, the current Chinese mindset does not help to diffuse but only fuels
the conflict even further.
The Facebook comment was right about CPP not being Communist that seeks total control
of the economy by the state. Yet, China is state capitalism, an oligarchy, or crony
capitalism. China is a plutocracy by the marriage between the party leadership (the state),
and the monopolizing mega-corporations (the money) like Huawei, Ali, the four state-owned commercial
banks , and Sinopec Group .
It is far from a free-market where the only way to win a competition is to provide
excellent products, where the state has no role in deciding the winner and no ability to
finance itself by forcing the circulation of central-banknotes. China does have a private
sector – the semi-free-market, the good part of our bad plutocracy. Still, even that
part is
weathering after supreme leader Xi took power, and most Chinese do no realize that we
are marching back into a more planned, more communism, more Mao Zedong like system, slowly
but surely. In China, life is artificially expensive under the tightening state control
that imposes layers upon layers of covert taxation, to the point of causing hesitation
to have more children .
However, the west, in general, is fundamentally the same, albeit having a
façade electoral democracy where no crucial issues (i.e., war and peace, monetary
policy, and downsizing the government) are allowed into a debate.
The real private sector (not the likes of Google and Lockheed Martin) is also dying. The
states interfere with the market relentlessly, in the name of safety, welfare, and
stimulating the economy, which achieved the opposite (i.e., the 1929 great depression, 2000
dot com bubble, and 2008 housing bubble). The Federal Reserve finances the government
spending via debt, encourages malinvestment by
atrocious QE packages , which all translate into taxing away people's purchasing power
by creating tons of money out of thin air.
We see the same unholy marriage between the state and the money like big techs, big
pharma, and, most disgustingly, the Military-Industrial Complex. People are either covertly
forced, or duped into funding the nonsense by paying tax, no matter which party they
elect.
Therefore, the Chinese are right about the West not in the position of a critic, but
for the wrong reason. We either fail to realize or willfully deny that we are living
under a harsh plutocracy. Instead, we are distracted by the never losing fake debate about which system
elects the better government, since the "one-party system" is most attacked by western
pro-democracy voices.
Strangely though, both systems have seemingly good intentions, either emphasizing a
person's moral conduct and experience in low-tier office (the Chinese internal nomination),
or the people's direct control of the government (the West electoral democracy). Strangely,
both unanimously favor the use of "government power" the "right way."
Yet, power always corrupts its user by attracting the money, no matter how
well-disciplined, how experienced he/she was. A system that operates on coercive power
always finds its way to circumvent any laws and regulations meant to promote meritocracy.
Both have tried to fight cronyism rigorously with new agencies and new legislation, but in
the end, cronyism always prevails, for both. For the most part of history, the essence
of the Chinese system is not much different from the West, since they are all plutocracies
that conned the people into helplessly relying on more power to solve problems caused by
power until it collapses.
In
a 1979 Chinese opera broadcasted nationwide, the protagonist, a low tier official,
finds himself risking his political career to enforce the law on the aristocrats who made
the law; intoxicated, he yelled in desperation
"谁做管官的官," which literally is " Quis
custodiet ipsos custodes " in Chinese; in the end, he left his career behind
– adding no more to the bloated, self-conflicting bureaucracy, to preserve his
integrity. Maybe this was a coincidence, 1979 was the year the Chinese leadership decided
to let the
government govern less – kudos to them.
The year 1979, and the economic boom that followed, is
one of the most common counter-arguments from a Chinese when you criticize the draconian
practices of CCP. Admittedly, there are times the state power is not insane. In 1979 Deng
Xiaoping at least gave up
some government mandate to allow the private sector to grow , resulting in the
exploitative system we see today, nonetheless a society much more productive than Mao
Zedong's total state dominance. Some state heads refrained from moving the government
"muscle" too much, such as Jimmy Carter's
resistance to wars and money supply that reduced overspending and inflation since the
Vietnam War. In these "less bad, more sensible" eras, it is easier for people's
entrepreneurial spirit and creativity to overcome the innate
irresponsibility of centralized capital management. As a result, we saw significant
progress like the Chinese miracle, and the upswing during the Reagan presidency (even if he
turned up wars, debt, and the Fed's money machine again). Sadly, the leaderships are eager
to claim credits, creating the impression that it is the right administration resulting in
progress and recovery when it is the lack of governing that allows the people to make
sensible decisions on their own, achieving faster growth.
If we Chinese and the American attack each other's electoral system, it is like the two
worst kids in the class picking on each other over their looks rather than their poor study
and bullying of other kids, which only makes them both worse. In the real world, we leave
the unhinged growth of government power – the real enemy of all people, Chinese and
American alike, unattended.
Like that Hongkonger, most Chinese learned to mock Trump's personal, and naively
conclude that the democracy that put him (and Hilter) in the office is a joke. Some more
informed Chinese mock the media's clownish, unfair treatment of Trump, and naively conclude
that the freedom of the press is a joke. However, a bombastic president, the democracy, and
the media are not the problems; neither are the aggressive
sino-phobic policies of which Trump pretends to be in charge. The actual problem is the
monstrous government, married with big money, capable of waging costly war, funding
wasteful programs that drain the middle class to enrich a selected few, no matter who is in
the office. It can either be the well-spoken Obama loved by the media, who started
seven
wars and won the Nobel peace prize, or the bombastic, scandalous New Yorker hated by
the press, who nonetheless continued these wars. People coerced into funding this abusive
machine themselves are part of, with their hard-earned tax dollars, is the problem. Yet,
you do not see the Chinese majority mocking this miserable setup and come to realize that
we are under the same situation!
For us, the Chinese, the real issue is not the superficial corruption that the supreme
leader XI fiercely fought, nor the insanity, the incompetence, and the betrayal of the oath
of some party members. It is our innate reliance on authorities and the love of collective
glory, a part of our culture passing down through generations over more than 2400 years,
being the problem. We can never break the dynastic cycle if we do not see the path
to the self-destruction of unhinged state power, such as Mao's era . If we are still yearning
for a "just leader" to solve issues like retirement, education, and medication, still
admiring exhaustive achievements such as the Belt and Road, the South China Sea, and
Taiwan, we then have learned nothing from the downfall of thirteen dynasties and countless
hegemonies throughout the history of China. The collective conscious of the Chinese have so
far failed to realize the force driving the rise and fall of a dynasty is not the moral and
intellect of the leaders, but the people's economic freedom relatively untouched or
infringed at times, by a mixture of chance, sanity, and imperialism vainglory. The blind
reliance on leaders and the love of collective grandiosity is only compounded when the
Americans fail to take back their power from the government, who is warring with China and
covertly overtaxing them. The collective enlightenment of the Chinese population is nearly
impossible, since the tyrants in Beijing have no shortage of strawman to throw at the
people and say "that is the problem, blame the belligerent Trump and the jealous
Americans", and the Communist Dynasty will always enjoy the " mandate of heaven ".
Even with a sheep's mindset, the Chinese economy will overtake the US, despite the slow
death of its most productive private sector. The sheer momentum of the slight right turn to
liberty 40 years ago is good enough for China, since the Americans do not restore their
free-market and liberty that had made them an exceptionally productive civilization for a
long time. But then what? We Chinese are just molecules burnt to fuel the blinding flash of
a new empire not far from its fourteenth dynastic downfall, just like the Achaemenids, the
Romans, the Umayyads, the Ottomans, Napoleon's France, the British, and the Americans
before us.
Xiaoran Tong has a Ph.D. in
Epidemiology from the Michigan State University (MSU). He is originally from Kunming,
Yunan, China and arrived in the US in 2014 to pursue his Ph.D. at MSU. He is Interested in
the history of America and its similarities with ancient and contemporary
China.
Amid the ongoing diplomatic spat between Washington DC and Beijing,
which now also includes the deployment of B-1B
bombers and warships in the South China Sea , late on Monday (local time) China's Global Times
reported , citing sources close to the Chinese government, that some "hawkish" officials in
China are calling for a renegotiation the the "phase one" trade deal with Washington as well as
a "tit-for-tat approach on spiraling trade issues after US' malicious attacks on China ignited
a tsunami of anger among Chinese trade insiders."
The calls to renegotiate the current version of the deal - which has yet to be actively
implemented - emerge amid dissatisfaction because "China has made compromise for the deal to
press ahead."
While in the past, these same trade negotiators "believed that it would be worthwhile to
make certain compromise to reach a partial truce in the 22-month trade war and ease escalating
tensions", given what the Global Times called "President Donald Trump's hyping an anti-China
conspiracy that aims to cover up his mishandling of the COVID-19 pandemic", advisors close to
the trade talks have suggested Chinese officials rekindling the possibility of invalidating the
trade pact and negotiating a new one to tilt the scales more to the Chinese side, sources close
the matter told the Global Times.
A former Chinese trade official told the Global Times on condition of anonymity on Monday
that China could complete such procedures based on force majeure provisions in the pact.
"It's in fact in China's interests to terminate the current phase one deal. It is beneficial
to us. The US now cannot afford to restart the trade war with China if everything goes back to
the starting point," another trade advisor to the Chinese government told the Global Times,
pointing to the staggering US economy and the coming of the US presidential election this
year.
"After signing the phase one deal, the US intensifies crackdown in other areas such as
technology, politics and the military against China. So if we don't retreat on trade issues,
the US could be trapped," the former official noted.
Some could disagree, and counter that Trump can certainly restart the trade war especially
since it suits his pre-election agenda - after all, now that the fate of the market is entirely
in the hands of the Fed which has gone full MMT, Trump is no longer afraid by the market's
response to a renewed trade war. In fact, with over 60% of the US population seeking to
distance US from China, it would appear that Trump's best bet to winning independent votes is
precisely to keep hammering China.
Confirming this, Trump said on Friday that he was "very torn" about whether to end the
China-US phase one deal, Fox News reported, with some observers interpreting his words as
equating to a threat from the US to re-launch a trade war against China.
Then again, over the weekend, the SCMP reported that US source familiar with recent
discussions stated US officials acknowledged China was largely delivering its pledges on
structural issues such as opening market access and improving IP protection but they have yet
to agree in some details including IP action plan and easing equity caps for foreign investors.
Furthermore, the source stated fallout from the virus meant agreement on purchasing US goods
has become much more important and that many believe China needs to increase pace on
purchases.
Meanwhile, Gao Lingyun, an expert at the Chinese Academy of Social Sciences who advises the
government on trade issues, told the Global Times on Monday that China has "well documented"
Washington's usual threats after previous rounds of confrontation. That means if the trade war
restarts, "China knows how to respond, and it is able to retaliate quickly and inflict serious
harm on the US economy," Gao said.
Still, as the Global Times concludes, analysts noted that terminating the phase one trade
deal would be China's "last option" and one that China would only resort to under extremely
hostile conditions.
"... What does a developing country like China, still mired in socio-economic inequality, technological dependence, political corruption and environmental degradation do? Concentrate on its own hinterland while bidding its time? Confront the hegemon head-on which would lead to military conflict? Or control its responses while cultivating partnerships with ALL peace-loving countries, whether rich or poor, First World or Third World, Western or non-Western? ..."
Unlike Escobar, Roberts, et al, I am much more sanguine about the prospects of China's rise
which has threatened the indispensable nation of Yankistan because China was not supposed to
rise above its assigned role as the cheap cog of the globalist economy serving the Capitalist
Oligarchy of the NWO. By dint of hard work, sly cunning and shrew tactics, China outgrew its
role by becoming the hub of the international economy via its New Silk Road and the BRI.
What does a developing country like China, still mired in socio-economic inequality,
technological dependence, political corruption and environmental degradation do? Concentrate on
its own hinterland while bidding its time? Confront the hegemon head-on which would lead to
military conflict? Or control its responses while cultivating partnerships with ALL
peace-loving countries, whether rich or poor, First World or Third World, Western or
non-Western?
The rapid decoupling of China's economy away from the USA started with the GFC 2008 but has
since accelerated with Obama's "Pivot to Asia" and Trump's trade war with China. Exports to the
USA account for less than 3% of China's GDP today with 60% of those exports being either US or
foreign goods manufactured in China. So the real figure is 1% of China's GDP consists of
Chinese goods exported to the US market, consisting mostly of industrial commodities or
consumer products.
As China has already charted its own independent path of building trading/investment
partnerships with Europe, Asia, Africa and Latin America, the USA has become threatened by
China's successful decoupling from its export dependence on the US market as proven by its
hostile reaction to Xi's BRI and China's New Silk Road. In addition, the US was caught
off-guard by the sudden rise of Chinese tech firms such as Huawei which is the world's number
one vendor of telecommunications equipment with undisputed world leadership in 5G
technology.
Shocked to find its manhood as no longer exceptional, Uncle Sam feels the need to show off
to the world: "Me Gringo! Big Dick!"
China has become, over the past two decades, the planet’s second-most powerful nation after the United States. Booming
economic growth has lifted millions of its citizens out of poverty and catapulted it to the world’s second-largest economy,
while increased military spending has made it the second-largest military power (though its military spending, and nuclear
stockpile, are still a small fraction of the U.S.’s).
That growth — in both economic and military power — has led U.S. officials to conclude that they must do more to counteract
what they regard as China’s growing influence. President Obama, early in his administration, memorably vowed an “Asia pivot,”
whereby the U.S. would devote fewer resources and less attention to the Middle East and more toward China’s growing power in its
own region.
That led to some moderate escalation in adversarial relations between the two countries — including the Trans Pacific
Partnership trade agreement (TPP) and other regional skirmishes — but nothing approaching direct military confrontation.
President Trump, since taking office, has largely heaped praise on the Chinese government and its leader President Xi Jinping,
siding with Xi over democracy protests in Hong Kong and even Beijing’s handling of the coronavirus outbreak.
But this pandemic has seriously escalated tensions between the two countries given the increasingly hostile rhetoric
emanating from various sectors of the west, making it more urgent than ever to grapple with the complex relations between the
two countries and how China ought to be perceived.
The question is far more complex than the usual efforts to create a new U.S. Enemy because numerous power centres in the U.S.
and the west generally — particularly its oligarchs, Wall Street, and international capital — are not remotely hostile to
Beijing but, quite the contrary, are both fond of it and dependent upon it. That’s why — unlike with other U.S. enemies such as
Saddam Hussein, Fidel Castro, the Iranian government or Nicolas Maduro — one finds very powerful actors, from Bill Gates to
Michael Bloomberg to the consulting giant McKinsey to Trump himself, defending Chinese officials and urging better relations
with them.
That, in turn, reflects a critical reality about U.S./China relations that defies standard foreign policy frameworks: while
hawkish, pro-war political elements in both parties speak of China as an adversary that must be confronted or even punished, the
interests of powerful western financial actors — the Davos crowd — are inextricably linked with China, using Chinese markets and
abusive Chinese labor practices to maximize their profit margins and, in the process, stripping away labor protections, liveable
wages and jobs from industrial towns in the U.S. and throughout the west.
That is why standard left-wing anti-imperialism or right-wing isolationism is an insufficient and overly simplified response
to thinking about China: policy choices regarding Beijing have immense impact on workers and the economic well-being of citizens
throughout the west.
Today’s new episode of SYSTEM UPDATE is devoted to sorting through the complexities of this relationship and how to think
about China. I’m joined by two guests with radically different views on these questions: the long-time Singeporean diplomat who
served as President of the U.N. Security Council, Kishore Mahbubani, whose just-released compelling book “Has China Won?” argues
that the U.S. should view China as a friendly competitor and not as a threat to its interests; and Matt Stoller, who has worked
on issues of economic authoritarianism and the U.S. working class in multiple positions in Congress and in various think tanks,
culminating in his 2019 book “Goliath,” and who argues that China is a threat to the economic well-being of the U.S. working
class and to civil liberties in the west.
The show, which I believe provides excellent insight into how to think about these questions, debuts this afternoon at 2:oo
pm ET on the Intercept’s YouTube channel or can be viewed on the player below at 2:30 p.m. As always, a transcript of the
program will be added shortly thereafter.
Update: May 7, 1:54 p.m. EDT
The debut time for this episode has been moved by 30 minutes; it will not debut on the Intercept’s YouTube channel at 2:30 pm
ET.
I have been watching China's gradual rise in the world's GDP– as well as GDP-per-capita– charts and a concomitant fall in the United
States' position in these charts, for nearly 20 years now. The United States' decline is still relative rather than absolute. In
absolute terms, its GDP is still "Number 1!" But the decline was accelerated from 2003 on, when successive US presidents decided
to pour massive amounts of government revenues into large-scale and always disastrous military adventures all around the world. As
of last November, Brown University's "Costs of War" project
tallied the U.S. budgetary costs of these wars, FY2001-2020, to be $6.4 trillion. These were funds that could have been invested,
instead, in repair and upgrading of vital infrastructure here at home– including vital health infrastructure. But no. Instead, the
money was shoveled into the pockets of the large military contractors who then used a portion of it on expensive lobbying operations
designed to ensure that the sow of military spending continued feeding her offspring (them.)
When Donald Trump became president, in 2017, one of his early instincts was to pull back from the foreign wars. (This was about
his only sound instinct.) The military-industrial complex then proved able to slow-walk a lot of the military-retraction moves
he wanted to make One of the other abiding themes of Trump's presidency has been his desire to "decouple" the U.S. economy from the
tight integration it had developed at many levels with the economy of China, as part of broader push to halt or slow the rise of
China's power in the global system. At the economic level, we have seen the "tariff wars" and the campaign against Huawei. At the
military level, we have seen a slight escalation in the kinds of "demonstration operations" the U.S. Navy has been mounting in the
South China Sea. Mobilizing against "Chinese influence" also seems to come naturally to a president who shows no hesitation in denigrating
anyone– even US citizens and politicians– who happens not to be of pale-complected European-style hue.
With the eruption of Covid-19 in U.S. communities nationwide, Pres. Trump's pre-existing proclivity to demonize and denigrate
anything Chinese has escalated considerably– spurred on, it seems, by his evident desire to find an external scapegoat to blame for
the terrible situation Covid-19 has inflicted on Americans and to detract voters' attention from the grave responsibility he and
his administration bear for their plight.
He and his economic advisors clearly realize that, with the supply chains of major US industries still inextricably
tied
up with companies located in China and with China still
holding $1.1 trillion-worth of U.S. government debt, he
can't just cut the cord and decouple from China overnight. Yesterday, his Treasury Secretary and the US Trade Representative held
a
phone call with China's Vice Premier Liu He, the intent of which was to reassure both sides that a trade deal concluded four
months ago would still be adhered to.
But today, less than 12 hours after the reassuring joint statement released after the phone call, Trump
told Fox News that he was
"very torn" about the trade deal, and had "not decided" whether to maintain it. This, as he launches frequent verbal tirades against
China for having "caused" the coronavirus crisis. US GDP is highly inflated by counting financial moves on Wall Street (extracting
money from suckers and moving money from one hand to another) as productive activity. China's purchasing power parity already exceeds
the US and I suspect its actual GDP does as well. Only US financialization is able to mask the lack of actual productivity in the
US economy.
I am somewhat skeptical about China chances in this race. That will be much tougher environment for China from now on. And
other major technological powers such as Germany, Korea and Japan are still allied with the USA.
The major problem for China is two social systems in one box: state capitalism part controlled by completely corrupt Communist
Party (which completely abandoned the communist doctrine and became essentially a religious cult ) + no less corrupt neoliberalism
part created with the help of the West.
The level of corruption inherent in the current setup (first adopted in Soviet NEP -- New Economic Policy) is tremendous, as
the party has absolute political power and controls the major economic and financial areas while the entrepreneurs try to bribe
state officials to get the leverage and/or enrich themselves at the state expense or bypass the bureaucratic limitations/inefficiencies
imposed by the state, or offload some costs. So mafia style relationship between party officials and entrepreneurs is not an aberration,
it is a norm. And periodic "purges" of corrupt Party officials do not solve the problem. Ecological problems in China are just
one side effect of this.
Add to this the certain pre-existing tendencies within Chinese society to put greed above everything else, the tendency clearly
visible in some emigrants and to which Yen devoted one post recently. Riots in some Asians countries against Chinese diaspora
are often at least partially caused by this diaspora behavior, not only by xenophobia. Note that several African countries with
Chinese investments now intent to sue China for damages from COVID-19. This is not accidental.
Technologically the USA and its G7 satellites are still in the lead although outsourcing manufacturing to China helped Chinese
tremendously to narrow the gap. For example, Intel CPUs still dominate both desktops and servers. All major operating systems
(with the exception of some flavors of Linux) are all USA developed.
You rise important points, but I respectfully disagree with all of them.
1) I don't think China is a "State capitalism" country. The term "State capitalism" was first coined by Lenin for a very specific
situation the USSR was in. Yes, the similarities are striking - and Deng Xiaoping's reforms were clearly inspired by Lenin's NEP
- but it is important to state that the CCP actively avoided the term and built upon the concept both theoretically and in practice.
Besides, we don't need to read Lenin's works critically, an not take him as the second coming of Jesus: when he used the term
"State capitalism", he used it in a clearly desperate moment of the USSR, almost by improvisation. Lenin's last years were definitely
desperate times.
Besides, the NEP didn't culminate with the capitalist restoration of the USSR. On the contrary: it collapsed in 1926 (after
another bad harvest) and gave way to the rise of Stalin and the radical faction of the CPSU. The Five-year plans were born (1928),
and agriculture would be fully collectivized by the end of the 1930s (a process which catapulted Molotov to the second most powerful
man in the USSR during the period). By the end of WWII, the USSR had a fully collectivized economy.
2) The corruption hypothesis is an attractive one - specially for the liberal middle classes of the post-war and for the Trotskyists
- but it doesn't stand the empirical test. The USA was an extremely corrupt nation from its foundation to pre-war, and it never
stopped it from growing and reaching prosperity. The Roman Empire and Republic were so corrupt that it was considered normal.
There's no evidence the PRC is historically exceptionally corrupt. However, I can see why the CCP is worried about corruption,
as it is a flank through which the West can sabotage it from within.
3) The COCOM tactic will be much harder to apply against China than against the USSR. For starters, the USSR lost circa 35%
of its GDP in WWII. This gave it a delay from which it never recovered. Second, the USSR fought against capitalism when capitalism
was at its apex. Third, the USSR collectivized and closed its economy too early, not taking into account that it still lived in
a capitalist world.
China doesn't have that now. It is fighting against capitalism in a phase where it is weakened. It is open and intimately integrated
economically with its capitalist enemies. It closed or is about to close the technological gap in many strategic sectors during
a stage where the capitalists have low retaliation capacity. It found time to close at least the GDP gap. It found time to recover
fully from its civil war and the Japanese Invasion of the Northeast.
Germany, South Korea and Japan are not technologically more advanced than the USA. This is a myth. Plus, they are too small.
They may serve as very useful - even essential - pawns for the USA-side, but I don't see any of the three ever achieving Pax
.
HiSilicon , Huawei
Technologies ' in-house semiconductor and integrated circuit design company, has surpassed
US chip giant Qualcomm in
terms of smartphone processor shipments in China for the first time amid coronavirus-linked
disruptions that have hit most major players, according to a report.
In the first quarter of 2020, HiSilicon shipped 22.21 million smartphone processors,
according to Chinese research firm CINNO's latest monthly report on China's semiconductor
industry. Although HiSilicon's shipments only increased slightly from the 22.17 million units
it shipped in the first quarter of last year, it was the only major company that did not see a
year-on-year decline in the quarter, CINNO said in a summary of the report posted on its
official WeChat account.
As a result, the Huawei subsidiary's market share surged to 43.9 per cent, from 36.5 per
cent during the same period last year, and beat Qualcomm for the first time to become China's
top smartphone processor supplier. HiSilicon's steady performance comes at a time when the
Chinese smartphone industry is being battered by delayed product launches and dampened consumer
sentiment linked to the coronavirus pandemic. Smartphone shipments in the country
slumped by 34.7 per cent – more than a third – to 47.7 million units in the
first quarter of 2020, according to a report released earlier this month by the China Academy
of Information and Communications Technology.
US-based Qualcomm, the long-time market leader, fell to second place in the latest quarter
with a year-on-year decline in its market share from 37.8 per cent to 32.8 per cent. Taiwan's
Mediatek maintained its third-place position, but also saw its market share slide year-on-year
from 14 per cent to 13.1 percent
.
Table showing the market share of smartphone processor supplies according to
CINNO Research. Source: CINNO Research / WeChat
Huawei, HiSilicon's parent company, is at the
centre of a high-profile US-China tech war. The Trump administration
added the company to its Entity List last year, citing the risk that Huawei could give
Beijing access to sensitive data from telecommunications networks. The trade blacklist
effectively bars Huawei from buying US products and services. In response, the Chinese company,
which has denied the allegations, is
ramping up its own capabilities to produce more American component-free network gear,
including through HiSilicon.
Huawei is also reportedly shifting
production of HiSilicon-designed chips
away from Taiwan Semiconductor Manufacturing Co (TSMC) and towards Shanghai-based
Semiconductor Manufacturing International Corp (SMIC) as Washington
readies new rules which would require foreign companies using US chipmaking equipment to
obtain a license before supplying chips to Huawei – a move that would directly affect
TSMC.
Over 90 per cent of Huawei phones in China now use HiSilicon processors, according to CINNO.
However, Huawei founder Ren Zhengfei said in an interview with Yahoo Finance last year that the
company would continue using chips from US vendors such as Intel and Qualcomm as long as it is
still allowed by US regulators.
In the face of the upcoming presidential elections, Republicans launched a new China Task
Force committee in US Congress on Thursday to attract attention despite its futile efforts to
pass the buck amid the pandemic. But this not-so-surprising move only shows how hysterical and
desperate Republicans have become as criticism of the government's mishandling of the domestic
coronavirus outbreak increases, experts said.
Following a series of anti-China moves the Trump administration has made when its epidemic
prevention spiraled out of control with more than 1.2 million infections - the world's largest
number - to date, House Minority Leader Kevin McCarthy announced on Thursday a proposal to set
up a new "China Task Force" which will develop legislative policies to curtail Chinese
influence. The committee currently consists of 15 Republicans with no Democrats joining.
McCarthy said the pandemic made it apparent "for a national strategy to deal with China."
The task force will hold meetings and briefings on China-related issues, which include China's
influence inside the US, presence on American campuses and control over important supply
chains, the Washington Post reported.
A search for the members in the China Task Force revealed their antagonism toward China. One
of them is Rep. Elise Stefanik, who in late April asked Secretary of State Mike Pompeo and the
attorney general to bring China to the International Court of Justice for the handling of
COVID-19, according to a report by The Adirondack Daily Enterprise.
Analysts said setting up the new China committee is the Republicans' new tactic to fuel
anti-China sentiment, but this won't help stop power from shifting from the West to East, which
was happening before the pandemic. The pandemic is very likely to speed up this process.
Democrats not joining the committee does not mean they are more China-friendly, but they
don't want Republicans to shift the focus of President Donald Trump's failure to handle the
pandemic. Since last year, both parties passed several bills regarding China's Xinjiang and
Hong Kong, interfering in China's internal affairs, Diao Daming, an associate professor at the
Renmin University of China in Beijing, told the Global Times on Friday.
Diao noted the Democrats in the Congress won't endorse the legislation but will support
other anti-China measures that the new committee aims to push forward.
"The pandemic will very likely further weaken the US and strengthen China," he said.
A man covering his face walks in Manhattan, New York on April 6 amid the serious outbreak
of COVID-19 in the US. Photo: AFP
Treating China as equals
In the past months, certain American politicians, including Pompeo, kept passing the buck,
making groundless accusations that China was responsible for the outbreak, and hyped
conspiracy theories by calling it the "China virus" to claim the virus originated from a
Wuhan lab. At Friday's media briefing, Chinese Foreign Ministry spokesperson Hua Chunying
joked that the press conference was almost all about refuting Pompeo's lies.
The extreme atmosphere has made many people in the US worry for a return of the McCarthy
era, where free speech in the country was curtailed. A former US Ambassador to China pointed
out in a CNN interview the US is now similar to Germany in the 1930s.
Li Haidong, a professor at the Institute of International Relations of the China Foreign
Affairs University, told the Global Times on Friday the task force will fuel the existing
unfriendly atmosphere toward China at the local level in the country.
Trump administration's China policy focuses on conflicts, and the task force could further
aggravate tensions, he said.
Former US Ambassador to China Max Baucus said in an interview with CNN that "The [Trump]
administration's rhetoric is so strong against China. It's over the top. We're entering a
kind of an era which is similar to Joe McCarthy back when he was red-baiting the State
Department, attacking communism."
"A little bit like Hitler in the 30s. A lot of people knew what was going on was wrong.
They knew it was wrong, but they didn't stand up and say anything about it. They felt
intimidated," he said.
Analysts warned that China needs to stay alert as the US is trying to create a new
McCarthy era of international repression on China.
But, on the other hand, we should be aware that most countries won't follow the US, Li
said.
"It's difficult for the US to mobilize the world against China. People know how selfish
and self-centered the US is. So only a few of its allies will join," he told the Global
Times.
The US interception of other countries' anti-virus medical supplies and pointing a finger
at the WHO when international cooperation is urgently needed occupied world headlines.
Meanwhile, the Chinese government had provided over 150 countries and international
organizations with supplies, hosted over 120 video conferences with health experts from more
than 160 members of the international community, and dispatched 19 medical groups to 17
countries, according to the Zhang Ming, Chinese Ambassador to the European Union, at a
Coronavirus Global Response pledging event on Monday.
Li told the Global Times that most countries, including its traditional allies, such as
Germany and France, have different demands from the US. So they won't join this wave.
As early as February 1, the European Union had dispatched tons of medical supplies to
assist China. And in March when the continent was hit hard, China immediately provided more
than 2 million protective masks and sent medical groups. Positive reactions were constantly
heard in Europe on China.
Meanwhile, it has been reported that China faces a rising wave of hostility led by the US
amid the pandemic. The discrimination against Chinese people is growing in some parts of the
world.
Li said "The rising hostility shows some Western countries are not accustomed to a rising
China. It's a challenge for them to learn to see China on an equal footing, which adds to
their anxiety."
He added that they need to learn to respect differences and deal with other countries
equally.
Analysts noted that China should step up efforts to enhance its own capabilities in
high-tech, military and other fields. It should also conduct far-reaching international
cooperation and uphold multilateralism to share its benefits with other countries, rather
than being distracted by the anti-China wave.
Cooperation amid competition
The task force on China is not the first one in the West. On April 24, several UK
Conservative MPs launched a "China Research Group" to promote "factual debate" in dealing
with the "rapidly changing nature of the relationship" between China and the UK. The group
would attempt to look "beyond" the coronavirus pandemic to "examine China's long-term
economic and diplomatic aims," BBC reported.
Kevin Hollinrake, an MP and a member of the group, told the Global Times that the group
will make some inquiries on specific policy areas. The group will look at, for example, how
the Chinese political system and business work.
It will look at certain work streams and develop fact-based reports based on those work
streams. "They may be reported back to parliament or published in the public domain,"
Hollinrake said.
Although the group was set up at a time when the virus was rampant in the UK, "the
pandemic itself is not the underlying issue," Hollinrake noted.
The China Research Group is likely to "lobby for a less cooperative approach to China, and
for the UK to align more with the US on China policy," Tim Summers, senior consulting fellow
on the Asia-Pacific program at Chatham House, told the Global Times.
However, Chris Wood, the British Consul General in Shanghai, told the Global Times that
"We will see continued discussions and collaboration. There is no global challenge that can
be solved without China's participation. We recognize that we very much want to work with
China on these big global issues, and that will continue."
In the post-coronavirus era, China and Europe might continue to seek cooperation amid
competition, analysts said, pointing out that Europe's anxieties are, to a large extent,
provoked by the US.
In the early stages of the pandemic, despite old disputes, cooperation was the mainstream
in China-Europe interactions. But things have changed since the US became the new epicenter,
Sun Keqin, a research fellow at the China Institutes of Contemporary International Relations,
told the Global Times.
Sun told the Global Times that to reduce the negative influence from the US on European
countries, China needs to make efforts to let its voice heard in international public opinion
and seek cooperation opportunities. What the US is advocating is nothing but rumors and
conspiracy, and China must smash these lies with sound and reasonable evidence and awaken
European countries, Sun said.
Casey •
19
hours ago So, is it correct that the DNC had some kind of Obama-era "chi-merica" project to
further their globalist, neolib project -- as it became obvious that the US was never going to
be able to pull off the unipolar Empire -- into the new century with a sort of US/China
alliance, with a substantial US aligned fifth-column (if that's the right phrase) working in
China to further the project? Then Trump came in a screwed that all up, trying to pretend to be
friendly to Russia, which the DNC promptly scuttled. And now the net result is Russia and China
growing relations, which is a very real nightmare for the US, the absolute worst possible
outcome for the globalists? Probably I have this all ass-backwards. Also, really, how long
would it take to relocate important industries to the US? Wouldn't that need to be a
multi-generational project because you can;t turn baristas into machinists over night? Also,
what prevents the US from taking over Venezuela right now, militarily, instead of those
apparently poorly organized attempts to infiltrate with mercenaries, as was recently
revealed?
If Uncle Sam defaults on his debts, that would be the biggest own goal ever. The whole
financial system is based on US Treasury bonds, and a default would send their value to zero.
The US Social Security Trust Fund is still worth almost three trillion dollars, most of it in
US Treasury bonds. Default means Goodbye Social Security Pensions, or at least a huge
"haircut".
I think Pompous Ass is bluffing. One reason is that Wall Street parasites have been
salivating over the Social Security trust fund for decades, and GW Bush was working on a plan
to give it to them. I don't think the bankster parasites will sit on their hands and let the
Trump idiots blow up their entire system. I think there would be a palace coup d'etat
first.
The US wants to сut industrial and supply dependence on China amid rising tensions between the two powers. However, not everyone
is eager to pack their bags and leave the lucrative Chinese market in the midst of the previous row.
The Trump administration has long been pushing American firms to get back to US soil, especially when trade tensions were flaring
between the two biggest global economies. Now the US has revived the trade war rhetoric again.
Read more
Asian markets plunge amid escalating US-China tensions
"We've been working on [reducing the reliance of our supply chains in China] over the last few years but we are now
turbo-charging that initiative,"
Under Secretary for Economic Growth, Energy and the Environment at the US State Department
Keith Krach told Reuters.
Krach as well as other officials told the agency that some critical and essential manufacturing should be moved from the
country, and the government may take steps on it soon. Apart from the US' seemingly favorite options of tariffs and sanctions,
the plans may include tax incentives and potential reshoring subsidies as well as closer relations with Taiwan – a move which has
always angered Beijing.
Washington is also mulling the creation of what one of the officials called 'Economic Prosperity Network' which would include
companies and groups from some
"trusted partners."
The network is set to share the same standards
"on everything
from digital business, energy and infrastructure to research, trade, education and commerce."
China's vital role in global supply chains was felt sharply amid the coronavirus pandemic as many international giants – from
tech to car industries – are reliant on the country. The pandemic has forced some US companies to seriously consider at least
partial relocation and changing supply chain strategy, according to one of the latest polls conducted by the American Chamber of
Commerce in China and its sister organization in Shanghai. However, the majority of firms said that the outbreak does push them
to turn their backs on China.
Nevertheless, one of the
"China hawks"
told Reuters that the virus created "a perfect
storm" as it
"crystallised all the worries that people have had about doing business with China"
and
the damages from Covid-19 have eclipsed possible profits.
When the trade war showed no signs of abating last year and the US and China were still hitting each other with tariffs,
another AmCham poll showed that the punitive measures were hurting US businesses operating in China. While over forty percent of
the 250 respondents were
"considering or have relocated"
production facilities outside China, some 35 percent of
companies said they would rather source within China and target the domestic market. Fewer than six percent wanted to move or
already shifted their factory operations to the US.
Set aside the enormous relocation costs – which the White House has recently pledged to cover should an American company
decide to ditch China – there is still another massive hurdle in this plan. China is still the world's top producer of rare earth
metals – the group of elements vital for production of multiple devices, from cell phones to some advanced military gear. Should
all the production be moved from China, it could ban exports of these materials. Last year Chinese media said the option was
already being mulled by Beijing, and it could consider the drastic measure again if trade war tensions further escalate.
The new rules will require licenses for US companies to sell certain items to companies
in China that support the military, even if the products are for civilian use. They also do
away with a civilian exception that allows certain US technology to be exported without a
license.
They come as relations between the United States and China have deteriorated amid the
new coronavirus outbreak
####
It's far too late and will be significantly damaging to US companies. No doubt Washington
still expects Beijing to buy Boeing airliners. If Beijing were to pull that plug, then it
would take out Arbus, P&W, GE, CFM all the suppliers, MRO ventures and collapse the whole
western airline supply chain. It would obviously kill any Chinese or Russian airline program
that has any western content . I doubt Beijing will go that far so they'll be looking
at actions, not words.
t-Rump and co need to show something sym-bollox to the American electorate that yet again
they are being 'tough on China' during this erection year but it requires China to play
along. It simply might not. It is reported that China is currently purchasing large
quantities of American LNG to fulfill 'Phase one' of t-Rump's Deal of the Century with
China.
Maybe that is the obvious counter, threatening to pull the whole DoC, starting with
dumping LNG purchases as a direct warning. t-Rump's Administration has pushed itself into a
smaller and smaller box, all of its own making. As I've always said and I still believe to be
true, the biggest threat to t-Rump's re-erection is t-Rump himself.
Paradoxically, the more Trump's belligerence and 'gut-based' trade policies damage
international trade, the more convinced his supporters become that only Trump can handle
increasingly-complicated trade relationships. This probably stems from his going into a
meeting under difficult conditions, emerging to fire off a miracle tweet, "China will now buy
massive quantities of our agricultural products", and ducking out the back without
elaboration. This leads to a misplaced belief that Trump can perform miracles, as much of a
jerk as he can be, because his loyalists rarely pay attention long enough for the rebuttal
which always comes, laying out his serial exaggerations. Remember when U.S. Steel was
building three new steel plants, on the strength of Trump's hard-ass negotiations in the
Canada-Mexico-USA Free Trade deal? Lighthizer's hard-ass negotiations, actually. Anyway,
yeah; totally made it up. He doesn't see anything wrong with making optimistic projections
which have no basis in fact.
Mind you, it would be a bit of a downer to have to explain again to Biden what 'oil' is,
every single time the subject comes up. But I wouldn't be too worried about that.
LNG is pretty cheap right now, like all energy products. I see China behaving much like
Russia; once it strikes an international bargain, it will stick to it until the terms play
out. But Trump might find a different China when he tries to strike the next agreement.
China can also take similar measures, sic (I read that) Alibaba and other gigantic Chinese
companies that rely on server farms are switching over to Chinese made chippery and not
buying foreign. Simply in lost sales for the foreseeable future is gigantic.
I imagine you are too young to remember Victor Kiam (he died in 2001) former president of the
Remington Razor Company. He had a popular line of commercials in the late 80's in which he
would say "I liked it so much, I bought the company".
The Chinese must have heard him, because they took his method to heart; Alibaba doesn't
just buy Chinese-made chips, they bought the company. Right after the United States started
up its
we-have-to-keep-priceless-American-technological-secrets-out-of-the-hands-of-the-thieving-Chinks
policies. Suit yourself, Sam.
Shanghai-based Semiconductor Manufacturing International, a $5.4 Billion company and one
of the largest such companies in China, pulled its listing from the NYSE.
In 2018, Skyworks Solutions had 83% of its business in China. Apple had 20%, but 20% of
Apple's revenue is a shitload of money. I had to laugh at the line, "Investors are
increasingly concerned over the prospect of rising global protectionism." 'Global
protectionism' pretty much covers The Donald's act.
Justin GLyn @ 65 is correct: New Zealand Prime Minister Jacinda Ardern instituted a Stage
4 lockdown in her country in mid-to-late March with the aim of eliminating the virus from
Kiwi shores. That goal is no longer feasible but
the country has begun relaxing its lockdown to Stage 3 in an effort to revive its
economy.
The US failure to anticipate blowback can be understood in one way: assuming that the US
did indeed seed the virus in Wuhan, then we might speculate that the seeding was timed to
coincide with the flu season in China and with mass preparations for Chinese New Year. The
thinking was that the virus would spread through public transportation networks throughout
the country and Beijing would have a full-time job on its hands just dealing with massive
viral outbreaks all over the country, and fail to deal with them even adequately, leading to
mass riots and eventually widespread resistance to Beijing, and maybe even the eventual
disintegration of the CCP and its overthrow. US and other expatriates would be trapped in the
country, and foreign embassies and consulates might even be torched, prompting a US-led
coalition to invade parts of the country (like the south and the southeast) and take over in
a start to the balkanisation of the country cunningly disguised as foreign help to keep
order.
The US certainly did not anticipate that Chinese people trusted enough in Beijing to be
willing to carry out whatever orders Beijing issued; the US assumption seems to be that
everywhere around the planet, people yearn to be just as individualistic and suspicious of
Big Government as Americans are, and that what they think of their local councils and
regional governments is the same as what they think of their national governments.
The reality is that in many countries, whatever people think of their local councils and
regional (state, provincial) governments may not be true of what they think of their national
governments, because the functions of the three tiers of government in their countries may
not overlap to the extent that they might do in the Anglocentric world.
Neither did the US anticipate that Chinese society could be advanced in its own way
technologically with various functions such as public health, public transport and others
integrated enough that the Chinese could respond to a rapidly spreading crisis in the way
they did. That is in part because US society and values are based on competition, mutual
suspicion and top-down orders among other things, rather than co-operation, collective
behaviour and willingness to consider solutions based on ideas from divergent yet integrated
sources.
That is a very plausible working hypothesis, and I mean it working, the main assumption is
still to be proven but it explains many other observations of fact. But I will append a
variable in the main assumption: we could even replace the initiative's agent with some
non-state actor, ie Big Pharma. I am unable to "decide" between these possibilities. Are the
Imperial forces conflicting to the extent implied? Are we yet at the point that a non-state
actor is bold enough for such an action? I really don't want to stretch a perfectly good
hypothesis but am I?
I was in China at the time when this unfolded and note the following: 1: The Chinese
cultural mindset is totally different from the Western one, and the gap much greater than
most Westerners realise. Look at the videos of the 75th Anniversary of Modern China for a few
clues 2: As the worlds largest atheist nation, death is considered final, rituals
notwithstanding So they are motivated to survive..( and focus on delicious food to this end)
3: They talk. Incessantly. It is no accident that WeChat has grown exponentially.. What
happens in one part of China is pretty quickly spread to other parts And on the Flipside,
there are surveillance cameras everywhere
So when this unfolded, Mid Spring festival when the cities were emptied, the memory of the
SARS epidemic sprang to forefront of the official mind. Xi JingPing appeared on most TV
Channels, making it clear that he was taking responsibility for the government response. And
implicitly, that if he failed, he would be gone, in keeping with the long tradition of
Chinese leadership.
At this point we decided to bail, being prime targets to host the virus. Avoided getting
quarantined in HongKong by 4 hours, and quarantine in Manus Island, Aus by one phone
call.
There were 6 temperature checks and 4 police checks on route to HongKong Airport; arriving
in New Zealand expecting some major medical checks. None. Just 2 nurses at a deck asking if
we felt OK - handed a pamphlet and sent on our way. I did try to follow up but given official
discouragement. So NZ was asleep at the wheel for weeks, and just plain lucky. However, once
NZ woke up, the response was excellent; PM Jacinda Adern's speech was masterful and the
response excellent. We had only two CoVid cases yesterday, as we move into level 3.
There are big problems in economic recovery here, but the alternative scenarios would have
been far worse. And theres got to be a reason why various luxury private jets are turning up
unannounced and often unmarked at the airports here :-)
Each of your explanations are compelling in their own way.
A few things that your explanations left out (this is not meant to be a comprehensive
list):
The strange resignation/firing of John Bolton.
The strangely good timing of the ARAMACO IPO;
Trump's strange reversal of his stated intention to not do partial trade deals with
China - he did a partial deal in January a couple of weeks after the virus became
known;
The strange non-resistance by medical establishment to Trump's failure to respond - no
one resigned as the Trump dragged his feet.
IMO any theory of deliberate release should consider these points.
Bolton's was asked to leave the administration because he was involved in pushing
development of a virus which accidentally escaped the lab -OR- willingly left to give
Trump/Deep State a scapegoat in case it became known that the use of the virus was
deliberate? In either case, the virus was already "in the wild" ...
... which would explain why no medical professional resigned in Feb/March. It was never
going to be possible to contain the virus in the West.
This would also explain why virus discussion were classified.
Trump did a trade deal with China that he knew they would have trouble to satisfy the
terms of. The ARAMACO IPO - which had been delayed several times - came just about 6 weeks
before the new virus was identified. And it was done despite the Houthi attack on ARAMACO
facilities two months before (investors should've been very wary of the continuing war at
the super high valuation).
<> <> <> <> <>
PS I do know that New Zealand had a lock-down but they did that as soon as they found
'community spread' and their vigilance has allowed them to start lifting the lock-down after
only a short period.
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.
YOU are completely MISreading the events so yo miss the target by 90% NO it wasnt the
Russians . neither the Chinese..
IT was the FREEtraders NEOcons from Wallstreet and CFR, that transfer all american
manufacturing overseas (china) deabsing the dollar into fiat money, banktupted the USA
traesury The USA is entering its Byzanntyne Empire pahse a Spartan roque millitary nation
while inploding intrenally the Angloamerican zionists already ecided toi amke China de first
world power
@Anonymous How should I describe it? The Chinese Communist Party has formed a plutarchy
and an oligopoly "with Chinese characteristics".
Sometime before the 20th century closed, there was a term coined: the "Princelings". These
were the extravagantly wealthy offspring of many of the leadership of the CCP, and
grandchildren of the men who endured the "Long March".
"Genocide" is a term that is broadly applied to what is more accurately described as
"ethnic cleansing". The Hans have taken over Tibet and Xin Jiang, and have oppressed the
locals in a ruthless manner, that is comparable to what the Jews have done to
Palestinians.
Systematically, the Chinese are converting the indigenous populations of poorer countries
into indentured servants. These countries are so indebted to their Chinese "benefactors" that
they have no hope for redemption, unless the Chinese are prepared to forgive the loans. So
far, the Chinese have not been disposed to do so.
The effect and the consequence of these developments are close enough to warrant the
comparison.
"The vicious virus, the polarization of US politics and deepening international
divergences have plunged humanity into unprecedented uncertainties. A jumbled,
irresponsible and impulsive US greatly enhanced the risks the world is facing.
"What's worse, the US did not engage in any reflection, and the inability of its
government was only attributed to partisanship. The anti-China element in its public
opinion has been brewing with the instigation of the administration and some politicians.
This has greatly crumbled the US' self-correction ability.
"The harm on humanity caused by a virus, no matter how frightening it is, only remains
at the physical level. But the US destruction at the political level is amplifying this
crisis that endangers global governance. Even if the pandemic is put under control,
humanity has to face the turbulence post-pandemic. Such dual uncertainties have gone
beyond the imagination of people even with their decades of living experience."
IMO and contrary to the editorial's conclusion, "populist politics" had nothing to do
with Trump's beyond mediocre response; rather, it's all been ideological beginning with
the utter lack of preparation.
Is the troop deployment along the Canadian border is to stop anyone interfering in the
coming chaos?
Posted by: Ian2 | Mar 26 2020 20:34 utc | 36
You have a point there --the coming chaos after the COVID-19 Health crisis.
Wondering if Trudeau knows about the fences that were erected this morning?
Maybe I missed Trump's tweet on his declaration of War.
- He has imposed more sanctions on Iranians.
- Indicted Maduro of Venezuela on narco trafficking, sponsor of terrorism; placed a $15
million bounty on his head --straight from the Panama playbook.
and this beauty - continues his trade war on China because -----
(Reuters) - Senior officials in the Trump administration agreed to new measures to
restrict the global supply of chips to China's Huawei Technologies, sources familiar with
the matter said, as the White House ramps up criticism of China over coronavirus.
The move comes as ties between Washington and Beijing grow more strained, with both
sides trading barbs over who is to blame for the spread of the disease and an escalating
tit-for-tat over the expulsion of journalists from both countries.
Under the proposed rule change, foreign companies that use U.S. chipmaking equipment
would be required to obtain a U.S. license before supplying certain chips to Huawei. The
Chinese telecoms company was blacklisted last year, limiting the company's
suppliers.[.]
"This is going to have a far more negative impact on U.S. companies than it will on Huawei,
because Huawei will develop their own supply chain," trade lawyer Doug Jacobson said.
"Ultimately, Huawei will find alternatives."[.]
Huawei has been doing just that - finding alternatives. Trade wars have been proven to end
badly. They end up going hot.
Here was me thinking the Western elites wanted to continue making money on Chinese
growth.
Much of the US elite is sinecured in the media, foreign policy, and national security
state establishments, whose status depends on the relative power and prestige of the US
state. The relative power and prestige of the US state is jeopardized by the continued growth
of China.
If you follow US coverage of China in the US, you'll find that this US elite is generally
critical of China, although style and presentation vary. The liberal "China watchers" among
the US elite in the media and foreign policy establishment tend to focus on human rights,
democracy promotion, and liberalism as vectors to attack the Chinese state. They tend to be
polished and more subtle rather than explicitly hostile.
The US elite in the national security establishment tend to be more overt about military
containment and or confrontation with China, and on developing an anti-China coalition in the
Pacific.
"Perhaps this will finally burst the out-of-control asset price bubble and drop-kick the
Outlaw US Empire's economy into the sewer as the much lower price will rapidly slow the
recycling of what remains of the petrodollar. Looks like Trump's reelection push just fell
into a massive sinkhole as the economy will tank."
Posted by: karlof1 | Mar 9 2020 1:29 utc | 49
....
Call me crazy- but this Virus provides great cover as to why the economy plummets, the
Murikan sheeple will eat it up. Prepare for the double media blitz on the virus AND the
economy tanking as its result.
Don't worry...just continue to go shopping and take those selfies.
It will be hard for the American people to swallow that one. From day 1 I've read a lot of
"articles" and "papers" from know-it-all Western doctors and researchers from commenters here
in this blog, all of them claiming to have very precise and definitive data on what was
happening. A lot of bombastic conclusions I've read here (including one that claimed R0 was
through the roof - it's funny how the R0 is being played down after it begun to infect the
West; suddenly, it's all just a stronger cold...).
And that's just here, in MoA's comment section. Imagine what was being published in the
Western MSM. I wouldn't be surprised there was a lot of rednecks popping their beers
celebrating the fall of China already.
Since China allegedly had a lot of idle industrial capacity - that is, if we take the
Western MSM theories seriously (including the fabled "ghost towns" stories) - then boosting
production wouldn't be a problem to China.
Disclaimer: it's normal for any kind of economy - socialist or capitalist - to have a
certain percentage of idle capacity. That's necessary in order to insure the economy against
unexpected oscillations in demand and to give space of maneuvre for future technological
progress. Indeed, that was one of the USSR's mistakes with its economy: they instinctly
thought unemployment should be zero, and waste should also be zero, so they planned in a way
all the factories always sought to operate at 100% capacity. That became a problem when
better machines and better methods were invented, since the factory manager wouldn't want to
stop production so that his factory would fall behind the other factories in the five-year
plan's goals. So, yes, China indeed has idle capacity - but it is mainly proposital, not a
failure of its socialist planning.
By the latest count, in addition to yuan loans worth 113 billion U.S. dollars granted by
financial institutions and more than 70 billion U.S. dollars paid out by insurance companies,
the Chinese government has allocated about 13 billion U.S. dollars to counter fallout from
the outbreak.
The numbers could look abstract. However, breaking the data down reveals how the money is
being carefully targeted. The government is allocating the money based on a thorough
evaluation of the system's strengths.
...
Local governments are equipped with more local knowledge that allows them to surgically
support key manufacturers or producers that are struggling.
Together, they have borne the bulk of the financial responsibility with an allocation of
equivalently more than nine billion U.S. dollars. It is carefully targeted, divided into
hundreds of thousands of individual grants that are tailor-made by and for each county, town,
city and business.
This is the mark of a socialist system.
The affected capitalist countries will simply use monetary devices (so the private sector
can offset the losses) and burn their own reserves with non-profitable palliatives such as
masks, tests, other quarantine infrastructure etc.
Sounds like US socialism. Basically corporate socialism. Loans are just dollars created out
of thin air, same as in US. Insurance payouts come from premiums, nothing socialist about
that, pure capitalism. Government hand outs to provinces, cities, state owned
corporations,well all of these are run by the party elite, its called pork. US handed out a
lot of pork during the last financial crisis. None of it trickled down to the little people.
I doubt it does in China either.
All crisis are opportunities for the elite to get richer. Those Biolake firms in Wuhan
will make out like bandits. Chinese firms will double the price of API's sold to India and
US. China will knock out the small farmer in the wake of concurrent chicken and swine flu so
the big enterprises take over, a mimicry of the US practice over the last century. China tech
firms will double up on surveillance apps, censoring tools, surveillance and toughen up
social credit restrictions. 5G will allow China to experiment with nanobots to monitor
citizens health from afar (thanks to Harvards Dr Leiber).
Oh yes, socialism with Chinese characteristics is a technocratic capitalists dream. Thats
why the West has never imposed sanctions on China since welcoming them to the global elites
club. Sanctions are reserved for those with true socialism, especially those who preach
equality and god forbid, democracy.
Call me crazy- but this Virus provides great cover as to why the economy plummets, the
Murikan sheeple will eat it up. Prepare for the double media blitz on the virus AND the
economy tanking as its result.
Don't forget the Russians.. They have to be to blame. See they just kept the price of oil low
so now the rest of the world gets gas cheaper than the USA. The USA motorist now has to bail
out the dopey frackers and shale oil ponzis.
Global envy will eat murica. Maybe they will just pull out all their troops and go home.
;)
As far as I know, no one here has mentioned that because of the
globalization drive by Clinton, Bush, and Obama, 85% of the medicines
used in the United States are manufactured in China. Even U.S. troops
depend on medicines from China! China could bring the entire health
system in the U.S. to a stop in a matter of months. This is what our inept
elites have done to America – they gave away the shop. People are beginning
to realize that manufacturing our own medicines is a matter of national
security but it'll take years to bring the factories back to the U.S. So
much for globalization.
Rod Dreher's blog IMHO is the best source for quick info on the coronavirus
because he is in touch with American M.D.'s who are married to women
from China who in turn are in contact with relatives at home and the Chinese
media. Of course, Rod himself can be hysterical at times but, apparently,
that's what it takes to have a successful blog. The M.D.'s are reporting
that the U.S. is already beginning to run out of certain medications, and
recommend stocking up on the basic necessities, i.e., recommend assuming
the mental framework of the survivalists – have plenty of canned goods, etc
and refill your prescriptions ASAP. This is what many people here seem to
forget – the coronavirus's indirect effects due to having no access to medications
may be much worse than the direct pathogenic effects.
"... the American-led takedown of the post-World War II international system has shattered long-standing rules and norms of behavior. ..."
"... The combination of disorder at home and abroad is spawning changes that are increasingly disadvantageous to the United States. With Congress having essentially walked off the job, there is a need for America's universities to provide the information and analysis of international best practices that the political system does not. ..."
I think this would be very informative for anybody seriously interested in the USA foreign
policy. Listening to him is so sad to realize that instead of person of his caliber we have
Pompous Pompeo, who forever is frozen on the level of a tank repair mechanical engineer, as
the Secretary of State.
Published on Feb 24, 2020
In the United States and other democracies, political and economic systems still work in
theory, but not in practice. Meanwhile, the American-led takedown of the post-World War II
international system has shattered long-standing rules and norms of behavior.
The combination of disorder at home and abroad is spawning changes that are increasingly
disadvantageous to the United States. With Congress having essentially walked off the job,
there is a need for America's universities to provide the information and analysis of
international best practices that the political system does not.
Ambassador Chas W. Freeman, Jr. is a senior fellow at Brown University's Watson
Institute for International and Public Affairs, a former U.S. Assistant Secretary of
Defense, ambassador to Saudi Arabia (during operations Desert Shield and Desert Storm),
acting Assistant Secretary of State for African Affairs, and Chargé d'affaires at
both Bangkok and Beijing. He began his diplomatic career in India but specialized in
Chinese affairs. (He was the principal American interpreter during President Nixon's visit
to Beijing in 1972.)
Ambassador Freeman is a much sought-after public speaker (see http://chasfreeman.net ) and the author of several
well-received books on statecraft and diplomacy. His most recent book, America's Continuing
Misadventures in the Middle East was published in May 2016. Interesting Times: China,
America, and the Shifting Balance of Prestige, appeared in March 2013. America's
Misadventures in the Middle East came out in 2010, as did the most recent revision of The
Diplomat's Dictionary, the companion volume to Arts of Power: Statecraft and Diplomacy. He
was the editor of the Encyclopedia Britannica entry on "diplomacy."
Chas Freeman studied at the Universidad Nacional Autónoma de México and in
Taiwan, and earned an AB magna cum laude from Yale University as well as a JD from the
Harvard Law School.
He chairs Projects International, Inc., a Washington-based firm that for more than three
decades has helped its American and foreign clients create ventures across borders,
facilitating their establishment of new businesses through the design, negotiation,
capitalization, and implementation of greenfield investments, mergers and acquisitions,
joint ventures, franchises, one-off transactions, sales and agencies in other
countries.
He is the author of several books including the most recent
Interesting times: China, America, and the shifting balance of prestige
(2013)
In unusually blunt statements, top Chinese officials hit back during last weekend's Munich Security Conference at Washington's
confrontational stance toward Beijing on a range of issues, including the Chinese tech giant Huawei and China's response to the coronavirus.
Trump administration officials, supported to the hilt by top Democrats, took a particularly aggressive attitude at the conference,
warning European powers that intelligence sharing could end if Huawei equipment were used in building 5G telecommunications networks.
US Secretary of State Mike Pompeo branded "Huawei and other Chinese state-backed tech companies" as "Trojan horses for Chinese
intelligence." In his speech, US Defence Secretary Mark Esper accused Beijing of carrying out a "nefarious strategy" through Huawei.
In a bid to intensify its pressure on its European allies, the US last week announced new charges of racketeering and theft of
trade secrets against Huawei. These follow the arrest of the company's chief financial officer, Meng Wanzhou, in Canada last year
after the US filed charges of fraud and sanctions evasion, and sought her extradition.
Esper made clear that the US attack on China was across the board. He declared that under President Xi Jinping's rule, "the Chinese
Communist Party is heading even faster and further in the wrong direction -- more internal repression, more predatory economic practices,
more heavy-handedness, and most concerning for me, a more aggressive military posture."
Asked about the speeches by Pompeo and Esper, Chinese Foreign Minister Wang Yi did not mince words, branding the US allegations
as "lies." He said their remarks were part of "a common scenario" everywhere they went. "I don't want to waste our time responding
to each and every thing they've said. The thing I want to say is that all these accusations against China are lies and not based
on facts."
Wang pointed to the driving force behind the confrontation -- the US drive to ensure its continued global domination by every
available means. "The root cause of all these problems and issues is that the US does not want to see the rapid development and rejuvenation
of China, still less would they want to accept the success of a socialist country, but that is not fair, China has the right to develop."
China, with its burgeoning markets, stock exchanges, billionaires and deep social divide, is not a socialist country. In fact,
Huawei, as Wang said in countering US criticism, is a privately-owned company: the world's largest telecommunications equipment provider
with nearly 200,000 employees.
Wang described the US attack on Huawei as "immoral" and asked: "Why can't America accept that other countries' companies can also
display their talent in the economy, in technology? Perhaps deep down, it doesn't hope to see other countries develop." He accused
the US of resorting to rumours to defame Huawei and declared there was no credible evidence that the company has a so-called back
door that harms US security.
The US accusations against China and Huawei are utterly hypocritical. The revelations by the whistleblower Edward Snowden demonstrated
that the US routinely spies electronically on the world's population, including governments and government leaders, allies and rivals
alike, as well as its own citizens.
The US intelligence establishment has long relied on electronic "back doors" provided by American tech corporations to gather
intelligence. The use of Huawei equipment not only threatens the economic position of US companies, but could undermine US spying
operations.
China's forthright push back against heavy US criticism in Munich stems firstly from the relentless campaign by Washington, not
only in propaganda, but through trade war measures and a huge military build-up in Asia against Beijing. Secondly, the Chinese regime
is seeking support from the European powers. Wang's comments gained traction in Munich amid deepening conflicts between the US and
its erstwhile European allies.
Britain has given the go-ahead for the inclusion of Huawei components in non-core aspects of its 5G rollout, while Germany and
France have signaled they will do the same. The European decisions are largely driven by technical and economic factors, as Huawei
is a leader in 5G technology and produces at a lower cost.
Washington's threats to end intelligence-sharing arrangements with the European powers could end up affecting US spying operations
as much as those of its European rivals. The New York Times
The US has sought to exploit the coronavirus outbreak in China to add to the barrage of criticism against Beijing. Trump's
economic adviser Larry Kudlow last week complained about the lack of Chinese transparency over the disease. He declared that Washington
was disappointed that American health experts had not been allowed into China, and questioned Chinese statistics.
A considerable portion of Wang's speech to the Munich Security Conference was devoted to defending China's handling of the
outbreak. He said the coronavirus largely had been confined to the city of Wuhan and Hubei Province, and the number of cases outside
China was a small percentage of the total. Wang said this was the outcome of the rapid development of a test for the virus, the dispatch
of 20,000 health workers to the area and the building of new health facilities.
Wang said: "In the spirit of openness and transparency, we promptly notified the world about the outbreak and shared the genetic
sequence of the virus. We have been working closely with WHO [World Health Organisation], invited international experts to join our
ranks, and provided assistance and facilitation to foreign nationals in China."
In comments to Reuters, the Chinese foreign minister effectively criticised the harsh travel restrictions imposed by the US
on any foreign nationals coming from China. "Some countries have stepped up measures, including quarantine measures, which are reasonable
and understandable, but for some countries they have overreacted which has triggered unnecessary panic," he said.
If Washington expected European support on the issue, its hopes were dashed. Conference chairman Wolfgang Ischinger praised
China's response to the epidemic and declared it was "not getting a very fair deal I think China deserves a little bit of compassion
and cooperation, and encouragement rather than only criticism."
China's reaction to the US criticisms in Munich underscores again the sharpening geo-political rivalries and break-up of longstanding
alliances being fueled by worsening global economic conditions. Far from responding to the lack of support from Europe against China
by moderating its confrontation, the US will intensify its provocative campaign, not just against Beijing, but any threat to its
global position, including from its European allies.
That such cynicism was wholly justified became evident when Edward Snowden revealed the NSA
machinations. Soon thereafter Juniper Networks, a provider of large backbone equipment, was
found to
have at least two NSA backdoors in its operation system. Other 'western' telecommunication
equipment companies were similarly manipulated :
Even neutral countries firms are not off-limits to NSA manipulations. A former Crypto AG
employee confirmed that high-level US officials approached neutral European countries and
argued that their cooperation was essential to the Cold War struggle against the Soviets. The
NSA allegedly received support from cryptographic companies Crypto AG and Gretag AG in
Switzerland, Transvertex in Sweden, Nokia in Finland, and even newly-privatized firms in
post-Communist Hungary. In 1970, according to a secret German BND intelligence paper,
supplied to the author, the Germans planned to "fuse" the operations of three cryptographic
firms-Crypto AG, Grattner AG (another Swiss cipher firm), and Ericsson of Sweden.
So why was the allegedly secret CIA history of an already known story leaked right now? And
why was it also leaked to a German TV station?
If you want to understand why the US intelligence community is so freaked out about Huawei,
it's because they've been playing the same game for decades.
The warmed up Crypto AG story is a subtle smear piece against Huawei and Kapersky.
The U.S. wants to convince European countries to not buy Huawei products for their 5G
networks. It wants to remind them that telecommunication products can be manipulated. It wants
to instill fear that China would use Huawei to spy on foreign countries just like the U.S. used
Crypto AG.
This is also the reason for this recent misleading Reuters headline which the story
itself debunked:
"At the end of 2019, intelligence was passed to us by the U.S., according to which Huawei is
proven to have been cooperating with China's security authorities," the newspaper quoted a
confidential foreign ministry document as saying.
'U.S. intelligence' that is handed over to manipulate someone is of course not 'proof' for
anything.
Secretary of State Mike Pompeo declared the Chinese Communist Party "the central threat of
our times" on Thursday, even as he sought to talk up the prospects of a United States trade
deal with Britain, which rebuffed American pressure to ban a Chinese company from future
telecommunications infrastructure.
The scathing criticism of the Chinese government was the strongest language Mr. Pompeo has
used as the Trump administration seeks to convince American allies of the risks posed by
using equipment from Huawei, a Chinese technology giant.
A week after Pompeo's panic message Trump took to the phone to convince Boris Johnson who
was
not impressed :
Donald Trump's previously close relationship with UK Prime Minister Boris Johnson looks close
to collapse, following new revelations that the president slammed down the phone on him.
Trump's behaviour during last week's call was described by officials as
„apoplectic," and Johnson has now reportedly shelved plans for an imminent visit to
Washington.
...
The call, which one source described to the Financial Times as „very difficult," came
after Johnson defied Trump and allowed Chinese telecoms company Huawei the rights to develop
the UK's 5G network.
Trump's fury was triggered by Johnson backing Huawei despite multiple threats by Trump and
his allies that the United States would withdraw security co-operation with the UK if the
deal went ahead.
Trump's threats reportedly „irritated" the UK government, with Johnson frustrated at
the president's failure to suggest any alternatives to the deal.
Huawei products are pretty good, relatively cheap and readily available. They are just as
buggy as the products of other equipment providers. The real reason why the U.S. does not want
anyone to buy Huawei products is that it is the one large network company the U.S. can not
convince to provide it with backdoors.
European countries do not fear China or even Chinese spying. They know that the U.S. is
doing similar on a much larger scale. Europeans do not see China as a threat and they do not
want to get involved in the escalating U.S.-China spat:
"Whose side should your country take in a conflict between the US and China?" Source - bigger
The U.S. just
indicted four Chinese military officers for the 2017 hacking of Equifax during which
millions of addresses and financial data were stolen. The former CIA Director General Michael
Hayden
had defended such pilfering as "honorable espionage" and Equifax had made it laughably easy
to
get into its systems :
[J]ust five days after Equifax went public with its breach -- KrebsOnSecurity broke the news
that the administrative account for a separate Equifax dispute resolution portal catering to
consumers in Argentina was wide open, protected by perhaps the most easy-to-guess password
combination ever: "admin/admin."
To indict foreign military officers for spying when they simply pilfered barely protected
servers is seen as offensive. What will the U.S. do when China does likewise?
Every nation spies. It is one of the oldest trades in this world. That the U.S. is making
such a fuss about putative Chinese spying when it itself is the biggest sinner is unbecoming.
Posted by b on February 11, 2020 at 18:52 UTC |
Permalink
thanks b...no shortage of hypocrisy in all this...
regarding @ 4 mike r which @8 ian2 linked properly to, i enjoyed the last paragraph which
i think sums it up well.. here it is..
"I continue to believe that the United States cannot effectively restrict the spread of a
technology under Chinese leadership without offering a superior product of its own. The fact
that the United States has attempted to suppress Huawei's market leadership in the absence of
any American competitor in this field is one of the oddest occurrences in the history of US
foreign policy. If the US were to announce something like a Manhattan Project for 5G
broadband and solicit the cooperation of its European and Asian allies, it probably would get
an enthusiastic response. As matters stand, America's efforts to stop Huawei have become an
embarrassment."
The reason European customers trust Huawei is because Huawei uses open-source software or at
least makes their code available for inspection by customers.
Closed-source software cannot provide secrecy or security. This was vividly demonstrated
last month when
NSA revealed a critical vulnerability in Windows 10 that rendered any cryptographic
security worthless.
Rashid's simulated attack exploits CVE-2020-0601, the critical vulnerability that
Microsoft patched on Tuesday after receiving a private tipoff from the NSA. As Ars
reported, the flaw can completely break certificate validation for websites, software
updates, VPNs, and other security-critical computer uses. It affects Windows 10 systems,
including server versions Windows Server 2016 and Windows Server 2019. Other versions of
Windows are unaffected.
The flaw involves the way the new versions of Windows check the validity of certificates
that use elliptic-curve cryptography. While the vulnerable Windows versions check three ECC
parameters, they fail to verify a fourth, crucial one, which is known as a base point
generator and is often represented in algorithms as 'G.' This failure is a result of
Microsoft's implementation of ECC rather than any flaw or weakness in the ECC algorithms
themselves.
The attacker examines the specific ECC algorithm used to generate the root-certificate
public key and proceeds to craft a private key that copies all of the certificate
parameters for that algorithm except for the point generator. Because vulnerable Windows
versions fail to check that parameter, they accept the private key as valid. With that, the
attacker has spoofed a Windows-trusted root certificate that can be used to mint any
individual certificate used for authentication of websites, software, and other sensitive
properties.
I do not believe this vulnerability was a bug. It is more likely a backdoor intentionally
left in the code for NSA to utilize. Whatever the case, NSA must have known about it for
years. Why did they reveal it now? Most likely someone else had discovered the back door and
may have been about to publish it.
(I
commented on these same issues on Sputnik a few weeks ago.)
The other possible US objection is that Huawei will only let their customers spy, not third
countries.
Posted by: Paul Cockshott | Feb 11 2020 21:57 utc | 24
It reminds me a joke about Emperor Napoleon arriving in a town. The population, the
notables and the mayor are greeting him, and the Emperor says "No gun salute, hm?". Mayor
replies "Sire, we have twenty reasons. Fist, we have canons", "Enough", replied Napoleon.
Isn't the "other possible US objection" exactly "Enough"? Of course, USA is not a mere
"third country", USA is the rule maker of rule based international order.
Last year I was so mad at USA bulling Huawei and ZTE, decided to buy a Huawei Honor View
V20 PCT-L29 Smartphone. Global version on T-Mobile network . Still fumbling
at the setting. This smartphone installed GPS and BeiDou (BDS). I never used Google searches
but instead DuckDuckGo long ago
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.
What is going on?
I could understand if this was DNC/CIA-MI6 passing orders down the line (a la Skripal) to
upset Trump but the US Intel Community has no interest in such a snub from the UK Govt.
Obviously this isn't the UK Govt asserting their independence from US instruction because
such a thing has never happened in my lifetime.
Wierd.
Anyway, too bad I won't be able to read the thread on my phone tomorrow as Bruce has just
broken the thread with his million-character link. :-(
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.
What is going on?
Posted by: Ash Naz | Feb 12 2020 0:20 utc | 39
However I cringe and the obedient vassals, and Boris who may well be the Chief Poodle,
given that exceedingly cute Justin is from another breed, Newtrumplander. But even poodles
have privacy concerns, you know? What you web surf, what you buy, whom do you send gifts and
WHAT gifts (dominatrix set?). However you trust NSA to use all that info solely for good
causes, well, you know, not everyone is an exhibitionist...
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.
Posted by: Ash Naz | Feb 12 2020 0:20 utc | 32
The reason is said to be that they've already bought and installed a lot of the
Huawei equipment, and the new decision is just a fake, to justify the position.
The reason is said to be that they've already bought and installed a lot of the Huawei
equipment, and the new decision is just a fake, to justify the position.
The financial angle makes sense, but what is the price of disobedience?
@Piotr Berman:
But even poodles have privacy concerns
The preventing blackmail angle makes sense too
And how useful to be able to use blackmail to get allies to jump when ordered? It's often
said that Washington has no real friends, just obedient vassals.
It would appear to me that the UK, by allowing Huawei (limited) access to their market,
are achieving several advantageous outcomes.
1) They are preventing potential for a duopoly of Eriksson & Nokia on the hardware by
allowing a third player into the market.
2) By only allowing a maximum of 35% of the market share, they prevent Huawei from quickly
out-competing the others on price and capturing a monopoly.
3) They are only allowing access to the network comm's market, and not the core of the
system, which may or may not protect against unwanted data capture and intrusion (by exactly
whom remains the question - as per the article above).
4) It allows the four main network providers (especially EE, owned by BT) and the
accompanying state surveillance apparatus the ability to familiarise themselves with Huawei
tech/code/vulnerabilities which may be invaluable going forward. On this point alone, the USA
(and Australia, among others) are doing themselves a great disservice by missing out on a
learning experience from arguably the world leader in this technology.
As md|Feb 12 2020 8:29 utc|44 alluded to, they are claiming to allow clintele access to
all code (and the freedom to modify it as desired). So denying them access to a particular
market only hinders the technical understanding of the technology and its implementation,
leaving such states behind.
The USA (and its' vassal client states) once again shoot themselves in the foot in a vain
attempt to create and re-create the archetypal "boogeyman" for the populace to wring their
hands over and keep them up at night. Fools.
I enjoy David Goldman (Spengler) article at Asia Times. He accurately notes the vast lead
Huawei/China has and then provides "but we can do something" bromides. What do mean "we",
kimosabe?
Per a quote from Newt Gingrich's book ""Trump vs. China: Facing America's Greatest Threat",
quoted recently by David Goldman. Gingrich didn't say who was the greatest threat, Trump or
China.
"It is not China's fault that in 2017, 89% of Baltimore eighth graders couldn't pass their
math exam
"It is not China's fault that too few Americans in K-12 and in college study math and
science to fill the graduate schools with future American scientists
"It is not China's fault that, faced with a dramatic increase in Chinese graduate students
in science, the government has not been able to revive programs like the 1958 National
Defense Education Act
"It is not China's fault the way our defense bureaucracy functions serves to create
exactly the 'military-industrial complex' that President Dwight Eisenhower warned about
"It is not China's fault that NASA has been so bureaucratic and its funding so erratic
that there is every reason to believe that China is catching up rapidly and may outpace us.
This is because of us not because of them
"It is not China's fault that the old, bureaucratic, entrenched American
telecommunications companies failed to develop a global strategy for 5G over the 11 years
that the Chinese company Huawei has been working to become a world leader "
Here is another Orwellian irony that has been forgotten down the MemoryHole.
Way back in 2014, Edward Snowden revealed that the Americans (and the NSA in particular)
were spying on Huawei dating back to at least 2007.
This American spying occurred before the current national security hysterics about Huawei,
indeed, before most people in the USA had even heard of the company itself.
As this article states,
"In the final analysis, the NSA spying campaign against Huawei has two fundamental
purposes. First, Huawei (unlike the American telecommunications companies) does not allow the
NSA free access to its infrastructure to conduct spying on its products' users. Accordingly,
as part of its mission of spying on the entire world's population, the NSA hacked into
Huawei's systems in order to gather information traveling through its infrastructure.
Second, the spying campaign against Huawei is part of broader efforts to protect the
profits and interests of American telecommunications companies at the expense of Huawei. This
is the purpose of the NSA's particular interest in Huawei's executives and their 'leadership
plans and intentions.'"
The other possible US objection is that Huawei will only let their customers spy, not third
countries.
Posted by: Paul Cockshott | Feb 11 2020 21:57 utc | 20
So it seems. In the words of Ren Zhengfei 'When we transfer the tech, they can modify code
on top of my tech, once that's through, it's not only shielded from me, it's shielded from
everyone else in the world US 5G will be their own thing, there's no security concern, the
only concern will be the U.S. keeping American companies (which bought it) in check.'
This corona virus panic is interesting. RT has an interesting piece that points out that
corona virus has been officially recognized in some 8,000 odd people and 200 odd people have
died from it, we need a sense of perspective. World wide seasonal flu, kills between 350,000
and 600,000 people each year. Tuberculosis kills over 1,000,000 people each year. Malaria
kills a similar number. AIDS killed over 500,000 last year. And we're panicking about 200 or
so?
Just had an email from a company I deal with in China, the relevant passages-
2. The company has been following instructions from the Chinese government to postpone
the Spring Festival holiday to Feb. 9th, 2020 if not any further postpone. But, we believe
most of our services should be provided as usual since then.
5. We also would like your attention that there's yet no evidence or cases to support
the transmission of the novel coronavirus through packages or imported goods. According to
the Centers for Disease Control and Prevention (CDC) of the US, because of poor survivability
of these coronaviruses on surfaces, there is likely very low risk of spread from products or
packaging that are shipped over a period of days or weeks at ambient temperatures. The
National Health Commission of the People's Republic of China advises that coronavirus is
spread most often by respiratory droplets from one person to another, regular packages from
Wuhan can be received as usual. Reference links are attached as the footnote below for your
references.[1]
6. The Company will take proactive measures like ultraviolet light to ensure a safe and
healthy environment of its warehouse. Disinfection work will be conducted before each
delivery.
"... The Americans are the ones who destroyed the country and wreaked havoc on it. They have refused to finish building the electrical system and infrastructure projects. They have bargained for the reconstruction of Iraq in exchange for Iraq giving up 50% of oil imports. So, I refused and decided to go to China and concluded an important and strategic agreement with it. Today, Trump is trying to cancel this important agreement. ..."
"... After my return from China, Trump called me and asked me to cancel the agreement, so I also refused, and he threatened [that there would be] massive demonstrations to topple me. Indeed, the demonstrations started and then Trump called, threatening to escalate in the event of non-cooperation and responding to his wishes, whereby a third party [presumed to be mercenaries or U.S. soldiers] would target both the demonstrators and security forces and kill them from atop the highest buildings and the US embassy in an attempt to pressure me and submit to his wishes and cancel the China agreement." ..."
"... It could also explain why President Trump is so concerned about China's growing foothold in Iraq, since it risks causing not only the end of the U.S. military hegemony in the country but could also lead to major trouble for the petrodollar system and the U.S.' position as a global financial power. Trump's policy aimed at stopping China and Iraq's growing ties is clearly having the opposite effect, showing that this administration's "gangster diplomacy" only serves to make the alternatives offered by countries like China and Russia all the more attractive. ..."
After the feed was cut, MPs who were present wrote down Abdul-Mahdi's remarks, which were
then given to the Arabic news outlet Ida'at .
Per that transcript , Abdul-Mahdi stated that:
The Americans are the ones who destroyed the country and wreaked havoc on it. They
have refused to finish building the electrical system and infrastructure projects. They have
bargained for the reconstruction of Iraq in exchange for Iraq giving up 50% of oil imports.
So, I refused and decided to go to China and concluded an important and strategic agreement
with it. Today, Trump is trying to cancel this important agreement. "
Abdul-Mahdi continued his remarks, noting that pressure from the Trump administration over
his negotiations and subsequent dealings with China grew substantially over time, even
resulting in death threats to himself and his defense minister:
After my return from China, Trump called me and asked me to cancel the agreement, so I
also refused, and he threatened [that there would be] massive demonstrations to topple me.
Indeed, the demonstrations started and then Trump called, threatening to escalate in the
event of non-cooperation and responding to his wishes, whereby a third party [presumed to be
mercenaries or U.S. soldiers] would target both the demonstrators and security forces and
kill them from atop the highest buildings and the US embassy in an attempt to pressure me and
submit to his wishes and cancel the China agreement."
"I did not respond and submitted my resignation and the Americans still insist to this day
on canceling the China agreement. When the defense minister said that those killing the
demonstrators was a third party, Trump called me immediately and physically threatened myself
and the defense minister in the event that there was more talk about this third party."
Very few English language outlets
reported on Abdul-Mahdi's comments. Tom Luongo, a Florida-based Independent Analyst and publisher of The Gold
Goats 'n Guns Newsletter, told MintPress that the likely reasons for the "surprising"
media silence over Abdul-Mahdi's claims were because "It never really made it out into official
channels " due to the cutting of the video feed during Iraq's Parliamentary session and due to
the fact that "it's very inconvenient and the media -- since Trump is doing what they want him
to do, be belligerent with Iran, protected Israel's interests there."
"They aren't going to contradict him on that if he's playing ball," Luongo added, before
continuing that the media would nonetheless "hold onto it for future reference .If this comes
out for real, they'll use it against him later if he tries to leave Iraq." "Everything in
Washington is used as leverage," he added.
Given the lack of media coverage and the cutting of the video feed of Abdul-Mahdi's full
remarks, it is worth pointing out that the narrative he laid out in his censored speech not
only fits with the timeline of recent events he discusses but also the tactics known to have
been employed behind closed doors by the Trump administration, particularly after Mike Pompeo
left the CIA to become Secretary of State.
For instance, Abdul-Mahdi's delegation to China ended on September 24, with the protests
against his government that Trump reportedly threatened to start on October 1. Reports of a
"third side" firing on Iraqi protesters were picked up by major media outlets at the time, such
as in this
BBC report which stated:
Reports say the security forces opened fire, but another account says unknown gunmen
were responsible .a source in Karbala told the BBC that one of the dead was a guard at a
nearby Shia shrine who happened to be passing by. The source also said the origin of the
gunfire was unknown and it had targeted both the protesters and security forces .
(emphasis added)"
U.S.-backed protests in other countries, such as in Ukraine in 2014, also saw evidence of a
"
third side " shooting both protesters and security forces alike.
After six weeks of intense protests , Abdul-Mahdi
submitted
his resignation on November 29, just a few days after Iraq's
Foreign Minister praised the new deals, including the "oil for reconstruction" deal, that had
been signed with China. Abdul-Mahdi has since stayed on as Prime Minister in a caretaker role
until Parliament decides on his replacement.
Abdul-Mahdi's claims of the covert pressure by the Trump administration are buttressed by
the use of similar tactics against Ecuador, where, in July 2018, a U.S. delegation at the
United Nations
threatened the nation with punitive trade measures and the withdrawal of military aid if
Ecuador moved forward with the introduction of a UN resolution to "protect, promote and support
breastfeeding."
The New York Times reported at the time that the U.S. delegation was seeking to
promote the interests of infant formula manufacturers. If the U.S. delegation is willing to use
such pressure on nations for promoting breastfeeding over infant formula, it goes without
saying that such behind-closed-doors pressure would be significantly more intense if a much
more lucrative resource, e.g. oil, were involved.
Regarding Abdul-Mahdi's claims, Luongo told MintPress that it is also worth
considering that it could have been anyone in the Trump administration making threats to
Abdul-Mahdi, not necessarily Trump himself. "What I won't say directly is that I don't know it
was Trump at the other end of the phone calls. Mahdi, it is to his best advantage politically
to blame everything on Trump. It could have been Mike Pompeo or Gina Haspel talking to
Abdul-Mahdi It could have been anyone, it most likely would be someone with plausible
deniability .This [Mahdi's claims] sounds credible I firmly believe Trump is capable of making
these threats but I don't think Trump would make those threats directly like that, but it would
absolutely be consistent with U.S. policy."
Luongo also argued that the current tensions between U.S. and Iraqi leadership preceded the
oil deal between Iraq and China by several weeks, "All of this starts with Prime Minister Mahdi
starting the process of opening up the Iraq-Syria border crossing and that was announced in
August. Then, the Israeli air attacks happened in September to try and stop that from
happening, attacks on PMU forces on the border crossing along with the ammo dump attacks near
Baghdad This drew the Iraqis' ire Mahdi then tried to close the air space over Iraq, but how
much of that he can enforce is a big question."
As to why it would be to Mahdi's advantage to blame Trump, Luongo stated that Mahdi "can
make edicts all day long, but, in reality, how much can he actually restrain the U.S. or the
Israelis from doing anything? Except for shame, diplomatic shame To me, it [Mahdi's claims]
seems perfectly credible because, during all of this, Trump is probably or someone else is
shaking him [Mahdi] down for the reconstruction of the oil fields [in Iraq] Trump has
explicitly stated "we want the oil."'
As Luongo noted, Trump's interest in the U.S. obtaining a significant share of Iraqi oil
revenue is hardly a secret. Just last March, Trump
asked Abdul-Mahdi "How about the oil?" at the end of a meeting at the White House,
prompting Abdul-Mahdi to ask "What do you mean?" To which Trump responded "Well, we did a lot,
we did a lot over there, we spent trillions over there, and a lot of people have been talking
about the oil," which was widely interpreted as Trump asking for part of Iraq's oil revenue in
exchange for the steep costs of the U.S.' continuing its now unwelcome military presence in
Iraq.
With Abdul-Mahdi having rejected Trump's "oil for reconstruction" proposal in favor of
China's, it seems likely that the Trump administration would default to so-called "gangster
diplomacy" tactics to pressure Iraq's government into accepting Trump's deal, especially given
the fact that China's deal was a much better offer. While Trump demanded half of Iraq's oil
revenue in exchange for completing reconstruction projects (according to Abdul-Mahdi), the deal
that was signed between Iraq and China would see around
20 percen t of Iraq's oil revenue go to China in exchange for reconstruction. Aside from
the potential loss in Iraq's oil revenue, there are many reasons for the Trump administration
to feel threatened by China's recent dealings in Iraq.
The Iraq-China oil deal – a prelude to something more?
When Abdul-Mahdi's delegation traveled to Beijing last September, the "oil for
reconstruction" deal was only
one of eight total agreements that were established. These agreements cover a range of
areas, including financial, commercial, security, reconstruction, communication, culture,
education and foreign affairs in addition to oil. Yet, the oil deal is by far the most
significant.
Per the agreement, Chinese firms will work on various reconstruction projects in exchange
for roughly 20 percent of Iraq's oil exports, approximately 100,00 barrels per day, for a
period of 20 years. According to Al-Monitor
, Abdul-Mahdi had the following to say about the deal: "We agreed [with Beijing] to set up a
joint investment fund, which the oil money will finance," adding that the agreement prohibits
China from monopolizing projects inside Iraq, forcing Bejing to work in cooperation with
international firms.
The agreement is similar to one negotiated
between Iraq and China in 2015 when Abdul-Mahdi was serving as Iraq's oil minister. That
year, Iraq joined China's Belt and Road Initiative in a deal that also involved exchanging oil
for investment, development and construction projects and saw China awarded several projects as
a result. In a notable similarity to recent events, that deal was put on hold due to "political
and security tensions" caused by unrest and the surge of ISIS in Iraq, that is until
Abdul-Mahdi saw Iraq rejoin the
initiative again late last year through the agreements his government signed with China
last September.
Chinese President Xi Jinping, center left, meet with Iraqi Prime Minister
Adil Abdul-Mahdi, center right, in Beijing, Sept. 23, 2019. Lintao Zhang | AP
Notably, after recent tensions between the U.S. and Iraq over the assassination of Soleimani
and the U.S.' subsequent refusal to remove its troops from Iraq despite parliament's demands,
Iraq quietly announced that it would dramatically increase its oil exports to China to
triple the
amount established in the deal signed in September. Given Abdul-Mahdi's recent claims about
the true forces behind Iraq's recent protests and Trump's threats against him being directly
related to his dealings with China, the move appears to be a not-so-veiled signal from
Abdul-Mahdi to Washington that he plans to deepen Iraq's partnership with China, at least for
as long as he remains in his caretaker role.
Iraq's decision to dramatically increase its oil exports to China came just one day after
the U.S. government
threatened to cut off Iraq's access to its central bank account, currently held at the
Federal Reserve Bank of New York, an account that
currently holds $35 billion in Iraqi oil revenue. The account was
set up after the U.S. invaded and began occupying Iraq in 2003 and Iraq currently removes
between $1-2 billion per month to cover essential government expenses. Losing access to its oil
revenue stored in that account would lead to the "
collapse " of Iraq's government, according to Iraqi government officials who spoke to
AFP .
Though Trump publicly promised to rebuke Iraq for the expulsion of U.S. troops via
sanctions, the threat to cut off Iraq's access to its account at the NY Federal Reserve Bank
was delivered privately and directly to the Prime Minister, adding further credibility to
Abdul-Mahdi's claims that Trump's most aggressive attempts at pressuring Iraq's government are
made in private and directed towards the country's Prime Minister.
Though Trump's push this time was about preventing the expulsion of U.S. troops from Iraq,
his reasons for doing so may also be related to concerns about China's growing foothold in the
region. Indeed, while Trump has now lost his desired share of Iraqi oil revenue (50 percent) to
China's counteroffer of 20 percent, the removal of U.S. troops from Iraq may see American
troops replaced with their Chinese counterparts as well, according to Tom Luongo.
"All of this is about the U.S. maintaining the fiction that it needs to stay in Iraq So,
China moving in there is the moment where they get their toe hold for the Belt and Road
[Initiative]," Luongo argued. "That helps to strengthen the economic relationship between Iraq,
Iran and China and obviating the need for the Americans to stay there. At some point, China
will have assets on the ground that they are going to want to defend militarily in the event of
any major crisis. This brings us to the next thing we know, that Mahdi and the Chinese
ambassador discussed that very thing in the wake of the Soleimani killing."
Indeed, according to news reports, Zhang Yao -- China's ambassador to Iraq -- " conveyed
Beijing's readiness to provide military assistance" should Iraq's government request it
soon after Soleimani's assassination. Yao made the offer a day after Iraq's parliament voted to
expel American troops from the country. Though it is currently unknown how Abdul-Mahdi
responded to the offer, the timing likely caused no shortage of concern among the Trump
administration about its rapidly waning influence in Iraq. "You can see what's coming here,"
Luongo told MintPress of the recent Chinese offer to Iraq, "China, Russia and Iran are
trying to cleave Iraq away from the United States and the U.S. is feeling very threatened by
this."
Russia is also playing a role in the current scenario as Iraq initiated talks with Moscow
regarding the
possible purchase of one of its air defense systems last September, the same month that
Iraq signed eight deals, including the oil deal with China. Then, in the wake of Soleimani's
death, Russia
again offered the air defense systems to Iraq to allow them to better defend their air
space. In the past, the U.S.
has threatened allied countries with sanctions and other measures if they purchase Russian
air defense systems as opposed to those manufactured by U.S. companies.
The U.S.' efforts to curb China's growing influence and presence in Iraq amid these new
strategic partnerships and agreements are limited, however, as the U.S. is increasingly relying on China
as part of its Iran policy, specifically in its goal of reducing Iranian oil export to zero.
China remains Iran's main crude oil and condensate importer, even after it reduced its imports
of Iranian oil significantly following U.S. pressure last year. Yet, the U.S. is now attempting to
pressure China to stop buying Iranian oil completely or face sanctions while also
attempting to privately sabotage the China-Iraq oil deal. It is highly unlikely China will
concede to the U.S. on both, if any, of those fronts, meaning the U.S. may be forced to choose
which policy front (Iran "containment" vs. Iraq's oil dealings with China) it values more in
the coming weeks and months.
Furthermore, the recent signing of the "phase one" trade deal with China revealed another
potential facet of the U.S.' increasingly complicated relationship with Iraq's oil sector given
that the trade deal
involves selling U.S. oil and gas to China at very low cost , suggesting that the Trump
administration may also see the Iraq-China oil deal result in Iraq emerging as a potential
competitor for the U.S. in selling cheap oil to China, the world's top oil importer.
The Petrodollar and the Phantom of the Petroyuan
In his televised statements last week following Iran's military response to the U.S.
assassination of General Soleimani, Trump insisted that the U.S.' Middle East policy is no
longer being directed by America's vast oil requirements. He
stated specifically that:
Over the last three years, under my leadership, our economy is stronger than ever before
and America has achieved energy independence. These historic accomplishments changed our
strategic priorities. These are accomplishments that nobody thought were possible. And
options in the Middle East became available. We are now the number-one producer of oil and
natural gas anywhere in the world. We are independent, and we do not need Middle East
oil . (emphasis added)"
Yet, given the centrality of the recent Iraq-China oil deal in guiding some of the Trump
administration's recent Middle East policy moves, this appears not to be the case. The
distinction may lie in the fact that, while the U.S. may now be less dependent on oil imports
from the Middle East, it still very much needs to continue to dominate how oil is traded and
sold on international markets in order to maintain its status as both a global military
and financial superpower.
Indeed, even if the U.S. is importing less Middle Eastern oil, the petrodollar system --
first forged in the 1970s -- requires that the U.S. maintains enough control over the global
oil trade so that the world's largest oil exporters, Iraq among them, continue to sell their
oil in dollars. Were Iraq to sell oil in another currency, or trade oil for services, as it
plans to do with China per the recently inked deal, a significant portion of Iraqi oil would
cease to generate a demand for dollars, violating the key tenet of the petrodollar
system.
Chinese representatives speak to defense personnel during a weapons expo organized
by the Iraqi defense ministry in Baghdad, March, 2017. Karim Kadim | AP
The takeaway from the petrodollar phenomenon is that as long as countries need oil, they
will need the dollar. As long as countries demand dollars, the U.S. can continue to go into
massive amounts of debt to fund its network of global military bases, Wall Street bailouts,
nuclear missiles, and tax cuts for the rich."
Thus, the use of the petrodollar has created a system whereby U.S. control of oil sales of
the largest oil exporters is necessary, not just to buttress the dollar, but also to support
its global military presence. Therefore, it is unsurprising that the issue of the U.S. troop
presence in Iraq and the issue of Iraq's push for oil independence against U.S. wishes have
become intertwined. Notably, one of the architects of the petrodollar system and the man who
infamously described U.S. soldiers as "dumb, stupid animals to be used as pawns in foreign
policy", former Secretary of State Henry Kissinger, has been advising
Trump and informing his China policy since 2016.
This take was also expressed by economist Michael Hudson,
who recently noted that U.S. access to oil, dollarization and U.S. military strategy are
intricately interwoven and that Trump's recent Iraq policy is intended "to escalate America's
presence in Iraq to keep control of the region's oil reserves," and, as Hudson says, "to back
Saudi Arabia's Wahabi troops (ISIS, Al Qaeda in Iraq, Al Nusra and other divisions of what are
actually America's foreign legion) to support U.S. control of Near Eastern oil as a buttress of
the U.S. dollar."
Hudson further asserts that it was Qassem Soleimani's efforts to promote Iraq's oil
independence at the expense of U.S. imperial ambitions that served one of the key motives
behind his assassination.
America opposed General Suleimani above all because he was fighting against ISIS and other
U.S.-backed terrorists in their attempt to break up Syria and replace Assad's regime with a
set of U.S.-compliant local leaders – the old British "divide and conquer" ploy. On
occasion, Suleimani had cooperated with U.S. troops in fighting ISIS groups that got "out of
line" meaning the U.S. party line. But every indication is that he was in Iraq to work
with that government seeking to regain control of the oil fields that President Trump has
bragged so loudly about grabbing. (emphasis added)"
Hudson adds that " U.S. neocons feared Suleimani's plan to help Iraq assert control of its
oil and withstand the terrorist attacks supported by U.S. and Saudi's on Iraq. That is what
made his assassination an immediate drive."
While other factors -- such as pressure
from U.S. allies such as Israel -- also played a factor in the decision to kill Soleimani,
the decision to assassinate him on Iraqi soil just hours before he was set to meet with
Abdul-Mahdi in a diplomatic role suggests that the underlying tensions caused by Iraq's push
for oil independence and its oil deal with China did play a factor in the timing of his
assassination. It also served as a threat to Abdul-Mahdi, who has claimed that the U.S.
threatened to kill both him and his defense minister just weeks prior over tensions directly
related to the push for independence of Iraq's oil sector from the U.S.
It appears that the ever-present role of the petrodollar in guiding U.S. policy in the
Middle East remains unchanged. The petrodollar has long been a driving factor behind the U.S.'
policy towards Iraq specifically, as one of the key triggers for the 2003 invasion of Iraq was
Saddam Hussein's decision to sell Iraqi oil in Euros opposed to dollars beginning in the year
2000. Just weeks before the invasion began, Hussein boasted that Iraq's Euro-based oil revenue
account was earning a higher interest rate than
it would have been if it had continued to sell its oil in dollars, an apparent signal to other
oil exporters that the petrodollar system was only really benefiting the United States at their
own expense.
Beyond current efforts to stave off Iraq's oil independence and keep its oil trade aligned
with the U.S., the fact that the U.S. is now seeking to limit China's ever-growing role in
Iraq's oil sector is also directly related to China's publicly known efforts to create its own
direct competitor to the petrodollar, the petroyuan.
Since 2017, China has made its plans for the petroyuan -- a direct competitor to the
petrodollar -- no secret, particularly after China eclipsed the U.S. as the world's largest
importer of oil.
The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to
price oil in coming months -- but unlike the contracts based on the U.S. dollar that currently dominate global
markets, this benchmark would use China's own currency. If there's widespread adoption, as the
Chinese hope, then that will mark a step toward challenging the greenback's status as the
world's most powerful currency .The plan is to price oil in yuan using a gold-backed futures contract in
Shanghai, but the road will be long and arduous."
If the U.S. continues on its current path and pushes Iraq further into the arms of China and
other U.S. rival states, it goes without saying that Iraq -- now a part of China's Belt and Road
Initiative -- may soon favor a petroyuan system over a petrodollar system, particularly as the
current U.S. administration threatens to hold Iraq's central bank account hostage for pursuing
policies Washington finds unfavorable.
It could also explain why President Trump is so concerned about China's growing foothold
in Iraq, since it risks causing not only the end of the U.S. military hegemony in the country but
could also lead to major trouble for the petrodollar system and the U.S.' position as a global
financial power. Trump's policy aimed at stopping China and Iraq's growing ties is clearly having
the opposite effect, showing that this administration's "gangster diplomacy" only serves to make
the alternatives offered by countries like China and Russia all the more attractive.
One can see how all these recent wars and military actions have a financial motive at their
core. Yet the mass of gullible Americans actually believe the reasons given, to "spread
democracy" and other wonderful things. Only a small number can see things for what they really
are. It's very frustrating to deal with the stupidity of the average person on a daily basis.
This is not Trump's policy, it is American policy and the variation is in how he implements
it. Any other person would have fallen in line with it as well. US policy has it's own inner
momentum that can't change course. The US depends upon continuation of the dollar as the
world's reserve currency. Were that to be lost the US likely would descend into chaos without
end. When the USSR came apart it was eventually able to downsize into the Russian state. We
don't have that here; there is no core ethnicity with it's own territory left anymore, it's
just a jumble. For the US it's a matter of survival.
The Chinese, for now, are not contradicting the Trump administration on the promise of
Chinese mega-purchases, because when Trump is more amicable their interests align. If an empty
promise that wasn't even made means the trade war de-escalation goes on, that is fine with
them. They would like to calm the markets as much as Trump would, and in this way they have
added leverage on Trump. Should they change their minds they can always explode the fiction
later on and injure Trump, perhaps strategically right around October.
Now that the dust has settled on the US-China trade deal and analysts have had some time to
pore over its 90+ pages, various chapters and (non-binding) terms that comprise the body of the
agreement, one high-level observation noted by Rabobank, is that the agreement foresees the
total amount of goods exports from the US to China to reach above $ 290BN by end-2021.
The implication of this is that the chart for US exports to China should basically look like
this for the next two years:
As Rabobank's senior economist Bjorn Giesbergen writes, t here are probably very few
economists that would deem such a trajectory feasible (except for the perpetually cheerful
economics team at Goldman , of course), seeing that it took the US more than 15 years to
raise exports from around USD16bn in 2000 to USD 130bn in 2017.
Moreover, the Chinese purchases of goods are beneficial to US companies, but at the cost of
other countries, and the agreement is only for two years. If China will buy more aircraft from
the US, that could be to the detriment of the EU.
According to the document "the parties project that the trajectory of increases will
continue in calendar years 2020 through 2025." But "to project" does not sound as firm as
"shall ensure." So, as the Rabo economist asks, "are we going to see a repetition of the 2019
turmoil caused by the phase 1 trade negotiations after those two years? Or is this supposed to
be solved in the phase 2 deal that is very unlikely to be made? What's more, while the
remaining tariffs provide leverage for US trade negotiators, they are still a tax on US
importers and US consumers of Chinese goods."
But before we even get there, going back to the chart shown above, Bloomberg today points
out something we have pointed out in the past, namely that China's $200 billion, two-year
spending spree negotiated with the Trump administration appears increasingly difficult to
deliver, and now a $50 billion "hole" appears to have opened up : that is the amount of U.S.
exports annually left out and many American businesses still uncertain about just what the
expectations are.
Some background: while Trump officials stressed the reforms aimed at curbing
intellectual-property theft and currency manipulation that China has agreed to in the "phase
one" trade deal signed Wednesday, the Chinese pledge to buy more American exports has become an
emblem of the deal to critics and supporters alike.
The administration has said those new exports in manufactured goods, energy, farm shipments
and services will come over two years on top of the $130 billion in goods and $57.6 billion in
services that the U.S. sent to China in 2017 -- the year before the trade war started and
exports were hit by Beijing's retaliatory measures to President Donald Trump's tariffs.
And while
Goldman said it is certainly feasible that China can ramp up its purchases of US goods ,
going so far as providing a matrix "scenario" of what such purchases could look like
that now appears virtually impossible, because as Bloomberg notes, the list of goods
categories in the agreement covers a narrower group of exports to China that added up to $78.8
billion in 2017, or $51.6 billion less than the overall goods exports to the Asian nation that
year. The goods trade commitment makes up $162.1 billion of the $200 billion total, with $37.9
billion to come from a boost in services trade such as travel and insurance.
Here, the math gets even more ridiculous:
The target for the first year that the deal takes effect is to add $63.9 billion in
manufactured goods, agriculture and energy exports. According to Bloomberg economist Maeva
Cousin's analysis, that would be an increase of 81% over the 2017 baseline. In year two, the
agreement calls for $98.2 billion surge in Chinese imports, which would require a 125%
increase over 2017.
Importantly for China, the deal requires those purchases to be "made at market prices based
on commercial considerations," a caveat which spooked commodities traders, and led to a sharp
drop in ags in the day following the deal's announcement.
Can China pull this off? Yes, if Beijing tears up existing trade deals and supply chains and
imposes explicit procurement targets and demands on China's local business. As Bloomberg notes,
"critics argue that such pre-ordained demand amounts to a slide into the sort of
government-managed trade that U.S. presidents abandoned decades ago" and the very sort of act
of central planning that U.S. officials have , paradoxically, spent years trying to convince
China to walk away from.
This may also explain why a key part of the trade deal will remain secret: the purchase plan
is based on what the administration insists is a specific – if classified – annex
of Chinese commitments. "The 20-page public version of that annex lists hundreds of products
and services from nuclear reactors to aircraft, printed circuits, pig iron, soybeans, crude oil
and computer services but no figures for purchases."
Going back to the critics, it is this convoluted mechanism that has them arguing that
China's stated targets will likely never be met: "This is ambitious and it will create some
stresses within the supply system," said Craig Allen, the president of the U.S.-China Business
Council.
That's not all: as Allen said, among the outstanding questions was whether China would lift
its retaliatory duties on American products as the US keeps its tariffs on some $360 billion in
imports from China as Trump seeks to maintain leverage for the second phase of
negotiations.
Allen also made clear the overall purchase schedule left many U.S. companies uncomfortable
even as they saw benefits in other parts of the deal. "The vast majority of our members are
looking for no more than a level playing field in China," Allen said. "We are not looking for
quotas or special treatment."
As a result, for many manufacturers what is actually changing -- and what China has
committed to instead of given a "best efforts" promise to achieve -- remains unclear.
Major exporters such as Boeing Co., whose CEO Dave Calhoun attended Wednesday's signing
ceremony, have stayed mum about what exactly the deal will mean for their business with China.
In an attempt to "clarify", Trump tweeted that the deal includes a Chinese commitment to buy
$16 billion to $20 billion in Boeing planes. It was unclear if he meant 737 MAX planes which
nobody in the world will ever voluntarily fly inside again.
Finally, prompting the latest round of cronyism allegations, Trump's new China pact also
includes plans for exports of American iron and steel , "a potential gain for an industry close
to the president that has benefited from his tariffs and complained about Chinese production
and overcapacity for years." As Bloomberg adds, the text of the agreement lists iron and steel
products ranging from pig iron to stainless steel wire and railway tracks, but steel industry
sources said they had been caught by surprise and not been given any additional details on
China's purchase commitments.
It is unclear why Beijing would need US product s: after all, in its scramble to erect ghost
cities and hit a goalseeked GDP print, China produces more than 50% of the world's steel,
drawning criticism from around the world – if not Greta Thunberg – for the massive
coal-derived pollution that comes from flooding global markets with cheap steel.
This partly explains why the US is taking its battle on 5G technology with the Chinese so
seriously. As a faltering global leader, the Americans do not take it kindly when China tries
to snatch a lunch right from under their nose. As such, the US-China trade war goes beyond
economics and ideology. It is about global domination across every conceivable technology that
consumers and governments worldwide are addicted to these days.
Metaphorically, technology is the new opium that rakes in money, power and control. Take a
look at the way consumers across the world are utilizing technologies. From smartphones to
mobile apps, from cloud-computing to cybersecurity, trillions of dollars are being spent by
consumers and their governments. The Americans were laughing their way to the bank until the
Chinese came along and upset their game.
As greed has no boundary or limit, every challenger or opposition to the consumption of this
"new opium" means a loss in revenue, power and control for the US and its preferred allies.
Sharing the spoils with others is looking like an inconceivable option for them at this
stage.
To call the tension between the US and China a trade war undermines this greater reality.
From unilateral sanctions to outright destruction of economies, it is starting to look as if
the US is using technology to regain global domination at all costs.
"... Trump is covering his retraction by calling it a trade deal. China's part of the deal is to agree to purchase the US goods that it already intended to purchase. ..."
The first thing
to understand is that it is not a trade deal. It is Trump backing off his tariffs when he
discovered that the tarrifs fall on US goods and American consumers, not on China. Trump is
covering his retraction by calling it a trade deal. China's part of the deal is to agree to
purchase the US goods that it already intended to purchase.
The purpose of tariffs is to protect domestic producers from foreign competition by raising
the price of imported goods. What Trump, his administration, and the financial press did not
understand is that at least half of the US trade deficit with China is the offshored goods
produced in China by such corporations as Apple, Nike, and Levi. The offshored production of US
global corporations counts as imports when they are brought into the US to be sold to
Americans. Thus, the cost of the tariffs were falling on US corporations and US consumers.
Tariffs are not an effective way to bring offshored US manufacturing home. If Trump or any
US government wants to bring US manufacturing back to the US from its offshored locations, the
way to achieve this result is to change the way the US taxes corporations. The rule would be:
If a US corporation produces in the US with US labor for US markets, the firm's profits are
taxed at a low rate. If the corporation produces products for the US market abroad with foreign
labor, the tax rate will be high enough to more than wipe out the labor cost savings.
As I have emphasized for years, the offshoring of US manufacturing has inflicted massive
external costs on the United States. Middle class jobs have been lost, careers ended, living
standards of former US manufacturing workers and families have dropped. The tax base of cities
and states has shrunk, causing cutbacks in public services and undermining municipal and state
pension funds. You can add to this list. These costs are the true cost of the increased profits
from the lower foreign labor and compliance costs. A relatively few executives and shareholders
benefitted at the expense of a vast number of Americans.
This is the problem that needs to be addressed and corrected.
...if nothing had happened in the US-China trade war. Well, me might have gotten to where we
are supposed to be with the deal
..a honest question. In terms of the environment and global climate, is it a good thing that
farmers will be producing more monoculture grains, dairy, beef and pork for export?
There has been much hype about the signing of Phase One (and probably only) US-China trade
deal. However based on a front page story in today's Washington Post, there is not much there.
The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors
that had them, although some were halved. But numerous US sectors see no change at all and are
now viewing the situation as not likely to improve, with them suffering losses of business
likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and
other sectors there is not much reduction of uncertainty regarding US-China trade, so not
likely much increase in investment.
The main items in it besides no worsening of tariffs, China has made promises not to
pressure US firms to turn over technology and also to increase imports from the US by $200
billion over the next two years, especially in energy and agriculture. So maybe US soybean
farmers will no longer need the bailouts of billions of $ Trump has been providing to them.
However, such promises have been made in the past.
As it is, I am watching commentators on Bloomberg, and about the most any of them are
willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations.
That is far from some dramatic breakthrough, and most of the tariffs put on as part of the
US-China trade war remain in place.
Barkley Rosser
spencer , January 16, 2020 3:49 pm
This looks like it may be a way to make it a status quo or back burner issue until after
the election.
Of course Trump will always be able to blow it up if he decides that would be to his
advantage.
Bert Schlitz , January 16, 2020 4:53 pm
I don't see how they "buy" 200 billion worth of goods. The Chinese economy is slowing and
that is why purchases were flattening by 2014.
Its noise and circuses.
pgl , January 16, 2020 5:48 pm
Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise
and circus. Check it out!
There has been much hype about the signing of Phase One (and probably only) US-China trade
deal. However based on a front page story in today's Washington Post, there is not much there.
The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors
that had them, although some were halved. But numerous US sectors see no change at all and are
now viewing the situation as not likely to improve, with them suffering losses of business
likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and
other sectors there is not much reduction of uncertainty regarding US-China trade, so not
likely much increase in investment.
The main items in it besides no worsening of tariffs, China has made promises not to
pressure US firms to turn over technology and also to increase imports from the US by $200
billion over the next two years, especially in energy and agriculture. So maybe US soybean
farmers will no longer need the bailouts of billions of $ Trump has been providing to them.
However, such promises have been made in the past.
As it is, I am watching commentators on Bloomberg, and about the most any of them are
willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations.
That is far from some dramatic breakthrough, and most of the tariffs put on as part of the
US-China trade war remain in place.
spencer , January 16, 2020 3:49 pm
This looks like it may be a way to make it a status quo or back burner issue until after
the election.
Of course Trump will always be able to blow it up if he decides that would be to his
advantage.
Bert Schlitz , January 16, 2020 4:53 pm
I don't see how they "buy" 200 billion worth of goods. The Chinese economy is slowing and
that is why purchases were flattening by 2014.
Its noise and circuses.
pgl , January 16, 2020 5:48 pm
Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise
and circus. Check it out!
Coming decade could see the US take on Russia, China and Iran over the New Silk Road
connection
The Raging Twenties started with a bang with the targeted assassination of Iran's General
Qasem Soleimani.
Yet a bigger bang awaits us throughout the decade: the myriad declinations of the New Great
Game in Eurasia, which pits the US against Russia, China and Iran, the three major nodes of
Eurasia integration.
Every game-changing act in geopolitics and geoeconomics in the coming decade will have to be
analyzed in connection to this epic clash.
The Deep State and crucial sectors of the US ruling class are absolutely terrified that
China is already outpacing the "indispensable nation" economically and that Russia has
outpaced
it militarily . The Pentagon officially designates the three Eurasian nodes as
"threats."
Hybrid War techniques – carrying inbuilt 24/7 demonization – will proliferate
with the aim of containing China's "threat," Russian "aggression" and Iran's "sponsorship of
terrorism." The myth of the "free market" will continue to drown under the imposition of a
barrage of illegal sanctions, euphemistically defined as new trade "rules."
Yet that will be hardly enough to derail the Russia-China strategic partnership. To unlock
the deeper meaning of this partnership, we need to understand that Beijing defines it as
rolling towards a "new era." That implies strategic long-term planning – with the key
date being 2049, the centennial of New China.
The horizon for the multiple projects of the Belt and Road Initiative – as in the
China-driven New Silk Roads – is indeed the 2040s, when Beijing expects to have fully
woven a new, multipolar paradigm of sovereign nations/partners across Eurasia and beyond, all
connected by an interlocking maze of belts and roads.
The Russian project – Greater Eurasia –
somewhat mirrors Belt & Road and will be integrated with it. Belt & Road, the Eurasia
Economic Union, the Shanghai Cooperation Organization and the Asia Infrastructure Investment
Bank are all converging towards the same vision.
Realpolitik
So this "new era", as defined by the Chinese, relies heavily on close Russia-China
coordination, in every sector. Made in China 2025 is encompassing a series of techno/scientific
breakthroughs. At the same time, Russia has established itself as an unparalleled technological
resource for weapons and systems that the Chinese still cannot match.
At the latest BRICS summit in Brasilia, President Xi Jinping told Vladimir Putin that "the
current international situation with rising instability and uncertainty urge China and Russia
to establish closer strategic coordination." Putin's response: "Under the current situation,
the two sides should continue to maintain close strategic communication."
Russia is showing China how the West respects realpolitik power in any form, and Beijing is
finally starting to use theirs. The result is that after five centuries of Western domination
– which, incidentally, led to the decline of the Ancient Silk Roads – the Heartland
is back, with a bang, asserting its preeminence.
On a personal note, my travels these past two years, from West Asia to Central Asia, and my
conversations these past two months with analysts in Nur-Sultan, Moscow and Italy, have allowed
me to get deeper into the intricacies of what sharp minds define as the Double Helix. We are
all aware of the immense challenges ahead – while barely managing to track the stunning
re-emergence of the Heartland in real-time.
In soft power terms, the sterling role of Russian diplomacy will become even more paramount
– backed up by a Ministry of Defense led by Sergei Shoigu, a Tuvan from Siberia, and an
intel arm that is capable of constructive dialogue with everybody: India/Pakistan, North/South
Korea, Iran/Saudi Arabia, Afghanistan.
This apparatus does smooth (complex) geopolitical issues over in a manner that still eludes
Beijing.
In parallel, virtually the whole Asia-Pacific – from the Eastern Mediterranean to the
Indian Ocean – now takes into full consideration Russia-China as a counter-force to US
naval and financial overreach.
Stakes in Southwest Asia
The targeted assassination of Soleimani, for all its long-term fallout, is just one move in
the Southwest Asia chessboard. What's ultimately at stake is a macro geoeconomic prize: a
land bridge from the Persian Gulf to the Eastern Mediterranean.
Last summer, an Iran-Iraq-Syria trilateral established that "the goal of negotiations is to
activate the Iranian-Iraqi-Syria load and transport corridor as part of a wider plan for
reviving the Silk Road."
There could not be a more strategic connectivity corridor, capable of simultaneously
interlinking with the International North-South Transportation Corridor; the Iran-Central
Asia-China connection all the way to the Pacific; and projecting Latakia towards the
Mediterranean and the Atlantic.
What's on the horizon is, in fact, a sub-sect of Belt & Road in Southwest Asia. Iran is
a key node of Belt & Road; China will be heavily involved in the rebuilding of Syria; and
Beijing-Baghdad signed multiple deals and set up an Iraqi-Chinese Reconstruction Fund (income
from 300,000 barrels of oil a day in exchange for Chinese credit for Chinese companies
rebuilding Iraqi infrastructure).
A quick look at the map reveals the "secret" of the US refusing to pack up and leave Iraq,
as demanded by the Iraqi Parliament and Prime Minister: to prevent the emergence of this
corridor by any means necessary. Especially when we see that all the roads that China is
building across Central Asia – I navigated many of them in November and December –
ultimately link China with Iran.
The final objective: to unite Shanghai to the Eastern Mediterranean – overland, across
the Heartland.
As much as Gwadar port in the Arabian Sea is an essential node of the China-Pakistan
Economic Corridor, and part of China's multi-pronged "escape from Malacca" strategy, India also
courted Iran to match Gwadar via the port of Chabahar in the Gulf of Oman.
So as much as Beijing wants to connect the Arabian Sea with Xinjiang, via the economic
corridor, India wants to connect with Afghanistan and Central Asia via Iran.
Yet India's investments in Chabahar may come to nothing, with New Delhi still mulling
whether to become an active part of the US "Indo-Pacific" strategy, which would imply dropping
Tehran.
The Russia-China-Iran joint naval exercise in late December, starting exactly from Chabahar,
was a timely wake-up for New Delhi. India simply cannot afford to ignore Iran and end up losing
its key connectivity node, Chabahar.
The immutable fact: everyone needs and wants Iran connectivity. For obvious reasons, since
the Persian empire, this is the privileged hub for all Central Asian trade routes.
On top of it, Iran for China is a matter of national security. China is heavily invested in
Iran's energy industry. All bilateral trade will be settled in yuan or in a basket of
currencies bypassing the US dollar.
US neocons, meanwhile, still dream of what the Cheney regime was aiming at in the past
decade: regime change in Iran leading to the US dominating the Caspian Sea as a springboard to
Central Asia, only one step away from Xinjiang and weaponization of anti-China sentiment. It
could be seen as a New Silk Road in reverse to disrupt the Chinese vision.
Battle of the Ages
A new book, The Impact of China's Belt and Road
Initiativ e , by Jeremy Garlick of the University of Economics in Prague, carries the
merit of admitting that, "making sense" of Belt & Road "is extremely difficult."
This is an extremely serious attempt to theorize Belt & Road's immense complexity
– especially considering China's flexible, syncretic approach to policymaking, quite
bewildering for Westerners. To reach his goal, Garlick gets into Tang Shiping's social
evolution paradigm, delves into neo-Gramscian hegemony, and dissects the concept of "offensive
mercantilism" – all that as part of an effort in "complex eclecticism."
The contrast with the pedestrian Belt & Road demonization narrative emanating from US
"analysts" is glaring. The book tackles in detail the multifaceted nature of Belt & Road's
trans-regionalism as an evolving, organic process.
Imperial policymakers won't bother to understand how and why Belt & Road is setting a
new global paradigm. The NATO summit in London last month offered a few pointers. NATO
uncritically adopted three US priorities: even more aggressive policy towards Russia;
containment of China (including military surveillance); and militarization of space – a
spin-off from the 2002 Full Spectrum Dominance doctrine.
So NATO will be drawn into the "Indo-Pacific" strategy – which means containment of
China. And as NATO is the EU's weaponized arm, that implies the US interfering on how Europe
does business with China – at every level.
Retired US Army Colonel Lawrence Wilkerson, Colin Powell's chief of staff from 2001 to 2005,
cuts to the chase: "America exists today to make war. How else do we interpret 19 straight
years of war and no end in sight? It's part of who we are. It's part of what the American
Empire is. We are going to lie, cheat and steal, as Pompeo is doing right now, as Trump is
doing right now, as Esper is doing right now and a host of other members of my political party,
the Republicans, are doing right now. We are going to lie, cheat and steal to do whatever it is
we have to do to continue this war complex. That's the truth of it. And that's the agony of
it."
Moscow, Beijing and Tehran are fully aware of the stakes. Diplomats and analysts are working
on the trend, for the trio, to evolve a concerted effort to protect one another from all forms
of hybrid war – sanctions included – launched against each of them.
For the US, this is indeed an existential battle – against the whole Eurasia
integration process, the New Silk Roads, the Russia-China strategic partnership, those Russian
hypersonic weapons mixed with supple diplomacy, the profound disgust and revolt against US
policies all across the Global South, the nearly inevitable collapse of the US dollar. What's
certain is that the Empire won't go quietly into the night. We should all be ready for the
battle of the ages.
An extremely rare candid and somewhat precise piece of journalism by the NYT (albeit telling
the story from the point of view of the Americans/capitalists):
What it does not do is tackle the root causes of the trade war. The deal leaves
untouched Beijing's subsidies for homegrown industries and its firm control over crucial
levers of its hard-charging economy . The deal also keeps in place most of Mr. Trump's
tariffs on $360 billion worth of Chinese goods, a much heavier tax than Americans pay for
products from practically anywhere else.
Solving those issues could take years.
Interesting to see what the Americans consider to be China's "root causes of the trade
war". And we still have people who believe the war against China is not a war between
capitalism and socialism, but between "freedom and tyranny". Pure middle class liberal
dellusion of grandeur.
--//--
In the last open thread, in my first comment, I highlighted how fast the Western MSM gave
up the idea the Labour Party should have its first female leader in order to prop up their
guy, Keir Starmer (literally the only male still in the dispute right now). The reason, of
course, is that his main rival - Rebecca Long-Bailey - is Corbyn's successor and, as such,
has Momentum's (and, probably, of the unions) support.
I have been stating here for some time now that the function of the middle class is to
serve as the battering ram of the capitalists. They are the class tasked with fabricating the
narratives and "theories" which all the society should believe and never question. They are
what that 007 villain (Spectre) called "visionaires", or what the far-rightists in America
call "the experts".
If that's true, then postmodernism is their ideological weapon of choice nowadays.
doesn't matter in which order they're read, but Escobar's
latest intersects with Alastair
Crooke's to provide Big Picture perspective.
Towards his conclusion, Escobar cites retired US Army Colonel Lawrence Wilkerson, Colin
Powell's chief of staff from 2001 to 2005:
"We are going to lie, cheat and steal to do whatever it is we have to do to continue this
war complex. That's the truth of it. And that's the agony of it."
But nowhere in the citation does Wilkerson say that any of this effort's being done to
defend the USA, whereas its beyond clear that Iran, China and Russia are all working to
protect their nations and people. Rather, it appears as if "the profound disgust and revolt
against US policies all across the Global South" is finally being adopted by a majority of
the USA's polity as it becomes clear that all the lying, cheating and stealing is being done
at the expense of the 99% for the 1%'s benefit.
As Crooke alludes, wagging the dog a la Clinton might save Trump from being convicted and
removed by the Senate, but such a move will likely cost him the election, although much
depends on how those controlling the D-Party behave in the face of Sanders winning the
nomination via the primaries prior to the Convention.
Under the text of the Phase One deal - which
was released later in the day by the Office of the US Trade Representative - both sides
agree that they can formally complain to each other if either feels the other side is not
holding up its end of the bargain.
China Accepts Deal to Buy $200Bln in US Goods
First and foremost, the document obliges Beijing to purchase at least $200 billion worth of
US goods over the next two years.
"During the two-year period from January 1, 2020, through December 31, 2021, China shall
ensure that purchases and imports into China from the United States of the manufactured
goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the
corresponding 2017 baseline amount by no less than $200 billion", the text of the agreement
reads.
The agreement said China
will ensure that it buys $32.9 billion worth of US manufactured goods this year and $44.8
billion in 2021; $12.5 billion in US agricultural goods this year and $19.5 billion in 2021;
$18.5 billion in US energy products this year and $33.9 billion in 2021; and $12.8 billion in
US services this year and $25.1 billion in 2021.
US, China Agree to Protect Patents,
Fight Abuse of Trade Secrets
The United States and China agreed to protect patents, particularly in pharmaceuticals, and
ban counterfeit products and the misappropriation of trade secrets.
"China shall permit pharmaceutical patent applicants to rely on supplemental data to satisfy
relevant requirements for patentability, including sufficiency of disclosure and inventive
step, during patent examination proceedings, patent review proceedings, and judicial
proceedings", the text of the deal said. "The United States
affirms that existing US measures afford treatment equivalent to that provided for in
this Article".
Beijing and Washington also resolved to strengthen cooperation and coordination in combating
piracy, including counterfeiting on e-commerce platforms, in the agreement.
On the protection of trade secrets, the United States said China will treat as "urgent" the
use, or attempted use, of claimed trade secret information and provide its judicial authorities
the authority to order a preliminary injunction based on case facts and circumstances.
Washington pledged to do the same for China.
China to Boost US Energy Imports by $52
Bln
China also agreed to increase purchases of US energy products by $52 billion in the next two
years.
The US energy products will be part of the total $200 billion worth of US goods that China
will import through 2021, according to the agreement.
"For the category of energy products no less than $18.5 billion above the corresponding 2017
baseline amount is purchased and imported into China from the United States in calendar year
2020, and no less than $33.9 billion above the corresponding 2017 baseline amount is
purchased and imported into China from the United States in calendar year 2021", the text of
the deal said.
The agreement listed the US energy products that China will be buying as: crude oil,
liquefied natural gas, refined petroleum and coal.
China is the world's largest buyer of oil and the United States is the largest producer of
the commodity.
Oil prices, which hit five-week lows earlier on Wednesday, pared their losses after the
energy deal was announced by the US and Chinese governments.
Avoiding Currency
Manipulations
Under the Phase One deal China agrees to not engage in currency manipulation for the purpose
of achieving trade advantages over the United States.
"The Parties
shall refrain from competitive devaluations and not target exchange rates for competitive
purposes, including through large-scale, persistent, one-sided intervention in exchange
markets," the agreement states.
The United States and China will communicate regularly and consult on foreign exchange
markets, activities and policies as well as consult with each other regarding the International
Monetary Fund's assessment of the exchange rate of each country, the agreement states.
The agreement states that the United States and China should achieve and maintain a
market-determined exchange rate regime.
The agreement comes after two years of wrangling and numerous halts in discussions, during
which both sides piled hundreds of billions of dollars of tit-for-tat tariffs on each
other.
Despite the signing of the accord, the Trump administration
will maintain tariffs on $360 billion of Chinese goods in an attempt to hold Beijing
accountable to the deal, US officials said. The Chinese government has also said it will decide
later on the tariffs it has imposed on US imports, which last stood at $185 billion in
value.
The US-China trade war sparked in January 2019, when the Trump administration announced
duties on Chinese-made solar panels and washing machines. The Trump administration has since
placed tariffs on $550 billion worth of Chinese products.
'Phase Two' Will End US-China
Trade War?
US Treasury Secretary Steve Mnuchin commented earlier on Wednesday on the agreement and said
that certain technology and cybersecurity issues would be resolved in the next chapter of the
deal to end the trade dispute.
"I think a very significant amount of the technology issues are in Phase One. There are other
certain areas of services away from financial services that will be in Phase Two. There are
certain additional cybersecurity issues that will be in Phase Two [...] There still more
issues to deal with and we'll address those", Mnuchin said, cited by CNBC.
Although the timing and details of Phase Two remain vague, Mnuchin ruled out Huawei being
included,
claiming that the Chinese tech giant is part of "the national security dialogue".
Trump claimed during a news conference on Wednesday that he does not foresee a Phase Three
trade agreement with China, expecting to conclude the trade negotiations with Phase
Two.
"We've already begun discussions on a Phase 2 deal", Pence said, cited by Fox Business.
Trump said earlier that inking of the second phase of the deal may have to wait until after
the 2020 presidential election to allow time to negotiate a better agreement.
Phase One and Phase Two could reportedly ease trade tensions between the two major economic
powers but it would unlikely settle the dispute, The Washington Post reported.
According to the media outlet, the Trump administration is developing new export control
regulations aimed at limiting flows of sophisticated technology to China, while US officials
embarked on closely scrutinizing potential Chinese investments in the United States. Media
reports of alleged new economic and technology levies against Beijing sparked speculation
among analysts that Phase Three should not be excluded.
Despite the latest Sino-American phase one deal to ease tensions over trade, one former top
US official is now calling for a decoupling between both economies, reported the
South China Morning Post (SCMP).
Former US ambassador to India Ashley Tellis explains in a new book titled Strategic Asia
2020: US-China Competition for Global Influence -- that the world's two largest economies have
entered a new period of sustained competition.
Tellis said Washington had developed a view that "China is today and will be for the
foreseeable future the principal challenger to the US."
"The US quest for a partnership with China was fated to fail once China's growth in economic
capabilities was gradually matched by its rising military power," he said.
Tellis said Washington must resume its ability to support the liberal international order
established by the US more than a half-century ago, and "provide the global public goods that
bestow legitimacy upon its primacy and strengthen its power-projection capabilities to protect
its allies and friends."
He said this approach would require more strategic cooperation with allies such as
Australia, Japan, and South Korea.
"The US should use coordinated action with allies to confront China's trade malpractices
should pursue targeted decoupling of the US and Chinese economies, mainly in order to protect
its defense capabilities rather than seeking a comprehensive rupture."
The latest phase one deal between both countries is a temporary trade truce -- likely to be
broken as a strategic rivalry encompasses trade, technology, investment, currency, and
geopolitical concerns will continue to strain relations in the early 2020s.
A much greater decoupling could be dead ahead and likely to intensify over time, as it's
already occurring in the technology sector.
Tellis said President Trump labeling China as a strategic
competitor was one of "the most important changes in US-China relations."
The decoupling has already started as Washington races to safeguard the country's
cutting-edge technologies, including 5G, automation, artificial intelligence, autonomous
vehicle, hypersonics, and robotics, from getting into the hands of Chinese firms.
A perfect example of this is blacklisting Huawei and other Chinese technology firms from
buying US semiconductor components.
Liu Weidong, a US affairs specialist from the Chinese Academy of Social Sciences, told SCMP
that increased protectionism among Washington lawmakers suggests the decoupling trend between
both countries is far from over.
The broader shift at play is that decoupling will result in de-globalization ,
economic and financial fragmentation, and disruption of complex supply chains.
BEIJING, Dec. 21 (Xinhua) -- The
phase-one economic and trade deal between China and the United States benefits both sides and
the whole world, Chinese President Xi Jinping said Friday.
In a phone conversation with his U.S. counterpart, Donald Trump, Xi noted that the two
countries have reached the phase-one agreement on the basis of the principle of equality and
mutual respect.
Against the backdrop of an extremely complicated international environment, the agreement
benefits China, the United States, as well as peace and prosperity of the whole world, Xi
said.
For his part, Trump said that the phase-one economic and trade agreement reached between
China and the United States is good for the two countries and the whole world.
Noting that both countries' markets and the world have responded very positively to the
agreement, Trump said that the United States is willing to maintain close communication with
China and strive for the signing and implementation of the agreement at an early date.
Xi stressed that the economic and trade cooperation between China and the United States has
made significant contributions to the stability and development of China-U.S. relations and the
advancement of the world economy.
Modern economy and modern technologies have integrated the world as a whole, thus making the
interests of China and the United States more intertwined with each other, Xi said, adding that
the two sides will experience some differences in cooperation.
As long as both sides keep holding the mainstream of China-U.S. economic and trade
cooperation featuring mutual benefits and win-win outcomes, and always respect each other's
national dignity, sovereignty and core interests, they will overcome difficulties on the way of
progress, and push forward their economic and trade relations under the new historical
conditions, so as to benefit the two countries and peoples, Xi said.
China expresses serious concerns over the U.S. side's recent negative words and actions on
issues related to China's Taiwan, Hong Kong, Xinjiang and Tibet, Xi said.
He noted that the U.S. behaviors have interfered in China's internal affairs and harmed
China's interests, which is detrimental to the mutual trust and bilateral cooperation.
China hopes that the United States will seriously implement the important consensuses
reached by the two leaders over various meetings and phone conversations, pay high attention
and attach great importance to China's concerns, and prevent bilateral relations and important
agendas from being disturbed, Xi said.
Trump said he is looking forward to maintaining regular communication with Xi by various
means, adding he is confident that both countries can properly handle differences, and
U.S.-China relations can maintain smooth development.
Xi said he is willing to maintain contacts with Trump by various means, exchange views over
bilateral relations and international affairs, and jointly promote China-U.S. relations on the
basis of coordination, cooperation and stability.
The two heads of state also exchanged views on the situation of the Korean Peninsula. Xi
stressed that it is imperative to stick to the general direction of a political settlement,
saying all parties should meet each other halfway, and maintain dialogue and momentum for the
mitigation of the situation, which is in the common interests of all.
If true this china capitulation. Or some shrewd tactical maneuver, as the next year it is
China who hold trump cards -- it can derail Trump re-election with ease.
I have my doubts about Trump being the Grand Dealmaker he calls himself. Looking at seven
bankruptcies as a proof of that ... mythical skill I don't find much. I recall Trump suing the
Deutsche Bank after the bank wanted a credit back. His lawyers in court referred to the bank
crisis, called the Deutsche Bank as a bank responsible for that and said that thus they don't
deserve repayment. that was Chutzpah in the First Degree, For very obvious reasons Trump lost
that case and did pay back.
When Trunmp recently went on searching lawyers to work and sue for him he didn't find any. A
big corp lawyer anonymously briefly explained why: "Doesn't pay. Doesn't listen.'
A US-China trade deal was announced to chaotic fanfare late Friday Asian time – and we
are sceptical. First, we still don't have details other than that December tariffs were
postponed by both sides, the 15% US tariffs imposed on 1 September are to be reduced to 7.5% as
a sign of goodwill, and the 25% tariffs on USD250bn stay in place . Second, we aren't going to
get a signing ceremony between the US and Chinese leaders, which does not send an encouraging
signal. And third, what we see is close to the terms we previously criticized for being
unrealistic in reports such as 'A Great Deal of Nonsense" and "LOL-A-PLAZA".
The US Trade Representative (USTR) says the final text of the phase one
agreement is still being finalised, and he will sign it early next year for a likely incept
date of end-January 2020. The areas covered include: Intellectual Property (IP); Technology
Transfer; Agriculture; Financial Services; Currency; Expanding Trade; and Dispute Resolution.
Each of these promises much and yet potentially delivers little.
China has pledged to address issues of geographical indications, trademarks, and enforcement
against pirated and counterfeit goods. That's just after a Chinese court ruled that Japanese
retailer Muji doesn't own its own name in China and a local rival started years afterwards
does. Enforcement matters, not promises: more on that in a moment.
China has agreed to end forcing or pressuring foreign companies to transfer their tech as a
condition for obtaining market access or administrative approvals. Again, enforcement is all
that matters here. China also " commits to refrain from directing or supporting outbound
investments aimed at acquiring foreign technology pursuant to industrial plans that create
distortion. " That is China's reason for outbound investment! For example, Sweden's Defence
Research Agency just released a detailed survey of Chinese corporate acquisitions in their
country showing at least half are correlated with the "Made in China 20205" plan.
China will " support a dramatic expansion of US food, agriculture and seafood product
exports " , with the USTR stating the target is to jump to USD40bn in 2020, a USD16bn increase
over the pre-trade war level of USD24bn, and to aim for USD50bn. Part of that reflects China's
decimated pork herd, so is hardly a concession. Yet it is hard to conceive of how the total
figure can be achieved without China using the US to displace agri imports from other nations,
e.g., Argentinean and Brazilian soy, and perhaps Aussie and Kiwi farm goods. That also
increases China's economic exposure to the US at a time of rising geopolitical tensions between
the two (see news of the US' secret expulsion of two Chinese diplomats), and US' farmers
exposure to China in kind. For its part, the Chinese press are not mentioning these US hard
targets, and are talking about WTO trading terms, which bodes poorly.
The financial services chapter pledges China to an opening up already underway as it
searches for new sources of USD inflows, so again is not a concession. Interestingly, it also
says US ratings agencies will get access – which will be fun given the evident credit
stresses emerging in China just as US banks will be trying to sell China as an investment
destination. .
On currency the US is requiring "high-standard commitments" to refrain from competitive
devaluations and targeting of exchange rates. Everyone knows the CNY is not freely-traded
– but also that China is doing its best to prop it up, not to try to push it lower. The
key message is CNY is not going to be allowed to do what it ought to be doing, i.e., weakening,
as China is pledging new fiscal stimulus in 2020 that will decrease its external surplus. That
runs counter to market forces, and smacks of a kind of Plaza Accord. Of course, as long as this
US-China agreement holds that might be sustainable due to the promised higher capital
inflows...
Eexcept the expanding trade chapter implies the opposite. The USTR says China is pledging to
boost its 2020 imports of US goods and services by USD100bn over the level in 2017, and by
USD100bn again in 2021, for a total increase of USD200bn . Given 2017 was pre-trade war and US
exports to China dropped off a cliff in 2019, this means around a 110% y/y increase in
purchases in 2020 – and agri is only a portion of that. The problems should be obvious.
How can a slowing Chinese economy (imports are down y/y from most sources), see this kind of
increase without substituting US for world exports or local goods? How can a China with a USD
liquidity shortage serious enough to be driving said lowered import bill, and
'1USD-in/1USD-out' de facto capital controls, cope with the net reduction on the trade side? As
of November, the 12-month rolling Chinese global trade surplus with the US it was USD330bn and
globally was USD440bn. We are talking about reducing that US figure by 2/3 and the global total
by 1/2!
Which brings us to the last chapter: Dispute Resolution. Getting China to comply is far
harder than getting it to sign. The USTR notes the agreement " establishes strong procedures
for addressing disputes related to the agreement and allows each party to take proportionate
responsive actions that it deems appropriate ." In other words, each side can unilaterally do
what they want when they want! So much for the unilateral US control of the process.
So how to see this in summary? The reduction in tariffs from 15% to 7.5% is a positive,
albeit far less than the Wall Street Journal had promised. (NB, the USTR took the
extraordinary step of publicly chastising the WSJ journalists who wrote that story –
regular readers may recall I have also called them out more than once in the past.) Indeed, if
China really has agreed to all that is stated here then further incremental tariff rollbacks
can be seen – though the USTR has said the 25% tariffs will stay as collateral for a
phase two deal that nobody really expects to happen. Yet the terms of this phase one still seem
to be A Great Deal of Nonsense. How can China stop buying foreign tech? How can it buy as much
US stuff as pledged? How can it do so and not undermine the WTO? How can it do so and not
weaken CNY? And how can it do so with a strong CNY without increasing its USD debts, its
strategic reliance on the USD, and to US goods? In short, if China does as the USTR claims, the
US is a huge winner here (and there are lots of losers); if China does not comply with what
look an impossible import targets, then the US can frame China as the bad guy and the tariffs
can go back up again. Arguably, the question is not if that will happen, but when.
The most important thing about the "phase one" trade agreement announced Friday by U.S. and
Chinese officials is what won't happen: The two countries won't impose additional tariffs on
Sunday that would have further escalated the trade war.
There will also be a bit of de-escalation. In September, Trump imposed 15 percent
tariffs on $110 billion worth of Chinese consumer goods, such as clothing; those tariffs will
be cut in half, to 7.5 percent. But the largest piece of Trump's China tariffs -- a 25 percent
tariff on $250 billion in goods mostly sold to businesses rather than consumers -- will stay
unchanged, for now.
Awaited confirmation by China about the Trade Deal before writing about it. This article is what I
waited to be published: "Phase one trade deal a step forward, a new beginning," yes, an
optimistic tone, although tempered in the text:
"Rome was not built in a day. Trade protectionism has expanded in some places of the
world, affecting some people's thinking. It is not easy for China and the US to agree on the
text of the deal. But how to define this deal and whether it can keep its positive effects
on the global market and even accumulate more positive energy will depend on further efforts
from China and the US , as the global market has been disturbed by the trade war.
" We must see that the first phase of the trade agreement is a win-win outcome which
will deliver tangible benefits to the world . The response from investors around the
world is most real because they would not use their own money just to make a grand gesture.
However, some people in both China and the US may hype that their own country suffers loss
from this deal. This is a natural counter-stream of public opinion, but does not represent
the mainstream attitude on either side." [My Emphasis]
Gee, "benefits for the whole world," not just China and Outlaw US Empire? What forced the
Empire to compromise:
"The US-China trade war happens at a time when the US' strategic thinking on China has
changed. This requires Washington to find a strategic impetus to end the trade war. So what
would be such a strategic impetus?
"We believe as long as the US side is realistic, it is possible that such a strategic
impetus can be formed and gradually expanded. The trade war is not an effective way to
resolve the strategic competition between China and the US. It can neither scare China nor
effectively weaken China, but will cause a gradual rise in the cost of the US economy" .
[My Emphasis]
IMO, China's assessment's correct. The financialized economy of the Evil Outlaw US Empire
has drained it of the resilience it once enjoyed and that China's economy has obtained. Plus,
as I wrote several months ago, China's employing geoeconomic levers which the Empire can no
longer deploy and is thus stuck with using the only remaining tool it has--its waning
geopolitical levers.
Awaited confirmation by China about the Trade Deal before writing about it. This article is what I
waited to be published: "Phase one trade deal a step forward, a new beginning," yes, an
optimistic tone, although tempered in the text:
"Rome was not built in a day. Trade protectionism has expanded in some places of the
world, affecting some people's thinking. It is not easy for China and the US to agree on the
text of the deal. But how to define this deal and whether it can keep its positive effects
on the global market and even accumulate more positive energy will depend on further efforts
from China and the US , as the global market has been disturbed by the trade war.
" We must see that the first phase of the trade agreement is a win-win outcome which
will deliver tangible benefits to the world . The response from investors around the
world is most real because they would not use their own money just to make a grand gesture.
However, some people in both China and the US may hype that their own country suffers loss
from this deal. This is a natural counter-stream of public opinion, but does not represent
the mainstream attitude on either side." [My Emphasis]
Gee, "benefits for the whole world," not just China and Outlaw US Empire? What forced the
Empire to compromise:
"The US-China trade war happens at a time when the US' strategic thinking on China has
changed. This requires Washington to find a strategic impetus to end the trade war. So what
would be such a strategic impetus?
"We believe as long as the US side is realistic, it is possible that such a strategic
impetus can be formed and gradually expanded. The trade war is not an effective way to
resolve the strategic competition between China and the US. It can neither scare China nor
effectively weaken China, but will cause a gradual rise in the cost of the US economy" .
[My Emphasis]
IMO, China's assessment's correct. The financialized economy of the Evil Outlaw US Empire
has drained it of the resilience it once enjoyed and that China's economy has obtained. Plus,
as I wrote several months ago, China's employing geoeconomic levers which the Empire can no
longer deploy and is thus stuck with using the only remaining tool it has--its waning
geopolitical levers.
The take away quotes
"
...... the FT reports that Beijing has ordered all government offices and public institutions
to remove foreign computer equipment and software within three years.
..........
The take home message here is that US PC and software giants are about to lose billions in
sale to Chinese customers, a move that will infuriate Trump who will, correctly, see such
attempts to isolate the Chinese PC market from US vendors.
"
This is going to be difficult for China but they have a domestic OS, the Kylin OS, that is
Unix/Linux based, so much Open Source software is available to replace the Microsoft/Apple
software they currently use until they develop their own.
This speaks to Trump saying he can wait for a trade deal until after the (s)election but
it seems obvious that his negotiating position is going to get weaker by the day.
-------------------------------
Another aspect of the tech war that is financial also is that I am reading the China is on
the cusp of releasing a digital fiat RMD currency. This will have serious disintermediation
effects on the BIS, City of London Corp and others doing currency exchange if any can do such
on their phones. I am reading about digital currencies needing a blockchain underpinning but
if the US dollar can exist without one currently then what are the show stoppers except the
private finance dead weight in the middle?
"... When you factor in reelection worries, Trump needs to find a mutually agreeable solution to at least pause the trade war. Such a move will surely revive economic growth hurt by sanctions and ensure the smoothest possible path toward a second term. People vote with their wallets, and Trump gets that. ..."
"... Nothing could be worse for Xi than the markets concluding that China is in a recession with one of its prime economic centers now in open revolt. Just as quickly as China was dubbed the next rising superpower, her economic and political obituary could be written. ..."
"... Here is where a so-called Phase One trade deal could help patch up the relationship and give both sides the short-term domestic boost their leaderships are looking for. ..."
"... But there are reasons to worry. A recent report in Axios claims that China is quite angry over Trump's decision to sign the Hong Kong bill, and as a result talks between the two nations have "stalled." Still, both sides have ample reasons to get a trade deal done. However, if Trump does indeed get reelected and China feels stable domestically once again, the pull of history -- specifically, which nation will dominate geopolitics in the 21st century -- may be too strong to resist. ..."
Consider America's position. President Trump surely has incentives to push for what I would
call a strategic pause in his quest to contain a rising China through tough trade moves. At the
moment, staring down a possible vote on articles of impeachment and a Senate trial, rising
trade tensions, which could reignite fears of a recession, are the last thing the president
needs. When you factor in reelection worries, Trump needs to find a mutually agreeable
solution to at least pause the trade war. Such a move will surely revive economic growth hurt
by sanctions and ensure the smoothest possible path toward a second term. People vote with
their wallets, and Trump gets that.
Chinese president Xi Jinping, meanwhile, has similar concerns. China's 6 percent economic
growth, something Washington can only dream of, is likely a number that exists only on paper,
for Beijing is known to cook their books. With growth more than likely just barely in positive
territory, thanks in large part to U.S. trade tariffs, and the challenges in Hong Kong not
looking as if they will subside anytime soon, Xi needs to deliver what he can claim is a
victory that also revives economic growth, at least for the time being. This will help
stabilize China domestically, plus give Xi time to allow Hong Kong's protests to burn out while
not having to worry about economic troubles at the same time.
Nothing could be worse for Xi than the markets concluding that China is in a recession
with one of its prime economic centers now in open revolt. Just as quickly as China was dubbed
the next rising superpower, her economic and political obituary could be written.
Here is where a so-called Phase One trade deal could help patch up the relationship and
give both sides the short-term domestic boost their leaderships are looking for. A
potential deal could involve China rolling back tariffs on all U.S. goods, agreeing to a large
purchase of American agricultural goods, and providing basic protections on all U.S.
intellectual property involving high-technology goods (think 5G, computers, and robotics). In
turn, America would roll back all tariffs -- something China wants very badly --
including, and most importantly, agreeing not to launch the scheduled new round of massive
tariffs on December 15, which are viewed as potentially the most damaging to date. While such
an interim deal is far from perfect -- China hawks will surely go ballistic, calling the deal
nothing more than appeasement or select your other favorite neocon smear -- Xi and Trump are
pragmatic enough to see that a deal is in both sides' interests.
But there are reasons to worry. A recent report in Axios claims that China is
quite angry over Trump's decision to sign the Hong Kong bill, and as a result talks between the
two nations have "stalled." Still, both sides have ample reasons to get a trade deal done.
However, if Trump does indeed get reelected and China feels stable domestically once again, the
pull of history -- specifically, which nation will dominate geopolitics in the 21st century --
may be too strong to resist.
Harry J. Kazianis is a senior director at the Center for the National Interest and the
executive editor of The National Interest magazine.
By offering Hong Kong official tools of support, President Trump has broadened the trade
dispute...
Throughout negotiations, the Chinese have been reluctant to get a deal over the line,
walking away from agreed upon terms several times. By supporting Hong Kong, President Trump is
showing the Chinese Communist Party that he will not sit idly by while they jerk trade
negotiations around.
American tech companies are
getting the go-ahead to resume business with Chinese smartphone giant Huawei Technologies
Co., but it may be too late: It is now building smartphones without U.S. chips.
Huawei's latest phone,
which it unveiled in September -- the Mate 30 with a curved display and wide-angle
cameras that competes with Apple
Inc.'s iPhone 11 -- contained no U.S. parts, according to an analysis by UBS and Fomalhaut Techno Solutions, a Japanese
technology lab that took the device apart to inspect its insides.
In May, the Trump administration banned U.S. shipments to Huawei as trade tensions with
Beijing escalated. That move stopped companies like Qualcomm Inc. and Intel Corp. from exporting chips to the company, though
some shipments of parts resumed over the summer after companies determined they weren't
affected by the ban.
Meanwhile, Huawei has made significant strides in shedding its dependence on parts from
U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in
America; many U.S. chip companies make their semiconductors abroad.)
Huawei long relied on suppliers like Qorvo Inc., the North Carolina maker of chips that are used
to connect smartphones with cell towers, and Skyworks Solutions Inc., a Woburn, Mass.-based company that
makes similar chips. It also used parts from Broadcom Inc., the San Jose-based maker of Bluetooth and
Wi-Fi chips, and Cirrus Logic Inc.,
an Austin, Texas-based company that makes chips for producing sound.
Yet Another Trump Trade Win
Trump cut off supplies so China looked elsewhere.
Trump changed his mind.
This is what constitutes a win.
"When Huawei came out with this high-end phone -- and this is its flagship -- with no U.S.
content, that made a pretty big statement," said Christopher Rolland, a semiconductor analyst
at Susquehanna International Group.
Huawei executives told Rolland that the company was moving away from American parts, but it
was still surprising how quickly it happened.
This was likely going to happen anyway, but Trump escalated the speed at which it
happened.
The trade war is the first act in the much larger game of hegemony.
Both sides are disentangling.
Apple finished their Indian plant.
Huawei went ex-US (but almost certainly not US IP)
Europe is already muttering about human rights in Hong Kong and Xiangjang.
We're nearly ready for act 2. That's when Europe joins in on squeezing trade, and the rest
of the democratic world and a few others is bullied and bribed to follow.
Do you know why Russia still sells rocket engines to US after being hit US sanctions?
Don't tell me they need US dollar.
Do you know that China is facing US embargo under the pretext of national security from
1949 until now and things allowed to export to China mostly agriculture produce, gas and oil?
This is the reason they develop their own technologies which the media told me stolen from
the US even that the US doesn't have like 5G, quantum satellite, hypersonic weapons just to
name a few.
russia needs to stop selling those engines to merica and cut them out of space... what a
dumb move... russia always trying to be friends with evil merica
Plainly, China will never buy the same amount of soybeans or chips than before as Russia
will never accumulate US dollars in its Reserve. They have discovered than US is not a
reliable partner.
Those that think that China is only about ripping off US technology are going to be
surprised. Sure that was once China's main method as it was for the early USA to rip off
British textile secrets. Trump trying to take down China's biggest technology company has
been a real wake up call for them. Now, they will own all of the content and will dominate in
Asian markets, the middle east, etc. They already did it in solar panels and much else. They
have a plan. They build infrastructure, we let it ours decay. They invest in education, we
leave out students in debt up to their eyeballs and then give them Starbucks jobs. They have
high speed trains everywhere, we have Amtrak. They are looking outward, we are looking
inward. America first, rah rah. This will end badly - for the USA.
no average american benefits from international trade unless the product is unattainable
state side. if we can grow it, we should. if we can make it, we should. excess can be sold
outside the nation but since everything has been weaponized, we are the ones caught in the
middle who suffer.
tariffs are good and we should use them to protect our industries. the problem is that our
industry was destroyed before implementing tarrifs.. that part doesn't make sense and all of
our major corporations have sold out anyways, further screwing john q public because lets be
real, companies are out for profit and shareholder return, not protecting employees and
consumers. so they could care less where its being made / sold as long as they see their
bottom line increase, no worries.
problem is big business doesn't want to pay it. it has always been that way. when the
money system was put in place, business owners didn't like the idea of increased competition
(less slaves and more company owners) and therefore they were given the ability to claim you
for tax purposes, hence why anytime you take a job they want your SS#. investment in the past
happened because of things that were to come in the future. the future in america from her
current vantage is trans/post humanism with the idea of automation, human/machine integration
and that leaves little room or interest in building $100m slave factories for working class
people to grind away in
chips have been made consistently in Malaysia, Taiwan and Korea for the better part of
almost 25 years, not real sure how any of what you said is relative to current events. just
syncrhonicity and morons like you saying dumb ****.
Wow, the article is really insulting to the Chinese. Like building a smart phone for them
was like landing on the moon or something. They steal everything from everyone anyways, so
who cares what they build.......
This is why they are trying to ban Chinese hardware... not because they fear they are
spying on us but because their govt mandated backdoors aren't installed on Chinese hardware.
The US govt wants to ban their use because they can't spy on them... That is the real
reason.
US is losing the technology race against China. In the first phase China copied the tech,
now it is on par, and in five to ten years the murican chip manufacturers are out of
business.
The point is this: the muricans are lazy bastards, most of the brain power is imported.
They lived too long off the dollar reserve currency status, soon enough nobody will
interested in that toilet paper anymore.
Two years ago, Donald *** Trumptard on behalf of his handler, the US War State/Dark
State/Deep State , launched a world wide war against the Chinky company, Huawei, in order, to
kill it.
But that failed spectacularly. Not only is Huawei not dead, but its revenue actually grown
24% in 2019.
Now, its smart phones, and 5G cell tower equipments are totally free of US components.
WHY IS THE US DARK STATE SO TERRIFIED OF HUAWEI'S 5G WIRELESS TECHNOLOGY?
The US Dark State/War State/Deep State, that is the NSA/CIA/Pentagon/MIC/MSM . . . etc has
forced every western tech companies to install backdoors and malwares on their equipments,
except Huawei. They have tried to force Huawei to install those NSA backdoors and malwares,
in 2014, but the company categorically refused.
"The real issue is that nothing has changed since a 2014 report from The Register that
Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered
intelligence access to the data that crosses their networks.
All our emails, text messages, phone calls, internet searches, web browsing, library
records, . . . etc, are recorded and stored by NSA/CIA's vast servers farms.
Now, Huawei is not only the leading 5G wireless provider, but it is the only one, so far.
The other companies like Nokia and Ericsson are far behind.
5G is going to completely replace 4G and 3G. It is about 200 times faster than 4GLTE, in
download speed.
What this means is that if the world adopts the Huawei equipments and standards, it will
threaten to UNDO the US Dark State's vast global surveillance network.
This is what terrifies the US Dark State. Their vast Global Surveillance Network is the
basis of its power, and tools to enslave mankind.
There is a very good reason, why the American Founding Fathers , enacted every measures,
to protect our rights and privacy, so that we will not be controlled and enslaved by the
tyranny of totalitarian government, which is already upon us, in the form of US Dark
State/War State .
The US Dark State/Deep State/War State does not represent America. It is Un-American. It
is not the American Republic founded by our Founding Fathers, and enshrined in the US
Constitution.
Maybe so, Asoka. I think the Rothschild Clan plays both sides. They are in China. Some
purport the family carrying that lineage is named Li.
The U.S. is slowly but surely being isolated for The Great Fall...when we lose world
currency status. The Banking Cartel will evidently make huge money and gain enormous power
once the U.S. collapses. China already has the massive surveillance state, lack of privacy,
institutionalized social scoring, and workers' living cubes located on factory premises...so
the Rothshilds are in love. Sigh. So much control!! So much degradation!!! They're in
love!!!
"I think the Rothschild Clan plays both sides. They are in China. Some purport the family
carrying that lineage is named Li."
They are trying hard to infiltrate China. But the Chinese banks and financial service
firms are State Owned . They are hard penetrate. That is why they are using Donald *** Trump
to launch the Mother of All Great Trade War , to force the Chinese to open up their financial
sector for infiltration and plundering.
Plus, Chinese and westerner looks distinctively different. And so, they are trying the
inter-marriage trick with the rich and powerful Chinese families.
"... More generally, I think AI gets far too much of the billing in authoritarian apocalypse forecasts. Cheap, ubiquitous cameras, microphones, and location trackers are the real issue. If the state can track everyone's movements and conversations, then it can build a better Stasi even with crude, simple ai. ..."
The theory behind this is one of strength reinforcing strength – the strengths of
ubiquitous data gathering and analysis reinforcing the strengths of authoritarian repression to
create an unstoppable juggernaut of nearly perfectly efficient oppression. Yet there is another
story to be told – of weakness reinforcing weakness. Authoritarian states were always
particularly prone to the deficiencies identified in James Scott's Seeing Like a State
– the desire to make citizens and their doings legible to the state, by
standardizing and categorizing them, and reorganizing collective life in simplified ways, for
example by remaking cities so that they were not organic structures that emerged from the
doings of their citizens, but instead grand chessboards
with ordered squares and boulevards, reducing all complexities to a
square of planed wood . The grand state bureaucracies that were built to carry out these
operations were responsible for multitudes of horrors, but also for the crumbling of the
Stalinist state into a Brezhnevian desuetude, where everyone pretended to be carrying on as
normal because everyone else was carrying on too. The deficiencies of state action, and its
need to reduce the world into something simpler that it could comprehend and act upon created a
kind of feedback loop, in which imperfections of vision and action repeatedly reinforced each
other.
So what might a similar analysis say about the marriage of authoritarianism and machine
learning? Something like the following, I think. There are two notable problems with machine
learning. One – that while it can do many extraordinary things, it is not nearly as
universally effective as the mythology suggests. The other is that it can serve as a magnifier
for already existing biases in the data. The patterns that it identifies may be the product of
the problematic data that goes in, which is (to the extent that it is accurate) often the
product of biased social processes. When this data is then used to make decisions that may
plausibly reinforce those processes (by singling e.g. particular groups that are regarded as
problematic out for particular police attention, leading them to be more liable to be arrested
and so on), the bias may feed upon itself.
This is a substantial problem in democratic societies, but it is a problem where there are
at least some counteracting tendencies. The great advantage of democracy is its openness to
contrary opinions and divergent perspectives . This opens up democracy to a specific set of
destabilizing attacks but it also means that there are countervailing tendencies to
self-reinforcing biases. When there are groups that are victimized by such biases, they may
mobilize against it (although they will find it harder to mobilize against algorithms than
overt discrimination). When there are obvious inefficiencies or social, political or economic
problems that result from biases, then there will be ways for people to point out these
inefficiencies or problems.
These correction tendencies will be weaker in authoritarian societies; in extreme versions
of authoritarianism, they may barely even exist. Groups that are discriminated against will
have no obvious recourse. Major mistakes may go uncorrected: they may be nearly invisible to a
state whose data is polluted both by the means employed to observe and classify it, and the
policies implemented on the basis of this data. A plausible feedback loop would see bias
leading to error leading to further bias, and no ready ways to correct it. This of course, will
be likely to be reinforced by the ordinary politics of authoritarianism, and the typical
reluctance to correct leaders, even when their policies are leading to disaster. The flawed
ideology of the leader (We must all study Comrade Xi thought to discover the truth!) and of the
algorithm (machine learning is magic!) may reinforce each other in highly unfortunate ways.
In short, there is a very plausible set of mechanisms under which machine learning and
related techniques may turn out to be a disaster for authoritarianism, reinforcing its
weaknesses rather than its strengths, by increasing its tendency to bad decision making, and
reducing further the possibility of negative feedback that could help correct against errors.
This disaster would unfold in two ways. The first will involve enormous human costs:
self-reinforcing bias will likely increase discrimination against out-groups, of the sort that
we are seeing against the Uighur today. The second will involve more ordinary self-ramifying
errors, that may lead to widespread planning disasters, which will differ from those described
in Scott's account of High Modernism in that they are not as immediately visible, but that may
also be more pernicious, and more damaging to the political health and viability of the regime
for just that reason.
So in short, this conjecture would suggest that the conjunction of AI and authoritarianism
(has someone coined the term 'aithoritarianism' yet? I'd really prefer not to take the blame),
will have more or less the opposite effects of what people expect. It will not be Singapore
writ large, and perhaps more brutal. Instead, it will be both more radically monstrous and more
radically unstable.
Like all monotheoretic accounts, you should treat this post with some skepticism –
political reality is always more complex and muddier than any abstraction. There are surely
other effects (another, particularly interesting one for big countries such as China, is to
relax the assumption that the state is a monolith, and to think about the intersection between
machine learning and warring bureaucratic factions within the center, and between the center
and periphery).Yet I think that it is plausible that it at least maps one significant set of
causal relationships, that may push (in combination with, or against, other structural forces)
towards very different outcomes than the conventional wisdom imagines. Comments, elaborations,
qualifications and disagreements welcome.
Ben 11.25.19 at 6:32 pm (no link)
This seems to equivocate between two meanings of bias. Bias might mean a flaw that leads to
empirically incorrect judgements and so to bad decisions, and it's true that that type of
bias could destabilize an authoritarian state. But what we usually worry about with machine
learning is that the system will find very real, but deeply unjust, patterns in the data, and
reinforce those pattern. If there's a particular ethnic group that really does produce a
disproportionate number of dissidents, and an algorithm leads to even-more-excessive
repression of that group -- I'm not sure why an authoritarian state would see a stability
threat in that tendency.
More generally, I think AI gets far too much of the billing in authoritarian
apocalypse forecasts. Cheap, ubiquitous cameras, microphones, and location trackers are the
real issue. If the state can track everyone's movements and conversations, then it can build
a better Stasi even with crude, simple ai.
I'd just like to point out (re: the tweet in the original post) that the "Uighur
face-matching AI" idea is bullshit invented by scaremongers, with no basis in fact and
traceable to a shoddy reddit thread. The Chinese government is not using facial recognition
to identify Uighur, and the facial recognition fears about the Chinese government are vastly
overstated.
Australia's border control facial recognition software is far more advanced than
China's, as is the UK's, and facial recognition is actually pretty common in democracies. See
e.g. the iPhone.
The main areas in which China uses facial recognition are in verifying ID for some high
cost functions (like buying high speed rail tickets), and it's quite easy to avoid these
functions by joining a queue and paying a human. The real intrusiveness of the Chinese
security state is in its constant bag searches and very human-centric abuses of power in
everyday life in connection with "security". Whether you get stopped and searched depends a
lot on very arbitrary and error prone judgments by bored security staff at railway stations,
in public squares, and on buses, not some evil intrusive state technology.
Conversely, the UK is a world leader in installing and using CCTV cameras, and has been
for a long time. Furthermore, these CCTV cameras are a huge boon to law-abiding citizens,
since they act as both excellent forms of crime prevention (I have had this experience
myself) and for finding serious criminals. The people responsible for the death of those 39
Vietnamese labourers in the ice truck were caught because of CCTV; so was the guy who
murdered that woman on the street in Melbourne a few years ago.
Finally to address another point that's already been raised (sadly): China no longer
harvests organs, and the 2019 report that says it does is a sham. The social credit system is
also largely a myth, and nobody from China even seems to know wtf it is.
If you're going to talk about how state's work, and the relative merits of autocratic vs.
democratic states and their interaction with technology, it's a really good idea to get the
basic facts right first.
Nathanael 11.26.19 at 6:10 am (no link)
I'll add that John Quiggin's point that Xi has already lost control of the provinces is
correct -- but it DOES threaten his position as dictator. Once the provincial governors know
they can act with impunity, it is absolutely standard for the next step to be getting rid of
that annoying guy who is pretending to be dictator. It may take a few years but Xi now has
dozens of powerful insiders who know that he's a weakling. They'll bide their time but when
he crosses too many of them they'll take him out. And if China doesn't shut down coal, he's
going to look like a weakling internationally too, in a couple of years. This will create a
new group of ambitious insiders with a different reason to take him out.
Xi broke the "technocratic consensus" which was present after Deng, of central committee
members who strove for competence and fact-based decision-making. That was a surprisingly
effective type of junta government which led to lots of thinkpieces about whether
authoritarian China would beat the democratic west. But it succumbed to the succession
problem, like all authoritarian systems; Xi made himself Premier-for-life and the country is
now exhibiting all the usual failures of authoritarian countries.
Hidari 11.26.19 at 9:08 am (no link)
@11 Yes it's strange that allegations of Chinese use of facial recognition software is
gaining so much traction at a time when the Trump regime is deliberately ratcheting up
tensions with China to pursue nakedly imperial goals, when the objective facts of Israeli use
of similar software, which the Israelis boast about (
https://www.nbcnews.com/news/all/why-did-microsoft-fund-israeli-firm-surveils-west-bank-palestinians-n1072116
) doesn't cause so much interest, at a time when the Trump regime has simple decreed that the
Israeli invasion/colonisation of Palestine is 'legal under international law'.
One of life's little mysteries I guess.
If we must talk about China could we at least bring it back to areas where we are
responsible and where, therefore, we can do something about it?
So in due course the trade war was replaced by the full scale cold war.
Notable quotes:
"... Needless to say, no differences will be "settled amicably" and now China will have no choice but to retaliate, aggressively straining relations with the US, and further complicating Trump's effort to wind down his nearly two-year old trade war with Beijing. ..."
"... The legislation, S. 1838, which was passed virtually unanimously in both chambers, requires annual reviews of Hong Kong's special trade status under American law and will allow Washington to suspend said status in case the city does not retain a sufficient degree of autonomy under the "one country, two systems" framework. The bill also sanctions any officials deemed responsible for human rights abuses or undermining the city's autonomy. ..."
"... The House cleared the bill 417-1 on Nov. 20 after the Senate passed it without opposition, veto-proof majorities that left Trump with little choice but to acquiesce, or else suffer bruising fallout from his own party. the GOP. ..."
"... In accordance with the law, the Commerce Department will have 180 days to produce a report examining whether the Chinese government has tried use Hong Kong's special trading status to import advanced "dual use" technologies in violation of US export control laws. Dual use technologies are those that can have commercial and military applications. ..."
"... The new law directs the US secretary of state to "clearly inform the government of the People's Republic of China that the use of media outlets to spread disinformation or to intimidate and threaten its perceived enemies in Hong Kong or in other countries is unacceptable." ..."
"... The state department should take any such activity "into consideration when granting visas for travel and work in the United States to journalists from the People's Republic of China who are affiliated with any such media organizations", the law says. ..."
"... Yes I think getting the western financial institutions out of HK is the plan. I'm sure they appreciate the US doing this for them, but of course they could never admit that. ..."
Less than an hour after Trump once again paraded with yet another all-time high in the
S&P...
... and on day 510 of the trade war, it appears the president was confident enough that a
collapse in trade talks won't drag stocks too far lower, and moments after futures reopened at
6pm, the White House said that Trump had signed the Hong Kong bill backing pro-democracy
protesters, defying China and making sure that every trader's Thanksgiving holiday was just
ruined.
In a late Wednesday statement from the White House, Trump said that:
I signed these bills out of respect for President Xi, China, and the people of Hong Kong.
They are being enacted in the hope that Leaders and Representatives of China and Hong Kong
will be able to amicably settle their differences leading to long term peace and prosperity
for all.
Needless to say, no differences will be "settled amicably" and now China will have no
choice but to retaliate, aggressively straining relations with the US, and further complicating
Trump's effort to wind down his nearly two-year old trade war with Beijing.
Trump's signing of the bill comes during a period of unprecedented unrest in Hong Kong,
where anti-government protests sparked by a now-shelved extradition bill proposal have
ballooned into broader calls for democratic reform and police accountability.
"The Hong Kong Human Rights and Democracy Act reaffirms and amends the United States-Hong
Kong Policy Act of 1992, specifies United States policy towards Hong Kong and directs
assessment of the political developments in Hong Kong," the White House said in a statement.
"Certain provisions of the act would interfere with the exercise of the president's
constitutional authority to state the foreign policy of the United States."
The legislation, S. 1838, which was passed virtually unanimously in both chambers,
requires annual reviews of Hong Kong's special trade status under American law and will allow
Washington to suspend said status in case the city does not retain a sufficient degree of
autonomy under the "one country, two systems" framework. The bill also sanctions any officials
deemed responsible for human rights abuses or undermining the city's autonomy.
The House cleared the bill 417-1 on Nov. 20 after the Senate passed it without
opposition, veto-proof majorities that left Trump with little choice but to acquiesce, or else
suffer bruising fallout from his own party. the GOP.
Trump also signed into law the PROTECT Hong Kong act, which will prohibit the sale of
US-made munitions such as tear gas and rubber bullets to the city's authorities.
While many members of Congress in both parties have voiced strong support for protesters
demanding more autonomy for the city, Trump had stayed largely silent, even as the
demonstrations have been met by rising police violence.
Until now.
The bill's author, Senator Marco Rubio of Florida, said that with the legislation's
enactment, the US now had "new and meaningful tools to deter further influence and interference
from Beijing into Hong Kong's internal affairs."
In accordance with the law, the Commerce Department will have 180 days to produce a
report examining whether the Chinese government has tried use Hong Kong's special trading
status to import advanced "dual use" technologies in violation of US export control laws. Dual
use technologies are those that can have commercial and military applications.
One other less discussed but notable provision of the Hong Kong Human Rights Act targets
media outlets affiliated with China's government. The new law directs the US secretary of
state to "clearly inform the government of the People's Republic of China that the use of media
outlets to spread disinformation or to intimidate and threaten its perceived enemies in Hong
Kong or in other countries is unacceptable."
The state department should take any such activity "into consideration when granting
visas for travel and work in the United States to journalists from the People's Republic of
China who are affiliated with any such media organizations", the law says.
* * *
In the days leading up to Trump's signature, China's foreign ministry had urged Trump to
prevent the legislation from becoming law, warning the Americans not to underestimate China's
determination to defend its "sovereignty, security and development interests."
"If the U.S. insists on going down this wrong path, China will take strong countermeasures,
" said China's foreign ministry spokesman Geng Shuang at a briefing Thursday in Beijing. On
Monday, China's Vice Foreign Minister Zheng Zeguang summoned the U.S. ambassador, Terry
Branstad to express "strong opposition" to what the country's government considers American
interference in the protests, including the legislation, according to statement. The new U.S.
law comes just as Washington and Beijing showed signs of working toward "phase-one" of deal to
ease the trade war. Trump would like the agreement finished in order to ease economic
uncertainty for his re-election campaign in 2020, and has floated the possibility of signing
the deal in a farm state as an acknowledgment of the constituency that's borne the brunt of
retaliatory Chinese tariffs.
Last week China's Vice Premier and chief trade negotiator Liu He said before a speech at the
Bloomberg New Economy Forum in Beijing, that he was "cautiously optimistic" about reaching the
phase one accord. He will now have no choice but to amend his statement.
In anticipation of a stern Chinese rebuke, US equity futures tumbled, wiping out most of the
previous day's gains... Still, the generally modest pullback - the S&P was around 2,940
when Trump announced the Phase 1 deal on Oct 11 - suggests that despite Trump's signature,
markets expect a Chinese deal to still come through. That may be an aggressive and overly
"hopeful" assumption, especially now that China now longer has a carte blanche to do whatever
it wants in Hong Kong, especially in the aftermath of this weekend's
landslide victory for the pro-Democracy camp which won in 17 of the city's 18
districts.
"Following last weekend's historic elections in Hong Kong that included record turnout, this
new law could not be more timely in showing strong US support for Hongkongers' long-cherished
freedoms," said Rubio
This is another attempt by the US to stop BRICS. They care NOTHING about HK, only its
usefulness in the US war on Chinas growing importance in world trade.
but no no no... trading with communists brings jobs to sell cheap crap. oh what was I
thinking.... cheap crap, jobs, and the richest of the rich get richer... my bad.
it ain’t like the commies are going to use the money to build up their military..
Of course the obvious solution is to just let people choose whatever or whomever they want
to associate with and be respected and left alone for their choice.
But no. We all have to live and abide by the wishes of other people bcuz of "unity" and
****.
Eh guys, you still do not understand that all this (not only China and Hong Kong) is a
very big "elite" performance for ordinary people to keep you (the rest of the boobies) in
subjection. It's like in boxing - contractual fights. Do you think world "elites" benefit
from peace and order? You are mistaken - these guys have the world as death (the death of
their Power and their Control). An example from the history of Europe - in the 18-19 and
early 20th century, Europe only did what it fought. But the funny thing is that the monarchs
(the real owners of Europe) were relatives among themselves. The First World War was
popularly called “The War of Three Cousins” (English monarch, German Kaiser and
Russian emperor). But the Europeans paid for the dismantling of relatives. Now the "monarchs"
are bankers and your position has not changed, you changed only the owners after 1918.
Problem with Hong Kong is, it is dependent on China to survive. That is not only true for
the most basic neccessities, but also as a port for international trade. However, in the last
25 years, Shenzhen and Guangzhou have built up their own trade hubs, which has pulled trade
away from being concentrated in Hong Kong, and consequently more dependent on China. Our
ideas of Hong Kong remaining an independent island nation isn't going to work for three
reasons:
1. Without being a doorway to China, there is no other reason for its existence.
2. Hong Kong is indeed Chinese sovereign territory, that was taken away from it to be made
into a trade colony by the British in 1841, under the Treaty of Nanking. The British gave up
Hong Kong in 1997, under the 1984 signed Sino-British Joint Declaration, in which Britain
agreed to return not only the New Territories but also Kowloon and Hong Kong itself. China
promised to implement a "One Country, Two Systems" regime, under which for fifty years Hong
Kong citizens could continue to practice capitalism and political freedoms forbidden on the
mainland. So, when the year 2047 comes around, Hong Kong will be fully absorbed and
integrated in a One Country, One system Chinese regime. In otherwords, Hong Kong's fate was
already sealed in 1984, and there is nothing America can legally do about it.
3. Hong Kong still needs the basic neccessities from China to survive. Don't count on
either the British or the Americans to provide it.
Yes I think getting the western financial institutions out of HK is the plan. I'm sure
they appreciate the US doing this for them, but of course they could never admit
that.
Xi Jinping tells that bullshit little story about China's 5,000 year History, but the truth
is really much more pragmatic: China doesn't aim to be an empire for the simple reason it
learned from America's mistakes.
The CCP already knows that being the sole superpower is unsustainable and, in the medium
term, goes even against its main objective, which is to establish a "moderately prosperous
society" in China until 2030 (they consider the 2000s Belgium as the standard for "moderately
prosperous").
Socialist China has shown, so far, an incredible capacity of learning from other nations'
mistakes:
1) It correctly read the historical conjuncture of the late 1960s, by concluding that the
historical cycle of socialist revolutions was over, and moved on to try to break the Cold War
embargo in order to initiate a cycle of wealth production. They achieved that in 1972. This was
when Mao Zedong was still alive and commanding China with absolute authority, so it's a myth
China "freed itself" only when and because Mao died (1976);
2) It learned from the failed experiment of the Brazilian liberal dictatorship, by doing
exactly the opposite of the Zona Franca de Manaus . The result was the creation of the
Special Economic Zones, which allowed capitalist investment from abroad to come to China but in
quarentene, and with technological transfer.
3) It learned from the trap the USSR fell, and used a peaceful geopolitical strategy. It
avoided an arms race and was able to expand its allied nations portfolio and slowly tightened
its grip over the American economy.
4) It learned from the the failure of Soviet socialism in producing very good quality
consumer goods. It solved this problem by "opening up" for capitalist exploitation the sectors
which produced and distributed consumer goods, without affecting the strategic sectors
(defense, finance, natural resources, etc.).
5) It learned from the failure of the American empire of maintaining its status as the
world's "lonely superpower" by not adopting a war culture in China and by being more tolerant
with its neighbors. But that didn't mean they didn't consolidated position: military spending
continues to go up and the Armed Forces continues to be modernized and under firm CCP control.
The South China Sea is a "corridor of life" for the Chinese, so the CCP quickly, but in a
peaceful manner, took control of it, very aware that it would probably cost the Vietnamese
friendship. But that was the exception that proves the rule, an exceptional situation where the
benefits were greater than the costs.
This isn't the only
article I've read over the past several days suggesting China won't agree to a trade deal
anytime soon. The following are amongst the reasons why:
"China's trade has gradually steadied as the nation moves to explore third markets. 'A
substantial decline in trade and a drastic fall in economic growth which some international
observers were worried about didn't occur, pointing to the potential and resilience of the
Chinese economy,' he went on to say.
"The US, for its part, has seen its current account deficit as a percentage of GDP shoot
up from 2.9 percent to 3.2 percent. This suggests the trade war is failing to address the
issue of the US' current account deficit, stressed Zhu, who is currently the Chairman of the
National Institute of Financial Research at Tsinghua University. He added that, more
worryingly, tariffs mean additional costs are put on US companies and consumers."
Evil Outlaw US Empire planners in their hubristic zeal to decouple from China's economy
erred massively in thinking China would be the one harmed and come begging for a trade deal.
Instead, China's geoeconomic strategy is clearly working and is more potent than what the
Empire can bring to the table--Oops! China can now play Trump.
psychohistorian 63
I see Trump's envoy Kissinger is standing next to Xi. Seems like Trump is trying to cook
something up with Kissinger regularly on the scene when it comes to Russia and China.
Interesting that Kissinger is there . Steve Pieczenik takes the very strong view
that Pompeo is a dead man walking. Worth every second of his five minute discourse . What I like
about Steve and his various takes on people of note is that he assassinates them immediately
and intensely with a quick turn of phrase.
Kissinger was also Nixon's envoy. He engineered the split between China and the Soviet
Union amongst other things. China and Russia's current leadership though may be above
Kissinger's pay grade.
Numbers show joke is on the US, not Huawei US ban lit a fire under Huawei, seen
taking lead in smartphones and awash in cash as bonds trade at a premium
By Umesh Desai
Unlisted Chinese telecommunications giant Huawei Technologies was made an international
pariah by US regulators earlier this year after a ban on buying key parts and on access to
crucial markets.
You think that sounded the death knell for the company? Think again.
This week, Huawei announced a US$286 million
bonuses bonanza to its employees . Its bonds continue to trade above par, and its cash
balances are massive. Hardly the signs of a company struggling under sanctions.
The company has repeatedly denied US allegations that it is a front for the Chinese
government – the justification Washington cited for banning US companies from using
Huawei-manufactured gear.
Huawei is the world's biggest telecom equipment maker and it's the second biggest smartphone
maker.
According to data from International Data Corporation, smartphone shipments in the
July-September quarter rose 18.6% to 66.6 million, just behind global leader Samsung's 78.2
million.
"Huawei has been gaining market share in China and overseas despite US trade war frictions
and may become the leading smartphone maker in the next two quarters," said Nitin Soni,
director of corporate ratings at Fitch Ratings.
He said telcos across emerging markets, which are facing capital expenditure pressures
and limited 5G business viability in the short term, may be willing to buy Huawei's 5G
equipment given it is cheaper and has better technology than European counterparts.
It's not just Soni. Industry leaders also acknowledge Huawei's quality standards
.
Indian telco Bharti Enterprises' chairman Sunil Mittal said recently, for example, "I can
safely say their products in 3G and 4G that we have experienced are significantly superior to
Ericsson and Nokia. I use all three of them. "
Indeed, the bond-market performance of the unrated, unlisted company confirms Huawei's
strength. Its dollar-denominated bonds traded in global markets are changing hands at above
par, indicating bond investors are confident about the company's cash position and liquidity
situation.
Its bonds due 2025, which pay a coupon of 4.125%, are trading at a price of $104 while the
holder would only get $100 at maturity. The premium would be compensated by the annual coupon,
which would reduce the yield. The bonds are currently yielding 3.4% compared with the 4.25%
yield at the time of the issuance. In price terms the bonds have rallied from $99 in 2015 to
$104. Prices move inversely to yields.
The financial highlights also betray no signs of weakness. The company has a cash hoard of
$39 billion and generates $10 billion from operations each year.
So, in fact, the US ban on Huawei may be helping the company.
"A ban on US companies such as Google to supply software to Huawei may lead to faster
innovation by Huawei to develop its own operating system and chips," said Soni.
America's misguided war on Chinese technology By Jeffrey D Sachs November 8,
2019
The worst foreign-policy decision by the United States of the last generation – and
perhaps longer – was the "war of choice" that it launched in Iraq in 2003 for the stated
purpose of eliminating weapons of mass destruction that did not, in fact, exist. Understanding
the illogic behind that disastrous decision has never been more relevant, because it is being
used to justify a similarly misguided US policy today.
The decision to invade Iraq followed the illogic of then-US vice-president Richard Cheney,
who declared that even if the risk of WMD falling into terrorist hands was tiny – say, 1%
– we should act as if that scenario would certainly occur.
Such reasoning is guaranteed to lead to wrong decisions more often than not. Yet the US and
some of its allies are now using the Cheney Doctrine to attack
Chinese technology. The US government argues that because we can't know with certainty that
Chinese technologies are safe, we should act as if they are certainly dangerous and bar
them.
Proper decision-making applies probability estimates to alternative actions. A generation
ago, US policymakers should have considered not only the (alleged) 1% risk of WMD falling into
terrorist hands, but also the 99% risk of a war based on flawed premises. By focusing only on
the 1% risk, Cheney (and many others) distracted the public's attention from the much greater
likelihood that the Iraq war lacked justification and that it would gravely destabilize the
Middle East and global politics.
The problem with the Cheney Doctrine is not only that it dictates taking actions predicated
on small risks without considering the potentially very high costs. Politicians are tempted to
whip up fears for ulterior purposes.
That is what US leaders are doing again: creating a panic over Chinese technology companies
by raising, and exaggerating, tiny risks. The most pertinent case (but not the only one) is the
US government attack on the wireless broadband company Huawei. The US is closing its markets to
the company and trying hard to shut down its business around the world. As with Iraq, the US
could end up creating a geopolitical disaster for no reason.
I have followed Huawei's technological advances and work in developing countries, as I
believe that fifth-generation (5G) and other digital technologies offer a huge boost to ending
poverty and other Sustainable Development Goals. I have similarly interacted with other telecom
companies and encouraged the industry to step up actions for the United Nations' SDGs. When I
wrote a short foreword (without compensation) for a
Huawei report on the topic, and was criticized by foes of China, I asked top industry and
government officials for evidence of wayward activities by Huawei. I heard repeatedly that
Huawei behaves no differently than trusted industry leaders.
The US government nonetheless argues that Huawei's 5G equipment could undermine global
security. A "back door" in Huawei's software or hardware, US officials claim, could enable the
Chinese government to engage in surveillance around the world. After all, US officials note,
China's laws require Chinese companies to cooperate with the government for purposes of
national security.
Given the technology's importance for their sustainable development, low-income economies
around the world would be foolhardy to reject an early 5G rollout. Yet despite providing no
evidence of back doors, the US is telling the world to stay away from Huawei
Now, the facts are these. Huawei's 5G equipment is low-cost and high-quality, currently
ahead of many competitors, and already rolling out. Its high performance results from years of
substantial spending on research and development, scale economies, and learning by doing in the
Chinese digital marketplace. Given the technology's importance for their sustainable
development, low-income economies around the world would be foolhardy to reject an early 5G
rollout.
Yet despite providing no evidence of back doors, the US is telling the world to stay away
from Huawei. The US claims are generic. As a US Federal Communications Commissioner
put it , "The country that owns 5G will own innovations and set the standards for the rest
of the world, and that country is currently not likely to be the United States." Other
countries, most notably the United Kingdom, have
found no back doors in Huawei's hardware and software. Even if back doors were discovered
later, they could almost surely be closed at that point.
The debate over Huawei rages in Germany, where the US government threatens to curtail
intelligence cooperation unless the authorities exclude Huawei's 5G technology. Perhaps as a
result of the US pressure, Germany's spy chief recently made a claim
tantamount to the Cheney Doctrine: "Infrastructure is not a suitable area for a group that
cannot be trusted fully." He offered no evidence of specific misdeeds. Chancellor Angela
Merkel, by contrast, is fighting
behind the scenes to leave the market open for Huawei.
Ironically, though predictably, the US complaints partly reflect America's
own surveillance activities at home and abroad. Chinese equipment might make secret
surveillance by the US government more difficult. But unwarranted surveillance by any
government should be ended. Independent UN monitoring to curtail such activities should become
part of the global telecommunications system. In short, we should choose diplomacy and
institutional safeguards, not a technology war.
The threat of US demands to blockade Huawei concerns more than the early rollout of the 5G
network. The risks to the rules-based trading system are profound. Now that the US is no longer
the world's undisputed technology leader, President Donald Trump and his advisers don't want to
compete according to a rules-based system. Their goal is to contain China's technological rise.
Their simultaneous attempt to neutralize the World Trade Organization by
disabling its dispute settlement system shows the same disdain for global rules.
If the Trump administration "succeeds" in dividing the world into separate technology camps,
the risks of future conflicts will multiply. The US championed open trade after World War II
not only to boost global efficiency and expand markets for American technology, but also to
reverse the collapse of international trade in the 1930s. That collapse stemmed in part from
protectionist tariffs imposed by the US under the 1930 Smoot-Hawley Act , which
amplified the Great Depression, in turn contributing to the rise of Adolf Hitler and,
ultimately, the outbreak of World War II.
In international affairs, no less than in other domains, stoking fears and acting on them,
rather than on the evidence, is the path to ruin. Let's stick to rationality, evidence and
rules as the safest course of action. And let us create independent monitors to curtail the
threat of any country using global networks for surveillance of or cyberwarfare on others. That
way, the world can get on with the urgent task of harnessing breakthrough digital technologies
for the global good.
The world's worst negotiating strategy is to give the other side everything they want in
exchange for worthless empty promises, yet this is exactly what Trump and his trade team are doing.
All
the Chinese trade team has to do to get rid of tariffs and other U.S. bargaining chips is mutter
some empty phrase about "agreeing in principle" and the U.S. surrenders all its bargaining chips.
If the other side are such naive chumps that they give you everything you want without
actually committing to anything remotely consequential, why bother with a formal agreement?
Just
play the other side for the chumps they are: if they threaten to reinstate tariffs, just issue
another worthless press release about "progress has been made."
The other guaranteed losing strategy in negotiation is advertise your own fatal
weakness, which in Trump's case is his obsession with pushing the U.S. stock market to new highs.
There
is no greater gift he could hand the Chinese trade team than this monumental weakness, for all they
have to do is talk tough and the U.S. stock market promptly tanks, sending the Trump Team into a
panic of appeasement and empty claims of "progress."
The Chinese team has gotten their way for a year by playing Trump's team as chumps and
patsies, so why stop now?
The Chinese know they can get way without giving anything away
by continuing to play the American patsies and using the president's obsession with keeping U.S.
stocks lofting higher to their advantage: declare the talks stalled, U.S. stocks crater, the
American team panics and rushes to remove anything that might have enforcement teeth, reducing any
"trade deal" to nothing but empty promises.
Given their success at playing America's team, why do a deal at all? Just play the
chumps for another year,
and maybe Trump will be gone and a new set of even more naive
patsies enter the White House.
If we put ourselves in the shoes of the Chinese negotiators, we realize there's no need
to sign a deal at all:
the Trump team has gone out of its way to make it needless for
China to agree to anything remotely enforceable. All the Chinese have to do is issue some stern
talk that crushes U.S. stocks and the Trump Team scurries back, desperate to appease so another
rumor of a "trade deal" can be issued to send U.S. stocks higher.
It would be pathetic if it wasn't so foolish and consequential.
"... Pompeo said the United States had long cherished its friendship with the Chinese people, adding the Communist government was not the same thing as the people of China. ..."
"... We are in a civilization war about the global social contract and whether sovereign public finance gets a chance to be compared against the Western centuries old private finance controlled world. ..."
"... The USA has been successful at bribing foreign leaders, taking them under their wing, and getting them to accept their place in the world order. They think they can do this with anybody. ..."
"... The US never really counts on foreign leaders taking their peoples interests at heart and standing up to the hegemon. As far as Pompeo goes this is classic projection. It is a sign they are losing and are worried about it. ..."
Below is a Reuters posting about Mike Pompeo presenting the public/private finance "dog
whistle" at a Hudson Institute think tank gala dinner....the pot calling the kettle
black.
"
WASHINGTON (Reuters) - U.S. Secretary of State Mike Pompeo on Wednesday stepped up recent
U.S. rhetoric targeting China's ruling Communist Party, saying Beijing was focused on
international domination and needed to be confronted.
Pompeo made the remarks even as the Trump administration said it still expected to sign
the first phase of deal to end a damaging trade war with China next month, despite Chile's
withdrawal on Wednesday as the host of an APEC summit where U.S. officials had hoped this
would happen.
Pompeo said the United States had long cherished its friendship with the Chinese people,
adding the Communist government was not the same thing as the people of China.
"They are reaching for and using methods that have created challenges for the United
States and for the world and we collectively, all of us, need to confront these challenges
... head on," Pompeo said in an address to a gala dinner in New York of the conservative
Hudson Institute think tank.
"It is no longer realistic to ignore the fundamental differences between our two systems,
and the impact that the differences in those systems have on American national security."
"
I posted the above about 6 hours ago on the Weekly Open thread and now get up to read that
the financial markets are down and Trump is tweeting that it is the Fed's fault for not
lowering rates even further even though there are a couple of ZH postings that refer to
China's response to Pompeo's remarks as offensive and maybe a trade deal won't get
signed...
We are in a civilization war about the global social contract and whether sovereign public
finance gets a chance to be compared against the Western centuries old private finance
controlled world.
Haha. The fight is an old one. Who is to be master and who is to be slave. China was supposed to happily be the world's
cheap manufacturer and not get too big for its britches. The USA has been successful at bribing foreign leaders, taking
them under their wing, and getting them to accept their place in the world order. They think they can do this with anybody.
They think every leader is a budding Lenin Moreno or that they can arrange a coup and force into office another Lenin
Moreno. Russia, China, and India will not allow it.
All have at one time or another (Russia quite recently) been under the heel of Western empire. All have old and proud
civilizations.
The US never really counts on foreign leaders taking their peoples interests at heart and standing up to the hegemon.
As far as Pompeo goes this is classic projection. It is a sign they are losing and are worried about it.
Chinese Patriotism: Huawei Smartphone Sales Jump 66% In China As Apple iPhone Sales Slump
by
Tyler Durden
Wed, 10/30/2019 - 13:50
0
SHARES
We're starting to get first-hand knowledge of what we're coining as the
"
blowback
period
"
in the trade war. This is a point in time when Chinese consumers, downright
furious of President Trump's protectionist policies that targeted Chinese companies over the
summer, have collectively stood up to an aggressor (the US), and have
secretly fired back,
targeting US firms by abandoning their products for domestic ones, all in the name of patriotism.
Honestly, over time, the trade war, if solved next month or next year, or who knows at this point
when it'll be solved, will have devastating consequences for corporate America as their market
share in China will erode as patriotism forces consumers to gravitate towards domestic brands.
A new report from
Canalys
, an
independent research firm focused on technology, has linked patriotism in China for the jump in
Huawei smartphone sales in the third quarter.
Huawei's 3Q19 smartphone sales soared by 66% YoY in China
, compared with a 31%
increase in 2Q19.
Between 2Q-3Q, President Trump escalated the trade war to near full-blown, and also attacked
individual companies with economic sanctions and banned certain ones from doing business in the US.
Chinese consumers responded by
ditching American products, like Apple iPhones
, as
this is some of the first evidence we've seen of the blowback period, likely to worsen in 4Q19
through 1Q20.
As shown in the chart below, the July-September period of 2019 was a devastating quarter for
Huawei's top rivals, including Vivo, Oppo, Xiaomi (other Chinese brands), along with depressing
sales from Apple.
Smartphone shipments overall were 97.8 million, down 3% from 100.6 million for the same period
last year.
Apple's YoY slump gained momentum from -14% in 2Q to -28% for 3Q
.
Chinese patriotism
allowed Huawei's market share in the country to expand from
24.9% to 42.4% over the past year.
Canalys analyst Mo Jia said, "The U.S.-China trade war is also creating new opportunities,"
adding that, "
Huawei's retail partners are rolling out advertisements to link Huawei with
being the patriotic choice, to appeal to a growing demographic of Chinese consumers willing to take
political factors into account when making a purchase decision.
"
The blowback period has begun, and corporate America should be terrified that their market share
in China is about to evaporate.
"As I have stated strongly before, and just to reiterate, if Turkey does anything that
I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy
and obliterate the Economy of Turkey
(I've done before!)
"
Donald J. Trump
"China uses a host of monopolizing strategies to extend its geopolitical and commercial
power, everything from below cost pricing to grab market share, patent trolling,
espionage, mergers, and financial manipulation. In fact, the CCP is best understood as
a giant monopoly that also controls a nation of 1.4 billion people and a large military
apparatus...
China's biggest asset in gaining power was how most people in the West just didn't
realize that the CCP aimed to use it. Now China's cover is blown. The raw exercise of
power to censor a random Houston Rockets basketball executive has made millions of
people take notice. Everyone knows, the Chinese government isn't content to control its
own nation, it must have all bow down to its power and authority.
Matt overstates the headline I think. The empowerment of China may have gone into higher
gear with Bill Clinton perhaps, but has been fully supported by every President, both
parties, and especially the moneyed interests in the US, who place their short term greed
first and foremost.
Follow the money. China is certainly not alone among organizations, and even nations, in
playing on the personal greed, divided loyalties, and lust for power of our political and
financial class.
This in itself is nothing new. But the extent of it, and the fashionable acceptance of it
amongst our society's elites, the industrialization of political corruption and big money
in politics, has been breathtaking.
That looks like vast and generally incorrect exaggeration. While China mode substantial
progress in catching up with the West, the technology is still dominated by the West.
But as technological revolution is slowing down and in some areas coming to the end (die size
in semiconductors in one example; it is impossible to shrink it further; smartphones reached
saturation level, and hardware wise their capabilities are far above what a regular user needs or
wants) it is easier for other countries to catch up.
In any case, the main reason for trade war with China is to try to slow down its
ascendance.
The problem for China is that China converted to neoliberalism, and as such (like Russia) is
subject to all the ills the neoliberal society tend to bring into the country. Including a very
high level of inequality.
And while backlash against neoliberalism is growing and in the USA
neoliberalism entered a prolong crisis with secular stagnation as the "new normal" , the question
is what is that alternative ? And while backlash against neoliberalism is growing and in the USA
neoliberalism entered a prolong crisis with secular stagnation as the "new normal" , the question
is what is that alternative ?
Notable quotes:
"... Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means). ..."
"... Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world. ..."
"... China has more problems than the United States. Taiwan, Tibet, Hong Kong, persecuting Uyghurs in Xinjiang, Indonesia and Malaysia because of Islam, Inner Mongolia separatists, Kashmir and India, USA trade pressure, Japan and South Korea are competitors. ..."
It is very popular these days to talk and write about the "trade war" between the United
States and China. But is there really one raging? Or is it, what we are witnessing, simply a
clash of political and ideological systems : one being extremely successful and optimistic, the
other depressing, full of dark cynicism and nihilism?
In the past, West used to produce almost everything. While colonizing the entire planet (one
should just look at the map of the globe, between the two world wars), Europe and later the
United States, Canada and Australia, kept plundering all the continents of natural resources,
holding hundreds of millions of human beings in what could be easily described as 'forced
labor', often bordering on slavery.
Under such conditions, it was very easy to be 'number one', to reign without competition,
and to toss around huge amounts of cash, for the sole purpose of indoctrinating local and
overseas 'subjects' on topics such as the 'glory' of capitalism, colonialism (open and hidden),
and Western-style 'democracy'.
It is essential to point out that in the recent past, the global Western dictatorship (and
that included the 'economic system) used to have absolutely no competition. Systems that were
created to challenge it, were smashed with the most brutal, sadistic methods. One only needs
recall invasions from the West to the young Soviet Union, with the consequent genocide and
famines. Or other genocides in Indochina, which was fighting its wars for independence, first
against France, later against the United States.
*
Times changed. But Western tactics haven't.
There are now many new systems, in numerous corners of the world. These systems, some
Communist, others socialist or even populist, are ready to defend their citizens, and to use
the natural resources to feed the people, and to educate, house and cure them.
No matter how popular these systems are at home, the West finds ways to demonize them, using
its well-established propaganda machinery. First, to smear them and then, if they resist, to
directly liquidate them.
As before, during the colonial era, no competition has been permitted. Disobedience is
punishable by death.
Naturally, the Western system has not been built on excellence, hard work and creativity,
only. It was constructed on fear, oppression and brutal force. For centuries, it has clearly
been a monopoly.
*
Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to
survive, defending they own cultures, and advancing their philosophies.
To the West, China has proved to be an extremely tough adversary.
With its political, economic, and social system, it has managed to construct a
forward-looking, optimistic and extraordinarily productive society. Its scientific research is
now second to none. Its culture is thriving. Together with its closest ally, Russia, China
excels in many essential fields.
That is precisely what irks, even horrifies the West.
For decades and centuries, Europe and the United States have not been ready to tolerate any
major country, which would set up its own set of rules and goals.
China refuses to accept the diktat from abroad. It now appears to be self-sufficient,
ideologically, politically, economically and intellectually. Where it is not fully
self-sufficient, it can rely on its friends and allies. Those allies are, increasingly, located
outside the Western sphere.
*
Is China really competing with the West? Yes and no. And often not consciously.
It is a giant; still the most populous nation on earth. It is building, determinedly, its
socialist motherland (applying "socialism with the Chinese characteristics" model). It is
trying to construct a global system which has roots in the thousands of years of its history
(BRI – Belt and Road Initiative, often nicknamed the "New Silk Road").
Its highly talented and hardworking, as well as increasingly educated population, is
producing, at a higher pace and often at higher quality than the countries in Europe, or the
United States. As it produces, it also, naturally, trades.
This is where the 'problem' arises. The West, particularly the United States, is not used to
a country that creates things for the sake and benefit of its people. For centuries, Asian,
African and Latin American people were ordered what and how to produce, where and for how much
to sell the produce. Or else!
Of course, the West has never consulted anyone. It has been producing what it (and its
corporations) desired. It was forcing countries all over the world, to buy its products. If
they refused, they got invaded, or their fragile governments (often semi-colonies, anyway)
overthrown.
The most 'terrible' thing that China is doing is: it is producing what is good for China,
and for its citizens.
That is, in the eyes of the West, unforgiveable!
*
In the process, China 'competes'. But fairly: it produces a lot, cheaply, and increasingly
well. The same can be said about Russia.
These two countries are not competing maliciously. If they were to decide to, they could
sink the US economy, or perhaps the economy of the entire West, within a week.
But they don't even think about it.
However, as said above, to just work hard, invent new and better products, advance
scientific research, and use the gains to improve the lives of ordinary people (they will be no
extreme poverty in China by the end of 2020) is seen as the arch-crime in London and
Washington.
Why? Because the Chinese and Russian systems appear to be much better, or at least, simply
better, than those which are reigning in the West and its colonies. And because they are
working for the people, not for corporations or for the colonial powers.
And the demagogues in the West – in its mass media outlets and academia – are
horrified that perhaps, soon, the world will wake up and see the reality. Which is actually
already happening: slowly but surely.
*
To portray China as an evil country, is essential for the hegemony of the West. There is
nothing so terrifying to London and Washington as the combination of these words: "Socialism/
Communism, Asian, success". The West invents new and newer 'opposition movements', it then
supports them and finances them, just in order to then point fingers and bark: "China is
fighting back, and it is violating human rights", when it defends itself and its citizens. This
tactic is clear, right now, in both the northwest of the country, and in Honk Kong.
Not everything that China builds is excellent. Europe is still producing better cars, shoes
and fragrances, and the United States, better airplanes. But the progress that China has
registered during the last two decades, is remarkable. Were it to be football, it is China 2:
West 1.
Most likely, unless there is real war, that in ten years, China will catch up in many
fields; catch up, and surpass the West. Side by side with Russia.
It could have been excellent news for the entire world. China is sharing its achievements,
even with the poorest of the poor countries in Africa, or with Laos in Asia.
The only problem is, that the West feels that it has to rule. It is unrepentant, observing
the world from a clearly fundamentalist view. It cannot help it: it is absolutely, religiously
convinced that it has to give orders to every man and woman, in every corner of the globe.
It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will
testify: what is taking place there is not good, even for the ordinary citizens. Western
governments and corporations are now robbing even their own citizens. The standard of living is
nose-diving.
China, with just a fraction of the wealth, is building a much more egalitarian society,
although you would never guess so, if you exclusively relied on Western statistics.
*
So, "trade war" slogans are an attempt to convince the local and global public that "China
is unfair", that it is "taking advantage" of the West. President Trump is "defending" the
United States against the Chinese 'Commies'. But the more he "defends them", the poorer they
get. Strange, isn't it?
While the Chinese people, Russian people, even Laotian people, are, 'miraculously', getting
richer and richer. They are getting more and more optimistic.
For decades, the West used to preach 'free trade', and competition. That is, when it was in
charge, or let's say, 'the only kid on the block'.
In the name of competition and free trade, dozens of governments got overthrown, and
millions of people killed.
And now?
What is China suppose to do? Frankly, what?
Should it curb its production, or perhaps close scientific labs? Should it consult the US
President or perhaps British Prime Minister, before it makes any essential economic decision?
Should it control the exchange rate of RMB, in accordance with the wishes of the economic tsars
in Washington? That would be thoroughly ridiculous, considering that (socialist/Communist)
China will soon become the biggest economy in the world, or maybe it already is.
There is all that abstract talk, but nothing concrete suggested. Or is it like that on
purpose?
Could it be that the West does not want to improve relations with Beijing?
On September 7, 2019, AP reported:
White House economic adviser Larry Kudlow compared trade talks with China on Friday to the
U.S. standoff with Russia during the Cold War
"The stakes are so high, we have to get it right, and if that takes a decade, so be it,"
he said.
Kudlow emphasized that it took the United States decades to get the results it wanted with
Russia. He noted that he worked in the Reagan administration: "I remember President Reagan
waging a similar fight against the Soviet Union."
Precisely! The war against the Soviet Union was hardly a war for economic survival of
the United States. It was an ideological battle, which the United States, unfortunately won,
because it utilized both propaganda and economic terror (the arms race and other
means).
Now, China is next on the list, and the White House is not even trying to hide it. But
China is savvy. It is beginning to understand the game. And it is ready, by all means, to
defend the system which has pulled almost all its citizens out of misery, and which could, one
day soon, do the same for the rest of the world.
US is hemorrhaging around $1.7 trillion dollars(according to the bond king) a year with
the “greatest economy ever” and near zero interest rate. Clearly, this is not
sustainable and can’t last much longer. When the jig is up, whoever has the most
guns(not gold) will prevail. .
China has more problems than the United States. Taiwan, Tibet, Hong Kong, persecuting
Uyghurs in Xinjiang, Indonesia and Malaysia because of Islam, Inner Mongolia separatists,
Kashmir and India, USA trade pressure, Japan and South Korea are competitors.
China has some bright spots with Pakistan, North Korea and a very open hand negotiated
with the African Union to colonize that continent etc. Russia is neutral but if it is to fall
it will probably be towards Europe not the East.
Vietnam is falling away leaving Myanmar and Cambodia. Thailand might already be a Western
proxy.
You've broken down nothing. China can sell somewhere else, since it makes all the stuff.
The US makes very little and will pay far more Chinese equivalent goods. Further, China's GDP
is now 80% domestically generated; of the remaining 20% export income, the US accounts for
only 30% of it, ie 6%. China can stand a loss of 6% easily. While the Americans, led the
Ape-in-Chief have been thumping their chests, the nimble Chinese have taken markets
everywhere, diversified their manufacturing bases and transportation systems. The US is
shouting at the Moon. Enjoy the tan...
'The war against the Soviet Union was hardly a war for economic survival of the United
States. It was an ideological battle, which the United States, unfortunately won,'
Really !!! have a read of Gulag Archipelago before you come out with anything this
stupid.
The author apparently has never been to China to know what their perspective is. Instead,
he is superimposing what western ideologs think it is. To Americans, it is political and
ideological struggle. To the Chinese, it's basic economics and the welfare of its people. The
Chinese know better than anyone else, what it was like being down in the gutter for almost
200 years, about the time the British showed up with their opium trade in the 1830's. The
Chinese have made great strides in the last 45 years to get their people out of poverty,
modernize, and build an industrialized economy that rivals any other economy in the world.
The truth is, it's a feat that Americans are tacitly envious of, and will do whatever it
takes to cut the Chinese down.
The problem is, America is not the shining example of success and exceptionalism it thinks
it is. It has fallen behind the power curve and isn't competitive any longer. Free trade is
far and away better in China than what you will find in America. Don't believe it? Go there
and see for yourself. Then ask yourself, why did the greater chunk of American manufacturing
left and went to China in the first place, (besides chasing cheap labor), If it wasn't for
free trade?
Many other countries don't share the same ideology or values with Americans either,
particularly when America can't provide for the welfare of its own people, so why would they
want to copy that model of decay?
attractive properties in shenzhen or any tier 1 chinese cities are in the millions or tens
of millions of dollars. not likely to jump higher anytime soon but whole lot of downside
potential. Vancouver is full up. why not seattle, DC or somewhere with "cheap" prices?
They have two alternatives to SWIFT - CIPS & NSPK. Further, both Russia and China are
using their own and local currencies in trade, bypassing not only SWIFT fees and delays, but
the USD exchange rate rip-off.
Frankly ZH readers are about 10 yrs behind the latest developments, hence the rednecks
ranting about their already lost cause. Do some research.
"So far, China has exercised restraint." ...because they don't want the world to see what
a truly monstrous regime runs that country...much like Israhell tries to silence and stifle
criticism of its monstrous racist and supremacist regime.
Meanwhile the West is on meds as it willingly takes the dagger someone is handing it to
enable it to commit suicide..
I wonder who is pulling strings in the background?
Canada and australia most certainly did NOT plunder the world, at anytime. We have all the
resources we will ever need,and we have never sought an empire. Don't try to drag us down
into your pit for company. It is your pit, along with Britain. Let the British keep you
company.
China "is ready to defend the system which has pulled almost all its citizens out of
misery"
China is very late to the game of "printing debt" It has taken the USA 100 years to
bankrupt itself. China with it's 350% of GDP has managed it in 30 years.
That looks like vast and generally incorrect exaggeration. While China mode substantial progress in catching up with the West, the
technology is still dominated by the West.
But as technological revolution is slowing down and in some areas coming to the end (die size in semiconductors in one example;
it is impossible to shrink it further; smartphones reached saturation level, and hardware wise their capabilities are far above what
a regular user needs or wants) it is easier for other countries to catch up.
In any case, the main reason for trade war with China is to try to slow down its ascendance.
The problem for China is that China converted to neoliberalism, and as such (like Russia) is subject to all the ills the neoliberal
society tend to bring into the country. Including a very high level of inequality.
Notable quotes:
"... Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means). ..."
"... Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world. ..."
It is very popular these days to talk and write about the "trade war" between the United States and China. But is there really
one raging? Or is it, what we are witnessing, simply a clash of political and ideological systems : one being extremely successful
and optimistic, the other depressing, full of dark cynicism and nihilism?
In the past, West used to produce almost everything. While colonizing the entire planet (one should just look at the map of the
globe, between the two world wars), Europe and later the United States, Canada and Australia, kept plundering all the continents
of natural resources, holding hundreds of millions of human beings in what could be easily described as 'forced labor', often bordering
on slavery.
Under such conditions, it was very easy to be 'number one', to reign without competition, and to toss around huge amounts of cash,
for the sole purpose of indoctrinating local and overseas 'subjects' on topics such as the 'glory' of capitalism, colonialism (open
and hidden), and Western-style 'democracy'.
It is essential to point out that in the recent past, the global Western dictatorship (and that included the 'economic system)
used to have absolutely no competition. Systems that were created to challenge it, were smashed with the most brutal, sadistic methods.
One only needs recall invasions from the West to the young Soviet Union, with the consequent genocide and famines. Or other genocides
in Indochina, which was fighting its wars for independence, first against France, later against the United States.
*
Times changed. But Western tactics haven't.
There are now many new systems, in numerous corners of the world. These systems, some Communist, others socialist or even populist,
are ready to defend their citizens, and to use the natural resources to feed the people, and to educate, house and cure them.
No matter how popular these systems are at home, the West finds ways to demonize them, using its well-established propaganda machinery.
First, to smear them and then, if they resist, to directly liquidate them.
As before, during the colonial era, no competition has been permitted. Disobedience is punishable by death.
Naturally, the Western system has not been built on excellence, hard work and creativity, only. It was constructed on fear, oppression
and brutal force. For centuries, it has clearly been a monopoly.
*
Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to survive, defending they own cultures,
and advancing their philosophies.
To the West, China has proved to be an extremely tough adversary.
With its political, economic, and social system, it has managed to construct a forward-looking, optimistic and extraordinarily
productive society. Its scientific research is now second to none. Its culture is thriving. Together with its closest ally, Russia,
China excels in many essential fields.
That is precisely what irks, even horrifies the West.
For decades and centuries, Europe and the United States have not been ready to tolerate any major country, which would set up
its own set of rules and goals.
China refuses to accept the diktat from abroad. It now appears to be self-sufficient, ideologically, politically, economically
and intellectually. Where it is not fully self-sufficient, it can rely on its friends and allies. Those allies are, increasingly,
located outside the Western sphere.
*
Is China really competing with the West? Yes and no. And often not consciously.
It is a giant; still the most populous nation on earth. It is building, determinedly, its socialist motherland (applying "socialism
with the Chinese characteristics" model). It is trying to construct a global system which has roots in the thousands of years of
its history (BRI – Belt and Road Initiative, often nicknamed the "New Silk Road").
Its highly talented and hardworking, as well as increasingly educated population, is producing, at a higher pace and often at
higher quality than the countries in Europe, or the United States. As it produces, it also, naturally, trades.
This is where the 'problem' arises. The West, particularly the United States, is not used to a country that creates things for
the sake and benefit of its people. For centuries, Asian, African and Latin American people were ordered what and how to produce,
where and for how much to sell the produce. Or else!
Of course, the West has never consulted anyone. It has been producing what it (and its corporations) desired. It was forcing countries
all over the world, to buy its products. If they refused, they got invaded, or their fragile governments (often semi-colonies, anyway)
overthrown.
The most 'terrible' thing that China is doing is: it is producing what is good for China, and for its citizens.
That is, in the eyes of the West, unforgiveable!
*
In the process, China 'competes'. But fairly: it produces a lot, cheaply, and increasingly well. The same can be said about Russia.
These two countries are not competing maliciously. If they were to decide to, they could sink the US economy, or perhaps the economy
of the entire West, within a week.
But they don't even think about it.
However, as said above, to just work hard, invent new and better products, advance scientific research, and use the gains to improve
the lives of ordinary people (they will be no extreme poverty in China by the end of 2020) is seen as the arch-crime in London and
Washington.
Why? Because the Chinese and Russian systems appear to be much better, or at least, simply better, than those which are reigning
in the West and its colonies. And because they are working for the people, not for corporations or for the colonial powers.
And the demagogues in the West – in its mass media outlets and academia – are horrified that perhaps, soon, the world will wake
up and see the reality. Which is actually already happening: slowly but surely.
*
To portray China as an evil country, is essential for the hegemony of the West. There is nothing so terrifying to London and Washington
as the combination of these words: "Socialism/ Communism, Asian, success". The West invents new and newer 'opposition movements',
it then supports them and finances them, just in order to then point fingers and bark: "China is fighting back, and it is violating
human rights", when it defends itself and its citizens. This tactic is clear, right now, in both the northwest of the country, and
in Honk Kong.
Not everything that China builds is excellent. Europe is still producing better cars, shoes and fragrances, and the United States,
better airplanes. But the progress that China has registered during the last two decades, is remarkable. Were it to be football,
it is China 2: West 1.
Most likely, unless there is real war, that in ten years, China will catch up in many fields; catch up, and surpass the West.
Side by side with Russia.
It could have been excellent news for the entire world. China is sharing its achievements, even with the poorest of the poor countries
in Africa, or with Laos in Asia.
The only problem is, that the West feels that it has to rule. It is unrepentant, observing the world from a clearly fundamentalist
view. It cannot help it: it is absolutely, religiously convinced that it has to give orders to every man and woman, in every corner
of the globe.
It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will testify: what is taking place there is
not good, even for the ordinary citizens. Western governments and corporations are now robbing even their own citizens. The standard
of living is nose-diving.
China, with just a fraction of the wealth, is building a much more egalitarian society, although you would never guess so, if
you exclusively relied on Western statistics.
*
So, "trade war" slogans are an attempt to convince the local and global public that "China is unfair", that it is "taking advantage"
of the West. President Trump is "defending" the United States against the Chinese 'Commies'. But the more he "defends them", the
poorer they get. Strange, isn't it?
While the Chinese people, Russian people, even Laotian people, are, 'miraculously', getting richer and richer. They are getting
more and more optimistic.
For decades, the West used to preach 'free trade', and competition. That is, when it was in charge, or let's say, 'the only kid
on the block'.
In the name of competition and free trade, dozens of governments got overthrown, and millions of people killed.
And now?
What is China suppose to do? Frankly, what?
Should it curb its production, or perhaps close scientific labs? Should it consult the US President or perhaps British Prime Minister,
before it makes any essential economic decision? Should it control the exchange rate of RMB, in accordance with the wishes of the
economic tsars in Washington? That would be thoroughly ridiculous, considering that (socialist/Communist) China will soon become
the biggest economy in the world, or maybe it already is.
There is all that abstract talk, but nothing concrete suggested. Or is it like that on purpose?
Could it be that the West does not want to improve relations with Beijing?
On September 7, 2019, AP reported:
White House economic adviser Larry Kudlow compared trade talks with China on Friday to the U.S. standoff with Russia during
the Cold War
"The stakes are so high, we have to get it right, and if that takes a decade, so be it," he said.
Kudlow emphasized that it took the United States decades to get the results it wanted with Russia. He noted that he worked
in the Reagan administration: "I remember President Reagan waging a similar fight against the Soviet Union."
Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological
battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other
means).
Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled
almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world.
The USA is a real leader in technology and arm production. This is the country that created
PC, Internet and smartphones, which changed the world. So technical supremacy paves the way to
imperial behaviour.
CIA is one of the most powerful tools of the empire, the force that is instrumental in
peeking the USA on globalist path now (looks at Russiagate) .
The path of U.S.-Israeli arrogance and domination, with its various dimensions, and with
its direct and indirect extensions and alliances, which is witnessing military defeats and
political failures, reflected successive defeats for the American strategies and plans, one
after the other. All this has led [the U.S.] to a state of indecision, retreat, and inability
to control the progress of events in our Arab and Islamic world. There is a broader
international context for this – a context that, in its turn, helps to expose the
American crisis, and the decline of the [U.S.] unipolar hegemony, in the face of pluralism,
the characteristics of which are yet to be stabilized.
"The crisis of the arrogant world order is deepened by the collapse of U.S. and
international stock markets, and by the confusion and powerlessness of the American economy.
This reflects the height of the structural crisis of the model of capitalist arrogance.
Therefore, it can be said that we are in the midst of historic transformations that foretell
the retreat of the USA as a hegemonic power, the disintegration of the unipolar hegemonic
order, and the beginning of the accelerated historic decline of the Zionist entity.
After World War II, the U.S. has adopted the leading, central hegemonic project. At its
hands, this project has witnessed great development of the means of control and unprecedented
subjugation. It has benefited from an accumulation of multi-faceted accomplishments in
science, culture, technology, knowledge, economy, and the military, which was supported by an
economic political plan that views the world as nothing but open markets subject to the laws
of [the U.S.].
"The most dangerous aspect of Western logic of hegemony in general, and the American logic
of hegemony in particular, is their basic belief that they own the world, and have the right
to hegemony due to their supremacy in several fields. Thus, the Western, and especially
American, expansionist strategy, when coupled with the enterprise of capitalist economy, has
become a strategy of a global nature, whose covetous desires and appetite know no bounds.
The barbaric capitalism has turned globalism into a means to spread disintegration, to sow
discord, to destroy identities, and to impose the most dangerous form of cultural, economic,
and social plunder. Globalization reached its most dangerous phase, when it was transformed
into military globalization by the owners of the Western hegemony enterprise, the greatest
manifestation of which was evident in the Middle East, from Afghanistan to Iraq, to
Palestine, and to Lebanon.
There is no doubt that American terrorism is the source of all terrorism in the world. The
Bush administration has turned the U.S. into a danger threatening the whole world, on all
levels. If a global opinion poll were held today, the United States would emerge as the most
hated country in the world.
The most important goal of American arrogance is to take control of the peoples
politically, economically, and culturally, and to plunder their resources.
That said, as
Bloomberg
noted, Liu didn't address specifics about the trade talks in his speech. Instead, the
vice premier said China would expand investments in core technologies to ensure the economic
restructuring of the economy was stable, adding that economic activity in the year ahead is "very
bright."
"We're not worried about short-term economic volatility. We have every confidence in our
ability to meet macroeconomic targets for the year," he said.
As reported on Friday, ahead of the latest round of talks, President Trump's top economic
advisors and industry experts warned him of an economic downturn if a further escalation in the
trade war is seen by 2020. As such, it is likely that a lite trade deal could be on the table next
month.
But as our readers have recently learned, the trade war didn't start the synchronized global
downturn, which has been almost entirely a function of China's clogged up credit impulse...
... so any deal - lite or otherwise - won't result in an immediate acceleration of global
growth; indeed, as some speculate, failure to observe a substantial economic rebound following a
"deal" could well mark the point when central banks and governments finally throw in the towel, as
they finally usher in the final lap in the global race to
debase
destroy fiat currencies and
hyperinflate away the debt: MMT and Helicopter Money.
Trump's pathetic Trade war accomplished nothing. US exports down
18% globally. Farmer destroyed. US markets for all goods harmed.
The world is offloading any and all dependence on US products.
Impulsive stupid jerk. 45% of the world population on US
Sanctions, rising black markets, US supply chain disruptions, US
manufacturing in a recession.
Tariffs are tax deductible so they
do not accumulate any tax benefit to the US Treasury. They are
virtually all rolled over into the national debt. So while the
consumer may not notice a rising CPI, they are getting drown in
Trump Debt, the largest spending deficits in US history, largest
debt to GDP of over 110% and rising. Trump has the fastest
acceleration of US debt of any white house occupancy nearly 4
trillion in 2.7 years. It is obvious Trump is clueless in
virtually everything. Has no capacity to comprehend a thing.
Look at this scatterbrained Turkey Kurds fiasco. Impulsive,
thoughtless and accomplished nothing. US troops now guarding
Syrian oil. Astonishing. Everything this guy touches turned into a
burning crap filled dumpster fire.
'I will be so good at the military, your head will spin'
"When those 'gunds' start shooting they tend to do things"
Then there are no deals from the self-proclaimed "art of the
Deal"... nothing. Look at Iran. He has made negative progress
across the board. Thank to the orange stupid nations across the
globe are circumventing US Dollar Reserve. Each day the US
importance and more importantly reliability is diminished.
Look at Trump in high tech... Merck has developed an Ebola
vaccine in EUROPE not the USA. The USA hasn't even approved it
yet. What is Trump doing... ATTACKING BIG PHARMA. Trumptards love
seeing that. Yet it is the Trumptards that keep screaming to buy
Murica products but if they have to pay more for them, then
suddenly they demonize the US companies. Big Pharma will be the
next sector to joint Semiconductor to leave the USA.
Trump blacklist Big tech. Why? Tech products have a very short
shelf life. If the US doesn't sell tech product what do they have
that others want? COAL? Soy Beans? From smart to stupid. Look at
Intel and Microsoft. Trump band Intel Chip sales to China and
threatens Microsoft operating software. In one year China now has
RISC V chips from Alibaba, all open source and the Chinese
Military has switched to Linux and UNIX GNU. So who loses here?
The US tech businesses. Look at Micron dying on the vine, tossed
from China.
Meanwhile China has 5G and has replaced all US components in
its boards with the help of Hitachi and Panasonic who are doing
the same with all their electronics to avoid Trump Blacklist
compliance. Trump is low tech and dumb as dirt. The US Tech sector
is being carpet bombed under Trump... and without tech, what
products does the US have to sell that world markets want? Not a
god damn thing.
Let's remember that Trump didn't want a partial deal... Now he
will take anything to get him out of his self-made wreckage.
Meanwhile impeachment is coming... Mista no deals is going down in
flames.
Last year 300,000 us farmers grew soy
and had 110 mmt. This year there are 100,000 us Soy farmers
left and they grew 34 mmt... not enough to export.
...
Arbitrary and capricious meddling by US politicians in
commodity contracts renders all contracts voidable under
force majeure. I would have thought with your handle you
would have known this. Those markets will never come back.
They will forever be marginalized and smaller. Trump's
damage to US trade is permanent.
In other words, consolidation among large corp farmers,
decimation of the smaller family farmers? I am truly
asking, but seems to remind me of the trend since the
1980s.
Trump and China claimed "substantial progress" this past spring,
and it all fell apart within a couple months. The same thing will
happen on this "deal"....
Former World Leaders: The Trade War Threatens
the World's Economy https://nyti.ms/2MAFOTC
NYT - Kevin Rudd, Helen Clark and Carl Bildt - October 11
Despite an interim deal, global peace and prosperity
remain at risk if the United States and China do not
fully resolve their conflict.
(The authors are former prime ministers
of Australia, New Zealand and Sweden.)
This piece has been updated to reflect news developments.
The 18-month trade war between the United States and China represents the single greatest
threat to global economic growth.
President Trump announced on Friday a preliminary trade détente with China, saying
that the two countries have a verbal agreement for an initial phase of a deal. The agreement
reportedly includes concessions from China to protect American intellectual property, to
accept guidelines on managing its currency and to buy tens of billions worth of American
agricultural products. Washington, for its part, will not go through next month with placing
more tariffs on Chinese products.
This is an encouraging sign, but a verbal agreement is just a first step. A failure to
bring the trade war to a final conclusion significantly increases the risk of recession next
year in the United States, Europe, Japan and other developed and emerging economies. It would
also seriously undermine China's near-term growth prospects.
That's why, as representatives of a group of 10 former prime ministers and presidents from
center-left and center-right governments that have enjoyed close relations with both the
United States and China, we are writing to urge Presidents Donald Trump and Xi Jinping to
reach a substantive trade agreement by year's end. It's time to bring this source of global
economic uncertainty to a close.
America's and China's prosperity have been built on global free trade. America has
profited immensely from access to global markets since its birth. China, since opening up 40
years ago, has lifted millions of its people out of poverty largely through global trade.
Indeed, much of the prosperity enjoyed by people across the world is anchored in our ability
to sell goods and services freely across national boundaries.
Now, however, we see global growth in trade lagging behind general economic growth for the
first time in decades. In part, this is the product of the expanding trade war between
America and China, the world's two largest economies. In part, it is because of a more
general outbreak of protectionism around the world. Both these factors threaten continued
global prosperity.
We recognize, as former leaders of countries with longstanding economic relationships with
China, the real difficulties regarding a number of Beijing's trade and economic practices. We
understand, for example, the challenges that arise from Chinese policies on intellectual
property and technology transfer, its restrictions on access to its markets, and its
subsidization of private and public companies that are active in the global marketplace. We
believe that these practices need to change in whichever countries may use them. But it is
particularly important in China, because it is the world's second-largest economy.
At the same time, as countries long committed to the principles of free trade, we do not
see the ever-widening tariff war, started by the United States, as an effective way to
resolve trade and economic disputes. Tariffs, by definition, are the enemy of free trade.
Their cumulative impact, particularly combined with the current resurgence of protectionism
worldwide, only depresses economic growth, employment and living standards. Tariffs raise the
cost of living for working families as consumer prices are driven up.
Stock markets rose on Friday with the news of the preliminary deal. The tariff war has
been creating economic uncertainty, depressing international investor confidence, compounding
downward pressure on growth and increasing the risk of recession. The disruption of global
supply chains is already profound, and it may continue until a final deal is reached.
We believe that the World Trade Organization, despite its limitations, is best positioned
to address China's trade practices. We also believe that the W.T.O. is the most appropriate
forum in which to resolve trade disputes. So we urge the United States and China to work with
other member states to strengthen the W.T.O.'s institutional capacity.
Our group of former prime ministers and presidents includes François Fillon of
France, Joe Clark of Canada, Enrico Letta of Italy, Jan Peter Balkenende of the Netherlands,
Felipe Calderón and Ernesto Zedillo of Mexico, and Han Seung-soo of South Korea. Given
our collective experience, we are not naïve about the inherent complexities in
negotiating trade agreements. Many of us have negotiated free-trade pacts with both the
United States and China. We are deeply familiar with the concerns of each country, including
the domestic political constituencies that argue for continued protection.
Many of those domestic concerns have focused on the long-term enforcement of any
agreement. On this point, we argue that it is in China's own long-term economic interest to
ensure the effective implementation of any new trade deal -- whether involving intellectual
property, technology transfer, state subsidies or market access. Such policies would also
need to apply to all of China's trading partners, just as they would need to apply to its
relationship with the United States.
On the question of enforcement, China must be acutely aware that if it fails to comply
with the terms of the agreement, an already damaging trade war is likely to resume. A new
trade agreement should include strong enforcement provisions, along with strengthened W.T.O.
dispute-resolution mechanisms, to give greater confidence to both parties.
For these reasons, and given the gravity of the global economic outlook for 2020, we urge
both countries to exercise every effort to reach a substantive agreement this year. We also
urge the United States to withdraw the punitive tariffs it has imposed -- and that China do
the same with the reciprocal tariffs it has enacted.
Beyond trade, we are anxious about the wider strategic impact of any further decoupling of
the Chinese and the American economies, particularly in technology and finance. Such a
decoupling would present a long-term threat to global peace and security.
It would also effectively constitute the first step in the declaration of a new Cold War.
As with the last Cold War, many nations would be forced to choose between the two powers. And
that is a choice none of us wants to make.
"... Meanwhile, Chinese consumers aren't paying higher prices for U.S. imports. A study by the Peterson Institute for International Economics shows that since the beginning of 2018, China has raised the average tariff rate on U.S. imports from 8.0 percent to 21.8 percent and has lowered the average tariff rate on all its other trading partners from 8.0 percent to 6.7 percent. China imposed tariffs only on U.S. commodities that can be replaced with imports from other countries at similar prices. It actually lowered duties for those U.S. products that can't be bought elsewhere more cheaply, such as semiconductors and pharmaceuticals. Consequently, China's import prices for the same products have dropped overall, in spite of higher tariffs on U.S. imports. ..."
"... Beijing has proved much more capable than Washington of minimizing the pain to its consumers and economy. ..."
"... The uncomfortable truth for Trump is that U.S. trade deficits don't spring from the practices of U.S. trading partners; they come from the United States' own spending habits. ..."
"... The United States has run a persistent trade deficit since 1975, both overall and with most of its trading partners. Over the past 20 years, U.S. domestic expenditures have always exceeded GDP, resulting in negative net exports, or a trade deficit. ..."
"... Even a total Chinese capitulation in the trade war wouldn't make a dent in the overall U.S. trade deficit. ..."
"... The U.S. economy, on the other hand, has had the longest expansion in history, and the inevitable down cycle is already on the horizon: second-quarter GDP growth this year dropped to 2.0 percent from the first quarter's 3.1 percent. ..."
"... If the trade war continues, it will compromise the international trading system, which relies on a global division of labor based on each country's comparative advantage. Once that system becomes less dependable -- when disrupted, for instance, by the boycotts and hostility of trade wars -- countries will start decoupling from one another. ..."
Everyone Loses in the US-Chinese Clash
-- but Especially Americans
... Economists reckon the dead-weight loss arising from the existing tariffs on $200
billion in Chinese imports to be $620 per household, or about $80 billion, annually. This
represents about 0.4 percent of U.S. GDP. If the United States continues to expand its tariff
regime as scheduled, that loss will more than double.
Meanwhile, Chinese consumers aren't paying higher prices for U.S. imports. A study by the
Peterson Institute for International Economics shows that since the beginning of 2018, China
has raised the average tariff rate on U.S. imports from 8.0 percent to 21.8 percent and has
lowered the average tariff rate on all its other trading partners from 8.0 percent to 6.7
percent. China imposed tariffs only on U.S. commodities that can be replaced with imports
from other countries at similar prices. It actually lowered duties for those U.S. products
that can't be bought elsewhere more cheaply, such as semiconductors and pharmaceuticals.
Consequently, China's import prices for the same products have dropped overall, in spite of
higher tariffs on U.S. imports.
Beijing's nimble calculations are well illustrated by the example of lobsters. China
imposed a 25 percent tariff on U.S. lobsters in July 2018, precipitating a 70 percent drop in
U.S. lobster exports. At the same time, Beijing cut tariffs on Canadian lobsters by three
percent, and as a result, Canadian lobster exports to China doubled. Chinese consumers now
pay less for lobsters imported from essentially the same waters.
THE INESCAPABLE DEFICIT
Beijing has proved much more capable than Washington of minimizing the pain to its
consumers and economy. But the trade war would be more palatable for Washington if its
confrontation with China were accomplishing Trump's goals. The president thinks that China is
"ripping off" the United States. He wants to reduce the United States' overall trade deficit
by changing China's trade practices. But levying tariffs on Chinese imports has had the
paradoxical effect of inflating the United States' overall trade deficit, which, according to
the U.S. Census Bureau, rose by $28 billion in the first seven months of this year compared
with the same period last year.
The uncomfortable truth for Trump is that U.S. trade deficits don't spring from the
practices of U.S. trading partners; they come from the United States' own spending habits.
The United States has run a persistent trade deficit since 1975, both overall and with most
of its trading partners. Over the past 20 years, U.S. domestic expenditures have always
exceeded GDP, resulting in negative net exports, or a trade deficit. The shortfall has
shifted over time but has remained between three and six percent of GDP.
Trump wants to boost
U.S. exports to trim the deficit, but trade wars inevitably invite retaliation that leads to
significant reductions in exports. Moreover, increasing the volume of exports does not
necessarily reduce trade deficits unless it is accompanied by a reduction in the country's
spending in terms of consumption and investment. The right way to reduce a trade deficit is
to grow the economy faster than concurrent domestic expenditures, which can be accomplished
only by encouraging innovation and increasing productivity. A trade war does the opposite,
damaging the economy, impeding growth, and hindering innovation.
Even a total Chinese capitulation in the trade war wouldn't make a dent in the overall
U.S. trade deficit. If China buys more from the United States, it will purchase less from
other countries, which will then sell the difference either to the United States or to its
competitors.
For example, look at aircraft sales by the U.S. firm Boeing and its European
rival, Airbus. At the moment, both companies are operating at full capacity. If China buys
1,000 more aircraft from Boeing and 1,000 fewer from Airbus, the European plane-maker will
still sell those 1,000 aircraft, just to the United States or to other countries that might
have bought instead from Boeing.
China understands this, which is one reason it hasn't put
higher tariffs on U.S.-made aircraft. Whatever the outcome of the trade war, the deficit
won't be greatly changed.
A RESILIENT CHINA
The trade war has not really damaged China so far, largely because Beijing has managed to
keep import prices from rising and because its exports to the United States have been less
affected than anticipated.
This pattern will change as U.S. importers begin to switch from
buying from China to buying from third countries to avoid paying the high tariffs. But
assuming China's GDP continues to grow at around five to six percent every year, the effect
of that change will be quite modest.
Some pundits doubt the accuracy of Chinese figures for
economic growth, but multilateral agencies and independent research institutions set Chinese
GDP growth within a range of five to six percent.
Skeptics also miss the bigger picture that China's economy is slowing down as it shifts to
a consumption-driven model. Some manufacturing will leave China if the high tariffs become
permanent, but the significance of such a development should not be overstated. Independent
of the anxiety bred by Trump's tariffs, China is gradually weaning itself off its dependence
on export-led growth. Exports to the United States as a proportion of China's GDP steadily
declined from a peak of 11 percent in 2005 to less than four percent by 2018. In 2006, total
exports made up 36 percent of China's GDP; by 2018, that figure had been cut by half, to 18
percent, which is much lower than the average of 29 percent for the industrialized countries
of the Organization for Economic Cooperation and Development. Chinese leaders have long
sought to steer their economy away from export-driven manufacturing to a consumer-driven
model.
To be sure, the trade war has exacted a severe psychological toll on the Chinese economy.
In 2018, when the tariffs were first announced, they caused a near panic in China's market at
a time when growth was slowing thanks to a round of credit tightening. The stock market took
a beating, plummeting some 25 percent. The government initially felt pressured to find a way
out of the trade war quickly. But as the smoke cleared to reveal little real damage,
confidence in the market rebounded: stock indexes had risen by 23 percent and 34 percent on
the Shanghai and Shenzhen exchanges, respectively, by September 12, 2019. The resilience of
the Chinese economy in the face of the trade war helps explain why Beijing has stiffened its
negotiating position in spite of Trump's escalation.
China hasn't had a recession in the past 40 years and won't have one in the foreseeable
future, because its economy is still at an early stage of development, with per capita GDP
only one-sixth of that of the United States. Due to declining rates of saving and rising
wages, the engine of China's economy is shifting from investments and exports to private
consumption. As a result, the country's growth rate is expected to slow. The International
Monetary Fund projects that China's real GDP growth will fall from 6.6 percent in 2018 to 5.5
percent in 2024; other estimates put the growth rate at an even lower number.
Although the
rate of Chinese growth may dip, there is little risk that the Chinese economy will contract
in the foreseeable future. Private consumption, which has been increasing, representing 35
percent of GDP in 2010 and 39 percent last year, is expected to continue to rise and to drive
economic growth, especially now that China has expanded its social safety net and welfare
provisions, freeing up private savings for consumption.
The U.S. economy, on the other hand, has had the longest expansion in history, and the
inevitable down cycle is already on the horizon: second-quarter GDP growth this year dropped
to 2.0 percent from the first quarter's 3.1 percent. The trade war, without taking into
account the escalations from September, will shave off at least half a percentage point of
U.S. GDP, and that much of a drag on the economy may tip it into the anticipated downturn.
(According to a September Washington Post poll, 60 percent of Americans expect a recession in
2020.) The prospect of a recession could provide Trump with the impetus to call off the trade
war. Here, then, is one plausible way the trade war will come to an end. Americans aren't
uniformly feeling the pain of the tariffs yet. But a turning point is likely to come when the
economy starts to lose steam.
If the trade war continues, it will compromise the international trading system, which
relies on a global division of labor based on each country's comparative advantage. Once that
system becomes less dependable -- when disrupted, for instance, by the boycotts and hostility
of trade wars -- countries will start decoupling from one another.
China and the United States are joined at the hip economically, each being the other's
biggest trading partner. Any attempt to decouple the two economies will bring catastrophic
consequences for both, and for the world at large. Consumer prices will rise, world economic
growth will slow, supply chains will be disrupted and laboriously duplicated on a global
scale, and a digital divide -- in technology, the Internet, and telecommunications -- will
vastly hamper innovation by limiting the horizons and ambitions of technology firms.
...
"... Yes, the U.S. government can hurt Huawei in the short term by limiting their access to technology (and to certain foreign markets). But, absent a viable competitor, this won't have much impact in the long term. Because Huawei is fundamentally not a technology company. Huawei is a human resources company. And is kind of obsessed with survival. ..."
"... Huawei's fundamental purpose has always been about survival. ..."
"... Huawei, like most engineering-based enterprises, has only one real resource, which is the cumulative brainpower of its people. This is the resource that creates the products and sells them to their customers. And as technology changes quickly, they must continually create and recreate the products – and therefore the value of the enterprise. Huawei's main strength is the system they have developed for the creation, assessment and distribution of value by over 190,000 people. It's about HR strategy. ..."
Huawei is going to beat Trump with human resources
By Jeff Towson
President Trump's placement of Huawei on the U.S. entity list was a body blow. The
magnitude of the hit should not be understated. Being cut off from U.S. technology so
suddenly staggered the multinational. But, to their credit, Huawei didn't go down. They took
the hit and stayed on their feet.
I'm not really sure what the U.S. government thought it would achieve with the ban. To
stop Huawei's growth in international markets? To shift 5G market share to Ericsson and
Nokia? To cripple the company? Just an assertion of principle?
I think they really just don't understand Huawei.
Yes, the U.S. government can hurt Huawei in the short term by limiting their access to
technology (and to certain foreign markets). But, absent a viable competitor, this won't have
much impact in the long term. Because Huawei is fundamentally not a technology company.
Huawei is a human resources company. And is kind of obsessed with survival.
Huawei's core strategy has always been about survival.
If you read Ren Zhengfei's talks and papers going back to the early 1990's, what jumps out
at you is how different Huawei is. The goal of the company has never really been about money.
Nor about becoming a tech giant. Nor about innovation. And it has definitely not been about
going public and getting a big payday. Huawei's fundamental purpose has always been about
survival.
"Being big and strong temporarily is not what we want. What we want is the ability and
resilience to survive sustainably," said Ren in 2001.
Actually he has been talking for literally decades about how Huawei can survive long-term
– and about the common causes of corporate decline. My simplistic take is that Ren came
up with a fairly logical plan for long-term survival: Serve your customers no matter what.
Then get big and slowly grind your competitors down with lower costs and greater R&D
spending. And within this, the only resource you really have are your people and their
cumulative brainpower.
Huawei's main resource is its people.
Huawei, like most engineering-based enterprises, has only one real resource, which is the
cumulative brainpower of its people. This is the resource that creates the products and sells
them to their customers. And as technology changes quickly, they must continually create and
recreate the products – and therefore the value of the enterprise. Huawei's main
strength is the system they have developed for the creation, assessment and distribution of
value by over 190,000 people. It's about HR strategy.
Unlike the companies in the U.S. and Europe, where the shareholders are the stakeholders
with ultimate say or multiple stakeholders, such as employees, owners and the community, at
Huawei, the only stakeholders you ever really hear about are the current employees. It's all
about the top contributing, current employees. Shareholders, providers of capital, retired
employees and even the founders are all a distant second in importance.
Note how different this is to other large engineering-focused companies (say GM and
Bosch), where much of the value goes into guaranteed salaries (regardless of contribution)
and into post-retirement benefits (i.e., not current employees). Huawei is not only focused
primarily on this one group, they are also operating much more as a meritocracy with regards
to labor.
Huawei to me looks a lot like what 3G capital has been doing in consumer-facing companies
like Budweiser and Burger King. They have instituted "meritocracy and partnership" on a
massive scale in a knowledge business. There is a lot of ownership. And you rise and fall
based on your performance.
Huawei is awesome at inspiring dedication in their top contributing, current employees.
And that is pretty logical. If brainpower is Huawei's main resource, this is the group that
creates that value. So recruiting and motivating this group is the biggest priority. And they
don't just want them motivated. They want them "all in."
In practice, this is actually pretty complicated. It's a big company. Employees are at
different stages of their lives and careers. How do you get current staff, senior staff and
incoming staff to go "all in" in creating value for customers – and therefore the
enterprise?
My outsider's take is that Huawei is mostly focused on motivating teams and team managers.
High-performance teams with aggressive and dedicated managers are the engine of Huawei. And
these are mostly in sales and marketing and R&D. They make the largest contributions to
the customers and therefore the enterprise. You motivate at the team level and within the
departments that matter most. And then you scale it up.
But how do you assess contributed value?
Staff are rated every 6-12 months across metrics such as sales performance (usually
team-based), talent, dedication, and the potential for advancement. The phrases I keep coming
across in my reading are "dedicated employees" and "high-performance teams." In fact, the
book on their HR book is titled Dedication.
Once assessed, how do you reward performance?
High-performing contributors are given higher bonuses, of course. But they are also
identified and given more opportunities (and responsibilities). They are given more training
and the option to participate in the employee share ownership program (very important). Low
performers, in contrast, are demoted or exited. Meritocracy works in both directions.
And this brings us back to the main point of this article: How does the U.S. tech ban
impact any of this? How does it impact an HR system for motivating the more than 190,000
employees that continually recreate the company and ensure its survival?
In the long term, it doesn't.
Yes, the company took a big hit in the short term in terms of its access to tech
(especially in semiconductors and in the consumer business) and to a few markets. But the
core of the company is still churning along like it has for 30 years. And I think it is very
likely Huawei will overcome these supply chain problems. And, ironically, the current crisis
is probably resulting in increased motivation and dedication across the company.
White House Weighs Blocking Chinese Companies From U.S. Exchanges
By Alan Rappeport and Ana Swanson
WASHINGTON -- The Trump administration is discussing whether to block Chinese companies
from listing shares on American stock exchanges, the latest push to try to sever economic
ties between the United States and China, according to people familiar with the
deliberations.
The internal discussions are in their early stages and no decision is imminent, these
people cautioned.
The talks come as senior officials from both countries are scheduled to resume trade
negotiations in Washington early next month. President Trump, who has continued to give mixed
signals about the prospect of a trade deal with China, said earlier this week that an
agreement could come "sooner than you think." His decision to delay an increase in tariffs
until mid-October and China's recent purchases of American agricultural products has fueled
optimism that the talks could produce an agreement.
But the prospect of further limiting American investment in China underscores the
challenge that the two sides will continue to face even as they try to de-escalate a trade
war that has shaken the global economy. The administration has already increased scrutiny of
foreign investment with a particular eye toward China, including expanding the types of
investments that can be subject to a national security review.
Last week, the Treasury Department unveiled new regulations detailing how a 2018 law, the
Foreign Investment Risk Review Modernization Act, will work to prevent foreign firms from
using investments like minority stakes to capture sensitive American information. And the
United States has already blacklisted some Chinese companies, including Huawei, effectively
barring them from doing business with American companies.
Stocks dropped on Friday after a report on the deliberations was published by Bloomberg
News. The market continued to slide through most of the day. At close, the S&P 500 was
down 0.5 percent and the Nasdaq composite index was down 1.1 percent.
Losses were particularly steep in the technology sector, and among semiconductor stocks,
two parts of the market that have been sensitive to the latest updates on the economic
tensions between China and the United States.
Details of how the United States would restrict Chinese companies from American stock
markets were still being worked out and the idea remained in its early stages, the people
familiar with the deliberations said.
China hawks within the administration have discussed the possibility of tighter
restrictions on listed Chinese companies for many months. Supporters say the efforts would
close longstanding loopholes that have allowed Chinese companies with links to its government
to take advantage of America's financial rules and solicit funds from American investors
without proper disclosure.
Skeptics caution that the move could be deeply disruptive to markets and the economy and
risk turning American investors and pension funds into another casualty of the trade war.
The effect of limiting Chinese firms from raising capital inside the United States could
be significant. As of the beginning of this year, 156 Chinese companies were listed on
American exchanges and had a total market capitalization of $1.2 trillion, according to the
U.S.-China Economic and Security Review Commission.
"The underlying concerns have merit, but how to deal with them without creating a lot of
collateral damage is tricky," Patrick Chovanec, managing director at Silvercrest Asset
Management, wrote in a post on Twitter. "Abruptly delisting Chinese firms en masse would
clearly send shock waves through markets."
The idea gained traction on Capitol Hill this summer when Republicans and Democrats in the
Senate and the House introduced legislation that would delist firms that were out of
compliance with American regulators for three years. The lawmakers argued that Chinese
companies have been benefiting from American capital markets while playing by a different set
of rules.
American complaints center on a lack of transparency into the ownership and finances of
Chinese firms. The business community has long criticized China for classifying some auditor
reports on company finances as state secrets and outlawing cross-border transfers of
auditors' documentation.
In 2015, the Chinese affiliates of the Big Four accounting firms -- Deloitte Touch
Tohmatsu, KPMG, PricewaterhouseCoopers and Ernst & Young -- paid $500,000 each to settle
a dispute about their refusal to provide documentation on Chinese companies to the Securities
and Exchange Commission, which an American judge had ruled was a violation of United States
law.
The White House has grown more interested in blocking Chinese firms in recent weeks, with
some in the administration describing it as a top priority. Officials say the topic is not
yet an issue in bilateral negotiations with the Chinese and inserting it into the talks could
lead negotiations to fall apart again.
"This would be another step in ratcheting up the pressure," said Michael Pillsbury, a
China scholar at the Hudson Institute who said he raised the concept of investment
restrictions with the White House after negotiations with China broke down in the spring.
The White House declined to comment.
The concept has divided Mr. Trump's advisers along their usual fault lines, with Peter
Navarro, Mr. Trump's trade adviser, advocating action and Treasury Secretary Steven Mnuchin
urging caution....
A house bill bans using Huawei and ZTE phones; also adds 1 billion in taxpayer paid for
equipment to be donated to to USA companies so the USA companies can trash the China made
equipment and exchange if for 1 billion in USA and Israel made equipment.
I wonder does this mean the USA and Israel cannot compete with the Chinese?
"... With the inaugural "Huawei AppGallery" emerging with the Mate 30, the company has now positioned itself on an investment trajectory to create a new "Huawei core" to compete with the world of Google-led Android systems outright. ..."
"... Beyond Apple and the iPhone, the Android operating system dominates in the global smartphone market. Describing it as an "operating system" is barely fitting; it might otherwise be described as "an ecosystem" with a wide range of Google orientated services within it. ..."
"... They include the popular browser Chrome, the YouTube video service, Google mail and, most critically, the "Google Playstore," which, owing to its popularity, attracts more developers and investors than any other unofficial App stores. This "ecosystem" creates a "web of comfort" which effectively entrenches the consumer in the Android orbit. ..."
"... p until May 2019, Huawei was a part of this orbit. Its subsequent estrangement from Android owing to the American government's decision has forced some difficult choices. It has made markets keen to observe how the Mate 30 will perform given its lack of Google applications and the need for users to obtain some apps through third-party stores. ..."
"... So, the question is: How are they now adapting and making that transition? Bengt Nordstrom of North Stream research in Sweden notes that "they have a strategy to become completely independent from U.S. technology. And in many areas, they have become independent." ..."
"... Huawei's announced bid to invest over 1 billion U.S. dollars in developing its own application "core" or ecosystem. This, in essence, is an effort to get developers to establish applications for the new "Huawei App store" and thus establish a self-reliant, independent path from the world of Android. ..."
"... To achieve this, the company has pledged a competitive revenue sharing scheme of 15 percent to developers, half of that what Apple and Google demand for participation in their own app-stores. ..."
September 21, 2019
Huawei's pivotal moment
By Tom Fowdy
Huawei launched its Mate 30 series on Friday, the first new device produced by the
Shenzhen telecommunications firm since it has been blacklisted by the United States
government and excluded from American technology markets.
The subsequent result of the listing had led Google to sever ties with the company and
prohibit new devices from using its Play Store services and operating system, something which
ultimately impacts the Mate 30 Series, which is using an open-source version of Android.
The impact of it all has led Western commentators to ask questions about Huawei's future
in Western smartphone markets, particularly what applications can it access.
However, not all is bleak, and what may start off as a hindrance for the company is set to
transform into an opportunity. The United States' assault on the company has forced Huawei to
innovate.
With the inaugural "Huawei AppGallery" emerging with the Mate 30, the company has now
positioned itself on an investment trajectory to create a new "Huawei core" to compete with
the world of Google-led Android systems outright.
In this case, what seems like a detriment is part of a broader pivotal moment for Huawei.
The company's portfolio is about to change forever.
Beyond Apple and the iPhone, the Android operating system dominates in the global
smartphone market. Describing it as an "operating system" is barely fitting; it might
otherwise be described as "an ecosystem" with a wide range of Google orientated services
within it.
They include the popular browser Chrome, the YouTube video service, Google mail and,
most critically, the "Google Playstore," which, owing to its popularity, attracts more
developers and investors than any other unofficial App stores. This "ecosystem" creates a
"web of comfort" which effectively entrenches the consumer in the Android orbit.
U p until May 2019, Huawei was a part of this orbit. Its subsequent estrangement from
Android owing to the American government's decision has forced some difficult choices. It has
made markets keen to observe how the Mate 30 will perform given its lack of Google
applications and the need for users to obtain some apps through third-party stores.
So, the question is: How are they now adapting and making that transition? Bengt
Nordstrom of North Stream research in Sweden notes that "they have a strategy to become
completely independent from U.S. technology. And in many areas, they have become
independent."
First of all, we are well aware that Huawei is developing its own Harmony Operating System
as a contingency measure, although it has not chosen to apply it to the Mate 30 as an olive
branch to Google.
Second, and most excitingly is Huawei's announced bid to invest over 1 billion U.S.
dollars in developing its own application "core" or ecosystem. This, in essence, is an effort
to get developers to establish applications for the new "Huawei App store" and thus establish
a self-reliant, independent path from the world of Android.
To achieve this, the company has pledged a competitive revenue sharing scheme of 15
percent to developers, half of that what Apple and Google demand for participation in their
own app-stores.
This effort is combined with a wider scope in research and development from the company,
which is also designed to forfeit dependence upon American technology chains in terms of
critical components and other parts.
We have already seen massive investment pledges from Huawei to build new research and
development centers in the United Kingdom, Belgium, Italy and Brazil. They are not empty
promises, but a serious and strategic effort.
In this case, what was intended to be a political effort to destroy and contain Huawei is
likely to prove a pivotal turning point in the company's history with huge repercussions for
global smartphone and technology markets.
Instead of having once been reliant on and thus beneficial to American technology markets,
the outcome is that Huawei will re-emerge independent of and competing against it.
Armed with a pending new operating system, a new application development drive and a
broader research effort, what seemed otherwise a detriment is likely to bring a massive
opportunity. Thus, it is very important to examine the long-term prospects for the company's
fortunes ahead of short-term challenges.
"... "The Kirin 990 is not only an SoC and a 5G modem glued together. We put a lot of effort in integrating the two chips. So the new chip uses less power and generates less heat while getting the job done," said Huawei fellow Ai Wei before the launch event. ..."
"... The whole Kirin 990 5G chip is so dense that it contains 10.3 billion semiconductors, the first and largest of its kind. ..."
"... Another example is AI-based video quality improvements, which takes in a low quality video and render a better one. Objects in the rendered video have much sharper edges. Huawei technicians refused to explain how they made it, but the underlying tech seems to be object recognition, content-based pixel generation and noise reduction, since these are the tricks AI does well. ..."
"... Huawei's P30 Pro smartphone, together with the Kirin 980 chip, has taken "smartphone zoom to the next level," according to third-party review site DxOMark. The phone was on top of all smartphones when it comes to photography in DxOMark's ranking. The Kirin 990 is packed with more graphic features to continue Huawei's dominance. ..."
Smartest and fastest: Huawei reveals new smartphone chip Kirin 990 5G
By Gong Zhe
Chinese smartphone giant Huawei, which has been under heavy attack from the U.S.
government during the last few months, just revealed its next-generation smartphone
system-on-a-chip (SoC) product "Kirin 990 5G," signaling the company's business is not
stalled by foreign strangling.
The launch event was held simultaneously at IFA electronic show in Berlin, Germany, and in
Beijing on Friday.
In his keynote speech, Huawei's head of gadgets Richard Yu told the press that the chip is
more advanced than other flagship smartphone SoCs, because it has a built-in 5G modem.
Current rivals of the chip, like Qualcomm's Snapdragon 855, have no 5G modem and have to
rely on an extra chip to support 5G.
"The Kirin 990 is not only an SoC and a 5G modem glued together. We put a lot of
effort in integrating the two chips. So the new chip uses less power and generates less heat
while getting the job done," said Huawei fellow Ai Wei before the launch event.
The whole Kirin 990 5G chip is so dense that it contains 10.3 billion semiconductors,
the first and largest of its kind.
Flexible AI power
The chip also features three AI cores, two larger than the other smaller. This design,
first in smartphones, saves battery power by only using the small core to process simple AI
tasks, while resorting to the larger cores for more complex jobs.
The company named the cores "Ascend Lite" and "Ascend Tiny" to relate the cores to
Huawei's new, self-proclaimed "fastest AI training chip in the world," the Ascend 910.
Huawei built a showcase at the Beijing launch event to demonstrate the chip's AI power.
They showed a FaceID-like face recognition feature in a Kirin 990-powered developer board
that can work when the person is four meters away from the phone, times further than Apple's
current product.
Another example is AI-based video quality improvements, which takes in a low quality
video and render a better one. Objects in the rendered video have much sharper edges. Huawei
technicians refused to explain how they made it, but the underlying tech seems to be object
recognition, content-based pixel generation and noise reduction, since these are the tricks
AI does well.
Even better photos
Huawei's P30 Pro smartphone, together with the Kirin 980 chip, has taken "smartphone
zoom to the next level," according to third-party review site DxOMark. The phone was on top
of all smartphones when it comes to photography in DxOMark's ranking. The Kirin 990 is packed
with more graphic features to continue Huawei's dominance.
A Kirin 990-powered smartphone can shoot 4K videos (3840 x 2160 pixels) at 60 frames per
second, on par with market flagship phones.
The chip can also run DSLR-level noise-reduction algorithm – namely "Block Match 3D"
– to bring professional tech to consumer devices.
"Porting an algorithm from DSLR to smartphone may be easy. But getting the program to run
fast enough can be hard for any phone maker," Ai told CGTN Digital.
Non-U.S. tech
The design of Kirin 990 is still based on technology Huawei bought from British tech
company ARM, used by several mainstream brands.
After the U.S. began imposing restrictions on Huawei, ARM cut ties with the Chinese phone
maker. Despite this, Huawei has been able to use and modify AMRv8 technology thanks to its
permanent ARM license. Hence why chips like Kirin 990 can still be legally built and
sold.
In addition to ARM, there are other major smartphone tech companies cutting ties with
Huawei, forcing the Chinese company to create its own alternatives. After Google announced to
bar Huawei phones from installing their apps, Huawei started porting its IoT system "Harmony"
to smartphones.
But Huawei still wishes to use technologies from all over the world. As Ai Wei explained
at the launch event, "Huawei will not deliberately remove all U.S. tech from its smartphones.
But when the supply from U.S. was cut, Huawei has to find a way to survive."
"That's why Huawei chose to create its own technology," Ai added....
The point in article after article is that China is emphasizing technical advance in building
the economy from rural to urban applications and the emphasis will not be lessened. The rural
applications I am reading about are especially exciting.
I appreciate the interview, but Clayton Dube as director of the University of Southern
California's U.S.-China Institute knows remarkably little about China or American relations
with China. Possibly Dube is being especially cautious, but still:
"The air in Los Angeles," the academic explains by way of an example, "is influenced by
the air coming out of northern China. But of course, that bad air in China is produced by
factories often producing for the American market. And so we have not only outsourced
production, we've outsourced pollution."
This is absurdly wrong. China has been working on cleaning the environment for years now
and the effects as monitored have been dramatic.
The idea that China thinks of 1849 to 1949 as a colonial period that took them 100 years to
get free from, for instance, immediately helps me understand some of where they are coming
from.
The idea that China thinks of 1849 to 1949 as a colonial period that took them 100 years to
get free from, for instance, immediately helps me understand some of where they are coming
from.
[ Surely so, this very day is "International Day of Peace in Nanjing" in memory of the
victims of the terrible Japanese occupation:
Four Years After Declaring War on Pollution, China Is Winning
Research gives estimates on the longer lives that are now possible in the country.
By Michael Greenstone
On March 4, 2014, the Chinese premier, Li Keqiang, told almost 3,000 delegates at the
National People's Congress and many more watching live on state television, "We will
resolutely declare war against pollution as we declared war against poverty."
China has had the benefit of skipping over other advanced nation's Legacy infrastructure.
Leapfrogging ahead in some areas of development is smart and saves money for China as
well, but that doesn't make China superior to other advanced nations.
The U.S. Has a Fleet of 300 Electric Buses. China Has 421,000
The rest of the world will struggle for years to match China's rapid embrace of electric
transit.
By Brian Eckhouse - Bloomberg
Fearing 'Spy Trains,' Congress May Ban a Chinese Maker of Subway Cars
By Ana Swanson
CHICAGO -- America's next fight with China is unfolding at a glistening new factory in
Chicago, which stands empty except for the shells of two subway cars and space for future
business that is unlikely to come.
A Chinese state-owned company called CRRC Corporation, the world's largest train maker,
completed the $100 million facility this year in the hopes of winning contracts to build
subway cars and other passenger trains for American cities like Chicago and Washington.
But growing fears about China's economic ambitions and its potential to track and spy on
Americans are about to quash those plans. Congress is soon expected to approve legislation
that would effectively bar the company from competing for new contracts in the United States,
citing national security and economic concerns. The White House has expressed its support for
the effort....
Terrific discussion on how the West perceives China...
[ Actually a discussion that shows a remarkable misperception of China even by an American
China academic-specialist. As such the discussion is important though discouraging. ]
"... I always thought globalization was about the opportunity for a handful of businesses and corporations to control major industries around the world. ..."
"... There is an anti-China hawks faction based in the Republican party that has made its present felt. People like Robert Lighthizer, Peter Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but they have not reached the stage where they are asking: "Are you now, or have you ever been, born Chinese?". ..."
"... We have also seen hawk factions against Russia, Iran and not long ago Venezuela. The ones for Russia and Iran have been long going but the ones against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do the same against Cuba and threaten any country that does trade with them. Who knows what other country may fall within his sights? ..."
"... it seems business people in the government are being pushed aside by hawkish factions who do not care what effect it has on the economy or the country. Great! ..."
"... Those are the same "hawks" that are busy destroying the rest of America as well. ..."
"... As it is now, China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals consumed by US patients alone creates a serious vulnerability. ..."
"... Situating the manufacturing in countries that are part of the Chinese sphere of influence won't help much in a conflict. China would probably be able to sweep through much of Southeast Asia quickly or interdict shipments if there was war. ..."
"... the world wide presence/threat of the USA military and diplomatic corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic "spreading of democracy" around the world via military actions is a factor in USA job loss. This is yet another cost of the bloated military to the general USA population. ..."
"... Trump, as usual, got his strings pulled by the Deep State when he went for actual implementation of a campaign promise. The DS doesn't care about working Americans, they are simply against China. ..."
"... as Julius Krein, editor of American Affairs, writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia." ..."
"... Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills, and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever direction, and everybody's eyes move in unison. ..."
"... The argument/discussion is not about how and where to outsource our jobs, it's about how stupid it was to do it in the first place ..."
"... Also the Chinese internal market continues to attract MNC's and this attraction will continue to grow far into the future. China's middle class is already larger than the total population of the US and it continues to grow rapidly. While down presently the Chinese internal consumption continues to grow at an annual rate of some 8.5%. ..."
"... Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market, and incentivizing the Chinese to offer better conditions to Co's of the rest of the world. How can that help the US ? ..."
"... The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the death blow to American Labor is over. In that light it makes little difference whether our corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest is coming to an end. And none too soon. ..."
"... I hope some candidates discuss the imperative to have the US start making it's own medications again. ..."
"... I could not believe the government has allowed the entire supply chain of building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S the national security issue we need to deal with immediately. As well as other vital drugs.. ..."
"... Chinese manufacturers have the wealth and experience to teach production line workers and make things anywhere. Western companies manufacturing in China have belatedly looked for facilities in neighboring countries and found the Chinese are already there. ..."
"... Trump doesn't give a damn about getting manufacturing jobs back into the United States! (Or at least his advisors don't). ..."
"... Low housing costs, lead to lower wages so UK employers were able to compete in a free trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics. ..."
"... He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had disappeared by the 20th. The West's high cost of living means high wages and an inability to compete in a free trade world. ..."
By Marshall Auerback, a
market analyst and commentator. Produced by Economy for All, a project of the Independent Media
Institute
"Chimerica" is a term originally coined by the historian Niall Ferguson and economist Moritz
Schularick to describe the growing economic relationship between the U.S. and China since the
latter's entry into the World Trade Organization (WTO) in 2001. In the words of Ferguson : "The Chinese did the saving, the
Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese
did the lending, the Americans the borrowing." Much of the pre-crisis boom in global trade was
driven by this economic symbiosis, which is why successive American presidents tolerated this
marriage of convenience
despite the increasing costs to the U.S. economy . The net benefits calculation, however,
began to change after 2008, and the conflict has intensified further after the 2016
presidential election result. Today, the cumulative stress of Donald Trump's escalating trade
war is leading to if not an irreparable breach between the two countries, then certainly a
significant fraying. The imminent resumption of trade talks notwithstanding, the rising cost of
the tariffs is already inducing some U.S. manufacturers to exit China. But in most instances,
they are not returning to home shores.
It may have taken Trump to point out the pitfalls of the Chimerica link, but coming up with
a coherent strategy to replace it is clearly beyond the president's abilities. America is
likely to remain a relative manufacturing wasteland, as barren as Trump's own ill-conceived
ideas on trade. At the same time, it's not going to be an unmitigated victory for China either,
as Beijing is increasingly suffering from a large confluence of internal and external
pressures.
Chimerica helped to launch China as a global trade power. To the extent that this marriage
helped the U.S. economy, it skewed toward the largely blue state coastal regions. Wall Street
banks located on the East Coast happily collected lucrative commissions and investment banking
fees, as China's export proceeds were recycled into U.S. treasuries, stocks, and high-end real
estate while the capital markets boomed; on the West Coast, "new economy" companies thrived,
their growth and profitability unhindered by the onslaught of Chinese manufactured exports. By
contrast, facilitated by technological advances that permitted large-scale outsourcing by U.S.
manufacturers, Chimerica laid waste to much of what was left of America's Rust Belt, and the
politics of many of the displaced workers mutated to the extent that Donald Trump became an
appealing alternative to the establishment in 2016.
The major legacy of Chimerica, then, is that too many American workers have been
semi-permanently replaced by low-cost offshored labor. Prior to great advances in technology,
along with globalization, displacement of the current labor force could only have occurred
through immigration of workers into the country. Historically, displacement by immigrants
generally began at the menial level of the labor force, and became more restrictive as when it
became correlated with significant unemployment. Given the rise of globalization and the
corresponding liberalization of immigration in the past few decades, however, policy no longer
arrests the displacement of American workers. The policy backlash has consequently manifested
itself more via trade protectionism. Trump has sought to consolidate his Rust Belt base of
supporters by launching a trade war, especially versus Beijing, the ultimate effects of which
he hoped would be to re-domicile supply chains that had earlier migrated to China.
Early on in his presidency, there was some hope that Trump's protectionism was at best a
bluff or, at worst, an aberration, and that the return of a Democrat to the White House in 2020
would eventually reestablish the status quo ante. But the president still can't get a wall, and
his protectionism has become more pronounced almost as if to compensate. The problem today is
that even if Trump is voted out of office in 2020, corporate America is becoming less inclined
to wait out the end of his presidency to return to the pre-Trump status quo of parking the bulk
of their manufacturing in China. There is too much risk in putting all of one's eggs in the
China basket, especially given
growing national security concerns . Hence, U.S. companies are taking action. In spite of
decades of investment in these China-domiciled supply chains, a number of American companies
are pulling out:
toy manufacturer Hasbro , Illinois-based
phone accessories manufacturer Xentris Wireless, and lifestyle clothing company PacSun are
a few of the operators who are exiting the country.
But they are not coming back to the U.S., relocating instead to places like Vietnam,
Bangladesh, Mexico, the Philippines and Taiwan. The chief financial officer of Xentris, Ben
Buttolph, says
that the company will never return to China: "We are trying to have multiple locations
certified for all of our products, so that if all of a sudden there's an issue with one of the
locations, we just flip the switch." Likewise, the CEO of Hasbro, Brian Goldner,
recently spoke of "great opportunities in Vietnam, India and other territories like
Mexico."
All is not lost for the U.S., however, as Goldner did celebrate the success of Hasbro's
facility in East Longmeadow, Massachusetts, which has resumed
production of Play-Doh in the U.S. for the first time since 2004 . It is doubtful, however,
that this represents the recapturing of the high value-added supply chains that Trump envisaged
when he first launched his trade assault on Beijing.
In general, as Julius Krein,
editor of American Affairs , writes: "United States industry is losing ground to foreign
competitors on price, quality and technology. In many areas, our manufacturing capacity cannot
compete with what exists in Asia."
These are not isolated examples.
Defense One also notes the following development:
It came without a breaking news alert or presidential tweet, but the technological
competition with China entered a new phase last month. Several developments quietly heralded
this shift: Cross-border investments between the United States and China plunged to their
lowest levels since 2014, with the tech sector suffering the most precipitous drop. U.S. chip
giants Intel and AMD abruptly ended or declined to extend important partnerships with Chinese
entities. The Department of Commerce halved the number of licenses that let U.S. companies
assign Chinese nationals to sensitive technology and engineering projects.
This development consequently makes it hard to proclaim Beijing a winner in this dispute
either. The country still needs access to U.S. high tech. The government announced yet
another fiscal stimulus to the economy earlier this month in response to a cluster of
weakening economic data, much of which is related to the trade shock. It is also the case that
China is being buffeted politically, both externally and internally: externally, in addition to
the escalating trade war, China's own efforts to counter the effects of rising protectionism by
creating a " reverse
Marshall Plan " via the Belt and Road Initiative is
floundering .
China's "iron brother," Pakistan, is increasingly being victimized by India's aggressive
Hindu-centric nationalism . It is hard to imagine the Modi government opportunistically
taking the step of annexing Kashmir and undermining Pakistan, had it not sensed Beijing's
increasing vulnerability.
Internally, Beijing is finding it increasingly challenging as it seeks to enforce its "One
China" policy in Hong Kong and Taiwan. The
withdrawal of the controversial extradition law that first precipitated widespread
demonstrations in Hong Kong has not alleviated the political pressures in the territory, but
simply allowed an even bigger protest culture to take root and strengthen an independent
political mindset. Similarly, Taiwan has also openly supported the Hong Kong protesters,
pledging help to those seeking asylum . Both regions now constitute both a huge humiliation
and challenge to the primacy of China's ruling Communist Party. And now on top of that, foreign
manufacturers are leaving the country, weakening a totally leveraged manufacturing complex.
The implications of this divorce go well beyond the U.S. and China. They constitute another
step toward regionalization, another step away from a quaint ideological "post-history"
construct that saw Washington, D.C., as the head office and the rest of the world as a bunch of
branch plants for "America, Inc." It's hardly comforting to contemplate that the last time we
reached this historic juncture was the early 1900s, when a similarly globalized economy broke
down, followed by the Great War. As Niall Ferguson points out , "a high level of economic integration does not
necessarily prevent the growth of strategic rivalry and, ultimately, conflict." There's no
doubt that both Washington and Beijing will likely making soothing noises to the markets in
order to create favorable conditions for the trade talks in October, but their actions suggest
that they are both digging in
for a longer struggle . Today's trade wars, therefore, are likely to morph into something
more destructive, which is a lose-lose in an era where human advancement depends on greater
integration between economic powers.
There may be another aspect to this development and that is of geopolitics. You can see
that in Marshall's article when the CFO of Xentris said: "We are trying to have multiple
locations certified for all of our products, so that if all of a sudden there's an issue with
one of the locations, we just flip the switch." There is an anti-China hawks faction based in
the Republican party that has made its present felt. People like Robert Lighthizer, Peter
Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but
they have not reached the stage where they are asking: "Are you now, or have you ever been,
born Chinese?".
So we have seen a long string of sanctions and tariffs at play so that China will change its
laws and institutions to suit American interests. Yeah, I can't see that happening anytime
soon but hey, America First, Baby. We have also seen hawk factions against Russia, Iran and
not long ago Venezuela. The ones for Russia and Iran have been long going but the ones
against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do
the same against Cuba and threaten any country that does trade with them. Who knows what
other country may fall within his sights?
That being the case if you were running an international country, you can no longer just have
your manufacturing base or service operations just in one country. If Xentris is an example,
US companies may have to split manufacturing into several countries in case one fine day that
Trump will sanction yet another country that your company depends on.
I would imagine that it
would not be so efficient but it seems business people in the government are being pushed
aside by hawkish factions who do not care what effect it has on the economy or the country.
Great!
Those are the same "hawks" that are busy destroying the rest of America as well. Another
four years of this will, effectively, dismantle what democracy is left. The world trade won't
be the big issue. The departure of millions of Americans will.
If that happens, be sure to thank the Catfood Democrats for it. Because they are the
people who will do their very best and hardest to throw the next election to Trump, one way
or another.
It seems like diversification of supply chains can only be a good thing. As it is now,
China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze
them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals
consumed by US patients alone creates a serious vulnerability.
I really don't think it matters if manufacturing jobs are repatriated to the US, or just
set up and spread around elsewhere for now – since they'll be obsolete jobs in the near
future anyway, as robotics and AI get increasingly efficient at doing the work that human
workers currently do.
Situating the manufacturing in countries that are part of the Chinese sphere of influence
won't help much in a conflict. China would probably be able to sweep through much of
Southeast Asia quickly or interdict shipments if there was war.
So the status quo was preferable? The tone of the article seems to suggest that America should accept it place as a
third-world manufacturer, as if these Asian nations have some magical sauce that can't be
replicated. Gawd.
The US does have a lot of magic. Like one third of FDI related to tax evasion. Pulling Mac
Book manufacturing out of Austin for the lack of one 'screw', etc. So is the premise of going after China on trade and IP policies good. I would agree. Maybe
not in strategy, but at least someone has opened the box.
I agree with your comment, the article suggests the status quo was preferable. Of note, Trump has shown his supporters that something CAN be done other than follow the
"resistance is futile" path of the Bill Clinton/Bush Jr./Obama administrations.
I also suggest that the world wide presence/threat of the USA military and diplomatic
corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic
"spreading of democracy" around the world via military actions is a factor in USA job
loss. This is yet another cost of the bloated military to the general USA population.
I worked in the electronics industry for 30+ years and watched high margin manufacturing
move to Asia. Now the lower level component manufacturers (PCBs, passives) are firmly established in
Asia as the USA companies have helped train worthy competitors overseas. It took 25+ years to move much of USA manufacturing overseas, indicating to me that it
will take a long time to bring it back significantly, well outside the Trump time frame.
But I suspect Trump voters will appreciate Trump's headline efforts. If the Democrats push for more Free Trade as good for the USA, it will hurt them at the
ballot box.
The second time as farce. How tragicomic that Trump has succeeded in little more than
repatriating the manufacture of Play-Doh. On the other hand, the shipping cost of unbaked brick seems a rational factor in Hasbro's
decision. A GND that shortens supply lines would be more effective in repatriating heavy
industry, but then printed circuit boards aren't all that heavy .
The thing is Trump, as usual, got his strings pulled by the Deep State when he went for
actual implementation of a campaign promise. The DS doesn't care about working Americans,
they are simply against China.
So he goes and puts tariffs on a country, not a product. And surprise, said product
doesn't come back on-shore. Comical (and yeah, cosmically a bit just) that Vietnam is getting
so much of that manufacturing. Wasn't what he was elected for.
In general, as Julius Krein, editor of American Affairs, writes: "United States industry
is losing ground to foreign competitors on price, quality and technology. In many areas, our
manufacturing capacity cannot compete with what exists in Asia."
As a engineer up to my elbows in manufacturing for forty years, this was awfully easy to
predict way back then (I gave up complaining about it about 2000), and then watch happen
– real time. And to once again state the obvious, China did not TAKE American jobs,
American CEOs GAVE them our jobs. We will not fix this problem until we identify and fix the
root cause.
Now the only way to fix it is (once again obviously) massive government investment such as
mandated by the GND. We need the GND, it is not only required to save the world, it will save
our country.
Agree, it was predictable, and it was predicted. What we've been talking about is the "Giant sucking sound" Ross Perot foretold would
happen prior to the passing of NAFTA. It wasn't hard back then to see that he was right, but it took a few decades for the
public to feel the impact, boiling frogs and all that.
Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills,
and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price
of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery
way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever
direction, and everybody's eyes move in unison.
NAFTA and China are two completely separate things. I have actually supported NAFTA in
principle because we should encourage trade to be focused on our immediate neighbors. A
wealthier and safer Mexico and Central America would create markets for us and virtually
eliminate illegal immigrants as the southern border.
China is on the other side of the world and is not part of NAFTA. While we should have
cordial relations with it, if we are looking for inexpensive labor, south of the border is
the better place to focus on that. So Trump's tariffs on China are not the wrong thing to do
per se. The problem is that they are being done in a vacuum of general trade policy where he
is looking at everything as transaction bilateral relations with every country on the planet,
which requires an immense amount of detailed thought and negotiation, neither of which appear
to be a focus of this administration.
The countries that the companies are talking about moving their operations to are
generally part of the new TPP which the US is not part of. So, we have removed ourselves from
having trade relations with countries US CEOs are setting up operations in, but those
countries are now starting to work together to counter both China (original TPP purpose) and
the US (now that the US has bailed on it). Sounds like a recipe for a replay of China's giant
sucking sound.
The argument/discussion is not about how and where to outsource our jobs, it's about how
stupid it was to do it in the first place. Anyone smart enough to breath knows that Mexico is next door, and China is on the other
side of the world, but they are both part of the same giant sucking sound. The fact that you support both NAFTA ,think it was unwise to back out of the TPP, and
think the issue is the present administration's lack of " detailed thought and negotiation
" indicate a truly unbelievable level of denial.
NAFTA and MFN for China were two different actions towards the same goal . . . the use of
Free Trade to dismantle thingmaking in America and re-mantle thingmaking in foreign
export-aggression platforms to use against America.
Free Trade is the new Slavery. Militant Belligerent Protectionism is the new
Abolition.
I remember when a Midwest Democrat (Stabenow?) tried to get a law passed that would
prohibit a US corporation from deducting, from their federal taxes, the cost of moving
factories overseas. A very minor disincentive, but a disincentive nonetheless. The Repubs beat it down as "anti-business". Concern about American workers is something to express in political speeches around
election time but not in legislation.
Hidden within this narrative is the fact that some countries, and not only China, have for
long been playing beggar-thy-neighbor policies by restraining internal consumption and
redirecting savings to the rest of the world that in turn finance their exporting machines.
IMO, the biggest mistake made by China has been not to force fast enough a transition from a
saving economy to a consumer economy with more balanced external relationships.
These kind of
policies are confrontational. As confrontational as tariffs or even as economic sanctions in
my view. Yet, the prevailing economic narrative is that saving and exporting is the right
economic thing to do. In this sense I think it matters a lot to which countries are being re
directed investments of american companies leaving China. My intuition is that, for instance,
Vietnam migth be willing to play this game while Mexico not. Investing in countries that save
too much migth be counterproductive.
I very much regret this aggressive narrative that has become common place in which
countries are identified simply as competitors, if not enemies, in a global chess game.
Political moves are confrontational and or humiliating. These Game of Thrones dynamics are
played precisely when some international consensus in more important things like figthing
climate change would be more than desirable. We are headed to truly bad times.
Here is
an article by Steve Dickinson from the layers office Harris Bricken McVay Sliwoski that
is based on his Co's China practice. Steve's conclusion goes as follows:
The Chinese system put in place from 1992 to 2005 was a unique system and not likely to
be replaced in S.E./South Asia or in any other region of the world. So for manufacturers,
moving to a new region means doing the analysis from the ground up. Simply taking what they
do in China and moving it to a new location is not likely to be a workable solution.
Also the Chinese internal market continues to attract MNC's and this attraction will
continue to grow far into the future. China's middle class is already larger than the total
population of the US and it continues to grow rapidly. While down presently the Chinese
internal consumption continues to grow at an annual rate of some 8.5%.
Personal savings deposited in bank accounts reach the equivalent of some $US 30 Trillion !
Compare that to consumer debt at some $US 6.5 Trillion. In other words China is growing into
the largest consumer market on earth and the biggest advantage that its internal market
procures is its 'economies of scale' that make Chinese productions hyper-competitive. In
other words China is gaining the kind of advantage that the US had along the 20th century.
The advantage of a super large market size that dwarfs other national markets.
Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market,
and incentivizing the Chinese to offer better conditions to Co's of the rest of the world.
How can that help the US ?
The biggest problem of the West and particularly the US is its ideological approach to
economics. The Chinese adopted a pragmatic approach and it has served them well. Time to
relearn the meaning of political economics (économie politique).
I read Dickinson's PR piece linked by laodan. I used to work for a big law firm that had
an international practice group focusing on moving US businesses to China ( I was not
involved in that practice area, did environmental law and litigation.) The firm's PR
department tasked lawyers with certain expertise to generate these kinds of come-ons as part
of the compensation weighting scheme -- publish, and bring in business, or lose out in the
annual "whining for dollars" partnership division of spoils. Eat what you kill.
Dickinson is talking his book, of course. I have no idea if his read of the history and
the current state of affairs in China and the "Asian Tigers" (does anyone use that term any
more?) is accurate and complete, but what he describes is his firm's readiness to help
supranational (emphasize SUPRAnational) and post-national corporate entities get a leg up in
the race to the bottom. He'll help you find the places where the ruling class will give away
the biggest share of the "national birthright" so the corporate entity can maximize profit by
streamlining production and consumption, and of course growth. All the stuff that is killing
the planet. But his time frame, his personal time frame, presumably, as well as the framing
of the corporate shark entities which he is a remora to, cares nothing for the bigger
economic and ecological effects of more stuff, more shipping, more energy use, and of course
more combustion and consumption.
And I'd note that he carefully omits all the baksheesh and greasing of palms that i read
is such an important part of "doing business" at any kind of scale, to varying degrees
everywhere in the world. I wonder if his custom analyses of the relative merits of, say,
Vietnam vs. China vs. Cambodia vs. Taiwan includes sketching out the bribes that have to be
paid to close on the sale of national birthrights on the way to the bottom that the globalist
business model drives everything toward?
I'm sure he would be happy to have the ear and hourly billings of all the great decision
makers of all the various kinds of businesses, high to low tech, wanting to take full
advantage of the "opportunities" that may be on offer, on how to ride the asymptotically
downward curve of the race to the bottom, for fun and profit
Looks like China has had a pretty effective industrial policy, unlike the US where
corporate vampire capital dominion and corruption have bled the mopery white (not a racial
reference, of course ) Do economists and policy wonks in the US even dare to use the phrase
"industrial policy" any more? Or is it just presumed that "shareholder value" trumps all
else? Especially as the author puts it, again quoting Ferguson, where we are "in an era where
human advancement depends on greater integration between economic powers."
The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the
death blow to American Labor is over. In that light it makes little difference whether our
corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest
is coming to an end. And none too soon.
For national security reasons at minimum, I hope some candidates discuss the imperative to
have the US start making it's own medications again.
Makes more sense to subsidize our production of medication than to give billions in subsidies
to very profitable oil companies.
I agree. I could not believe the government has allowed the entire supply chain of
building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S
the national security issue we need to deal with immediately. As well as other vital
drugs..
Anecdotally, I have started making this my number one political conversation issue –
replete with references ( because of course not a soul believes it at first).. I have yet to
find a single person Repub or Demo who isn't horrified and against it .
Any nation with this much power over our drug supply they could kill millions of us in short
order
Even getting manufacturing out of China will not bankrupt that country as intended. If USA
is intent on pursuing a nationalistic basis to sanctions, I think its bound to fail. Trade
always finds a way as we can well remember from our own commercial / industrial
development.
Chinese manufacturers have the wealth and experience to teach production line workers and
make things anywhere. Western companies manufacturing in China have belatedly looked for
facilities in neighboring countries and found the Chinese are already there. What's still
available is land far from roads and rivers with little power supply.
Another thing is preserving wealth. US Industrialists will keep their money offshore and
remit only as much as they need in the homeland. A major problem imo is a mental restraint in USA thinking. Life is all about competition
and winning. The actual activity, whatever it is, provides no joy unless you win. That
fearful tag "No-one remembers who came second" is banded about. Thats not a philosophy for
happiness. It forces the population into displacement activities few of which are wholesome.
Here endeth the lesson.
It's not a bug, it's a feature! Trump doesn't give a damn about getting manufacturing jobs back into the United States!
(Or at least his advisors don't).
The trick is to move them out of nationalistic China, which is setting itself up as a
competitor for power, and move the jobs into nice docile low-wage colonies, like Mexico and
Indonesia and Bangladesh.
The only catch: China has all the integrated supply lines and is stable. Moving your
manufacturing into a dozen different uncoordinated unstable third-world banana republics has
its own down side.
The UK repealed the Corn Laws to embark on free trade. This reduced the price of bread, and lowered the cost of living, so UK employers could pay
internationally competitive wages. Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employer pays through wages, so the employer
is paying for that bread through wages. Expensive bread leads to higher wages making UK employers unable to compete in a free
trade world. "The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
Disposable income = wages – (taxes + the cost of living) Employees get their money from wages and the employer pays via wages. Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord's rents in wages reducing profit. Ricardo is just talking about housing costs, employees all rented in those days. The appalling conditions UK workers lived in during the 19th century were well
documented.
Low housing costs, lead to lower wages so UK employers were able to compete in a free
trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had
disappeared by the 20th. The West's high cost of living means high wages and an inability to
compete in a free trade world.
Never mind our companies can off-shore to where employers can pay lower wages for higher
profits. Look at the US cost of living Donald; this is why those jobs ain't coming back. It's hard to make a good profit in the US, when employers have to cover the US cost of
living in wages, reducing profit. The cost of living = housing costs + healthcare costs + student loan costs + other debt
repayments + food + other costs of living
A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis
Fukuyama said it was the end of history.
It was all going so well, until the neoliberals got to work.
The US created an open, globalised world with the Washington Consensus.
China went from almost nothing to become a global super power.
That wasn't supposed to happen, let's get the rocket scientists onto it.
Maximising profit is all about reducing costs.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
It did have, but now China has become too expensive and developed Eastern economies are
off-shoring to places like Vietnam, Bangladesh and the Philippines.
An open, globalised world is a race to the bottom on costs.
"The Washington Consensus was always going to work better for China than the US"
the rocket scientists.
Several years ago Naked Capitalism ran an article about how a young George Ball was one of
the New Immoralists for International Corporate Globalonial Plantationism. And that was
before neoliberalism.
"[A]n era where human advancement depends on greater integration between economic
powers."
Oh, by all the gods, no. And what, pray, defines 'human advancement'? What the hell is Mr Auerback talking
about?
Further integration only propels the speed at which resources are extracted and the planet
dies incrementally more. The future will not be one fully integrated planet guided by
whatever-the-hell oligarchs and their 'meritocratic' servitors deign the best options. The
future will of necessity be vastly more local, vastly more hand-made, vastly less energy- and
resource-intensive, and there will be vastly less intercontinental and intra-continental
trade. World-spanning – even continent-spanning political-economic arrangements have no
long term viability whatsoever. Trying to maintain such is a foolish waste of effort and
resources that could be more usefully be directed at de-growth and de-industrialization.
And with that, The Lord Curmudgeon shook his cane one last time at the kids on his lawn
and returned to the troll's cave from which he came.
The last engine of global growth, China, has now reached the end of the line as they have
seen their Minsky Moment coming. China was the latest victim of neoclassical economics. The biggest danger to capitalism is neoclassical economics; it brought capitalism to its
knees in the 1930s and is having another go now.
1929 and 2008 look so similar because they are; it's the same economics and thinking. Richard Vague has analysed the data for 1929 and 2008 and they were even more similar than
they initially appear. Real estate lending was actually the biggest problem in 1929.
Margin lending was another factor in 2008.
The 1920s US mistake is now global.
Japan, the UK, the US, Euro-zone and now China. The last engine of global growth, China, has now reached the end of the line as they have
seen their Minsky Moment coming. The debt fuelled growth model not only runs out of steam, all the debt in the economy then
acts like a drag anchor holding the economy back. Japan has been like this for thirty years.
Richard Koo explains the processes at work in the Japanese economy since the 1990s, which
are at now at work throughout the global economy.
"... Furthermore, because of the horrific legacy of the one-child policy, China faces a rapidly aging population that will strain resources and reduce the number of working-age people . By 2050, it is estimated that the average Chinese will be 56 years of age. In contrast, the average American will be 44. No amount of spending or legal reform will prevent Beijing's coming demographic crisis. ..."
Part of the Trump administration's
latest round of 15 percent tariffs on Chinese imports went into effect Sunday, with the
rest to follow on December 15. These increases will impact the prices of many consumer goods
that Americans rely on, including clothing, appliances, televisions, smartwatches, textbooks,
diapers, coffee, and even whiskey. And given their timing, they'll likely have an effect on
holiday shopping. This makes all the more welcome President Trump's
recent statement during the G7 summit that China is looking to end the trade war and that
he too is open to making a deal.
Trump is right to negotiate with Chinese President Xi Jinping, as finding an off-ramp from
the trade war should be Washington's priority. America's interest is in out-competing Beijing,
not hurting our own economy in an attempt to damage theirs. The United States has a better hand
here, but we must play it to our advantage.
America's great strength is in our freedom, our market economy, and our democratic system.
The United States has attained a level of prosperity unseen in human history, and that economic
engine is what fuels our military power. Without a strong economy, we cannot have a strong
military. Thus an endless trade war endangers American security in the long term: as both sides
pile on retaliatory tariffs, the risk of recession increases. American consumers will feel each
new trade barrier as it hits their pocketbooks.
Washington must not pursue policies that hurt those it governs. And the suffering inflicted
by a trade war wouldn't just be limited to the pricing of consumer goods. It would also make us
weaker for no good reason. And it would lower tax revenues, requiring America to go further
into debt to maintain our present level of security.
Advertisement
Moreover, long-term trade attacks on China are unnecessary, because China already has more
problems than America. Beijing suffers from high national debt, a lack of clear economic
reform, and a rapidly aging population. It has few, if any, good or timely solutions to these
pressing issues.
According to the Institute of International Finance, China's total national, corporate, and
household debt is now
over 300 percent of its GDP. What makes this especially bad for Beijing is that the debt
was taken on very quickly after the 2008 global recession, without the power of a global
reserve currency to make borrowing easier, as the United States has. Moreover, this debt is
largely corporate and China's state-capitalist system makes it harder for Chinese companies
survive market pressures. Beijing has used cheap credit to fuel its exports and its economic
rise through fully and partially state-controlled national companies.
The Chinese economic system has undergone some reforms in recent years but
still remains too top-down and too focused on exports over consumption as compared to more
developed economies. In other words, China needs to transition to a full market economy like
Taiwan and South Korea did on their paths to prosperity, but it hasn't done so yet.
Furthermore, because of the horrific legacy of the one-child policy, China faces a
rapidly aging population that will strain resources and reduce the number of
working-age people . By 2050, it is estimated that the average Chinese will be 56 years of
age. In contrast, the average American will be 44. No amount of spending or legal reform will
prevent Beijing's coming demographic crisis.
This comparative weakness is why it makes sense to find a trade war off-ramp sooner rather
than later. China needs one badly and will eventually want a deal -- if it doesn't already. As
for the United States, recession may be inevitable, but it would be better if it were not
self-inflicted.
Already the trade war has cost American billions in higher prices for
imported products. American farmers have
been hit hard by China's retaliatory tariffs and, according to
a report by IHS Markit, U.S. manufacturing has shrunk for the first since 2009. Economists
polled by Reuters believe the trade war has increased the risk of a recession, with a
median of those surveyed giving a 45 percent chance of a downturn over the next two years.
Additionally, major
banks have
expressed concerns , as the stock market takes hits with every new tariff increase and
angry statement between Washington and Beijing.
I couldnt disagree more. I want more tariffs against China and Europe. I want closed borders
and zero migration. China has infiltrated our government, our defense agencies, our nuclear
agencies, our major research centers, our college campuses, our media and bribed our
politicians. China is an imminent threat to Hong Kong, Taiwan and its militarization of the
islands in the South China Sea are a threat to all of South Asia. China has been stealing US,
Canadian and European technology for decades to leapfrog the US into technological dominance
globally. China's plan is to force the US our of the Asia Pacific. China has infiltrated
Canada and Australia to a similar degree (if not more) than the US. If you pander to these
free trade globalists then you will be paving the way for a military conflict between Chinese
and American Hegemony in Asia and elsewhere around the world. I dont know about you but I
will take a tariff and trade war over a military war any day. Ramp up those tariffs and shift
those supply chains out of China toward more benevolent allies and the world be be all the
safer for it.
China has been waging a one sided trade war against us for over 30 years, it's about time we
resisted. Becoming more economically intertwined with our dangerous and genocidal rival
doesn't sound like the right answer to me, especially when China will continue protectionist
policies and currency manipulation regardless of what we do. America has allowed its
industrial base to hemorrhage since the 70s, and bending over for our enemy to keep cheap
trash flowing and American factories closed is not the right answer.
Is this a white box article the Chamber of Commerce is using to astroturf?
China is a Monstrous regime that is killing and enslaving its citizens. It will simply
kill everyone over 65, then 60 if it becomes convenient like they did with their one child
policy. Problem solved.
You wish to keep trading with criminals, polluters, and pirates so you can get cheap junk
at WalMart?
You have a job. I wish you would lose yours and that dozens of blue collar had working but
laid off Americans can find one. It isn't how much something costs in dollars (or how much of
your soul it costs), it is how much it costs in your virtuous labor. I'd rather pay double
for stuff but get triple wages rather than pay half but be all but permanently
unemployed.
Well said. Calling off the trade would be good for US consumers and the economy in general.
But while we are on the subject,calling off the war on immigration would also be good for US
consumers and the economy in general.
Wow. This article is off-base on any number of levels.
"These increases will impact the prices of many consumer goods that Americans rely
on,"
No, no they won't. Tariffs are paid for by the importer, not the consumer. If the importer
could randomly increase prices, they would do so without tariffs. The market sets prices.
"America's interest is in out-competing Beijing, not hurting our own economy in an attempt
to damage theirs."
If America could out-compete Beijing, American manufacturing would not have moved to
China. It turns out, the American people simply don't want to live according to 3rd world
standards. We want decent homes and stuff. We don't want to live in a cesspool of pollution.
I'm sure the Chinese people have the same preferences, they just don't get a choice.
"Moreover, long-term trade attacks on China are unnecessary, because China already has
more problems than America."
I agree with the author here, but not for the same reasons. Attacking China doesn't
resolve anything. American companies will just move to a different 3rd world country with
whom we can't complete. Why should I care if my clothes come from China or Vietnam?
I am 100% supportive of the trade war and building the wall and tariffs. I say zero
immigration and make all Chinese Tariffs permanent. Negotiate a trade deal with the tariffs
intact. Id rather have a trade war with China and permanent tariffs than a war with China.
China has been stealing technology and has infiltrated media, government, defense,
education, government officials (usually through bribes) from the US, Canada, Australia and
Europe. China is proving itself to be a threat to Hong Kong, Taiwan, Vietnam, Philippines,
Indonesia, India and South Asia.
Much of this "so called Russia Collusion" is actually a deflection of democratic
politicians China is bribing to take down Trump in order to continue their military and
technological theft, their existing preferential trade and their existing network. China is a
serious danger to the US and the rest of the world. It is preferential to sacrifice a small
amount of prosperity today for long term peace with China.
Propaganda. The aging of Chinese population? Not to worry, China has no real Social Security
system, and so relies on massive surpluses of savings. The 300% consumer debt ratio? That
would cripple any country with no help from trade. Should we let Wells Fargo and Goldman
refinance them?
Farmers hit hard? As I recall we have had the worst corn harvest in decades, and shame on
us for not growing more wheat, oats, and sugar cane. Our beef and poultry prices will be
affected, not to mention our fast food industry, which has been whipsawed by political
correctness. But China will effectively ration its pork, as it faces an even worse African
Swine Flu crisis, and an additional one on grains from the Black Army Worm.
US decline in manufacturing? Look first at our glut of automobiles, and the self vetting
of plant capacity by GM. Don't forget the crisis in car leases, which have made older cars
worth less than their outstanding loans. And note, that the fall in lithium prices indicates
that China's car electrification initiative is falling flat.
One thing left out of the equation is oil. And why should China live high on Iranian oil
(mostly wastefully burned in power plants, mind you, and not cars) while we suffer attacks on
Saudi oil from Iranian proxies (all on ChiRussia's dime)? Puts our trade negotiations in
clear perspective, doesn't it?
Stopping the war will not bring back China as our major trading partner. China is not going
to be in this vulnerable position with America again. She is going to develop other markets
Fearing 'Spy Trains,' Congress May Ban a Chinese Maker of Subway Cars
By Ana Swanson
CHICAGO -- America's next fight with China is unfolding at a glistening new factory in
Chicago, which stands empty except for the shells of two subway cars and space for future
business that is unlikely to come.
A Chinese state-owned company called CRRC Corporation, the world's largest train maker,
completed the $100 million facility this year in the hopes of winning contracts to build subway
cars and other passenger trains for American cities like Chicago and Washington.
But growing fears about China's economic ambitions and its potential to track and spy on
Americans are about to quash those plans. Congress is soon expected to approve legislation that
would effectively bar the company from competing for new contracts in the United States, citing
national security and economic concerns. The White House has expressed its support for the
effort.
Washington's attempt to block a Chinese company from selling train cars inside America is
the latest escalation in a trade war that has quickly expanded from a spat over tariffs and
intellectual property to a broader fight over economic and national security.
President Trump and lawmakers from both parties are increasingly anxious about the economic
and technological ambitions of China, which has built cutting-edge global industries, including
those that produce advanced surveillance technology. Those fears have prompted Washington to
take an expansive view of potential risks, moving beyond simply trying to curtail Chinese
imports.
In addition to slapping tariffs on $360 billion worth of Chinese products, the
administration has banned Chinese companies like Huawei, the telecom giant, from buying
sensitive American technology. It is moving to curb the ability of firms to export technology
like artificial intelligence and quantum computing from the United States to China. And
Congress has given the administration expansive power to block Chinese investment on national
security grounds.
Now lawmakers have added a provision to a military spending bill that would prevent the use
of federal grants to buy subway trains from state-owned or state-controlled companies, a
measure that would effectively block CRRC's business.
The bill has gained bipartisan support from lawmakers who say companies like CRRC pose a
threat to the United States. Part of the concern is economic: Flush with cash from its rapid
growth, China has pumped money into building globally competitive businesses, often creating
overcapacity in markets like steel, solar panels and trains.
That has lowered prices for consumers -- including American taxpayers who pay for subway
cars. While a subway car has not been manufactured solely by an American company in decades,
CRRC's low prices have raised concerns among American freight train companies that the company
could ultimately move into -- and demolish -- their business.
CRRC has consistently underbid its competitors, winning over urban transit agencies that
are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC's Chicago
subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by
Bombardier, the Canadian manufacturer. And CRRC also proposed to build the Chicago facility and
create 170 new jobs.
Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy
aims of the Chinese government to dominate key global industries like electric cars, robotics
and rail.
"When you can subsidize, when you can wholly own an enterprise like China does, you can
create a wholly unlevel playing field," said Senator Tammy Baldwin, a Wisconsin Democrat who is
a co-sponsor of the legislation. "We're used to that unlevel playing field existing between the
U.S. and China, but now it's happening in our own backyard."
Another more nefarious worry is also at play. Lawmakers -- along with CRRC's competitors --
say they are concerned that subway cars made by a Chinese company might make it easier for
Beijing to spy on Americans and could pose a sabotage threat to American infrastructure, though
CRRC says it surrenders control of all technology in the cars to its buyers. Nonetheless,
critics speculate that the Chinese firm could incorporate technology into the cars that would
allow CRRC -- and the Chinese government -- to track the faces, movement, conversations or
phone calls of passengers through the train's cameras or Wi-Fi.
Scott Paul, the president of the Alliance for American Manufacturing, which represents
manufacturers and the United Steelworkers, said the risks of giving a Chinese company the
ability to monitor or control American infrastructure could not be understated given recent
laws requiring Chinese companies to turn over data to Beijing upon request.
"I just think it would be irresponsible to assume the Chinese government to which this firm
must answer would be a reliable security partner, given its well documented track record," Mr.
Paul said.
Whether those fears are justified remains uncertain. Proponents of the bill have not made
clear how subway cars manufactured by a Chinese company would pose a greater espionage threat
than everything else that China makes and sells in the United States, including laptops, phones
and home appliances.
Dave Smolensky, a spokesman for CRRC, said the company was being unfairly targeted by
companies that wanted to legislate a competitor out of business under the guise of national
security. He said the firm was a victim to "an aggressive multimillion-dollar media
disinformation campaign," funded mostly by domestic freight train companies, intended to play
on popular fears about China's rise.
Employees at the Chicago factory also dismissed the concerns, saying they had not seen any
evidence that they were working to construct "spy trains."
"I haven't seen any secret wires yet," said Perry Nobles, an electrician for CRRC who was
rigging wires in the interior of the trains. "With the world full of cellphones and computers,
I'd think there's an easier way to get information."
Rising fears of China's ambitions in Washington have prompted officials to adopt an
unsparing view, with policymakers and national security officials warning domestic and foreign
governments not to trust Chinese equipment.
American officials have waged a global offensive against Huawei, telling other countries
that allowing a Chinese company to build the world's next generation of wireless networks would
be akin to handing national secrets to a foreign agent.
Like CRRC, the fear surrounding Huawei is largely based on concerns about technological
dominance by China's authoritarian government. No one has yet disclosed finding a backdoor in
Huawei's products that would allow it to snoop -- but officials say by the time one is
discovered, it may be too late.
"The Chinese are working to put their systems in networks all across the world so they can
steal your information and my information," Secretary of State Mike Pompeo said in an interview
in May. "This administration is prepared to take this on."
As Senator John Cornyn, Republican of Texas, introduced the provision in March, he said,
"China poses a clear and present danger to our national security and has already infiltrated
our rail and bus manufacturing industries."
Representative Kevin McCarthy, a Republican whose California district is home to a Chinese
bus maker, BYD, had opposed a version of the provision that would apply to buses as well as
trains. House lawmakers dropped the bus provision, but the Senate bill would apply to both.
Congress will take the issue up again in the coming weeks as part of the annual defense
bill.
The legislation would not affect the thousands of American subway cars that CRRC previously
won contracts to build, including an 846-car order for the Chicago L. But it would block the
company from future contracts, such as those under consideration by the Chicago Metra and the
Washington Metro.
The Chicago facility is the company's second in the United States. A factory in
Massachusetts that employs more than 150 people is already building trains for Boston, Los
Angeles and Philadelphia, prompting concerns that the company plans to expand rapidly in the
United States as it has in other foreign markets.
Like many Chinese state enterprises, CRRC is guided by Beijing's Made in China 2025 plan,
which lays out an agenda to dominate key industries.
In its 2018 annual report, Liu Hualong, the company's chairman and party secretary, pledged
to pursue the dual goals of "Party construction as well as developing into a world-leading
company with global competitiveness."
"We conscientiously followed the important instructions of General Secretary Xi Jinping,"
the report said, referring to the Chinese president and Communist Party leader.
The last American firm to make passenger rail cars, the Pullman Company, produced its final
car in 1981. Since then, major American cities have bought subway cars from Bombardier and
Japanese manufacturers like Kawasaki, Hyundai and Hitachi.
But American manufacturers of freight rail cars, including the Greenbrier Companies and
TrinityRail, which is based in Mr. Cornyn's home state of Texas, say CRRC could use its footing
in the United States to steal its business. Together with unions and others, they have mounted
a lobbying campaign against CRRC under an umbrella group known as the Rail Security
Alliance.
The group says American taxpayer dollars should not be spent in China, where the empty rail
cars are made before being shipped to the United States for further work at the company's
facilities in Illinois or Massachusetts.
"We think those dollars should stay here," said Erik Olson, the vice president of the Rail
Security Alliance.
CRRC sends over experts from its giant headquarters in Qingdao, China, to plants in other
countries. In Chicago, the American employees call these Chinese citizens "shifu," a polite
term for a skilled worker meaning "master" or "teacher."
On a sunny day in July, the company break room was split between shifus, wearing white
jumpsuits and eating stuffed buns, and American workers, many of whom had joined the company in
the last few months. The gleaming concrete factory floor was bare, save for a few dozen people
installing wiring, air ducts and other components into the empty shells of two rail cars.
"We are a little concerned because it's our livelihood," said Mr. Nobles, who was hired in
March from a previous factory job making frames for the Ford Explorer.
This summer, CRRC replaced the Chinese flag outside the factory with a Chicago flag. It has
also retained two Washington lobbying firms, Squire Patton Boggs and Crossroads Strategies, to
plead its case in Congress.
It may be too late. Senator Sherrod Brown, Democrat of Ohio, said he helped sponsor the bill
to prevent the American transit system from being "controlled by a foreign country that is not
particularly friendly to us."
"They spell out in black and white they're going to use foreign investment as a weapon, and
we're taking action to defend ourselves," Mr. Brown said.
According to the great military thinker, Maj. Gen. J.F.C. Fuller, 'the object of war is not
victory. It is to achieve political goals.'
Too bad President Donald Trump does not read books. He has started economic wars against
China, Russia, Iran, Cuba and Venezuela without any clear strategic objective beyond inflating
his ego as the world's premier warlord and punishing them for disobedience.
Trump's wars are economic. They deploy the huge economic and financial might of the United
States to steamroll other nations that fail to comply with orders from Washington. Washington's
motto is 'obey me or else!' Economic wars are not bloodless. Imperial Germany and the Central
Powers were starved into surrender in 1918 by a crushing British naval blockade.
Trade sanctions are not making America great, as Trump claims. They are making America
detested around the globe as a crude bully. Trump's efforts to undermine the European Union and
intimidate Canada add to this ugly, brutal image.
Worse, Trump's tariff war against China has damaged the economy of both nations, the world's
leading economic powers, and raised tensions in Asia. The world is facing recession in large
part due to Trump's ill-advised wars. All to prove Trump's power and glory.
Trump and his advisors are right about China's often questionable trade practices. I did 15
years of business in China and saw a kaleidoscope of chicanery, double-dealing, and corruption.
A favorite Chinese trick was to leave imports baking in the sun on the docks, or long delaying
them by 'losing' paperwork.
I saw every kind of craziness in the Wild East Chinese market. But remember that it's a
'new' market in which western-style capitalism is only one generation old. Besides, China
learned many of its fishy trade practices from France, that mother of mercantilism.
China indeed steals technical and military information on a mass scale. But so does the US,
whose spy agencies suck up information across the world. America's claims to be a victim are
pretty rich.
What Trump & Co don't understand is that China was allowed into America's Greater Asia
Co-Prosperity Sphere by the clever President Nixon to bring it under US influence – just
as Japan and South Korea were in the 1950's. China's trade surplus with the US is its dividend
for playing by Washington's rules. If China's trade bonus is stripped away, so will China's
half-hearted acceptance of US policies. Military tensions will rise sharply.
In China's view, the US is repeating what Great Britain did in the 19th century by declaring
war to force opium grown in British-ruled Burma onto China's increasingly addicted people.
Today the trade crop is soya beans and wretched pigs.
Trump's ultimate objective, as China clearly knows, is to whip up a world crisis over trade,
then dramatically end it – of course, before next year's elections. Trump has become a
master dictator of US financial markets, rising or lowering them by surprise tweets. No
president should ever have such power, but Trump has seized it.
There is no telling how much money his minions have made in short or long selling on the
stock market thanks to insider information. America's trillion dollar markets have come to
depend on how Trump feels when he wakes up in the morning and watches Fox news, the Mother of
Misinformation.
It staggers the imagination to believe that Trump and his minions actually believe that they
can intimidate China into bending the knee. China withstood mass devastation and at least 14
million deaths in World War II in order to fight off Japanese domination. Does the White House
really think Beijing will cave in over soya beans and semi-conductors in a daft war directed by
a former beauty contest and casino operator? China's new emperor, Xi Jinping, is highly
unlikely to lose face in a trade war with the US. Dictators cannot afford to retreat. Xi can
wait it out until more balanced minds again occupy the White House.
Trade wars rarely produce any benefits for either side. They are the equivalent of sending
tens of thousands of soldiers to be mowed down by machine guns on the blood-soaked Somme
battlefield in WWI. Glory for the stupid generals; death and misery for the common soldiers
This fool's war of big egos will inevitably end in a face-saving compromise between
Washington and Beijing. Get on with it.
"... The old adage that the 'sea is always the sea' holds true for US foreign policy. And Iran repeating the same old routines, whilst expecting different outcomes is, of course, one definition of madness. A new US Administration will inherit the same genes as the last. ..."
"... And in any case, the US is institutionally incapable of making a substantive deal with Iran. A US President – any President – cannot lift Congressional sanctions on Iran. The American multitudinous sanctions on Iran have become a decades' long knot of interpenetrating legislation: a vast rhizome of tangled, root-legislation that not even Alexander the Great might disentangle: that is why the JCPOA was constructed around a core of US Presidential 'waivers' needing to be renewed each six months. Whatever might be agreed in the future, the sanctions – 'waived' or not – are, as it were, 'forever'. ..."
"... "[So] decoupling is already in motion. Like the shift of tectonic plates, the move towards a new tech alignment with China increases the potential for sudden, destabilizing convulsions in the global economy and supply chains. To defend America's technology leadership, policymakers must upgrade their toolkit to ensure that US technology leadership can withstand the aftershocks. ..."
"... "The key driver of this shift has not been the President's tariffs, but a changing consensus among rank-and-file policymakers about what constitutes national security. This expansive new conception of national security is sensitive to a broad array of potential threats, including to the economic livelihood of the United States, the integrity of its citizens personal data, and the country's technological advantage". ..."
"... A Quinnipiac University survey last week found for the first time in Trump's presidency, more voters now say the economy is getting worse rather than better, by a 37-31 percent margin – and by 41-37 percent, voters say the president's policies are hurting the economy. ..."
"... This is hugely significant. If Trump is experiencing a crisis of public confidence in respect to his assertive policies towards China, the last thing that he needs in the run-up to an election is an oil crisis, on top of a tariff/tech war crisis with China. A wrong move with Iran, and global oil supplies easily can go awry. Markets would not be happy. (So Trump's China 'bind' can also be Iran's opportunity ). ..."
There is consensus amongst the Washington foreign policy élite that all factions in
Iran understand that – ultimately – a deal with Washington on the nuclear issue
must ensue. It somehow is inevitable. They view Iran simply as 'playing out the clock', until
the advent of a new Administration makes a 'deal' possible again. And then Iran surely will be
back at the table, they affirm.
Maybe. But maybe that is entirely wrong. Maybe the Iranian leadership no longer believes in
'deals' with Washington. Maybe they simply have had enough of western regime change antics
(from the 1953 coup to the Iraq war waged on Iran at the western behest, to the present attempt
at Iran's economic strangulation). They are
quitting that failed paradigm for something new, something different.
The pages to that chapter have been shut. This does not imply some rabid anti-Americanism,
but simply the experience that that path is pointless. If there is a 'clock being played out',
it is that of the tic-toc of western political and economic hegemony in the Middle East is
running down, and not the 'clock' of US domestic politics. The old adage that the 'sea is
always the sea' holds true for US foreign policy. And Iran repeating the same old routines,
whilst expecting different outcomes is, of course, one definition of madness. A new US
Administration will inherit the same genes as the last.
And in any case, the US is institutionally incapable of making a substantive deal with
Iran. A US President – any President – cannot lift Congressional sanctions on Iran.
The American multitudinous sanctions on Iran have become a decades' long knot of
interpenetrating legislation: a vast rhizome of tangled, root-legislation that not even
Alexander the Great might disentangle: that is why the JCPOA was constructed around a core of
US Presidential 'waivers' needing to be renewed each six months. Whatever might be agreed in
the future, the sanctions – 'waived' or not – are, as it were, 'forever'.
If recent history has taught the Iranians anything, it is that such flimsy 'process' in the
hands of a mercurial US President can simply be blown away like old dead leaves. Yes, the US
has a systemic problem: US sanctions are a one-way valve: so easy to flow out, but once poured
forth, there is no return inlet (beyond uncertain waivers issued at the pleasure of an
incumbent President).
But more than just a long chapter reaching its inevitable end, Iran is seeing another path
opening out. Trump is in a 'China bind': a trade deal with China now looks "tough to
improbable", according to White House officials, in the context of the fast deteriorating
environment of security tensions between Washington and Beijing. Defense One spells it out:
"It came without a breaking news alert or presidential tweet, but the technological
competition with China entered a new phase last month. Several developments quietly heralded
this shift: Cross-border investments between the United States and China plunged to their
lowest levels since 2014, with the tech sector suffering the most precipitous drop. US chip
giants Intel and AMD abruptly ended
or declined to extend important partnerships with Chinese entities. The Department of Commerce
halved the number of
licenses that let US companies assign Chinese nationals to sensitive technology and engineering
projects.
"[So] decoupling is already in motion. Like the shift of tectonic plates, the move
towards a new tech alignment with China increases the potential for sudden, destabilizing
convulsions in the global economy and supply chains. To defend America's technology leadership,
policymakers must upgrade their toolkit to ensure that US technology leadership can withstand
the aftershocks.
"The key driver of this shift has not been the President's tariffs, but a changing
consensus among rank-and-file policymakers about what constitutes national security. This
expansive new conception of national security is sensitive to a broad array of potential
threats, including to the economic livelihood of the United States, the integrity of its
citizens personal data, and the country's technological advantage".
Trump's China 'bind' is this: A trade deal with China has long been viewed by the White
House as a major tool for 'goosing' the US stock market upwards, during the crucial
pre-election period. But as that is now said to be "tough to improbable" – and as US
national security consensus metamorphoses, the consequent de-coupling, combined with tariffs,
is beginning to bite. The effects are eating away at President Trump's prime political asset:
the public confidence in his handling of the economy: A Quinnipiac University
survey last week
found for the first time in Trump's presidency, more voters now say the economy is getting
worse rather than better, by a 37-31 percent margin – and by 41-37 percent, voters say
the president's policies are hurting the economy.
This is hugely significant. If Trump is experiencing a crisis of public confidence in
respect to his assertive policies towards China, the last thing that he needs in the run-up to
an election is an oil crisis, on top of a tariff/tech war crisis with China. A wrong move with
Iran, and global oil supplies easily can go awry. Markets would not be happy. (So Trump's China
'bind' can also be Iran's opportunity ).
No wonder Pompeo acted with such alacrity to put a tourniquet on the brewing 'war' in the
Middle East, sparked by Israel's simultaneous air attacks last month in Iraq, inside Beirut,
and in Syria (killing two Hizbullah soldiers). It is pretty clear that Washington did not want
this 'war', at least not now. America, as Defense One
noted , is becoming acutely sensitive to any risks to the global financial system from
"sudden, destabilizing convulsions in the global economy".
The recent Israeli military operations coincided with Iranian FM Zarif's sudden summons to
Biarritz (during the G7), exacerbating fears
within the Israeli Security Cabinet that Trump might meet with President Rouhani in NY at
the UN General Assembly – thus threatening Netanyahu's anti-Iran,
political 'identity' . The fear was that Trump could begin a 'bromance' with the Iranian
President (on the Kim Jong Un lines). And hence the Israeli provocations intended to stir some
Iranian (over)-reaction (which never came). Subsequently it became clear to Israel that Iran's
leadership had absolutely no intention to meet with Trump – and the whole episode
subsided.
Trump's Iran 'bind' therefore is somehow similar to his China 'bind': With China, he
initially wanted an easy trade achievement, but it has proved to be 'anything but'. With Iran,
Trump wanted a razzmatazz meeting with Rohani – even if that did not lead to a new 'deal'
(much as the Trump – Kim Jung Un TV spectaculars that caught the American imagination so
vividly, he may have hoped for a similar response to a Rohani handshake, or he may have even
aspired to an Oval Office spectacular).
Trump simply cannot understand why the Iranians won't do this, and he is peeved by the snub.
Iran is unfathomable to Team Trump.
Well, maybe the Iranians just don't want to do it. Firstly, they don't need to: the Iranian
Rial has been recovering steadily over the last four months and manufacturing output has
steadied. China's General Administration of Customs (GAC) detailing the country's oil imports
data shows that China has not cut its Iranian supply after the US waiver program ended on 2
May, but rather, it has
steadily increased Iranian crude imports since the official end of the waiver extension, up
from May and June levels. The new GAC data shows China imported over 900,000 barrels per day
(bpd) of crude oil from Iran in July, which is up 4.7% from the month before.
And a new path is opening in front of Iran. After Biarritz, Zarif flew directly to Beijing
where he discussed a huge, multi-hundred
billion (according to
one report ), twenty-five-year oil and gas investment, (and a separate) 'Road and Belt'
transport plan. Though the details are not disclosed, it is plain that China – unlike
America – sees Iran as a key future strategic partner, and China seems perfectly able to
fathom out the Iranians, too.
But here is the really substantive US shift taking place. It is that which is termed
"a new normal" now
taking a hold in Washington:
"To defend America's technology leadership, policymakers [are] upgrading their toolkit to
ensure that US technology leadership can withstand the aftershocks Unlike the President's trade
war, support for this new, expansive definition of national security and technology is largely
bipartisan, and likely here to stay.
with many of the president's top advisers viewing China first and foremost as a national
security threat, rather than as an economic partner – it's poised to affect huge parts of
American life, from the cost of many consumer goods to the nature of this country's
relationship with the government of Taiwan.
"Trump himself still views China primarily through an economic prism. But the angrier he
gets with Beijing, the more receptive he is to his advisers' hawkish stances toward China that
go well beyond trade."
"The angrier he gets with Beijing" Well, here is the key point: Washington seems to have
lost the ability to summon the resources to try to fathom either China, or the Iranian 'closed
book', let alone a 'Byzantine' Russia. It is a colossal attenuation of consciousness in
Washington; a loss of conscious 'vitality' to the grip of some 'irrefutable logic' that allows
no empathy, no outreach, to 'otherness'. Washington (and some European élites) have
retreated into their 'niche' consciousness, their mental enclave, gated and protected, from
having to understand – or engage – with wider human experience.
To compensate for these lacunae, Washington looks rather, to an engineering and
technological solution: If we cannot summon empathy, or understand Xi or the Iranian Supreme
Leader, we can muster artificial intelligence to substitute – a 'toolkit' in which the US
intends to be global leader.
This type of solution – from the US perspective – maybe works for China, but not
so much for Iran; and Trump is not keen on a full war with Iran in the lead up to elections. Is
this why Trump seems to be losing interest in the Middle East? He doesn't understand it; he
hasn't the interest or the means to fathom it; and he doesn't want to bomb it. And the China
'bind' is going to be all absorbing for him, for the meantime.
Your tariffs are 10-25 percent, that means the great workers in the U.S. are paying the
bill.
Donald J. Trump @realDonaldTrump
"China is eating the Tariffs." Billions pouring into USA. Targeted Patriot Farmers getting
massive Dollars from the incoming Tariffs! Good Jobs Numbers, No Inflation (Fed). China having
worst year in decades. Talks happening, good for all!
When President Donald Trump wants to convey that something is a big deal, he often reaches
for the same big number: 10,000.
He says it's the number of points the Dow Jones Industrial Average would be up had the
Federal Reserve not raised interest rates. It's the number of people attending his rallies --
or the number forced to wait outside because they couldn't get in.
It's also the number of jobs a company plans to create, the headcount of captured Islamic
State fighters, the number of migrants in a caravan headed to the U.S., and the Allied casualty
count on D-Day.
Sometimes the number is accurate. Other times, it's a wild guess -- or wildly wrong.
Trump on Wednesday predicted the Dow would be up -- another 10,000 points -- if he hadn't
embarked on a trade war with China.
"If I wanted to do nothing with China, my stock market -- our stock market -- would be
10,000 points higher than it is right now," Trump told reporters in the Oval Office.
That would be a dramatic rise. With the Dow closing at 26,728 on Thursday, another 10,000
points would represent a 37% increase.
Memorable Number
From a marketing standpoint, there's a great reason to use 10,000: It's memorable.
"He uses this round number in particular because it seems big," said Jonah Berger, marketing
professor at the Wharton School of the University of Pennsylvania, which Trump often boasts of
attending.
"He wants to convey something is a big problem, or something would be quite different, so he
uses a big round number to try and sway his audience," said Berger, author of "Contagious: Why
Things Catch On."
Trump has used the number since his 2016 campaign -- in speeches, remarks to reporters and
one-on-one interviews -- but it could take on new significance as he seeks to burnish his
record with the approach of the 2020 election.
The president has repeatedly sought to use 10,000 to his political advantage, even when it
doesn't neatly match reality.
'Horrible People'
For instance, he said in January that Immigration and Customs Enforcement officers last year
removed 10,000 known or suspected gang members whom he described as "horrible people." (The
agency actually reported arresting that number but removing 5,872 known or suspected gang
members in fiscal year 2018.)
The White House declined to comment on Trump's use of 10,000.
The president has other verbal habits. He has often cited self-imposed two week deadlines
for major announcements.
While Trump is often faulted by fact-checkers for making false statements, his spokeswoman
has said journalists take the president's words too literally.
"I think the president communicates in a way that some people, especially the media, aren't
necessarily comfortable with," White House press secretary Stephanie Grisham told the
Washington Post in a recent interview. "A lot of times they take him so literally. I know
people will roll their eyes if I say he was just kidding or was speaking in hypotheticals, but
sometimes he is."
'Truthful Hyperbole'
Trump defended his use of what he called "truthful hyperbole" in his 1987 book "The Art of
the Deal," calling it an "innocent form of exaggeration."
"People may not always think big themselves, but they can still get very excited by those
who do," Trump wrote. "People want to believe that something is the biggest and the greatest
and the most spectacular."
Wittingly or not, Trump has taken to a number that comes up often in history, religion and
culture.
The army of the Ten Thousand marched against Artaxerxes II of Persia. During the conquest of
Mecca, Muhammad was said to have 10,000 soldiers. The King James Bible has dozens of references
to 10,000. Minnesota's nickname is the Land of 10,000 Lakes. A television game show called "The
$10,000 Pyramid" debuted in the U.S. in the early 1970s.
But Trump's references typically are rooted in current affairs.
The president used the number in July to talk about attendance at a North Carolina rally
where his supporters chanted "Send her back!" after he invoked the name of Representative Ilhan
Omar, a Minnesota Democrat.
"We had thousands and thousands of people that wanted to come, and we said, 'Please don't
come,'" Trump said. "It held 10,000 people. It was packed. We could've sold that arena 10
times."
Authorities said 8,000 people got into the arena in Greenville, filling it to capacity,
according to WITN-TV in North Carolina. About 2,000 were denied entry and between 750 and 1,000
were in an overflow area, the station said, citing police estimates.
Booing Ryan
In July, Trump used the number to attack former House Speaker Paul Ryan after the Wisconsin
Republican was quoted in a book saying the president doesn't know how government works.
"I remember a day in Wisconsin -- a state that I won -- where I stood up and made a speech,
and then I introduced him and they booed him off the stage -- 10,000 people," Trump told
reporters at the White House.
The president appeared to be referring to a December 2016 post-election rally in West Allis,
Wisconsin, where he publicly thanked Ryan, who was in the crowd. Audible, but not deafening,
boos were heard as Trump tried to quiet his supporters by telling them that Ryan had improved
"like a fine wine."
Then there's job creation -- a Cameron LNG liquefied natural gas export facility in
Louisiana or an Intel Corp. semiconductor plant in Arizona.
In separate statements, Trump said they'd each create 10,000 jobs.
Bringing Credibility
Whether Trump's use of the number is accurate or not, the specificity can bring credibility
to the president's claims, said Manoj Thomas, a behavioral scientist and marketing professor at
Cornell University's SC Johnson College of Business.
"Using a number to quantify a claim -- even implausible numbers -- makes it more credible
because numbers are concrete," Thomas said. "Claims without any numbers, for example, 'The Dow
would be much higher if not for the trade war,' are more difficult for the human mind to
instinctively process because the information is abstract and lacks specificity."
Trump could add even more credibility to his claim by making the number even more specific,
Thomas said.
For instance, Thomas suggested: "The Dow would be 4,600 points higher if not for the trade
war."
Markets Soar on News of China Talks, but Hopes
for Progress Are Low https://nyti.ms/2LrdVwH
NYT - Ana Swanson and Matt Phillips - September 5
WASHINGTON -- President Trump's decision to renew talks with China in the coming weeks
sent financial markets soaring on Thursday, as investors seized on the development as a sign
that both sides could still find a way out of an economically damaging trade war.
The rally sent the S&P 500 up more than 1 percent, underscoring just how much
financial markets are subsisting on hopes and fears about the trade war. Shares fell through
most of August, as Mr. Trump escalated his fight with China and imposed more tariffs, only to
snap back on Thursday after news of the talks.
But expectations for progress remain low, and many in the United States and China see the
best outcome as a continued stalemate that would prevent a collapse in relations before the
2020 election. Both Mr. Trump and President Xi Jinping of China are under pressure from
domestic audiences to stand tough, and the talks will happen after Mr. Trump's next round of
punishing tariffs take effect on Oct. 1.
"Continuing to talk soothes markets a little bit," said Eswar Prasad, the former head of
the China division at the International Monetary Fund. "But the political cost to making
major concessions is, I think, too high for either side."
The skepticism stems in part from what is emerging as a familiar pattern for Mr. Trump,
for whom China is both a source of leverage and a potential vulnerability heading into an
election year. The president has so far imposed tariffs on more than $350 billion worth of
Chinese goods and routinely shifts from blasting China and threatening additional punishment
to trying to calm the waters in the face of jittery markets and negative economic news.
Over two weeks, Mr. Trump has called Mr. Xi an enemy of America, ordered companies to stop
doing business in China and suggested the United States was in no rush to reach a trade deal.
On Sunday, he moved ahead with his threat to eventually tax every golf club, shoe and
computer China sends into the United States, placing tariffs on another $112 billion of
Chinese goods.
Stock investors have zeroed in on the threat the trade war poses to the economy, buying
and selling in tandem with Mr. Trump's trade whims. Thursday's rally was the fifth positive
performance for the market in the past six sessions. It brought the S&P 500 to within
striking distance -- less than 2 percent -- of its high of 3025.86, reached on July 26.
The coming weeks could result in more of the same, analysts say: tough words when the
president wants to rally his base and a temporary cooling off when it seems to be hurting an
economy that is one of his main arguments for re-election.
Mr. Trump and his advisers are wary of a potential challenge from Democrats who will try
to paint the president as weak on China. Officials are cognizant that striking a deal based
on the kind of limited concessions China is currently offering would most likely be a
political liability in the president's bid for re-election. Democrats, along with some
Republicans, have previously accused Mr. Trump of buckling on China after he reached a deal
that allowed ZTE, the Chinese telecom company, to avoid tough American punishment.
Yet as collateral damage from the trade war increases, Mr. Trump is facing pressure to
relent. The bond market has been flashing warning signs of a potential recession, and both
consumer confidence and the manufacturing sector have slowed.
The trade war is also clearly weighing on the Chinese economy, which is growing at its
slowest pace in more than two decades. But China has responded defiantly, imposing
retaliatory tariffs on $75 billion worth of American goods. The country is preparing to
celebrate the 70th anniversary of its founding on Oct. 1, and analysts say Beijing would be
unlikely to make concessions at such a politically delicate moment.
People familiar with Chinese economic policymaking have said in recent weeks that Chinese
leaders remain interested in reaching a trade deal with the United States, but that they are
wary of what appear to be ever-increasing demands from the United States and what they
describe as frequent shifts in the American negotiating position.
The Chinese government continues to insist that it will not accept any agreement that is
unequal, or that prevents it from pursuing economic policies that it needs for continued
growth.
While both countries have motivation to come to an agreement, each is still insisting the
other will be the first to bend.
"China and the US announced new round of trade talks and will work to make substantial
progress," Hu Xijin, the editor of the state-run Global Times, wrote on Twitter. "Personally
I think the US, worn out by the trade war, may no longer hope for crushing China's will.
There's more possibility of a breakthrough between the two sides." ...
"... Can China then depend on widening internal demand to maintain its global edge? There are two reasons why not. The present authorities worry that a widening middle stratum could jeopardize their political control and seek to limit it.[a] ..."
"... The second reason, more important, is that much of the internal demand is the result of reckless borrowing by regional banks, which are facing an inability to sustain their investments. If they collapse, even partially, this could end the entire economic edge[b] of China. ..."
A structural crisis is chaotic. This means that instead of the normal standard set of
combinations or alliances that were previously used to maintain the stability of the system,
they constantly shift these alliances in search of short-term gains. This only makes the
situation worse. We notice here a paradox – the certainty of the end of the existing
system and the intrinsic uncertainty of what will eventually replace it and create thereby a
new system (or new systems) to stabilize realities .
Now, let us look at China's role in what is going on. In terms of the present system,
China seems to be gaining much advantage. To argue that this means the continuing functioning
of capitalism as a system is basically to (re)assert the invalid point that systems are
eternal and that China is replacing the United States in the same way as the United States
replaced Great Britain as the hegemonic power. Were this true, in another 20-30 years China
(or perhaps northeast Asia) would be able to set its rules for the capitalist
world-system.
But is this really happening? First of all, China's economic edge, while still greater
than that of the North, has been declining significantly. And this decline may well amplify
soon, as political resistance to China's attempts to control neighboring countries and entice
(that is, buy) the support of faraway countries grows, which seems to be occurring.
Can China then depend on widening internal demand to maintain its global edge? There are
two reasons why not. The present authorities worry that a widening middle stratum could
jeopardize their political control and seek to limit it.[a]
The second reason, more important, is that much of the internal demand is the result of
reckless borrowing by regional banks, which are facing an inability to sustain their
investments. If they collapse, even partially, this could end the entire economic edge[b] of
China.
In addition, there have been, and will continue to be, wild swings in geopolitical
alliances. In a sense, the key zones are not in the North, but in areas such as Russia,
India, Iran, Turkey, and southeastern Europe, all of them pursuing their own roles by a game
of swiftly and repeatedly changing sides. The bottom line is that, though China plays a
very big role in the short run, it is not as big a role as China would wish and that some in
the rest of the world-system fear. It is not possible for China to stop the disintegration of
the capitalist system. It can only try to secure its place in a future
world-system.
As far as Wallerstein's bottom line: The proof is in the pudding. That said, there seems to
be a tendency to regard Xi as all-powerful. IMNSHO, that's by no means the case, not only
because of China's middle class, but because of whatever China's equivalent of deplorables is.
The "wild swings in geopolitical alliances" might play a role, too; oil, Africa's minerals.
NOTES [a] I haven't seen this point made elsewhere. [b] Crisis, certainly. "Ending the
entire economic edge"? I'm not so sure.
"... That assumption looks to be incorrect. New Deal Democrat sent us the latest post from China Law Blog, written by lawyers who specialize in Chinese law with an eye to helping businesses get set up and operate in China. The post by Dan Harris is every bit as firm as its headline: Repeat After Me: There Will be No US-China Trade Deal . It also contains a good summary of key developments and detail on the various goods targeted. Key sections: ..."
"... But what should you make of President Trump's ordering US companies to immediately start looking for an alternative to China? He can't really do that, can he? No, but in many respects this is exactly what Trump has been doing since the U.S.-China trade war began. Trump cannot literally require American companies to pull out of China, but he can and has made it so difficult that they all but have to leave China. And this is what most of the international lawyers and international trade lawyers at my firm have come to believe has been Trump's plan all along. ..."
"... Every step of the way, Trump has made it all but impossible for China to make a trade deal with the United States, which is why this blog has been consistently clear that there will be no trade deal between the United States and China . If the US-China trade war/cold war were really about trade imbalances, it would have ended long ago with China buying more soybeans and Boeing airplanes from the United States. But from the very beginning, the U.S. has demanded China stop stealing IP and open its markets for foreign companies, and there is just no way China will agree to either of these things. Lead negotiator Robert Lighthizer is without a doubt smart enough to have known this all along. All this leads us to believe that the U.S. plan has always been to force a slow decoupling of the U.S. and China and then work to convince the rest of the democratic world (the EU, Australia, Canada, Latin America, Japan, etc.) to decouple from China, as well. In June, in Does China WANT a Second Decoupling? The Chinese Texts Say That it Does we wrote of how China wants this decoupling, as well. ..."
"... The fact that Trump issues this "order" amidst rising recession fears only highlights how ending U.S.-China trade is at the top of his to-do list. ..."
"... The critical part of the China Law Blog's reading is that the Trump Administration is deadly serious about its two big asks, intellectual property and market access. It's credible to attribute that to Trump's US Trade Representative, Lighthizer. As Lambert put it, Lighthizer is the closest thing this Administration has to a Jim Baker. Lighthizer started at Covington & Burling, then served in the Regan Administration as Deputy USTR before going to Skadden. Lighthizer is as fierce a China hawk as they come and has a long history of saying that the entry of China into the WTO was at the expense of US jobs (see here , for instance) and even making a full-throated defense of protectionism . ..."
"... In April, China made a concession to the US by designating all fetanyl products as controlled substances, in the hope that that would reduce shipments to the US. The DEA has stated that China is the main source of US fentanyl . Fentanyl accounted 18,000 overdose deaths in 2018, one fourth of the total. If you count all synthetic opioids, the toll rises to 28,000. China nevertheless claimed even then that fentanyl shipments to the US were "extremely limited" . ..."
"... Fentanyl featured in the escalation on Friday, and it could conceivably serve as the basis for a national emergency threat (even though, per the discussion earlier, it would have good odds of being overturned). One of Trump's four tweets urged US carriers to do more to halt shipments arriving from China or other destinations (Mexico is believed to be a route for the entry of Chinese fentanyl to the US). ..."
"... In May I had a conversation with a long-time friend. My friend works for a global manufacturer with a household name. He has helped oversee construction of plants around the world. He helps source components from around the world. He told me that "everybody's moving out" (of China). ..."
"... A few short years ago they had the Trans-Pacific Partnership being negotiated. This was nicknamed the "everybody but China" pact as that was its mission – to cut China out of the Pacific. Add to that the "Pivot to Asia" introduced by Obama which was to militarily threaten China and the writing was on the wall for China. They were to be boxed in and shut down. Trump may be the front man now for this effort but all the China-hawks have come out of the woodwork to be let loose in the government. ..."
"... I suppose that the plan is to force US companies to bail out of China and relocate to places like Vietnam, India, Bangladesh, etc. But the question is whether these countries have the infrastructure to support these new factories? ..."
"... I have mentioned before the idea of a multipolar world and I believe that we re seeing it now in action. The US and its vassals will be one pole and another one is forming around China, Iran and Russia. I doubt that the EU will be another as they are following what Trump orders even if reluctantly. There may be another factor. For centuries we have had an economy predicated on growth but I suspect that by the end of this century will will have one based on contraction due to climate change and depletion of resources. Better strap in. It could be a bumpy ride. ..."
Trump has been up to what he seems to like to do best: whipsawing those who might be affected by his plans. On Friday, he put
Mr. Market and huge swathes of Corporate America in a tizzy by retaliating against China's tariff increases. China announced that
it would impose new tariffs on $75 billion of US goods and the restart of tariffs on autos and auto parts. Trump tweeted that he
would increase tariffs on Chinese goods already subject to tariffs: the $250 billion at 25% would go to 30% on October 1and the $300
billion at 10% would go to 15% in phases, on September 1 and December 1. Trump also "hereby ordered" US companies to pull out of
China, suggesting that he'd rely on the International Emergency Economic Powers Act of 1977.
Then, as most of you have likely heard, Trump made remarks at the G-7 summit that we widely interpreted as an indicator that he'd
back off again, by admitting to regrets about how the trade spat was going. When the press took up that line, Trump doubled down,
with the White House releasing a statement that Trump's sole regret was not raising tariffs higher.
Needless to say, the all-too-typical Trump to-ing and fro-ing made for an easy target.
From the Washington Post :
Former treasury secretary Lawrence Summers, a veteran of the Clinton and Obama administrations, said the White House's conflicting
statements were just the latest in a string of mixed messages that had made it impossible for people to understand its agenda.
"Deeply misguided policy and strategy has been joined for some time by dubious negotiating tactics, with promises not kept
and threats not carried out on a regular basis," Summers said in an interview. "We are at a new stage now with very erratic presidential
behavior and frequent denials of obvious reality. I know of no U.S. historical precedent."
And despite rousing himself to make a show of his resolve, the Administration did back down on one part of Trump's Friday missives,
that of "ordering" US companies to get out of Dodge, um, China.
From
the Wall Street Journal :
Aides to President Trump said Sunday he has no plans to invoke emergency powers and force companies to relocate operations
from China
"What he is suggesting to American businesses," [economic adviser] Mr. [Larry] Kudlow said, is that "you ought to think about
moving your operations and your supply chains away from China and secondly, we'd like you to come back home."
Treasury Secretary Steven Mnuchin also weighed in, telling "Fox News Sunday" that the president didn't have plans to invoke
emergency powers to force U.S. companies out of China.
"I think what he was saying is he's ordering companies to start looking," Mr. Mnuchin said."
The Journal also pointed out that Trump might have trouble forcing companies to exit:
Both Messrs. Mnuchin and Kudlow said that the president could theoretically force U.S. companies to leave China by invoking
a law known as the International Emergency Economic Powers Act of 1977, or IEEPA .
According to the Congressional Research Service, IEEPA can be used to deal with "any unusual and extraordinary threat" outside
the U.S. "to the national security, foreign policy or economy of the United States, if the president declares a national emergency
with respect to such threat."
The president is required "in every possible instance" to consult with Congress before exercising authorities granted by IEEPA,
and to specify in a report to lawmakers why the circumstances constitute a threat and why the actions are necessary, CRS said
in a briefing paper on the law issued earlier this year. The president must submit follow-up reports every six months .
Rod Hunter, a partner at Baker McKenzie and expert on international trade, said Mr. Trump could declare a state of emergency
and issue the order, but that doesn't mean it will stand.
"Congress could effectively override such a decision, and private parties would certainly challenge the action as an unconstitutional
takings, a violation of due process rights and beyond the statutory authority granted to the president by Congress," Mr. Hunter
said in an email.
Mind you, just like Brexit, there is a way to do what Trump wants to do that would not be so destructive and shambolic. Trump's
China policy appears to be intended to make American more economically self-sufficient so as to improve the prosperity of US workers,
as well as curb a competing imperialist.
But as we've described at some length in earlier posts, restoring America's manufacturing capabilities isn't just a matter of
weaning itself off cheap Chinese imports. The US has ceded a tremendous amount of know-how, from the factory floor on up. Getting
that back is a generation-long undertaking, requiring commitment to a national strategy that would include significant government
investment in fundamental research, renewed emphasis on education, including much cheaper higher education and vocational training
for those that aren't suited or inclined to go to college, and a reorientation of government spending and subsidies to favor productive
sectors over the connected. Not only would it be difficult to get any Administration to embrace open industrial policy, particularly
one that would break a lot of rice bowls (such as in our hugely wasteful arms industry and our bloated financial sector), maintaining
it beyond even a two-term Presidency would be an even taller order.
But where is the Trump tariff cage match likely to wind up? Given how often Trump has backed off when Mr. Market has had a hissy,
most commentator appear to have assumed before Friday's tit for tat that Trump would back down, if nothing else, in the form of allowing
a lot of exceptions, and the US and China would find a way for Trump to get enough concessions from China that he could declare peace
with honor.
That assumption looks to be incorrect. New Deal Democrat sent us the latest post from China Law Blog, written by lawyers who
specialize in Chinese law with an eye to helping businesses get set up and operate in China. The post by Dan Harris is every bit
as firm as its headline:
Repeat After
Me: There Will be No US-China Trade Deal . It also contains a good summary of key developments and detail on the various goods
targeted. Key sections:
The US-China Trade War Is and Will be the New Normal
I hate to say we told you so, but for nearly a year, WE TOLD YOU SO. Since October, 2018 we have been all but screaming at
anyone and everyone who has product made in China and sold into the United States to get out of China fast, if at all possible.
We say this and we set out the below timeline to prove this not so much to show that we have been right all along, but to try
to convince you that we are right when we now say there will be no resolution to the US-China trade war for a very long
time and you need to act accordingly.
The below is our timeline/proof of our having predicted a straight-line decline in US-China trade relations
But what should you make of President Trump's ordering US companies to immediately start looking for an alternative
to China? He can't really do that, can he? No, but in many respects this is exactly what Trump has been doing since the U.S.-China
trade war began. Trump cannot literally require American companies to pull out of China, but he can and has made it so difficult
that they all but have to leave China. And this is what most of the international lawyers and international trade lawyers at my
firm have come to believe has been Trump's plan all along.
Every step of the way, Trump has made it all but impossible for China to make a trade deal with the United States, which
is why this blog has been consistently clear that there will be no trade deal between the United States and China . If the US-China
trade war/cold war were really about trade imbalances, it would have ended long ago with China buying more soybeans and Boeing
airplanes from the United States. But from the very beginning, the U.S. has demanded China stop stealing IP and open its markets
for foreign companies, and there is just no way China will agree to either of these things. Lead negotiator Robert Lighthizer
is without a doubt smart enough to have known this all along. All this leads us to believe that the U.S. plan has always been
to force a slow decoupling of the U.S. and China and then work to convince the rest of the democratic world (the EU, Australia,
Canada, Latin America, Japan, etc.) to decouple from China, as well. In June, in
Does China WANT a Second Decoupling? The Chinese Texts Say That it Does we wrote of how China wants this decoupling, as well.
This latest Trump "order" does not have the force of law, so in that respect it is not an order at all. But in most other respects
it is. This order indicates Trump's passionate desire to rid the United States of what he sees as the China
scourge . More importantly, it is yet another
clear signal that he will continue to escalate this war with China until such time as he considers the United States to be victorious.
The fact that Trump issues this "order" amidst rising recession fears only highlights how ending U.S.-China trade is at the
top of his to-do list.
So in terms of what this means for your business, it means that you must stop believing there will be a solution to the trade
war that will allow you to go back to doing business with China the way you used to do business with China. You need to instead
recognize that this situation is the New Normal as between the United States and China and that, if anything, things are way more
likely to get worse than they are to get better.
I'm persuaded by this point of view because these writers have adopted the perspective that we've found to be very useful in other
geopolitical negotiations, which is to look at the bargaining position of both sides and see if there is any overlap. If there isn't,
there won't be an agreement unless one of both parties makes a significant concession.
One reason that other observers have likely missed what the China Law Blog discern is that there's an Anglo-American tendency
to assume that differences can be settled and a deal can be had. But as Sir Ivan Rogers pointed out with Brexit, and you have similar
dynamics with the US and China, there aren't precedents for trade deals where the two sides want to get further apart rather than
closer. Sir Ivan is of the point of view that the desire to disengage makes it much harder to come to terms.
The critical part of the China Law Blog's reading is that the Trump Administration is deadly serious about its two big asks,
intellectual property and market access. It's credible to attribute that to Trump's US Trade Representative, Lighthizer. As Lambert
put it, Lighthizer is the closest thing this Administration has to a Jim Baker. Lighthizer started at Covington & Burling, then served
in the Regan Administration as Deputy USTR before going to Skadden. Lighthizer is as fierce a China hawk as they come and has a long
history of saying that the entry of China into the WTO was at the expense of US jobs (see
here , for instance)
and even making a full-throated defense of
protectionism .
A part of the trade spat that hasn't gotten the attention it warrants and seems to confirm the China Law Blog's thesis is the
arm-wrestling over China's fetanyl exports to the US. It's not hard to see that this is an inherently important issue, since as I
understand it, fentanyl is so potent that it is very easy to overdose on it, making it markedly more dangerous than other addictive
drugs. In other words, the high death rate of fentanyl may make reducing supply a more effective strategy than it normally is in
"the war on drugs". Substitution with just about any other controlled substance would be less dangerous. And if Trump were to make
a dent in this problem, it would serve as a PR offset to some of the costs of his China strategy, like lost soyabean exports.
Fentanyl featured in the escalation on Friday, and it could conceivably serve as the basis for a national emergency threat
(even though, per the discussion earlier, it would have good odds of being overturned). One of Trump's four tweets urged US carriers
to do more to halt shipments arriving from China or other destinations (Mexico is believed to be a route for the entry of Chinese
fentanyl to the US).
In other words, it's not clear where this row ends, but there doesn't seem to be a path to depressurization, much the less resolution.
President Trump said China called U.S. officials on Sunday evening and said "let's get back to the table," a day after the
White House said the president regretted not escalating tariffs further on Chinese goods.
Speaking to reporters alongside Egyptian President Abdel Fattah Al Sisi, Mr. Trump called the discussions a "very positive
development." .
The Chinese government didn't immediately respond to Mr. Trump's remarks or to requests to corroborate the president's account
of a phone call having taken place. Chinese government officials have repeatedly said that Beijing wants to negotiate differences
on trade. On Monday, Beijing's lead trade negotiator, Vice Premier Liu He, told a conference that China still wants to continue
trade talks with the U.S. following heightened tensions in the past few days.
In May I had a conversation with a long-time friend. My friend works for a global manufacturer with a household name. He
has helped oversee construction of plants around the world. He helps source components from around the world. He told me that
"everybody's moving out" (of China).
The ones who can have not waited for Trump's message of Friday.
A few short years ago they had the Trans-Pacific Partnership being negotiated. This was nicknamed the "everybody but China"
pact as that was its mission – to cut China out of the Pacific. Add to that the "Pivot to Asia" introduced by Obama which was
to militarily threaten China and the writing was on the wall for China. They were to be boxed in and shut down. Trump may be the
front man now for this effort but all the China-hawks have come out of the woodwork to be let loose in the government.
I suppose that the plan is to force US companies to bail out of China and relocate to places like Vietnam, India, Bangladesh,
etc. But the question is whether these countries have the infrastructure to support these new factories? Do they have a trained,
educated workforce to man these factories? Is there a will to move to such places? As far as those countries are concerned, these
new companies could be seen as a two-edged sword. Yes they will bring investment and opportunities in those countries. But how
will they know if a Trump or someone like him later on will not order those factories out if there is a dispute or if the US demands
that those countries change their laws and open themselves up to financial exploitation? Trump is demanding the same of China
right now. And will Trump demand that all the other western countries move out of China?
I have mentioned before the idea of a multipolar world and I believe that we re seeing it now in action. The US and its
vassals will be one pole and another one is forming around China, Iran and Russia. I doubt that the EU will be another as they
are following what Trump orders even if reluctantly. There may be another factor. For centuries we have had an economy predicated
on growth but I suspect that by the end of this century will will have one based on contraction due to climate change and depletion
of resources. Better strap in. It could be a bumpy ride.
This is all pretty interesting. More theater than trade. And the reason is that there is no demand. Demographics has a lot
to do with it as well. It might not make any difference now how much a company can cut costs by moving to SE Asia because nobody
will be very eager to buy more crap anyway. And manufacturing cannot up and move cheaply if they have to reinvent and retool their
processes to make them more environmentally acceptable. It's a sea change. And a tap-dance.
According to this article,"
The DEA has stated that
China is the main source of US fentanyl. " I followed the link, and found "The DEA has said China is a main
source of fentanyl and other synthetic opioids." Which I take as meaning that even if the US could totally shut down Chinese
synthetic opioid production, someone will still be making and supplying it.
So, if the facts as given above are reconfigured, all it would take is for the Chinese producers of synthetic opioids to pay
the US patent holders their due. Problem solved! All kidding aside, the demands to get intellectual property paid for requires
a very pliant judicial system to actually recognize that an idea should be rightfully owned by a person.
Individual agency is a product of 'enlightenment' thinking which opened the pathway for an idea to be the creation of a person
who willed the idea into existence. A few steps later, a corporation becomes a person and then a group of people can somehow own
a single idea and be able to rent that idea out. To think that the Chinese would accept this cockamamie/historically embedded/English
common law idea would be to deny their own culturally based motivated reasoning.
I don't know how this situation will be resolved, but it is quite laughable that the diversion through tariffs of IP revenues
which in US legal logic should be paid to Corporations is actually going to go to the US Treasury.
"All this leads us to believe that the U.S. plan has always been to force a slow decoupling of the U.S. and China and then
work to convince the rest of the democratic world (the EU, Australia, Canada, Latin America, Japan, etc.) to decouple from China,
as well"
That is about right, and I do not doubt that this is the desire of Trump's negotiating team. Nor do I doubt that they can easily
steer talks to fail as described (by asking for concessions on market access favorable to the US side, AND by refusing to back
down on Huawei etc).
However, while effectively forcing a decoupling of China and US is straightforward, controlling its speed is not. Pull the
plug too fast (which China can threaten to accelerate), and some big US companies eat it. While Lighthizer and friends may be
willing to pay that price, it will make a lot of others very nervous.
Then, perhaps more importantly, is forcing the rest of the world to follow suit (or else there is no point). JP, ROK, DE (the
high tech suppliers besides US) all trade at least as much with China as US. The world market buying Chinese made goods is also
bigger than the US. It would take some skillful diplomacy to make it happen. This is not only beyond the level of the Trump admin,
but I would say all US administrations since the year 2000, with the Iran deal maybe the only exception I can think of.
China will end up defending itself by getting the overly aggressive and self-discrediting Team Trump reelected. By openly provoking
a small proxy conflict for example. Trump gets to do his Ronald Reagan act, which is what his audience wants. It will be a weird
political symbiosis. (an oversized personality can't survive without a suitably inflated enemy, and Joe Biden is no Hillary Clinton.
The media will play along – such drama is the only thing keeping them in business now.)
Anyway, if there is a counterbalancing force to prevent this, I would think it is wall street.
Apparently the US federal workers pension plan has started investing in index funds which include some Chinese companies that
have been in Trump & Co's target list. From the FT this morning:
The letter -- a copy of which was seen by the Financial Times -- said an impending investment shift by the FRTIB would mean
that about $50bn in US government pensions becomes exposed to the "severe and undisclosed" risks of being invested in selected
Chinese companies.
The letter, dated August 26, was copied to senior US officials including Mike Pompeo, US secretary of state, and Steven
Mnuchin, Treasury secretary.
"The Federal Retirement Thrift Investment Board made a short-sighted -- and foolish -- decision to effectively fund the
Chinese government and Communist party's efforts to undermine US economic and national security with the retirement savings
of members of the US Armed Services and other federal employees," Mr Rubio told the Financial Times.
One thing I remember from early on in this dispute was the US wanting more opportunities to invest in the Chinese market beyond
just exports/manufacturing. If pension funds are getting involved I would think that private investors would like to do the same
thing, which would make long-term decoupling more difficult, especially if US businesses also want to sell things to people in
China even if those things are made elsewhere.
As always your post was very informative and helpful and I certainly believe that pulling the US out of China is the goal of
this whole trade dispute. I just wonder if things like this will put a damper on their plans.
China Did Not Trick the US -- Trade Negotiators Served Corporate Interests
By Dean Baker
The New York Times ran an article * last week with a headline saying that the 2020
Democratic presidential contenders faced a serious problem: "how to be tougher on trade than
Trump." Serious readers might have struggled with the idea of getting "tough on trade." After
all, trade is a tool, like a screwdriver. Is it possible to get tough on a screwdriver?
While the Times's headline may be especially egregious, it is characteristic of trade
coverage which takes an almost entirely Trumpian view of the topic. The media portray the
issue of some countries, most obviously China, benefiting at the expense of the United
States. Nothing could be more completely at odds with reality.
China has a huge trade surplus with the United States, about $420 billion (2.1 percent of
GDP) as of 2018. However, this doesn't mean that China is winning at the expense of the
United States and because of "stupid" trade negotiators, as Trump puts it.
The U.S. trade deficit with China was not an accident. Both Republican and Democratic
administrations signed trade deals that made it easy to manufacture goods in China and other
countries, and then export them back to the United States.
In many cases, this meant that large U.S. corporations, like General Electric and Boeing,
outsourced parts of their operations to China to take advantage of low-cost labor there. In
other cases, retailers like Walmart set up low-cost supply chains so that they could undercut
their competitors in the U.S. market.
General Electric, Boeing, Walmart and the rest did not lose from our trade deficit with
China. In fact, the trade deficit was the result of their efforts to increase their profits.
They have little reason to be unhappy with the trade deals negotiated over the last three
decades.
It is a very different story for workers in the United States. As a result of the
exploding trade deficit, we lost 3.4 million manufacturing jobs between 2000 and 2007, 20
percent of the workers in the sector. This is before the collapse of the housing bubble led
to the Great Recession. We lost 40 percent of all unionized jobs in manufacturing.
This job loss not only reduced the pay of manufacturing workers, but as these displaced
workers flooded into other sectors, it put downward pressure on the pay of less-educated
workers generally. This is a pretty awful story, but it is not a story of China tricking our
so-called stupid negotiators; it is a story of smart negotiators who served well the interest
of corporations.
For some reason, the media always accept the Trumpian narrative that the large trade
deficits the U.S. runs with China (and most of the rest of the world) were the result of
other countries outsmarting our negotiators, or at least an accidental result of past trade
deals. The media never say that large trade deficits were a predictable outcome of a trade
policy designed to serve the wealthy.
The fact that trade is a story of winners and losers within countries, rather than between
countries, is especially important now that our trade conflicts are entering a new phase,
especially with China. While not generally endorsing Trump's reality TV show tactics, most
reporting has taken the position that "we" in the U.S. have genuine grounds for complaint
with China.
The complaints don't center on the under-valuation of China's currency, which is a problem
for manufacturing workers. Rather, the issue that takes center stage is the supposed theft by
China of our intellectual property.
While this sort of claim is routinely asserted, the overwhelming majority of people in the
United States have never had any intellectual property stolen by China. It is companies like
Boeing, GE, Pfizer and Merck that are upset about China not respecting their patent and
copyright claims, and they want the rest of us to have a trade war to defend them.
If the goals of trade policies were put to a vote, these companies would be hugely
outnumbered. However, they can count on the strong support of the media in both the opinion
pages, and more importantly, the news pages. The issue is entirely framed in their favor, and
dissenting voices are as likely to be heard as in the People's Republic of China.
There is a lot at stake in preserving the myth that ordinary workers were hurt as just an
accidental byproduct of globalization. The story is that it just happens to be the case that
hundreds of millions of people in the developing world are willing to do the same work as our
manufacturing workers for a lot less money.
Yes, the loss of millions of manufacturing jobs is a sad story, but is just part of the
picture. There are also millions of smart ambitious people in the developing world who are
willing to do the same work as our doctors, dentists, lawyers and other professions for a lot
less money.
But the people who design trade policy have made sure that these people don't have the
opportunity to put the same downward pressure on our most highly paid workers, as did their
counterparts working in families. And, for what it's worth, the trade model works the same
when we're talking about doctors as manufacturing workers. Less pay for U.S. doctors means
lower cost health care, just as lower pay for textile workers means cheaper clothes.
The key point is that winners in the global economy, along with the big corporations, got
their good fortune because they rigged the process, not because of anything inherent in the
nature of globalization. (This is the point of my book Rigged: How the Rules of Globalization
and the Modern Economy Were Structured to Make the Rich Richer. ** )
On this basic point, the media have no more interest in truth than Donald Trump. Hence, we
can expect further media parroting about being "tough" on trade.
"... Still, even if Trump isn't making sense, will China give in to his demands? The short answer is, "What demands?" Trump mainly seems exercised by China's trade surplus with America, which has multiple causes and isn't really under the Chinese government's control. ..."
"... Others in his administration seem concerned by China's push into high-technology industries, which could indeed threaten U.S. dominance. But China is both an economic superpower and relatively poor compared with the U.S.; it's grossly unrealistic to imagine that such a country can be bullied into scaling back its technological ambitions ..."
"... Which brings us to the question of how much power the U.S. really has in this situation. ..."
"... So while Trump's tariffs certainly hurt the Chinese, Beijing is fairly well placed to counter their effects. China can pump up domestic spending with monetary and fiscal stimulus; it can boost its exports, to the world at large as well as to America, by letting the yuan fall. ..."
"... At the same time, China can inflict pain of its own. It can buy its soybeans elsewhere, hurting U.S. farmers. As we saw this week, even a mostly symbolic weakening of the yuan can send U.S. stocks plunging. ..."
"... And America's ability to counter these moves is hindered by a combination of technical and political factors. The Fed can cut rates, but not very much given how low they are already. We could do a fiscal stimulus, but having rammed through a plutocrat-friendly tax cut in 2017, Trump would have to make real concessions to Democrats to get anything more -- something he probably won't do. ..."
"... So Trump is in a much weaker position than he imagines, and my guess is that China's mini-devaluation of its currency was an attempt to educate him in that reality. But I very much doubt he has learned anything. His administration has been steadily hemorrhaging people who know anything about economics, and reports indicate that Trump isn't even listening to the band of ignoramuses he has left. ..."
China Tries to Teach Trump Economics
But he doesn't seem to be learning.
By Paul Krugman
If you want to understand the developing trade war with China, the first thing you need to
realize is that nothing Donald Trump is doing makes sense. His views on trade are incoherent.
His demands are incomprehensible. And he vastly overrates his ability to inflict damage on
China while underrating the damage China can do in return.
The second thing you need to realize is that China's response so far has been fairly
modest and measured, at least considering the situation. The U.S. has implemented or
announced tariffs on virtually everything China sells here, with average tariff rates not
seen in generations. The Chinese, by contrast, have yet to deploy anything like the full
range of tools at their disposal to offset Trump's actions and hurt his political base.
Why haven't the Chinese gone all out? It looks to me as if they're still trying to teach
Trump some economics. What they've been saying through their actions, in effect, is: "You
think you can bully us. But you can't. We, on the other hand, can ruin your farmers and crash
your stock market. Do you want to reconsider?"
There is, however, no indication that this message is getting through. Instead, every time
the Chinese pause and give Trump a chance to rethink, he takes it as vindication and pushes
even harder. What this suggests, in turn, is that sooner or later the warning shots will turn
into an all-out trade and currency war.
About Trump's views: His incoherence is on view almost every day, but one of his recent
tweets was a perfect illustration. Remember, Trump has been complaining nonstop about the
strength of the dollar, which he claims puts America at a competitive disadvantage. On Monday
he got the Treasury Department to declare China a currency manipulator, which was true seven
or eight years ago but isn't true now. Yet the very next day he wrote triumphantly that
"massive amounts of money from China and other parts of the world is pouring into the United
States," which he declared "a beautiful thing to see."
Um, what happens when "massive amounts of money" pour into your country? Your currency
rises, which is exactly what Trump is complaining about. And if lots of money were flooding
out of China, the yuan would be plunging, not experiencing the trivial (2 percent) decline
that Treasury condemned.
Oh well. I guess arithmetic is just a hoax perpetrated by the deep state.
Still, even if Trump isn't making sense, will China give in to his demands? The short
answer is, "What demands?" Trump mainly seems exercised by China's trade surplus with
America, which has multiple causes and isn't really under the Chinese government's
control.
Others in his administration seem concerned by China's push into high-technology
industries, which could indeed threaten U.S. dominance. But China is both an economic
superpower and relatively poor compared with the U.S.; it's grossly unrealistic to imagine
that such a country can be bullied into scaling back its technological ambitions .
Which brings us to the question of how much power the U.S. really has in this
situation.
America is, of course, a major market for Chinese goods, and China buys relatively little
in return, so the direct adverse effect of a tariff war is larger for the Chinese. But it's
important to have a sense of scale. China isn't like Mexico, which sends 80 percent of its
exports to the United States; the Chinese economy is less dependent on trade than smaller
nations, and less than a fifth of its exports come to America.
So while Trump's tariffs certainly hurt the Chinese, Beijing is fairly well placed to
counter their effects. China can pump up domestic spending with monetary and fiscal stimulus;
it can boost its exports, to the world at large as well as to America, by letting the yuan
fall.
At the same time, China can inflict pain of its own. It can buy its soybeans elsewhere,
hurting U.S. farmers. As we saw this week, even a mostly symbolic weakening of the yuan can
send U.S. stocks plunging.
And America's ability to counter these moves is hindered by a combination of technical and
political factors. The Fed can cut rates, but not very much given how low they are already.
We could do a fiscal stimulus, but having rammed through a plutocrat-friendly tax cut in
2017, Trump would have to make real concessions to Democrats to get anything more --
something he probably won't do.
What about a coordinated international response? That's unlikely, both because it's not
clear what Trump wants from China and because his general belligerence (not to mention his
racism) has left America with almost nobody willing to take its side in global disputes.
So Trump is in a much weaker position than he imagines, and my guess is that China's
mini-devaluation of its currency was an attempt to educate him in that reality. But I very
much doubt he has learned anything. His administration has been steadily hemorrhaging people
who know anything about economics, and reports indicate that Trump isn't even listening to
the band of ignoramuses he has left.
So this trade dispute will probably get much worse before it gets better.
""You think you [Trump] can bully us [Xi]. But you can't. We, on the other hand, can ruin
your farmers and crash your stock market. Do you want to reconsider?""
Krugman is putting his "liberal" thinking in to Xi's mind.
US farmers are the darling of the "liberal"? I suspect not so much unless to oppose
Trump.
To see the mechanism that China could crash the stock market requires some thinking.
How could China do such a thing? Tariffs on $100B (in a $19,000B economy) in US exports is
emotional to the exchanges. Dumping US debt would raise interest rates and make T Bills
attractive over stocks, which is not a bad thing. The "liberals" know a 'deplorable' 36000
Dow is a dream. Then what does China do with all those USD?
The issue is a lot of "liberals" do not want Trump to succeed in efforts to reverse the
MNC expulsion of labor from the US to developing countries.
I look forward to Trump asking the DNC select why he or she "wants Xi to win over labor in
the US?"
The underlying loser in the Trump scheme are the MNC's so will the DNC go all in for MNC's
at the expense of the worker?
Nostalgia for a past that never was; Part 1 review of Paul Collier's "The future of
capitalism"
Paul Collier's new book "The future of capitalism" is a very hard book to review. It is
short (215 pages) but it covers an enormous area, from social and economic interpretation of
the past seventy years in the West, to pleas for "ethical" companies, "ethical" families and
even an "ethical" world, to a set of proposals for reform in advanced economies.
The most uncharitable assessment would be to say that, at times, the book comes close (I
emphasize "close") to nationalism, "social eugenics", "family values" of the moral majority
kind, and conservativism in the literal sense of the word because it posits an idealized past
and exhorts us to return there. But one could also say that its diagnosis of the current ills
is accurate and remarkably clear-sighted. Its recommendations are often compelling,
sophisticated and yet common-sensical.
I have therefore decided to divide my review in two parts. In this part I will explain the
points, mostly methodological and historical, on which I disagree with Collier. In the second
part, I will discuss the diagnoses and recommendations on which I mostly agree.
Pragmatism. Collier positions himself as a "pragmatist" battling both (1) ideologues:
Utilitarians, Rawlsian (who are accused, somewhat strangely, of having introduced identity
politics) and Marxists; and (2) populists who have no ideology at all but simply play on
people's emotions. All three kinds of ideologies are wrong because they follow their script
which is inadequate for current problems while populists do not even care to make things
better but only to rule and have a good time. It is only a pragmatic approach that, according
to Collier, makes sense.
Pragmatism however is an ideology like any other. It is wrong to believe oneself exempt
from ideological traps if one claims to be a "pragmatist". Pragmatism collects whatever are
the ruling ideologies today and rearranges them: it provides an interpretative framework like
any other ideology. Pragmatists are, as Keynes said in a similar context "practical men, who
believe themselves to be quite exempt from any intellectual influences, [but] are usually the
slaves of some defunct economist [or ideologue; my addition]."
Adam Smith. The second building block of Collier book is based on his interpretation of
Adam Smith, which has become more popular recently and tries to "soften" the hard edge of the
Adam Smith of the "Wealth of Nations" (self-interest, profit, and power) by a more congenial
Smith from "The Theory of Moral Sentiments". This is an old debate that goes almost 200 years
back ("Die Adam Smith Frage").
There are, I think, if not two Smiths, then one Smith for two sets of circumstances: in
TMS, it is the Smith for our behavior with family, friends and community; in the WoN, it is
the Smith of economic life, our behavior as "economic agents". I discuss this in "Capitalism,
Alone". David Wootton in "Power, Pleasure and Profit" very persuasively makes the same point.
And even Collier says exactly the same thing towards the end of his book, but in the early
parts he argues that the Adam Smith of TMS applies to economics as well.
Now, for an economist only the Smith from the WoN matters. Economists do not claim (or
should not claim) to have particularly valuable insights regarding how people behave outside
of economics. So it is fully consistent for economists to use a model of Smith's homo
economicus who is pursuing monetary gains only, or more broadly, his own utility only. That
of course does not exclude, as Collier and some other writers (e.g., Peter Turchin) seem to
believe, cooperation with others. It is obvious that many of our monetary objectives are
better achieved through cooperation: I am better off cooperating with people at my university
than setting my own university. But whether I do one or the other, I am pursuing my own
selfish interest. I am not doing things for altruistic reasons -- which perhaps I might do in
my interactions with family or friends.
My point in "Capitalism, Alone" is that under hyper-commercialized globalization Smith's
economic sphere is rapidly expanding and "eating up" the sphere where the Smith of TMS
applies. Commodification "invades" family relations and our leisure time. Both Collier and I
agree on that. But while I think that this is an inherent feature of hyper-commercialized
globalization, Collier believes that the clock can be turned back to an "ethical world" which
existed in the past while somehow keeping globalization as it is now. This is an illusion and
leads me to Collier's nostalgia.
Social-democracy. In Collier's view of the Golden Age (1945-75), social-democracy that
brought it about did this for ethical reasons. In several places he repeats more of less this
breathtaking sentence "[Roosevelt] was elected because people recognized the New Deal was
ethical". He argues that the origin of social-democracy lies in a (nice) co-operative
movement, not that the reforms in capitalism after WW1 and WW2 were the product of a century
of often violent struggle of social democratic parties to improve workers' conditions. It is
not because ethical leaders decided suddenly to make capitalism "nicer" but because the two
world wars, the Bolshevik revolution, the growth of social-democratic and communist parties,
and their links with powerful trade unions, exacted the change of course from bourgeoisie
under the looming threat of social disorder and expropriation. So it is not through the
benevolence of the right that capitalism was transformed, but because the upper classes,
chastised by past experience, decided to follow their own enlightened self-interest: give up
some in order to preserve more. (For similar interpretations, see Samuel Moyn, Avner
Offer,)
This difference in the interpretations of history is important because Collier's view
applied to today basically calls for ethical rulers -- to somehow appear. This is why at the
end of the book he discusses how political leaders should be elected (not by party members or
primaries, but by the elected representatives of their parties). My interpretation implies
that unless there are strong social forces that would push back financial sector excesses,
tax evasion, and high inequality nothing will be changed. What matters is not ethics or
ethical leaders but group/class interest and relative power.
The facts. And finally the Arcadia of the trente glorieuses * when Collier holds that
moral giants strode the Earth, companies cared about workers, families were "full" and
"ethical", never really existed, at least not in the way it is described in the book. Yes,
like many others I have pointed out that the trente glorieuses were very good years for the
West both in terms of growth and surely in terms of narrowing of wealth and income
inequalities. But they were no Arcadia and in many respects they were much worse than the
present.
The period of Collier's "ethical family" in which "the husband was the head" when every
member cared for each other, and several generations lived together, was a hierarchical
patriarchy that even legally forbid any other types of family-formation. (I remember that in
my high school in Belgium, only fathers were allowed to sign off on pupils' grades or school
absences. Not mothers.)
In the USA, the Golden Age was the age of social mimicry and conservatism, widespread
racial discrimination, and gender inequality. When it comes to politics, it is often
forgotten that during the Golden Age, France was basically twice on the edge of a civil war:
during the Algerian war and in 1968. Spain, Portugal, and Greece were ruled by quasi-fascist
regimes. Terrorism of RAF and Brigate Rosse came in the 1970s. Finally, if these years were
so good and "ethical" why did we have the universal 1968 rebellion, from Paris to
Detroit?
That imagined world never was, and we are utterly unlikely to return to it; not only
because it never was but because the current word is entirely different. Collier overlooks
that the world of his youth to which he wants people to return was the world of enormous
income differences between the rich world and the Third World. It is for that reason that the
English working class could (as he writes) feel very proud and superior to the people in the
rest of the world. They cannot feel so proud and superior now because other nations are
catching up. Implicitly, regaining self-respect for the English working class requires a
return to such worldwide stratification of incomes.
The book is thus built on the quicksand of a world that did not exist, will not exist, and
on a methodology that I find wanting. 2020s will not be the imagined 1945, however loudly we
clamor for it. But this does not mean that the analyses of current problems and the
recommendations are wrong. Many of them are very good. So I will turn to them next.
How to create an ethical county, if not the world: Part 2 review of Paul Collier's "The
future of capitalism"
This is the second part of my review of Paul Collier's "The future of capitalism". The
first part is here. *
In this review of Collier's policy recommendations, I will break the discussion into three
parts, following Collier's own approach: how to make companies more ethical, families
stronger, and the world better.
Ethical firm. Collier argues that, in order for companies to be seen as ethical and to
offer their workforce meaningful jobs, companies should include workers in management, give
much more power to the middle-level management, and do profit-sharing. These are all
well-taken recommendations, and I believe, like Collier, that they would increase companies'
profitability in addition to providing "better" jobs. The question however is how many
companies nowadays can afford to provide such meaningful and (relatively) stable jobs because
of fast-evolving changes driven by globalization. Nevertheless the idea is correct.
Collier then moves to what may be the most intriguing recommendation in the book and that
goes beyond the usual "let's have higher and more progressive taxes". He looks at the big
divide between the successful global cities (like New York and London) and their left-behind
hinterlands. The success of metropolises comes from economies of scale, specialization, and
complementarity (gains of agglomeration). People can specialize because the demand for
specialized skills is high (the best tax accountants are located in New York not in small
dilapidated cities). Companies can enjoy economies of scale because the demand is high and
specialized workers benefit from complementarity in skills from other workers with whom they
are in close geographical and intellectual contact.
So who are the main winners from metropolises' success, asks Collier? People who own land
and housing (as housing prices skyrocket) and highly skilled professionals who, after paying
higher rents, still make more in global cities than elsewhere. Collier's suggestion then,
based on his work with Tony Venables, is to tax heavily these two groups of people, i.e., to
introduce supplemental taxes which would be geographical: tax housing and high income
individuals living in London.
How to help hinterland catch up? Use the money collected in London or New York to give
subsidies to large cluster-like companies (like Amazon) if they set they businesses in the
left-behind cities like Sheffield or Detroit. One can quibble with this idea but the logic of
the argument is, I think, quite compelling, and the taxation suggested by Collier has the
advantage of going beyond the indiscriminate increase in taxes for all. We are talking here
of targeted taxation and targeted subsidies. This is the lieu fort of Collier's book.
Ethical family. I am less enthusiastic about the suggestions in this area. Here Collier is
at his most conservative although that social conservatism is masked under the cover of
scientific studies that show that children living in "full" families with two heterosexual
parents are doing much better than children living with one parent only.
Collier almost implies that (say) mothers should stay in unloving or abusive relationships
so that there would be both parents present in the family. Such families should, according to
Collier, be given support and for all children public pre-K and K education should be free
(very reasonable). Collier also very persuasively describes manifold advantages that the
children of the rich receive, not only through inheritance but through intangible capital of
parental knowledge and connections. This type of social capital inheritance is not a
well-researched topic and I hope this changes since its importance in real life is
substantial.
Collier displays clear preference for "standard" families and even some "social eugenics"
as when he criticizes UK policy that provides free housing and since 1999 extra benefits for
single mothers to have encouraged "many women...to bear children who will not be raised
well".
The argument that parents should sacrifice themselves (regardless of the psychic cost) for
children is also dangerous. It leads us to a family formation of the 19th century when women
often lived in terrible marriages because of social pressure not to be seen as abandoning or
not caring for their children. This is neither a desirable nor a likely solution for today.
An ethical family should consider interests of all members equally, not subjugate the
happiness of some (mostly mothers) to that of others.
Ethical world. Collier has surprisingly little to say about the ethical world. His ethical
world is a world largely closed to new migration which Collier rejects based on a not
unreasonable view going back to Assar Lindbeck and George Borjas of cultural incompatibility
between the migrants and the natives. Interestingly, Collier does not quote either of these
two authors nor any others. (The book is directed at the general audience so the mentions of
other authors are extremely rare except when it comes to Collier himself and a few of his
co-authors).
It is slightly disconcerting that Collier who has spent more than three decades working on
Africa has almost nothing to say about how Africa and African migration fits into this
"ethical world". There are only two ways in which he addresses migration.
First, migrants or refugees should stay in countries that are geographically close to the
source countries: Venezuelans in Colombia, Syrians in Lebanon and Turkey, Afghanis in
Pakistan. Why the burden of migrants should be exclusively borne by the limitrophe countries
** that are often quite poor is never explained. Surely, an ethical world would require much
more from the rich.
Second, he argues that the West should help good companies invest in poor countries in
order to increase incomes there and reduce migration. But how is this to be achieved is never
explained. It is mentioned almost as an afterthought and is considered deserving of two
sentences only (in two different parts of the book). This is in contrast with a detailed
explanation, discussed above, of how governments should encourage and subsidize large
companies to relocate to second-tier cities. Could a similar scheme be designed for
investments in Africa? Nothing is said.
Further, where does it leave African migrants crisscrossing the Mediterranean as I write?
There are no geographically close countries where they could go (surely not to Libya) nor can
they wait for years in Mali for the Western companies to bring them jobs. Again, nothing is
said on that. It is not surprising that Collier is very supportive of Emmanuel Macron whose
anti-immigration policy is quite obvious, and of Danish Social Democrats that are in the
process of creating a kind of national social democracy with new laws that practically reduce
immigration to a trickle. Collier favors Fortress Europe although he does not say so
explicitly.
In keeping with his anti-immigration stance, Collier argues that migration is not an
integral part of globalization. Why –in principle– goods, services and one factor
of production (capital) should be allowed to move freely while another factor of production
(labor) is to remain stuck is not clear. Surely, the fact that trade is driven by comparative
advantage and migration by absolute is not the reason to be against migration. On exactly the
same grounds, one could be against movement of capital too.
In conclusion, I think that the recommendations regarding the "ethical firm" and
metropolis-hinterland divergence are spot on; the recommendations on "ethical family" are a
combination of very perceptive and sensible points, and a view of the family that at times
comes from a different age, and almost nothing is said about an "ethical world". This latter
is a big omission in the era of globalization, but perhaps Collier was solely interested in
how to improve nation-states.
** Territories situated on a border or frontier. In a broad sense, it means border
countries -- any group of neighbors of a given nation which border each other thus forming a
rim around that country.
"... This strategy is not popular with US corporations and will earn Trump some more opposition. Former Rep. Joe Walsh (R-Ill.) on Sunday announced he would mount a primary challenge to President Trump ..."
Trump has put US companies on alert that he might force them to withdraw from China, where
they have $256 billion invested. He says he is given this power by the 1977 law called the
International Emergency Economic Powers Act, or IEEPA.
The Republican Party has spent over a century warning against government involvement in
the private sector, but now their leader is doing it big time. Trump ordering companies
around about where they can invest is a form of fascism or rightwing national socialism. Left
socialism is about public sector economic activity for the good of people. National socialism
is the state usurping economic resources on behalf of a small corporate and high-official
elite.
Tara Golshan at Vox explained how Trump unilaterally raised China tariffs in the first
place by 25% (he is threatening to go to 30%):
"Trump's White House cited Section 232 of the Trade Expansion Act of 1962, a provision
that gives the secretary of commerce the authority to investigate and determine the impacts
of any import on the national security of the United States -- and the president the power to
adjust tariffs accordingly."
So one thing that is going on is that measures passed by Congress for limited and extreme
situations are being misused by presidents for everyday policy-making. . . here
This strategy is not popular with US corporations and will earn Trump some more
opposition. Former Rep. Joe Walsh (R-Ill.) on Sunday announced he would mount a primary
challenge to President Trump . . .
here
"... During his meeting with Johnson on Sunday at the G7 in France, the US president raised eyebrows when he responded in the affirmative to questions from reporters on whether he had any second thoughts about the tariff move. ..."
While one may accuse the US president of many things, having second thoughts is hardly one
of them: once Trump has decided on a course of action, he tends to follow through. Which is why
the global press gasped when a rare case of doubt emerged this morning during Trump's breakfast
meeting with the UK's Boris Johnson at the Biarritz G-7, when the US president acknowledged
having second thoughts about the escalating the trade war with China... only for his top
spokeswoman to later retract and say Trump meant he regretted not raising tariffs even
more.
During his meeting with Johnson on Sunday at the G7 in France, the US president raised
eyebrows when he responded in the affirmative to questions from reporters on whether he had any
second thoughts about the tariff move.
Every president of the USA for the past 50 years has cultivated US exports to China. You
want to just throw it away, only two or three years before the purchasing power of China
exceeds that of the USA???
China - 1.5 billion.
USA - 326 million
China growth rate 2018: 6.4%
USA growth rate 2018: 2.8% source
China now produces twice as many graduates a year as the US source
As of 2015, China had already taken global lead in manufacturing output:
source
China - $2,010 billion
USA - $1,867 billion
World market size, based on population:
source
China - 18.7%
USA - 4.3%
Greedy US corporations have been in bed with China robbing the US citizen with all those
job exports to China.
If things were produced in US, the corporations would have made less money, but the US
citizen would have been better off. The trade deficit which has been running for decades
wouldn't have been that much.
Anyone with a lick of commonsense knew Trump's detractors would be gunning for him during
his trip to Europe. Trump has not disappointed these people by continuing his effort to come
across as too clever for his own good. Trump gave these people more ammunition when he said
he has doubts about his actions.
During breakfast with the UK's Boris Johnson at the G-7 meeting in Biarritz, France Trump
acknowledged having second thoughts about the escalating the trade war with China. The
article below explores how this may cause Trump a great deal of grief.
Beijing just might be able to doom the president's chance of reelection. They can tune
tariffs to hurt Trump base.
Notable quotes:
"... China's tariff threats take aim at the heart of Trump's political support -- factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down. Soybean prices sank to a two-week low ..."
"... The tariffs beginning in September include 10% on pork, beef, and chicken, and various other agricultural goods, while soybeans will have the extra 5% tariff on top of the existing 25%. Starting in December, wheat, sorghum, and cotton will also get a 10% tariff. ..."
Some of the countermeasures will take effect starting Sept. 1, while the rest will come into
effect from Dec. 15, according to the announcement Friday from the Finance
Ministry. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300
billion of Chinese shipments
An extra 5% tariff will be put on American soybeans and crude-oil imports starting next
month. The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with
another 10% on top for some vehicles. With existing general duties on autos taken into account,
the total tariff charged on U.S. made cars would be as high as 50%.
China's tariff threats take aim at the heart of Trump's political support -- factories and
farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing
down. Soybean prices sank to a two-week low
.... ... ...
The tariffs beginning in September include 10% on pork, beef, and chicken, and various other
agricultural goods, while soybeans will have the extra 5% tariff on top of the existing 25%.
Starting in December, wheat, sorghum, and cotton will also get a 10% tariff.
"... "The 2008 experience demonstrated that the U.S. dollar as the global reserve and main trade currency is dangerous for all who use it. Currently any hickup in the U.S. economy leads to large scale recessions elsewhere." ..."
"... It has also become a primary tool for the US to assert extraterritorial jurisdiction over the world to enforce extreme uses of sanctions, as in blowing up the Iran deal. Already the EU has explored ways to get around that to work with Iran. ..."
"... The over use of sanctions, and abuse of the US financial position in order to govern others, reinforces the desire to deal with fears that dependence on the dollar risks vulnerability to economic depression due to US irresponsibility. ..."
"... The US is creating a perfect storm for the dollar, with is exactly what it would take to make others undertake the expense and difficulty of replacing it as the world reserve currency and presumed standard of exchange. ..."
"... I just had a thought. The USSA has been doing it all wrong for all these decades. There are at least two responses the USSA could have applied to the obviously impending debacle of simply allowing the Chinese to thoroughly undermine its industrial system. The most obvious response would have been tariffs, which could be perceived as an aggressive policy, but certainly not as the outright aggression of sanctions. ..."
"... Or probably even much better, a 'negative sales tax' on USSA manufactured products, which could in no way be perceived as aggressive at all. Note that there is (I presume) a vast difference between simply subsidizing companies (since subsidies coud then flow directly into the pockets of the companies' capitalists) and providing the companies' customers with a 'negative tax' on USSA produced products (basically an instant rebate). This could effectively provide price parity for the goods produced for the two countries, and could maintain the viability of the USSA manufacturing system. ..."
"... The US ruling class cannot grow out of its desire to extend its rule to the rest of the planet. But humanity is not as malleable as the American people-with their dreams of sharing in the dividends when America (Great Again) (aka its ruling class) orders the rest of the world around and exploits everyone the way that it exploits the working people in the United States. ..."
"... Are you not aware that the Bank of Japan basically owns 70% of the Japanese stock market in the from of ETFs? ..."
"... While Europe and Japan are failing economically at least America is at war with the second biggest power on the planet, making drastic moves justified in the face of a national emergency. ..."
"... I imagine now that John Maynard Keynes'ghost, if it were observing our current global political and economic affairs, would be having a laugh. It was Keynes who suggested the notion of International trade using a common trading currency created purely for International trade purposes, in a system in which nations would not be allowed to build up continuous balance-of-payments surpluses or deficits over several years, but would be required to spend their surpluses on countries forced to go into deficit because of other countries' desires for annual surpluses, leading to trade policies or currency manipulations to achieve such a dubious goal. ..."
"... The real solution though is a different system with some global exchange medium that can not be manipulated by one country or a block of selfish countries. ..."
The U.S. is decoupling itself from China. The effects of that process hurt all global
economies. To avoid damage other countries have no choice but to decouple themselves from the
U.S.
Today's Washington Post front page leads with a highly misleading headline:
It was China, not Trump, which retaliated. Trump reacted to that with a tweet-storm and by
intensifying
the trade war he started . The piece under the misleading headline
even says that :
President Trump demanded U.S. companies stop doing business with China and announced he
would raise the rate of tariffs on Beijing Friday, capping one of the most extraordinary
days in the long-running U.S.-China trade war. ... The day began with Beijing's announcement that it would impose new tariffs on $75 billion
in goods, including reinstated levies on auto products, starting this fall. It came to a
close Friday afternoon with Trump tweeting that he would raise the rate of existing and
planned tariffs on China by 5 percentage points.
Beijing's tariff retaliation was delivered with strategic timing, hours before an
important address by Powell, and as Trump prepared to depart for the G-7 meeting in
Biarritz.
After Trump's move the stock markets had a sad. Trade wars are, at least in the short
term, bad for commerce. The U.S. and the global economy are still teetering along, but will
soon be in recession.
The Trump administration is fine with that. (As is Dilbert creator
Scott
Adams (vid).)
U.S. grand strategy is to prevent other powers from becoming equals to itself or to
even surpass it. China, with with a population four times larger than the U.S., is the
country ready to do just that. It already built itself into an economic powerhouse and it is
also steadily increasing its military might.
China is thus a U.S. 'enemy' even though Trump avoided, until yesterday, to use that
term.
Over the last 20+ years the U.S. imported more and more goods from China and elsewhere
and diminishes its own manufacturing capabilities. It is difficult to wage war against
another country when one depends on that country's production capacities . The U.S. must
first decouple itself from China before it can launch the real war. Trump's trade war with
China is intended to achieve that. As Peter Lee
wrote
when the trade negotiations with China failed:
The decoupling strategy of the US China hawks is proceeding as planned. And economic pain
is a feature, not a bug. ... Failure of trade negotiations was pretty much baked in, thanks to [Trump's trade
negotiator] Lightizer's maximalist demands.
And that was fine with the China hawks.
Because their ultimate goal was to decouple the US & PRC economies, weaken the PRC,
and make it more vulnerable to domestic destabilization and global rollback.
If decoupling shaved a few points off global GDP, hurt American businesses, or pushed
the world into recession, well that's the price o' freedom.
Or at least the cost of IndoPACOM being able to win the d*ck measuring contest in East
Asia, which is what this is really all about.
Trump does not want a new trade deal with China. He wants to decouple the U.S. economy
from the future enemy. Trade wars tend to hurt all involved economies. While the decoupling
process is ongoing the U.S. will likely suffer a recession.
Trump is afraid that a downturn in the U.S. could lower his re-election chances. That
is why he wants to use the Federal Reserve Bank to douse the economy with more money without
regard for the long term consequences. That is the reason why the first part of his tweet
storm yesterday was
directed at Fed chief Jay Powell:
In his order for U.S. companies to withdraw from China, some close to the administration
saw the president embracing the calls for an economic decoupling made by the hawks inside
his administration.
The evidence of the shift may have been most apparent in a 14-word tweet in which Trump
appeared to call Xi an "enemy."
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" he said in a
Tweet posted after Powell gave a speech in Jackson Hole that contained implicit criticism
of Trump's trade policies and their impact on the U.S. and global economies.
Jay Powell does not want to lower the Fed interest rate. He does not want to increase bond
buying, i.e. quantitative easing. Interest rates are already too low and to further decrease
them has its own danger. The last time the Fed ran a too-low interest rate policy it caused
the 2008 crash and a global depression.
Expect Trump to fire Powell should he not be willing to follow his command. The U.S. will
push up its markets no matter what.
From Powell's perspective there is an additional danger in lowering U.S. interest
rates. When the U.S. runs insane economic and monetary policies U.S. allies will also want
decouple themselves - not from China but from the U.S. The 2008 experience demonstrated that
the U.S. dollar as the global reserve and main trade currency is dangerous for all who use
it. Currently any hickup in the U.S. economy leads to large scale recessions
elsewhere.
That is why even long term U.S. ally Britain warns of such danger and
looks for a way
out :
Bank of England Governor Mark Carney took aim at the U.S. dollar's "destabilising" role
in the world economy on Friday and said central banks might need to join together to create
their own replacement reserve currency.
The dollar's dominance of the global financial system increased the risks of a liquidity
trap of ultra-low interest rates and weak growth, Carney told central bankers from around
the world gathered in Jackson Hole, Wyoming, in the United States. ... Carney warned that very low equilibrium interest rates had in the past coincided with wars,
financial crises and abrupt changes in the banking system. ... China's yuan represented the most likely candidate to become a reserve currency to match
the dollar, but it still had a long way to go before it was ready.
The best solution would be a diversified multi-polar financial system, something that
could be provided by technology, Carney said.
Carney speaks of a "new Synthetic Hegemonic Currency (SHC)" which, in a purely
electronic form, could be created by a contract between the central banks of most or all
countries. It would replace the dollar as the main trade currency and lower the risk for
other economies to get infected by U.S. sicknesses (and manipulations).
Carney did not elaborate further but is an interesting concept. The devil will be, as
always, in the details. Will one be able to pay ones taxes in that currency? How will the
value of each sovereign currency in relation to SHC be determined?
That the U.S. dollar is used as a global reserve currency under the Bretton Woods
system is, in the words of the former French Minister of Finance Valéry Giscard
d'Estaing, an "exorbitant privilege". It if wants to keep that privilege it will have to go
back to sane economic and monetary policies. Otherwise the global economy will have no choice
but to decouple from it.
Posted by b on August 24, 2019 at 19:22 UTC |
Permalink
"The 2008 experience demonstrated that the U.S. dollar as the global reserve
and main trade currency is dangerous for all who use it. Currently any hickup in the U.S.
economy leads to large scale recessions elsewhere."
It has also become a primary tool for the US to assert extraterritorial jurisdiction over
the world to enforce extreme uses of sanctions, as in blowing up the Iran deal. Already the
EU has explored ways to get around that to work with Iran.
The over use of sanctions, and abuse of the US financial position in order to govern
others, reinforces the desire to deal with fears that dependence on the dollar risks
vulnerability to economic depression due to US irresponsibility.
The US is creating a perfect storm for the dollar, with is exactly what it would take to
make others undertake the expense and difficulty of replacing it as the world reserve
currency and presumed standard of exchange.
No one currency is quite as good now, but one could be improved, or a basket approach
could be used. In the ancient world, they used such a nominal currency as a standard by which
to value real currencies. We could again.
Trump does not want a new trade deal with China. He wants to decouple the U.S. economy
from the future enemy.
That may well be what is going on here. Something between total insanity and managed
insanity. The next president will unravel all of this in a year or so of effort. That is what
is so damaging. No business can plan on what is next. No policy is long term.
This is pure Trumpian logic unhinged. Hit them twice as hard as they hit you. I would not
dare to guess who is winding him up and pointing him in this direction. Trump has had one of
his busiest weeks yet.
I see Elisabeth Warren's crowd sizes are getting very large. I will feel better when no
one shows up to a Trump rally. China has time to wait this out and the ability to raise some
chaos on their own to help undermine Trump.
Sorry guys, it was the realization that the Empire had driven Russia into China's arms
that sparked the 'get tough' attitude on China.
The Empire HAD TO isolate China but their horrendous treatment of Russia provided an
opportunity for China to escape the coming 'smack down' by joining with Russia to challenge
Western global domination.
As usual, it is us 'little people that will suffer for the mistakes of our elites. And
elite propaganda means that most will suffer in silence, not realizing what really
happened.
It should be clear by now that elite adventurism is a choice that is not subject to
democratic controls. The sheeple will sleepwalk into WWIII.
Silver lining? Maybe a multi-lateral world saves us from the the more terrible dystopia of
a unilateral world.
I just had a thought. The USSA has been doing it all wrong for all these decades. There are
at least two responses the USSA could have applied to the obviously impending debacle of
simply allowing the Chinese to thoroughly undermine its industrial system. The most obvious
response would have been tariffs, which could be perceived as an aggressive policy, but
certainly not as the outright aggression of sanctions.
Or probably even much better, a 'negative sales tax' on USSA manufactured products, which
could in no way be perceived as aggressive at all. Note that there is (I presume) a vast
difference between simply subsidizing companies (since subsidies coud then flow directly into
the pockets of the companies' capitalists) and providing the companies' customers with a
'negative tax' on USSA produced products (basically an instant rebate). This could
effectively provide price parity for the goods produced for the two countries, and could
maintain the viability of the USSA manufacturing system.
But... no, we didn't do anything like that. Our Harvard trained economics geniuses hatched
the 'far superior' strategy of 'quantitative easing'. They simply eased all the money out of
the system and into the absurdly deep pockets of the oligarchs, supposedly in order to 'save
the system'. What a masterful strategy! So the options are all used up, and theres no sane
way forward. Great job.
So here's my plan. First, of course, we 'take care of' the lawyers. Well... no. First we
we bulldoze Harvard. Then we institute the mother of all class action lawsuits, the 99% as
plaintiffs and the 1% as defendants, and we clean them out (they will surely run off to
China, but good riddance). We will be left with all their fake money, but at least we can try
to start over.
From the article linked above...Just another model of political technology,....and of
civilization....
Titled 'Green is gold: the strategy and actions to China´s ecological civilization',
the plan that was analyzed during the UNEA assembly explains, in its beginning, its
starting point and destination: "Enjoying a beautiful house, a blue sky, a green land and
clean water is the dream of any Chinese citizen and, therefore, the center of the Chinese
dream (...) To achieve this vision, the government has decided to highlight the concept of
eco-civilization and incorporate it into every aspect of the economy, politics, culture and
social development of the country."
Definitely, a different political technology from that of Bannon...
Dianxi Xiaoge's YouTube channel is contemporary political technology at its finest.
Recommended viewing for all future world leaders.
Can one really get rid of one without just getting a new master? Contributor@4
Why not? Progress is not inevitable but it is possible.
The US ruling class cannot grow out of its desire to extend its rule to the rest of the
planet. But humanity is not as malleable as the American people-with their dreams of sharing
in the dividends when America (Great Again) (aka its ruling class) orders the rest of the
world around and exploits everyone the way that it exploits the working people in the United
States.
Somehow the profits of Empire never quite trickle down to the people who do the work
and man the armies.
Elsewhere, however the dream of ruling the planet either never occurred or was grown out of.
And people would be very happy to live good lives and make the earth a better place for
future generations.
Spot on in the first part of article about the inevitable new Cold War between China and
America and the serious fallout from the breakup of close economic ties. But not so good on
the second half wherein America central bankers are acting "insane"
while the rest of the developed world looks on in horror. Are you forgetting most of the
interest rates in Europe are now negative?
Are you not aware that the Bank of Japan basically owns 70% of the Japanese stock market in
the from of ETFs? America is way behind the curve when it comes to complete surrender to
"market forces." Trump wants Powell to play catchup now that it's game on with China. While
Europe and Japan are failing economically at least America is at war with the second biggest
power on the planet, making drastic moves justified in the face of a national emergency.
China is a bigger threat to America than Russia ever was because their economic model has
been so successful compared to the U.S. This is made more so because we no longer have a
government per se, only competing economic forces, while the Chinese have a government that
runs everything. If they lose this war, they still have a system. If we lose this war, we
lose everything.
I imagine now that John Maynard Keynes'ghost, if it were observing our current global
political and economic affairs, would be having a laugh. It was Keynes who suggested the
notion of International trade using a common trading currency created purely for
International trade purposes, in a system in which nations would not be allowed to build up
continuous balance-of-payments surpluses or deficits over several years, but would be
required to spend their surpluses on countries forced to go into deficit because of other
countries' desires for annual surpluses, leading to trade policies or currency manipulations
to achieve such a dubious goal.
The EU would be looking very different as a result, without a southern zone of debtor
nations with unstable economies and high unemployment, and a northern zone of smug nations
with full employment whose social welfare programs depend on an army of unemployed southerner
immigrants willing to work for peanuts.
When an American claims China has been behaving unfairly, what they really mean is that the
Chinese played America's rigged game and ended up outsmarting the dealer.
Why would others want to de-couple from US? What difference it would make to UK or other
EU vassals to serve FED/petro-dollar or to serve CCP/petro-yuan? Can one really get rid of
one without just getting a new master?
Posted by: Contributor | Aug 24 2019 20:02 utc | 4
The US$ is overvalued because there is, as it is the global reserve currency, a higher
demand for it than otherwise justifiable. In consequence U.S. companies buy up companies in
UK and Europe with an overvalued dollar. When the Fed lowers the price for US$ loans it
increases that effect. The Fed also creates bubbles, see the mortgage crisis, and the
currently overvalued stock markets, that have effects on foreign countries.
Said differently: The U.S. abuses is 'exorbitant privilege'. The hope is that China would
be less inclined to do so.
The real solution though is a different system with some global exchange medium that can
not be manipulated by one country or a block of selfish countries.
Here is an
interesting article entitled "The Dialectic of Globalization," that raises several important
questions pertaining to the phenomenon of globalism from the end of colonialism to the height
of "transnationalism" with the end of the cold war.
I can just about agree with its conclusions and provide my own opinion as to the end of
the "dialectic of globalism," that Trump seems to have, whether wittingly or not, ushered
into its next phase.
International neoliberalism needs vast amounts of regulating, but I do not believe that
Supranational governing agencies will be able to do this fairly and in the light of day. The
only other option then is to reassert state-controlled notions of legality which is what vast
proportions of the west seems to be clamoring for as can be seen with the
Trump-phenomenon.
Starting on
October 1st, the
250 BILLION
DOLLARS of goods
and products from
China, currently
being taxed at
25%, will be taxed
at 30%.
Additionally, the
remaining 300
BILLION DOLLARS of
goods and products
from China, that
was being taxed
from September 1st
at 10%, will now
be taxed at 15%.
From the same flaw the western MSM must suffer: did the NYT really expected China would
just treat Trump like a child, wait for him to lose the 2020 election and suddenly make
amends with the USA?
Did it really think this trade war was just a bad taste joke? Did it really think China
would just cave in in order to "defend globalisation"?
Do they really think of America as some kind of transcendental, abstract idea, and not a
concrete entity made of real human beings?
China announces tit for tat tariffs as yuan sinks to new low against the dollar.
Also sinking is Trump's popularity among US voters. AP has him at 36% approval versus 62%
disapproval. Remarkably, Trump's highest mark of 46% approval is for his handling of the
economy.
A no deal Brexit which Trump supports is just the thing to set off a recession in the EU
which spreads to Asia and the US.
What will his approval rating be then?
donkeytale , Aug 23 2019 13:43 utc |
86vk , Aug
23 2019 13:47 utc |
87
Wrong configuration from the last post (#85). I politely ask the administer to delete it.
The plan to retaliate against President Trump's tariffs suggests that neither side in the
trade war is prepared to back down.
I doubted this theory for a very long time, but now I'm beginning to believe it: Americans
really don't think they are responsible for the politicians they elect. They expect the rest
of the world to interpret any wrongdoings of their country as individual flaws of random
politicians. They expect the rest of the world to swallow the abuses by their POTUS under the
idea that they will elect another one the next election cycle. They expect the rest of the
world to be suportive, loyal and patient with their contry forever.
From the same flaw the western MSM must suffer: did the NYT really expected China would
just treat Trump like a child, wait for him to lose the 2020 election and suddenly make
amends with the USA? Did it really think this trade war was just a bad taste joke? Did it
really think China would just cave in in order to "defend globalisation"? Do they really
think of America as some kind of transcendental, abstract idea, and not a concrete entity
made of real human beings? Are they really that dense?
"The Democrats could up their game by taking a deeper look into this issue." you mean the CIA democrats like Mark Warner? the
US has nothing to offer the world except war, which is why the people of the US must destroy this country. there is 1000% bipartisan
agreement on the war drive against both china & russia. both parties spend their days yelling at each other about who is the most
commie, like Moscow Mitch or Comrade Nancy, b/c they are unified in their war drive. as they are on anything else that matters.
this country exists to wage war, as the platform for projection of power, against competitors. nothing else. the illusion that
any of the operators w/in the system, any of them at all, are doing anything but crafting a persona in relation to power for self-aggrandizement,
not challenging power in the slightest, is not helpful.
b, what makes you think the Democrats are not in on the scam?
Also, just like the US funds NGOs in other countries, China too spends hugely and has bought many influential lobbyists and
think-tanks as well as media personalities and politicians in the US. Not very different than Israel lobbyists through AIPAC and
the massive Israel First big money. China influence operations in the US is likely significantly larger than US influence operations
in China since China is a closed CCP controlled system.
b wrote
"
The Democrats could up their game by taking a deeper look into this issue.
"
I agree with jb at comment #1
Yes there are "good" Democrats which are very much in the minority. The rest D/R are acolytes for the God of Mammon finance/war
based social order of the West.
Yes, we are in a very strange WWIII with lots of spinning plates and propaganda action and shedding of blood mostly where the
Western public does not "see" it
Excellent work b! Funding what on the surface appears to be a propaganda op aimed at another nation becomes a form of campaign
finance for a president's reelection campaign! I wonder how many such funds went to similar work on previous occasions?
It seems that at some point in time those within the Outlaw US Empire deemed it unimportant that other nations learn the funding
for numerous NGOs seeking to subvert them are overtly financed by the USG and are thus not NGOs at all but CIA appendages; and
that despite the overtness, the USG still claims those organizations to be legitimate NGOs.
I find it worthy in an ironic manner that the USA will soon be eclipsed by the nation it might have become had it not sought
to be a global empire. In fact, it's the very product of those Open Door policy advocates that will soon become the bane of their
descendants who opted for a financialized Free Lunch economy for themselves instead of a massively robust, resilient industrial/commercial
economy for all Americans.
Falun Gong is kinda like Scientology crossed with Amway. Get rich quick while simultaneously healing your goiters. In its best
days it was a terrible scam. Now it is just a blunt instrument that the US State Department uses to try and beat China with.
The Epoch Times' Jeff Carlson has been in the thick of uncovering the broad Democratic Party coup (in league with transnational
intelligence assets) against the Trump Presidency. Thus b's depiction here of the Dems potentially acting in the role of white
knight subverts mountains of evidence. As for Falun Gong's potential affiliations with the CIA and NED that's another quite plausible
storyline altogether.
Funny thing, after watching a Vesti News video on youtube I saw a video ad for the Epoch Times. It had a young white millennial
saying a bunch of propaganda drivel about the evil communist Chinese with regards to the Hong Kong protests.
"... "The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting. ..."
"... The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement. ..."
American farmers are likely to feel the pain first. Soybean exports to China collapsed last year when the trade war began, and
agricultural exports will be hit harder when, or if, the new tariffs are imposed. Farmers are also suffering from extensive flooding
that has delayed planting.
"The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean
Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these
tariffs is mounting."
The new round of tariffs will hit other parts of the US food industry, with beans, lentils, honey, flour, corn and oats all on
the list of goods that will be taxed.
... ... ...
The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick
resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration
understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement.
Just days after Trump for the first time linked the ongoing Hong Kong protests with his
assessment of the US-China trade war, Beijing has issued an ultimatum to the White House: the
United States should not link trade negotiations with China to the Hong Kong protests,
denouncing such a move as a miscalculation.
In a short commentary published by Communist Party mouthpiece People's Daily late on Monday,
the author said that events in Hong Kong were the internal affairs of China, and linking them
with trade negotiations was a "dirty" aim.
"Making a fuss about Hong Kong will not be helpful to economic and trade negotiations
between China and the US," the commentary said. " They would be naive in thinking China would
make concessions if they played the Hong Kong card " the oped cautioned.
Chinese diplomatic observers also said Beijing considered the worsening situation in Hong
Kong a sovereignty issue and would be highly unlikely to cave to Washington's pressure.
The remarks followed a statement by US Vice-President Mike Pence on Monday which reiterated
President Donald Trump's demand to tie the largely stalled trade talks with Hong Kong's
deepening crisis, a day after hundreds of thousands of people marched peacefully in defiance of
repeated intimidation from Beijing. In an address at the Detroit Economic Club on Monday, Pence
said the Trump administration would continue to urge Beijing to resolve differences with the
protesters peacefully and warned that it would be harder for Washington to make a trade deal
with Beijing if there was violence in the former British territory. Separately, Mike Pompeo
said that China should allow Hong Kong protesters the freedom to express themselves, in what
China saw as clear interference in its own internal matters.
The Chinese article countered by saying that the top priority for Hong Kong was to stop
violence and restore order, adding that US politicians should not send the wrong message to
people creating chaos in the city. "In the face of political intimidation, we not only dare to
say no, but also take countermeasures," it warned.
Global Times, a tabloid controlled by the flagship state-run newspaper People's Daily, also
warned in an editorial on Monday that American political and public opinion elites should not
harbour the illusion they could influence China's decisions on Hong Kong.
"Because of the trade war, the US has lost the ability to impose additional pressure on
China," it said.
"The US should stop its meaningless threat of linking the China-US trade talks with the Hong
Kong problem. Beijing did not expect to quickly reach a trade deal with Washington. More
Chinese people are prepared that China and the US may not reach a deal for a long time."
Chinese analysts noted Trump appeared to have hardened his stance on Hong Kong in the past
week or so, under growing pressure from US lawmakers and extensive media coverage of the
increasingly violent protests. Indeed, it was only a month ago when we reported that "
Trump Abandoned Support For Hong Kong Protests To Revive Trade Talks With Beijing ." Now
that trade war is once again front and center, with Trump using it as leverage for further Fed
rate cuts, the US president is once again refocusing his attention on Hong Kong.
As the
SCMP writes , Trump initially focused on making a deal with China ahead of his 2020
re-election bid and adopted a hands-off approach by characterizing the protests as "riots"
which were a matter for China to handle. Over the past few days, he suggested Chinese President
Xi Jinping should resolve the situation by meeting with protest leaders and warned that any
violence in the handling of the Hong Kong crisis would exacerbate difficulties for attempts to
bring an early end to the trade war.
"Trump's about-face on Hong Kong, from being neutral to piling pressure on Beijing, is
largely due to domestic political pressure ahead of the presidential elections," said Shi
Yinhong, an international relations expert at Renmin University and an adviser to the State
Council which is China's cabinet.
" But the Hong Kong issue concerns China's sovereignty and the government's ability to
maintain stability, which in Beijing's view is of superior priority . China cannot afford to
make much compromise and will do everything to fend off interventions from abroad, in spite of
all the risks and ramifications," he said.
Despite the soured mood between China and the US over their spiralling trade war – as
well as escalating tensions over Huawei, Taiwan and other geopolitical rifts – both sides
were planning further trade talks in the coming 10 days, according to White House chief
economic adviser Larry Kudlow on Sunday.
Any progress would be virtually impossible with analysts cautioning that the US attempt to
"play the Hong Kong card" would further complicate the trade talks.
Meanwhile, in the latest significant escalation in diplomatic tensions, China responded
angrily to Washington's decision on a US$8 billion sale of F-16 fighter jets to Taiwan and
Trump's warning against Huawei citing national security threats.
"When a long list of old problems between the two countries remains unsolved, the US side
is now ramping up the pressure on Hong Kong," said Shen Dingli, a professor of US studies at
Fudan University. "China has so far refused to make concessions in the absence of adequate
mutual respect and trust and I don't think we'll have much room to compromise on Hong Kong or
other issues. We'll have to wait and see what the US would do next," he said.
Shi also said none of the flashpoints in the bilateral ties – from Hong Kong, Taiwan,
to the South China Sea and the denuclearisation of North Korea – had any easy solution in
sight, with both sides showing little willingness to cooperate and accommodate the other's
interests. He said the increasingly hardline, confrontational approach on China by Trump
– who faced mounting pressure in his bid for re-election, especially amid signs of a
looming global economic recession – would only make a trade deal increasingly
unattainable.
"Even if there were no Hong Kong crisis, could the US and China reach a trade deal? Even if
Beijing caved into Washington's pressure on Hong Kong, would it make it easier for them to
bridge their glaring differences in the trade talks and cut a deal?"
Of course not, and since Trump is far more interested in keeping trade war simmering and on
the verge of a substantial escalation if only to keep the Fed on its toes and ready for far
more aggressive rate cuts, and even "some quantitative easing", that's precisely what the US
president wants.
Trump's claim that China is paying for the tariffs is completely false and basically serves
to redirect income from his poor supporters to his wealthy supporters.
Not only that, the policy will have the consequence of further isolating the United States,
says Michael Hudson.
"Trump Is Delaying Tariffs on China for Holiday Shopping Season"
by Shira Feder...08.13.19...11:04AM ET
"The Trump administration announced Tuesday that tariffs set to be imposed Sept. 1 on
Chinese consumer products like electronics, sneakers, and video game consoles will not go
into effect until Dec. 15."...
US to Delay Some China Tariffs Until Stores Stock
Up for Holiday Shoppers https://nyti.ms/2H50NMv
NYT - Ana Swanson - August 13
The Trump administration on Tuesday narrowed the list of Chinese products it plans to
impose new tariffs on as of Sept. 1, delaying levies on cellphones, laptop computers, toys
and other consumer goods until after stores stock up for the back-to-school and holiday
shopping seasons. Stocks soared on the news.
The move, which pushed a new 10 percent tariff on some goods until Dec. 15 and spared
others entirely, came as President Trump faces mounting pressure from businesses and consumer
groups over the harm they say the continuing trade war between the United States and China is
doing.
Mr. Trump's earlier tariffs on Chinese imports were carefully crafted to hit businesses in
ways that everyday Americans would mostly not notice. But his announcement this month of the
10 percent tariff on $300 billion of Chinese goods meant consumers would soon feel the trade
war's sting more directly.
On Tuesday, Mr. Trump acknowledged as much.
"We're doing this for the Christmas season," he told reporters around noon. "Just in case
some of the tariffs would have an impact on U.S. customers." ...
... Mr. Trump's comments about the tariffs' impact on consumers followed the United States
trade representative's office announcement that while the new tariffs would take effect as
Mr. Trump had threatened, some notable items would not immediately be subject to them.
Consumer electronics, video game consoles, some toys, computer monitors and some footwear
and clothing items were among the items the trade representative's office said would not be
hit with tariffs until retailers had time to stockpile what they needed for their busiest
time of year.
The administration also said some products were being removed from the tariff list
altogether "based on health, safety, national security and other factors." A spokesman for
the trade representative's office said the products being excluded from the tariffs included
car seats, shipping containers, cranes, certain fish and Bibles and other religious
literature.
The S&P 500 climbed nearly 2 percent after the announcement, lifted partly by stocks
of retailers and computer chip producers that have been sensitive to indications that trade
tensions were getting either better or worse.
Best Buy, which gets a many of the products it sells from China, was among the
best-performing stocks in the S&P 500, up more than 8 percent in morning trading. The
Nasdaq composite index rose more than 2 percent. ...
OK, I'm having a very nerdy moment. Trying to understand why US-China bilateral trade
imbalance is so large. NOT because it's important, but just because it's kind of a puzzle; I
guess it's my inner @Brad_Setser 1/
6:39 AM - 10 Aug 2019
So last year US goods imports from China were $539.5 billion, US goods exports $120.3
billion. That's 4.5 to 1. Why so much asymmetry? I think 4 reasons: Hong Kong,
macroeconomics, value-added, and oil 2/
Hong Kong: effectively part of the Chinese economy, and the US runs a large surplus - $37
b in exports, only $6 b in imports. Basically a lot of US goods appear to enter China via HK
(something similar in Europe, where US exports to Germany go via Belgium/Netherlands) 3/
Adding HK reduces the export imbalance to "only" 3.5 to 1. Now macro: the US runs overall
trade deficit, with imports 1.5 times exports. China runs overall surplus, with imports only
0.8 exports. On some sort of gravity-ish story, this suggests ratio "should" be around 2
4/
Now add China's role as "great assembler", with value-added in exports really coming from
elsewhere; famous case of iPhone. Much less true than it used to be, but still means that
Chinese surplus is partly optical illusion 5/
Lastly, China imports a lot of oil, which means other things equal needs to run a surplus
on everything else. Used to be true of US, but with fracking we're now almost self-sufficient
in hydrocarbons (but not exporting to China) This adds a further reason for bilateral 6/
Someone with more time and patience should try to do the full accounting, but I think the
US-China bilateral can mainly be explained by "natural causes"; doesn't have much to do with
either country's trade policy 7/
I guess that Krugman is just a natural law kind of guy wherein IP protectionism and arbitrage
seeking cross border capital flows in an exorbitantly privileged global reserve currency are
just natural phenomenon like meteor showers and rain.
"... "While there were measures that could have been chosen with larger direct effects on supply chains, the announcements from Beijing represent a direct shot at the White House and seem designed for maximum political impact," Krueger said. " We expect a quick (and possibly intemperate) response from the White House, and consequently expect a more rapid escalation of trade tensions." ..."
"... In a mid-day note, Krueger added that "the next stop on the currency manipulation road is probably off the map." Krueger expects Trump's "drumbeat on currency" will get louder, with the potential for the president to use a "charge of currency manipulation to justify some combination of (more) tariffs, investment restrictions and export controls." ..."
"... Instructing state-owned Chinese firms to halt U.S. crop purchases triggered "the obligatory flight-to-quality," which pushed 10-year yields to 1.74%, with two-year yields keeping pace. That was "an impressive move that suggests August will not experience the traditional summer doldrums. Who needs vacation anyway?" ..."
"... Bank investors' eyes were "glued to the yield curve last week," with Trump's tariff tweet on Thursday, Graseck wrote in a note. They're now asking about Morgan Stanley's net interest margin (NIM), outlook. ..."
Analysts continued to warn about the dangers of an escalating trade war on Monday, as
China moved to strike back at the U.S., hitting U.S. stocks and boosting Treasuries.
Semiconductors, with direct exposure to trade, and banks stocks, which are sensitive to
interest rates, were among the decliners. The biggest U.S. banks slid, with the KBW Bank
Index dropping as much as 4.1% to the lowest since June 4. Bank of America Corp. led index
decliners, with a drop of 5.5%, the most since Dec. 4, while Citigroup Inc. shed more than 4%
and JPMorgan Chase & Co. slipped 3.8%.
Micron Technology Inc. fell 6.2% while Texas Instruments Inc. lost 4.4% and Intel Corp.
was down 4%. Apple Inc. dropped 5.6%, the most since May 13. Shares in Chinese tech giants
Alibaba Group Holding and JD.com Inc. fell near two month lows in U.S. Trading.
Agriculture equipment makers Deere & Co. and AGCO Corp. tumbled as China suspended
imports of U.S. agricultural products. The escalating trade tensions are also a major risk
for the U.S. automotive industry, which has a significant exposure to the country. According
to UBS's Global Wealth Management Chief Investment Officer Mark Haefele, the latest spat
raises the possibility that "tariffs could also be placed on auto imports."
President Donald Trump tweeted about China and the Fed on Monday morning, saying: "China
dropped the price of their currency to an almost a historic low. It's called 'currency
manipulation.' Are you listening Federal Reserve? This is a major violation which will
greatly weaken China over time!"
Here's a sample of some of the latest commentary:
Cowen, Chris Krueger
Krueger called China's retaliation "massive," adding that "on a scale of 1-10, it's an 11."
He cited the Chinese government calling on state buyers to halt U.S. agricultural purchases,
while there's "increased anecdotal evidence that the Chinese government is tightening its
overview of foreign firms."
"While there were measures that could have been chosen with larger direct effects on
supply chains, the announcements from Beijing represent a direct shot at the White House and
seem designed for maximum political impact," Krueger said. " We expect a quick (and possibly
intemperate) response from the White House, and consequently expect a more rapid escalation
of trade tensions."
"There now will be increased expectations that the Fed will cut again in September to
offset the drag caused by this escalation in the trade war," he added. "Such moves will only
be a partial, lagged offset to the recessionary headwinds a cycle of retaliation would
cause."
In a mid-day note, Krueger added that "the next stop on the currency manipulation road is
probably off the map." Krueger expects Trump's "drumbeat on currency" will get louder, with
the potential for the president to use a "charge of currency manipulation to justify some
combination of (more) tariffs, investment restrictions and export controls."
BMO, Ian Lyngen
"The wait is over for those wondering how Beijing would respond to Trump's recent tariff
announcement," BMO said. "The result: the yuan was allowed to depreciate well beyond
7.0."
Instructing state-owned Chinese firms to halt U.S. crop purchases triggered "the
obligatory flight-to-quality," which pushed 10-year yields to 1.74%, with two-year yields
keeping pace. That was "an impressive move that suggests August will not experience the
traditional summer doldrums. Who needs vacation anyway?"
"The most significant unknown at this moment," Lyngen added, "is how much further the yuan
will be allowed to fall given that it's already the weakest since 2008."
Morgan Stanley, Betsy Graseck (bank analyst)
Bank investors' eyes were "glued to the yield curve last week," with Trump's tariff tweet on
Thursday, Graseck wrote in a note. They're now asking about Morgan Stanley's net interest
margin (NIM), outlook.
Graseck didn't change her NIM assumptions -- yet. "We bake one additional cut of 25 basis
points in 2019 in-line with our economist, and bake in the 10-year at 1.75% by mid 2020," she
wrote. She'll update NIM and earnings per share estimates "if it looks like these trade
tariffs are going through as September approaches."
Morgan Stanley, Michael Zezas (policy strategist)
"The dynamics of U.S.-China negotiation and macro conditions mean the next round of tariffs
will likely be enacted, and investors are likely to behave as if further escalation will
follow in 2019 until markets price in impacts," Zezas wrote. "This supports our core view of
weaker growth and skews the Fed dovish."
Zezas sees incentives for the U.S. to escalate quickly. If the administration "understands
the Fed's trade policy reaction function, then it may also perceive that a more rapid
escalation could deliver one or more of three beneficial points ahead of the 2020 election:
1) A quicker, potentially more aggressive Fed stimulus response that could help the economy
heading into the election; 2) More time to re-frame the potential economic downside; and 3) A
major concession by China (not our base case, but it is, of course, a possibility)."
Veda, Henrietta Treyz
"The U.S. and China are moving into one of their most aggressive phases yet in the year-plus
long trade war and we fully expect things to escalate from here," Treyz wrote in a note.
Treyz added that China's ability to quickly adjust their currency is an advantage they
have over the U.S. that "goes to the heart of the issue for the Trump administration." The
administration may view China's communist regime as a "systemic advantage" versus "free
markets and democracy" in the U.S., as the Chinese can "subsidize domestic industry, quickly,
enact lower tax rates and provide stimulus."
Furthermore, her conversations with Republicans point to the belief that "China's economy
is on the brink of collapse," she said, with turmoil in Hong Kong "considered evidence of an
organic domestic uprising that many believe the Chinese government cannot contain."
Republicans may also believe Trump will "galvanize" his base behind him, while attracting
"anti-trade and union Democrats in the Rust Belt as he takes on the mantle of a war time
president going into 2020 by engaging in this trade war." ...
On Monday, China announced new tariffs on $60 billion of U.S. exports, and the United
States threatened new tariffs on up to $300 billion of Chinese goods. These actions were
cited as the principle reason for a decline of more than 600 points in the Dow Jones
industrial average, or about 2.4 percent in broader measures of the stock market. With the
total value of U.S. stocks around $30 trillion, this decline represents more than $700
billion in lost wealth.
This was not an isolated event. Again and again in the past year, markets have gyrated in
response to the state of trade negotiations between the United States and China.
The market sensitivity to threats and counter-threats in the trade war is quite
remarkable. Monday's announcement by the Chinese, for example, would be expected to raise
China's tariffs by about $10 billion. Much of this will show up as higher prices for Chinese
importers, and some of it will be avoided by diverting exports of goods such as liquid
natural gas to other markets, so the impact on U.S. corporate profits will be far less than
$10 billion. Meanwhile, U.S. tariffs are likely to raise corporate profits as higher import
costs push some business to domestic producers.
There is the further consideration that reasonable market participants should not have
entirely discounted the possibility of tariff increases Monday and that there surely remains
some chance a trade deal will be reached. So, in fact, the market should not even have moved
in full proportion to the change in corporate profitability associated with new tariffs.
There is a revealing puzzle here. Events whose direct impact on corporate profits is a few
billion dollars seem to be driving market fluctuations that change the total value of
corporations by hundreds of billions of dollars. To be sure, there would be many ways of
refining my calculation of the profit impact to recognize various feedbacks, and certainly
the imposition of tariffs increases uncertainty, which in general depresses markets. But with
any plausible calculation of the direct impact of tariff changes on profitability or
uncertainty about profitability, it is not possible to justify the kinds of changes in market
value we observed Monday or on many other days when there was news about the status of the
U.S.-China trade negotiations.
Part of the answer to the puzzle, I suspect, lies in markets' tendency to sometimes
overreact to news, especially in areas where they do not have long experience. This idea is
supported by the tendency illustrated by the market's Tuesday rally, which took place without
any particularly encouraging U.S.-China developments.
A larger part of the answer probably lies in the idea that the current trade conflict is a
possible prelude to a far larger conflict between the two nations with the largest economies
and greatest power for as far as can be foreseen. When it appears less likely that a conflict
over well-defined and ultimately not-that-difficult commercial issues can be resolved,
rational observers conclude that it is also less likely the United States and China can
manage issues ranging from 5G wireless technology to North Korea, from the future of Taiwan
to global climate change, and from the management of globalization to the security
architecture of the Pacific region.
A world where relations between the United States and China are largely conflictual could
involve a breakdown of global supply chains, a splinternet (as separate, noninteroperable
internets compete around the world), greatly increased defense expenditures and conceivably
even military conflict. All of this would be catastrophic for living standards and would also
have huge adverse effects on the value of global companies.
It is, I suspect, the greater risk of catastrophic medium-run outcomes, rather than the
proximate impact of trade conflicts, that is driving the outsize market reactions to trade
negotiation news.
This carries with it an important lesson for both sides: It is risky to turn the pursuit
of even vital national objectives into an existential crusade. Rather, even when nations have
objectives that are in conflict, it is important to seek compromise, to avoid inflammatory
rhetoric and to confine rather than enlarge the areas where demands are being made.
Establishing credibility that promises will be kept and surprises will be avoided is as or
more important with adversaries as with friends.
As the Trump administration carries on the trade negotiations, and as the presidential
campaign heats up, Americans will do well to remember that there is no greater threat to the
success of our national enterprise over the next quarter-century than mismanagement of the
relationship with China. It is not just possible but essential to be strong and resolute
without being imprudent and provocative.
As has long been expected, the White House is preparing to release a new rule on Wednesday barring
government agencies from buying equipment or doing any kind of business with Chinese telecoms giant
Huawei - ratcheting up tensions between the world's two largest economies at an already precarious
time for the global economy.
The Trump administration is expected to release a rule Wednesday afternoon that bans agencies
from directly purchasing telecom, video surveillance equipment or services from Huawei.
The prohibition was mandated by Congress as part of a broader defense bill signed into law last
year.
"The administration has a strong commitment to defending our nation from foreign
adversaries, and will fully comply with Congress on the implementation of the prohibition of
Chinese telecom and video surveillance equipment, including Huawei equipment,"
said
Jacob Wood, a spokesman for the Office of Management and Budget.
Per CNBC, the new rule is expected to take effect a week from Wednesday, and it applies not only
to Huawei, but also to a list of other telecom companies that have drawn security concerns, such as
ZTE and Hikvision.
The official said contractors will be able to seek waivers from individual federal agencies if
they believe their business with any of the targeted companies should be exempt from the rule.
Moreover, the new rule will also set a deadline of August 2020 for a broader ban
on
federal contractors doing business with Huawei and other firms.
The law passed by Congress is separate from the Trump Administration's own efforts to keep
Huawei in check.
The Commerce Department instigated the tensions between the US and China after it placed Huawei
on a blacklist that effectively bans the company from buying goods or doing any kind of business
with Huawei. A 90-day grace period that kept Huawei off the blacklist temporarily is now almost
over. And President Trump has apparently walked back his promised, made at the G-20 Summit in
Osaka, to ease the pressure on Huawei.
However, US chipmakers and tech firms can request waivers, and the CEOs of Google, Qualcomm,
Micron, Intel and others met with President Donald Trump at the White House last month and urged
the administration to issue those decisions quickly.
In an interview on CNBC, Huawei CSO Andy Purdy defended the company's track record, arguing that
European leaders in the UK and Germany had told their counterparts in the US that they had found no
evidence that Huawei was a security threat.
"We have tested the products of all vendors to international standards so that there's
trust through verification,"
Purdy said.
All Chinese government agencies
will be prohibited from buying CISCO and other American
telecommunications products. Furthermore, contractors dealing with
Chinese government agencies will also be so prohibited from buying
American telecom products.
America - population 329 million. Economic growth rate: 2.8%
China - population 1.4 billion. Economic growth rate: 6.5%
source:
Wikipedia
China is rapidly industrializing, and has the largest
manufacturing base in the world. The USA is already a mature
industrial economy, and since NAFTA has offshored most of its
manufacturing base. The USA leads the world in the design,
manufacture and export of weapons, but relies on coercive
political relationships (such as NATO) rather than the "free
market" to sell its overpriced and line of products to captive
satellite countries. China is rapidly expanding in the weapons
manufacturing sphere, as is Russia, and offer increasingly
competitive products at lower prices, and with fewer political
strings attached.
Something to think about before breastbeating and cheering
ourselves on.
Trump is getting the **** kicked out of him on CNBC and every
Financial media on the internet. When China dug in, that was the
end of the Trump bluff. For the first time, the absurd articles
about China losing are gone and now the new reality is that China
is going to squeeze the life out of Trump.
Huawei is just
another of Trump's wayward policies of getting Canadian poodles to
kidnap Huawei's founder's daughter. Nice dirty **** Trump. Women
already hate Trump this ices that cake.
Last week Huawei overtook Apple as the second largest smart
phone maker. Huawei announced it no longer had any dependence on
US manufacturers for 5G, another body blow to the blowhard.
Dozens of certifying agencies have no studied Huawei products
and have found zero instances of spyware or any instance of this
hardware being used for spying. In short, Trump and the NSA and
CIA look like a bunch of assholes. This will only accelerate
Huawei's 5G rollout.
Trump is being **** canned in every direction. The great part
of Trump von hitler's personality is that he knows his 10% Sept
Tariffs were essentially the end of his presidency, but is too
arrogant to reverse course. Instead, he is screaming at the Fed
for more loose money to support his bad policies. And he wants
more Farmer WELFARE. That dog don't hunt!
China is not going to roll over over for Trump. The financial
media is now tearing Trump a new ******* every hour. Markets are
not responding to Trump plunge team efforts. They continue to sell
off.
Where's the endgame they ask? This is the same deal as Trump
closing down the gov for nothing. Trumptards cheered as the orange
idiot painted himself in the corner and accomplished nothing. Not
one inch of wall has been constructed since Trump took office.
Trump floats on a raft of ********. Meanwhile Trump has a 20 year
history of hiring Illegals for Trump Organization. Total Fraud and
self dealer.
The GOP is now climbing the walls. Today Trump Screamed at the
Fed to reduce rates emergently and then said it had nothing to do
with China. Astonishing.
When China put an end to US Ag purchases effective immediately
they were basically saying they were tired of Trump's ********.
The farmer associations are turning on Trump round the clock.
Where is Trump? He's hiding out. But of course this has NOTHING to
do with China.
But here is Trump once again playing the phony national
Security card with Huawei when a dozen independent organizations
have published reports and cleared Huawei of the Trump
Administration's phony security claims.
Huawei Honor smartphones and tablets are really good. The top
models are even better than iPhones.
There were some Chinese
smartphones at Best Buy the last time I checked.
But I just bought the 128Gb Lenovo Zuk for $280 from Banggoog a
couple years ago when it was on sale. It's a little problematic to
update Android, but it works perfectly anyway. There is a forum
for Lenovo phones, though, with all answers.
Poland's state security agency arrested Huawei sales
director Wang Weijing and a Polish national over spying.
Dongfan Chung The 74-year-old former Boeing Co. engineer was
convicted in July of six counts of economic espionage and
other federal charges for keeping 300,000 pages of sensitive
papers in his home
Chi Mak He copied and sent sensitive documents on U.S.
Navy ships, submarines and weapons to China by courier.
Don't waste my time. A 20 second google search shows you
have no point, but the one on the top of your head.
Thus, Given the Chinese government's record on espionage,
"a good-faith assertion from Andy is not enough."
"In Huawei's
carrier business
, H1 sales revenue
reached CNY146.5 billion, with steady growth in production and
shipment of equipment for wireless networks, optical
transmission, data communications, IT, and related product
domains. To date, Huawei has secured 50 commercial 5G contracts
and has shipped more than 150,000 base stations to markets
around the world.
In Huawei's
enterprise business
, H1 sales revenue was
CNY31.6 billion. Huawei continues to enhance its ICT portfolio
across multiple domains, including cloud, artificial
intelligence, campus networks, data centers, Internet of
Things, and intelligent computing. It remains a trusted
supplier for government and utility customers, as well as
customers in commercial sectors like finance, transportation,
energy, and automobile.
In Huawei's
consumer business
, H1 sales revenue hit
CNY220.8 billion. Huawei's smartphone shipments (including
Honor phones) reached 118 million units, up
24% YoY
. The
company also saw rapid growth in its shipments of tablets, PCs,
and wearables. Huawei is beginning to scale its device
ecosystem to deliver a more seamless intelligent experience
across all major user scenarios. To date, the Huawei Mobile
Services ecosystem has more than 800,000 registered developers,
and 500 million users worldwide.
"Revenue grew fast up through May," said Liang. "Given the
foundation we laid in the first half of the year, we continue
to see growth even after we were added to the entity list.
That's not to say we don't have difficulties ahead. We do, and
they may affect the pace of our growth in the short term."
He added, "But we will stay the course. We are fully
confident in what the future holds, and we will continue
investing as planned – including a total of CNY120 billion in
R&D this year. We'll get through these challenges, and we're
confident that Huawei will enter a new stage of growth after
the worst of this is behind us."
WHAT A DUMB ****!: Thanks!!! That makes me 3 times
smarter than you because Huawei subcontractors do sell
Huawei products in the USA. You are an ignorant Asian
that should go back to his village and the one room
dirt floor hut... LOL
I'd be the first to say that I don't know everything about this
telecom but I will say this seems like a reasonable decision on
it's face for the US government not to put in Chinese
telecommunications equipment. Of course China is going to not like
it because with Hillary she just gave them direct access to damn
near anything through her email server.
First, Trump coerced the Fed into lowering interest rates which made US Dollars cheaper to
buy then he increased domestic taxation 10% though increasing the tariff on selected Chinese
goods. China then blocks the importation of all US foodstuffs and lowers the price of the
Yuan an amount equal to the tariff increase--and the US treasury and Trump have the gall to
call China the currency manipulator! NO, as usual with the Outlaw US Empire, it's accusations
are psychological projection of what itself does. Hudson discusses it
here . US financial markets have finally awakened to Trump's moves and have fallen 5%
over the last three trading days, with more likely to follow. Hudson on Trump:
"It's all a diversion so that people won't look at what's really happening, only at what
Trump is saying. But as people find that they have to pay higher prices, I don't think
they'll believe Trump. I think he's lost all credibility. That's why the stock market's
collapsing. They're aghast. They think that even Trump can't get away with this big a lie
when it's so obviously false."
As I commented last Friday on the AP article my local paper ran about the tariff hike, it
finally told the truth about who'll pay--US Consumers or China: US Consumers! AP, All
Propaganda, tore a gapping hole into Trump's narrative--but will people believe a media
outlet that's lied so often?
Trump can't win his global trade war. China won't capitulate; it's economy and society are
100x healthier than the Outlaw US Empire's and are resilient where the USA can only claim to
have been once upon a time. Why that is has been explained before. The transcript of this
interview's poor, but the topic covers the
answer by showing how Canada's economy became a victim of the same predators as the
USA's.
We know what happened, how and why. What we don't know how to do is reverse the situation
politically. Hudson compares the dire situation to that of Rome:
"So they obviously, the left-wingers such as Bernie Sanders, want to run for president as
a kind of educational campaign to make their policy clear to the people, but they know that
there's no way in which the ruling class will let them win.
"It's been very clear, if they did win, they would be assassinated very quickly. I've been
told that by presidential candidates. The threat is, you'll never be president, we have ways
of keeping you out, and should you succeed, we will do to you what the Romans did to every
advocate of democracy century after century, assassination."
It seems the best those of us residing within the Outlaw US Empire can hope for is that
Trump's policies will decimate US financial institutions worse than what occurred in 2008.
Hudson's perspective:
"I don't see any popular movement yet. You can very easily see why collapse is
inevitable....
"There's no way of knowing when there will be a break in the chain of payment. Usually
it's a bankruptcy of a big company, very often by fraud, as the 2008 crisis was bank mortgage
fraud. You don't know when people will fight back. Often, surprisingly, they only fight back
when things are getting better. But things still have a way to go to get much worse in
Canada, much worse in the United States, so I don't see any possibility of reform within the
next 4 to 8 years."
However, all that is about to change, because as Bank of America team of economists writes,
Trump's latest tariff announcement from last Thursday, when the president shockingly unveiled
10% tariffs on $300BN in Chinese imports starting September 1, "is a major escalation." The
reason for this is that past measures had mostly avoided consumer goods. By contrast, the
threatened tariffs would cover $120bn of consumer goods, out of $300bn in total, and since BofA
expects the tariffs to be implemented, either on schedule or later this year, the period of
dormant trade war inflation is about to end with a bang, not a whimper.
... ... ...
Was Trump's announcement a negotiating tactic?
For the past year, one of the points of
biggest contention among economists and traders is that despite what is now a 1+ year trade war
with China, inflation due to higher tariffs has been strangely missing, with some claiming that
the goods targeted in previous tariff rounds were either not "consumer" enough, or simply had
more affordable substitutes from other, non-Chinese supply chains, allowing US consumer to
avoid having higher prices passed upon them.
However, all that is about to change, because as Bank of America team of economists writes,
Trump's latest tariff announcement from last Thursday, when the president shockingly unveiled
10% tariffs on $300BN in Chinese imports starting September 1, "is a major escalation." The
reason for this is that past measures had mostly avoided consumer goods. By contrast, the
threatened tariffs would cover $120bn of consumer goods, out of $300bn in total, and since BofA
expects the tariffs to be implemented, either on schedule or later this year, the period of
dormant trade war inflation is about to end with a bang, not a whimper.
"... As the U.S. administration is ready to impose a 10 percent tariff on the remaining 300 billion U.S. dollars of Chinese imports, its sincerity in reaching a mutually beneficial trade deal with Beijing that can accommodate each other's major concerns has gone bust. It seems that in the eyes of Washington's China hawks, trade talks are no more than a formality with which to rip China off. ..."
"... While the White House is boasting about taxing China until a trade deal is reached, it should keep in mind that China will only accept a win-win agreement on the basis of mutual respect and equal treatment. ..."
"... Beijing's position has been consistent and clear: China does not want a trade war, but it is not afraid of one and will fight one if necessary. ..."
"... It is therefore hoped that Washington should drop its fantasy to bring Beijing down to its knees with its same and old tricks of maximun pressure. If it truly wants a deal, then they will need to show some real sincerity first. ..."
Despite calling the just-concluded China-U.S. trade talks in
Shanghai "constructive" and hoping for more "positive dialogue," the White House on Thursday
announced plans to impose extra tariffs on Chinese imports from Sept. 1.
Washington's unilateral escalation of trade disputes is a serious breach of trust after the
two sides reached in June consensus to restart trade talks on the basis of equality and mutual
respect.
Apart from undermining the momentum of the newly resumed China-U.S. trade talks, the U.S.
flip-flopping again exemplifies Washington's untrustworthiness in striking a deal and its
disturbing propensity for bullying.
The U.S. administration should bear in mind that its bullying and tariff threat, which has
not worked in the past, will not work this time.
For over a year, the U.S.-initiated trade disputes with China have bogged down not just
economic growth of the two countries but that of the whole world. Meanwhile, an increasingly
capricious Washington is harming the current world order with more uncertainties.
As the U.S. administration is ready to impose a 10 percent tariff on the remaining 300
billion U.S. dollars of Chinese imports, its sincerity in reaching a mutually beneficial trade
deal with Beijing that can accommodate each other's major concerns has gone bust. It seems that
in the eyes of Washington's China hawks, trade talks are no more than a formality with which to
rip China off.
Also, the new twist in China-U.S. trade talks shows that some Washington politicians are
trying to play tough against China on trade matters and gain cheap political points as the new
cycle of U.S. presidential election is looming.
Unlike previous rounds of taxing Chinese imports, the U.S. administration this time is
targeting a wide swath of consumer goods, and therefore, is "using American families as a
hostage" in its trade negotiations, according to Matt Priest, president of the Footwear
Distributors and Retailers of America.
While the White House is boasting about taxing China until a trade deal is reached, it
should keep in mind that China will only accept a win-win agreement on the basis of mutual
respect and equal treatment.
Beijing's position has been consistent and clear: China does not want a trade war, but it is
not afraid of one and will fight one if necessary.
In response to Washington's tariff assaults since March 2018, China has had to take forceful
counter measures. This instance will be no exception.
Still, Beijing remains committed to handling its trade problems with Washington as long as
the settlement is based on mutual respect and equality, and conform to China's core interests.
China, which still sees a steady economic growth and boasts enormous potential for further
development, will always find a way to withstand any pressure if there no deal is reached.
It is therefore hoped that Washington should drop its fantasy to bring Beijing down to its
knees with its same and old tricks of maximun pressure. If it truly wants a deal, then they
will need to show some real sincerity first.
he war of words between the world's top superpowers is getting more heated by the hour.
China's new ambassador to the United Nations, Zhang Jun, said on Friday that if the United
States wanted to fight China on trade, "then we will fight" and warned that Beijing was
prepared to take countermeasures over new U.S. tariffs, Reuters reports.
"China's position is very clear that if U.S. wishes to talk, then we will talk, if they want
to fight, then we will fight," he told reporters. Calling Trump latest tariff announcement an
"irrational, irresponsible act", Jun said that China "definitely will take whatever necessary
countermeasures to protect our fundamental right, and we also urge the United States to come
back to the right track in finding the right solution through the right way." The ambassador
also took a stab at the disintegration of good relations between the US and North Korea (with
Beijing's blessing no doubt), saying that "you cannot simply ask DPRK to do as much as possible
while you maintain the sanctions against DPRK, that definitely is not helpful" Yun said siding
the the Kim regime. It was more than obvious who the "you" he referred to was.
Pouring more salt on the sound, the Chinese diplomat said North Korea should be encourage,
and "we think at an appropriate time there should be action taken to ease the sanctions",
explicitly taking Pyongyang's side in the ongoing diplomatic saga between Kim and Trump.
When asked if China's trade relations with the United States could harm cooperation between
the countries on dealing with North Korea, Zhang said it would be difficult to predict. He
added: "It will be hard to imagine that on the one hand you are seeking the cooperation from
your partner, and on the other hand you are hurting the interests of your partner."
As North Korea's ally and neighbor, China's role in agreeing to and enforcing international
sanctions on the country over its nuclear and ballistic missile programs has been crucial.
However, it is what he said last that was most notable, as it touched on what will likely be
the next big geopolitical swan, namely Hong Kong. To wit, Jun said that while Beijing is
willing to cooperate with UN member states, it will never allow interference in "internal
affairs" such as the controversial regions of Xinjiang and Tibet, and - last but not least -
Hong Kong.
And in the latest warning to the defiant financial capital of the Pacific Rim, Jun virtually
warned that a Chinese incursion is now just a matter of time, he said that Hong Kong protests
are "really turning out to be chaotic and violent and we should no longer allow them to
continue this reprehensible behavior."
President Donald Trump's threat Thursday to put 10% tariffs on the remaining $300 billion of Chinese imports that aren't subject
to his existing levies
sent markets tumbling from Asia to Europe and in the U.S. on Friday. The new tax would hit American consumers, and businesses
are going to face even more
supply disruptions . China has already vowed to retaliate if Trump follows through.
Bloomberg Economics ' initial estimate of the
additional costs of U.S. tariffs and Chinese retaliation sees both economies taking a 0.2% hit to GDP by 2021.
Meanwhile, a simmering trade fight between Japan and South Korea
is boiling over , putting the health of two Asian export powers at stake. In Europe, concerns are mounting for a
hard U.K. exit from the European Union.
The week ended with fresh numbers out of Washington that show
U.S. trade actually declined during the first
six months of the year as exports flattened out.
One of Neoliberalism's assets as Hudson explains is "Intellectual Property" which is
another rent-seeking economic segment and part of Trump's Unilateral Pirate Ship. I think
you'll benefit from this Hudson paper detailing Cold War
2.0:
"The objective is to gain financial control of global resources and make trade 'partners'
pay interest, licensing fees and high prices for products in which the United States enjoys
monopoly pricing 'rights' for intellectual property. A trade war thus aims to make other
countries dependent on U.S.-controlled food, oil, banking and finance, or high-technology
goods whose disruption will cause austerity and suffering until the trade 'partner'
surrenders."
The Empire's dilemma is it's made education costs so high it can't get the domestic talent
it requires to continue its rapidly diminishing technological superiority, thus the need for
"more allies to bypass Huawei"--note the word usage, "bypass", not compete with or surpass,
the connotation being its removal as a rival, thus continuing dependency on US-based
tech.
Not entirely unrelated is my comment to vk at 8 above. The Outlaw US Empire is most
certainly classified as a Complex Society that tries to solve its problems with ever more
complex solutions that eventually lead to negative returns that further complicate the
problem. (Listen to the podcast
here by Joseph Tainter, author of The Collapse Of Complex Societies , where you
can also download a pdf copy!) With the USAF and the military as a whole, increasing amounts
of money are thrown at ever increasingly complex weapons systems yet performance in all
sectors deteriorates while the ability to recruit also degrades. The problems are widely
written about and are often cited here. And as we see with Iran and other examples, elegant
simplicity can defeat multilayered complexity. But Imperial policy makers continue to
double-down which further increases the complexity of the situation. Ouch!!
The global smartphone bust is currently underway
(has been for some time) - but
there's a new, surprising trend that could highlight one reason why the Trump administration has
waged economic war against China.
First, let's start with the global smartphone shipment data
from the
International Data
Corporation
(IDC) Worldwide Quarterly Mobile Phone Tracker.
This new data details how worldwide smartphone shipments fell 2.3% in 2Q19 YoY. It also states
that smartphone manufacturers shipped 333.2 million phones in 2Q19, which was up 6.5% QoQ.
An escalating trade war between the US and China contributed to sharp declines in shipments in
both countries over the last year. However, the declines weren't nearly as severe as expected in
China over 1H19 versus 1H18, suggesting that three years of a smartphone bust in Asia could be
nearing a recovery phase. Asia/Pacific (excluding Japan and China) maintained solid momentum in 2Q
YoY, with shipments up 3% in the quarter fueled by Southeast Asia markets.
The surprising trend IDC detected is that Huawei surpassed Apple in 2Q19, making it the
first time in seven years that Samsung and Apple weren't the top smartphones manufactures in the
world.
Now it seems that a South Korea company [Samsung] and a Chinese company [Huawei] are the world
leaders in smartphone shipments, something that has irritated the Trump administration.
Samsung ranked No.1 with 75.5 million shipments in 2Q19, a 5.5% YoY increase. Huawei was No.2
with 58.7 million shipments in 2Q19, a 8.3% YoY jump. Apple was No.3 with 33.8 million shipments in
2Q19, a -18.2% YoY plunge.
1) Huawei announces a .6%
decline in shipments worldwide over the Q1 numbers.
2) Huawei announces an all-time high in domestic
operations that now take up 62% of its sales.
What do these two numbers hide?
That Huawei's shipments to the international market must have
suffered a considerable decline.
That the rise in sales in low-value Chinese phones doesn't
begin to offset the large drop in high-value developed world sales
except on a purely nominal numerical basis of numbers of phones
sold. The money isn't in the phones. It's in the plans. In fact,
China pioneered the idea of giving the phones away for free and
then making it all back on the gated connection plans.
But there's no way that one Chinese plan equals one western
plan in profitability back to the company, so buffing up the
domestic numbers at the expense of the cash cow numbers overseas
is ultimately not a good business strategy.
Plus of course Huawei can report any number it wants inside
China and nobody has any way of testing its veracity. They could
have shipped 20,000,000 phones to distributors on consignment and
then marked it up as sales.
It's still high-end, per se. But the price premium is no
longer justified because other companies have commoditized the
high-end features.
Frankly, the company was doomed the moment
Jobs died and the reins were turned over to Cook - an
accountant by training, who clearly has no futurist vision or
marketing skill whatsoever.
Jobs might have been a puffed up peacock, but he was a
master of creating the Reality Distortion Field.
There is one big problem that no one is talking about. The cell
phone market is over saturated! Practically everyone has got a
cell phone these days. It's like the auto industry. There has
been an over production 10 billion automobiles in the world for
7.2 billion people, of which half really can't afford to buy, much
less drive, or even have a place to park it. I have seen people
with 3 and 4 cell phones, but you only have 2 ears. How are more
cell phones going to help you? Even women don't multitask that
well.
The only thing that would make sales better on cell
phones is if you could combine the computing power of a Cray
computer into a roll-up tablet. Or, maybe a brain implant would
be even better.
Tim Cook: "When you step back and consider
Wearables and Services together two areas where we have
strategically invested in last several years, they now approach
the size of a Fortune 50 company."
Just as investors thought it was safe to buy-the f**king-dip after Powell's plunge,
President Trump steals the jam out of their donut by announcing new China tariffs...
"... on September 1st, putting a small additional Tariff of 10% on the remaining 300
Billion Dollars of goods and products coming from China into our Country "
In a series of tweets, Trump laid out the state of the China trade deal... in a word -
terrible...
Our representatives have just returned from China where they had constructive talks having
to do with a future Trade Deal. We thought we had a deal with China three months ago, but
sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed
to...
...buy agricultural product from the U.S. in large quantities, but did not do so.
Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the
United States – this never happened, and many Americans continue to die! Trade talks
are continuing, and...
...during the talks the U.S. will start, on September 1st, putting a small additional
Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China
into our Country. This does not include the 250 Billion Dollars already Tariffed at
25%...
...We look forward to continuing our positive dialogue with China on a comprehensive Trade
Deal, and feel that the future between our two countries will be a very bright one!
"... Mr. Trump's anger was fueled, in part, by the fact that China has not begun buying large amounts of American farm products, which the president promised farmers would happen after a June meeting with Chinese President Xi Jinping. ..."
"... Mr. Trump took credit for China's weakening economy, saying the tariffs he's placed on $250 billion worth of Chinese goods have put enormous pressure on the country, costing it jobs and prompting companies to leave. ..."
"... American and Chinese negotiators finished talks on Wednesday with little progress toward ending a trade war that has shaken the world's economic confidence and rattled markets. ..."
"... Instead, both sides appear to be settling in for a lengthy economic conflict. ..."
"... Senior Chinese officials who gathered at an economic meeting on Tuesday run by China's top leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage "new risks and challenges" and ward off what they described as "downward pressure on the economy," according to the Chinese state news media. China could turn "a crisis into an opportunity," the report added. ..."
"... A lengthy trade war presents China's leaders with some difficult options. China is enduring an economic slowdown that has been made worse by the trade tensions. Beijing has responded by ratcheting up spending on infrastructure and other big-ticket projects, a reliable growth strategy that nevertheless could worsen the country's debt problems and do little to solve economic imbalances that could hinder its long-term prospects. ..."
"... At a daily news briefing on Wednesday, Hua Chunying, a spokeswoman for the Chinese Foreign Ministry, said that "only if the U.S. shows sufficient integrity and sincerity, and conducts trade talks with the spirit of equality, mutual respect, mutual understanding and mutual accommodation, can the trade talks make progress." ... ..."
"... the trade pressure by the United States on China has from the beginning been about undermining Chinese development. The US point has always been to stop Chinese scientific and technological advance but the Chinese have always understood and that is just not ever going to happen. ..."
"... Accept United States restrictions on Chinese investments in sensitive technologies without retaliating. ..."
"... Open up its services and agricultural sectors to full American competition. ..."
President Trump took credit for weakening
China's economy and downplayed the likelihood
of a trade deal before the 2020 election.
His comments came as his top negotiators were sitting
down to dinner with their counterparts in Shanghai.
Trump Goads China as Trade Talks
Resume https://nyti.ms/32X4vBj
NYT - Ana Swanson and Jeanna Smialek - July 30
WASHINGTON -- President Trump lashed out at China on Tuesday morning as trade talks
between the two nations resumed, taking credit for weakening China's economy and downplaying
the likelihood of a deal before the 2020 election.
The president's comments, in posts on Twitter and remarks to the press, came just as his
top negotiators were sitting down to dinner with their counterparts at the Fairmont Peace
Hotel in Shanghai. While both sides are trying to get trade talks back on track, Mr. Trump's
angry words underscored the diminishing prospects for a transformative trade deal anytime
soon and the extent to which the bilateral relationship has not unfolded in the way that Mr.
Trump expected.
"I think the biggest problem to a trade deal is China would love to wait and just hope,"
the president said. "They hope -- it's not going to happen, I hope, but they would just love
if I got defeated so they could deal with somebody like Elizabeth Warren or Sleepy Joe Biden
or any of these people, because then they'd be allowed and able to continue to rip off our
country like they've been doing for the last 30 years."
Mr. Trump's anger was fueled, in part, by the fact that China has not begun buying
large amounts of American farm products, which the president promised farmers would happen
after a June meeting with Chinese President Xi Jinping. Mr. Trump emerged from that
meeting in Osaka, Japan, saying he had agreed to postpone tariffs on an additional $300
billion of Chinese products and allow American firms to resume sales of nonsensitive goods to
the Chinese telecom firm Huawei. In return, Mr. Trump said China would immediately start
buying American agricultural goods, touting it as a big win for farmers.
But no such purchases have happened, and, in the weeks since, Chinese officials disputed
that they had agreed to buy more farm products as a condition of the talks. On Sunday,
Chinese state media reported that "millions of tons" of American soybeans had been shipped to
China. But Mr. Trump on Tuesday said no such purchases had materialized.
China "was supposed to start buying our agricultural product now -- no signs that they are
doing so," Mr. Trump tweeted. "That is the problem with China, they just don't come
through."
His comments on Tuesday appeared to be an effort to give his negotiators more leverage and
to pressure China into making concessions in talks this week. Mr. Trump took credit for
China's weakening economy, saying the tariffs he's placed on $250 billion worth of Chinese
goods have put enormous pressure on the country, costing it jobs and prompting companies to
leave.
But he seemed to veer between goading China to quickly accede to America's demands and
suggesting the country could get a better deal if it waits and a Democrat wins the 2020
presidential election. ...
US-China Trade Talks End With No Deal
in Sight https://nyti.ms/2GE3LHt
NYT - Alexandra Stevenson - July 31
American and Chinese negotiators finished talks on Wednesday with little progress toward ending a trade war that has
shaken the world's economic confidence and rattled markets.
Treasury Secretary Steven Mnuchin and Robert E. Lighthizer, the Trump administration's top
trade negotiator, were seen leaving trade talks on Wednesday, the Chinese state news media
said.
Both sides "conducted frank, efficient and constructive in-depth exchanges on major issues
of common interest in the economic and trade field," said a statement late in the day that
was released by CCTV, China's state broadcaster.
Another round of high-level talks will take place in the United States in September, CCTV
reported.
The Trump administration had not yet released its own statement.
The meeting marked the first formal resumption of talks after negotiations fell apart
almost three months ago, with each side pointing fingers at the other for derailing a deal.
They agreed to try again after meeting last month on the sidelines of the Group of 20 summit
meeting in Osaka, Japan.
Instead, both sides appear to be settling in for a lengthy economic conflict.
Senior Chinese officials who gathered at an economic meeting on Tuesday run by China's top
leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage "new
risks and challenges" and ward off what they described as "downward pressure on the economy,"
according to the Chinese state news media. China could turn "a crisis into an opportunity,"
the report added.
A lengthy trade war presents China's leaders with some difficult options. China is
enduring an economic slowdown that has been made worse by the trade tensions. Beijing has
responded by ratcheting up spending on infrastructure and other big-ticket projects, a
reliable growth strategy that nevertheless could worsen the country's debt problems and do
little to solve economic imbalances that could hinder its long-term prospects.
Should China reach a quick deal, on the other hand, the country's leaders risk looking
weak in the face of foreign powers, undermining the Communist Party's historical claim to
rule.
At a daily news briefing on Wednesday, Hua Chunying, a spokeswoman for the Chinese Foreign
Ministry, said that "only if the U.S. shows sufficient integrity and sincerity, and conducts
trade talks with the spirit of equality, mutual respect, mutual understanding and mutual
accommodation, can the trade talks make progress." ...
As I have repeatedly documented on Economist's View, the trade pressure by the United States
on China has from the beginning been about undermining Chinese development. The US point has
always been to stop Chinese scientific and technological advance but the Chinese have always
understood and that is just not ever going to happen.
Trump is asking China to redo just about everything with its economy
By Heather Long - Washington Post
The Trump administration has finally presented the Chinese government with a clear list of
trade demands. It's long and intense (there are eight sections), and President Trump isn't
just asking Chinese President Xi Jinping for a few modifications. He's asking Xi to
completely change his plans to turn the Chinese economy into a tech powerhouse.
The demands include the following:
• China will cut the $336 billion U.S.-China trade deficit by at least $200 billion
by 2020, a 60 percent reduction.
• China will stop subsidizing tech companies.
• China will cease stealing U.S. intellectual property.
• China will cut its tariffs on U.S. goods by 2020.
• China will not retaliate against the United States (including against U.S.
farmers).
• The Chinese government will open China to more U.S. investment.
U.S.-China Trade Talks End With Strong Demands, but Few Signs of a Deal
By Keith Bradsher
BEIJING -- The extensive list of United States trade demands was unexpectedly sweeping,
and showed that the Trump administration has no intention of backing down despite Beijing's
assertive stance in the last few days. "The list reads like the terms for a surrender rather
than a basis for negotiation," said Eswar Prasad, an economics professor at Cornell
University.
Here are the highlights of the demands:
China must
■ Cut its trade surplus by $100 billion in the 12 months starting in June, and by
another $100 billion in the following 12 months.
■ Halt all subsidies to advanced manufacturing industries in its so-called Made In
China 2025 program. The program covers 10 sectors, including aircraft manufacturing, electric
cars, robotics, computer microchips and artificial intelligence.
■ Accept that the United States may restrict imports from the industries under Made
in China 2025.
■ Take "immediate, verifiable steps" to halt cyberespionage into commercial networks
in the United States.
■ Strengthen intellectual property protections.
■ Accept United States restrictions on Chinese investments in sensitive technologies
without retaliating.
■ Cut its tariffs, which currently average 10 percent, to the same level as in the
United States, where they average 3.5 percent for all "noncritical sectors."
■ Open up its services and agricultural sectors to full American competition.
The United States also stipulated that the two sides should meet every quarter to review
progress.
"... If you believe the US media if they just removed Putin, Russia would go back to being a good little puppet state just like under Yeltins. Which is a shockingly naïve way to look at international relations. ..."
"... It is not just Chinese but Asian in general. Watch several seasons of the Japanese cartoon "Gundam" and get back to me about who the good guys are and who the bad guys are in it. ..."
"... People always suffer when they allow corrupt sociopaths to gain power. That is as true today as it was in Germany in 1930's and 40's. ..."
"... According to news reports since the moron in charge announced that he had signed an executive order 'blacklisting' Huawei, those lovely humans at Google are denying Huawei phones access to gmail and playstore. The android operating system is open source and still available to Huawei. ..."
"... Doubtless FB and M$ will follow suit. Getting rid of all the nasty stuff that spies on users 24/7/365 now means that Huawei phones have all the advantages with none of the disadvantages. ..."
"... In Games of Thrones, the good characters are regularly disembowled, choked and drowned to death. Or turn evil. The evil characters grow in power and menace and rarely perish. The overwhelming message is that all people and all power are evil. There is no good in the world or what good there is will be quickly stomped out. Resistance is useless. ..."
"... The main message is really that resistance is futile . If the powers that be can condition the contemporary (and naturally idealistic) Western youth to accept that hypothesis, any threat to their depredations and financial tyranny is rendered impotent. If resistance is futile, said youth will simply have to accept how things are and try to stay out of the way of tyrannical kings, rapacious queens, brutal captains of the guards and wanton dragons. I.e. sit down and shut up while HRC, John Bolton, John Brennan and James Clapper ruin the planet. ..."
"... In the US 33% supported unilateral action, 70% of congress voted for the unilateral military action ..."
"... Thomas Jefferson said: "I tremble for my countrymen because I know God is just..." ..."
"... "The powerful do what they can and the weak suffer what they must." ..."
"... The movies Hollywood produced are often telling psychological conflicts as the central story. Each character has a certain fixed attitude and the interacting of the characters create the story. It does not matter if the setting is in antic times or in the far future. In the end there are always the bad and the good guy slamming it out in a fistfight. ..."
"... The historic Chinese drama which I currently favor are based on sociological storytelling. As they develop the stories form their characters. Their attitudes change over time because the developing exterior circumstances push them into certain directions. Good becomes bad and again good. The persons change because they must, not because the are genetically defined. I find these kind of movies more interesting. ..."
"... The take away quote "Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by the United States." Empire is having its hand slapped back in Venezuela, Iran, Syria, ??? ..."
"... I see empire as a war junkie and they are starting to twitch in withdrawals which is dangerous but a necessary stage. Trumps latest tweets show that level of energy. The spinning plates of empire are not wowing the crowds like before.....what is plan Z? ..."
"... My own view is that, as with everything the US has done lately, it already lost the war before it even stepped into battle in the theater. ..."
"... Strangest thing of all that the US itself would do the forcing out of itself from the world's trust. ..."
"... As I've written previously, the political philosophers of the nascent USA thought they would have a Natural Aristocracy ( here and here ) somewhat based on a meritocratic system instead of the Old World's Inherited Aristocracy based on blood relations and closed to anyone not within a very small circle. Yet it was still an Aristocracy with all it inherent evils, and it is that vast assortment of evils the US citizenry has yet to overcome in its supposed--idealized--quest for self-government. ..."
"... If you are interested in watching a film with a sociological approach to telling a story and you are close to a cinema, Mike Leigh's "Peterloo" just started screening last Thursday in Australia. The film is an exploration of British society during the Regency period (in the early 19th century), the class attitudes and opinions prevalent then, and the conditions and events that led to 60,000 - 100,000 labouring class people gathering at St Peter's Field in Manchester in August 1819, and how it was viciously broken up by cavalry and foot soldiers acting on orders of the aristocracy. ..."
"... The culture I am immersed in (USA) is heavily weighted toward the dramatic and two dimensional. Simply put, mass perspective engineering is geared to over simplify and reinforce these views with media imprinting via hollywood, madison ave. etc. The lenses through which impressions from the "outside world" pass through engineered to give the desired results rather than expand consciousness or engender critical thinking. In short, we are breeding for weakness and gullibility. ..."
"... If it is Hollywood, then you can be certain the intention is to manipulate the younger generation to supporting and idolising their permanent wars. On the face of it, that indeed appears to be the case. ..."
" Why The Takedown Of Heinz-Christian Strache Will Strengthen The Right | Main May 19, 2019 The story in the
American Conservative is very weak: that "the Americans" have already won the war is just
due to the built-in superiority: the "land of the free" against "communist dictatorship"
(so everybody knows who has to win). Or, a variation, "free market" against "state-owned".
A typical statement of that article: "China views commercial relations with other
countries as an extension of the political conflict between Western democracies and itself
-- that is, an extension of war." -- a very defining element of the "American" character,
to project the own aggression onto others.
There was another opinion-piece somewhere, can't find it anymore, where the author
argued that hopefully that "trade-war" will do really good for the Chinese economy --
forget about the US, and develop the home market.
As I believe that the sanctions are a great gift to Russia, I also believe that this
"trade-war" is a (potential) great gift to China.
That was an interesting article on psychological vs sociological storytelling and it makes
a good companion piece when thinking about how the US media personalizes US geo-political
conflicts with the heads of rival state (Putin, Xi, Castro, Kim Jong-un, Khomeini,
Gaddafi).
If you believe the US media if they just removed Putin, Russia would go back to
being a good little puppet state just like under Yeltins. Which is a shockingly naïve
way to look at international relations. States have permanent interests and any competent
head of State will always represent those interests to the best of their ability. True, you
could overthrow the government and replace every senior government figure with a compliant
puppet (which the US always tries to do), but the permanent interests that arise from the
inhabitants of the State will always rise up and (re)assert themselves. When the State
leadership is bribed or threatened into ignoring or acting against these needs it
ultimately creates a failed State.
Even the US media seems to subconsciously understand this, when they talk of "overly
ambitious US goals of remaking societies", however, they never make the logical next step
of investigating why these States do not wish to be remade as per the US imagined ideal,
what the interests of these actually are and how diplomacy can resolve conflicts.
According
to the US media everything boils down to the US = good, anyone who disagrees with our
policies = bad and diplomacy is just a measure of how vulgar our threats are during talks.
I'm specifically thinking of the US Ambassador to Russia, John Huntsman's boast of a US
aircraft carrier in the Mediterranean as being 100,000 tons of diplomacy to Russia - of all
the ridiculous and stupid things to says to Russia when supposedly trying to "ease"
tensions (I still can't believe Huntsmen, former Ambassador to China under Obama, is
regarded a "serious" professional ambassador within the State departments when compared to
all the celebrity ambassadorships the US President for fundraiser).
It is not just Chinese but Asian in general. Watch several seasons of the Japanese
cartoon "Gundam" and get back to me about who the good guys are and who the bad guys
are in it.
The whole notion that the "good guys" and the "bad guys" are set in stone
is antithetical to any worldview founded in Buddhism/Confucianism, or influenced by the
same. Can you imagine western children's programming teaching ambiguity between good and
evil? That which is which depends upon the observer's perspective? This is the sort of
concept that few western people get exposed to until graduate level ethics and philosophy
courses.
Or maybe not. I have never seen a single episode of "Game of Thrones" and maybe
that delves into ethical complexities that typical western mass media avoids. I wouldn't
know. What I do know is that this moral and ethical complexity is something that most Asian
children are introduced to before they hit their teens.
Trump just tweeted "If Iran wants to fight, that will be the official end of Iran. Never
threaten the United States again!". Needless to say, more ridiculousness, Trump is pretty
close to plagiarizing himself with his prior comments regarding North Korean "North Korean
Leader Kim Jong Un just stated that the "Nuclear Button is on his desk at all times." Will
someone from his depleted and food starved regime please inform him that I too have a
Nuclear Button, but it is a much bigger & more powerful one than his, and my Button
works!". I think Trump is getting desperate now waiting by the phone for the Iranians to
call him. Trump is certainly still smarting after the failed Venezuela coup and wants to
avoid a second embarrassing defeat, however I doubt the Iranians will care that much about
his latest threat by tweet.
GOT was jarring this season. In the penultimate episode, a dragon wreaks havoc on a western
capital city, brutally murdering most of its inhabitants.
It is impossible not to make the correlation of the dragon as China and kings landing
(The city) as Washington d.c.
From this one can glean that they were attempting to show the ascendancy of China and
the utter destruction of the U.S. With shades of gray thrown about as to if the people of
the city deserved to be burned alive and as to whether the dragon and its rider, China,
have become what they originally set out to vanquish. The old Nietzsche maxim...those who
fight with monsters...
It was indeed unsettling because there are no moral winners. It is well realised for
this reason but poorly written and produced in other aspects as noted above by other
posters.
"First published From Parameters, Summer 1997, pp. 4-14: US Army War College: "There will
be no peace. At any given moment for the rest of our lifetimes, there will be multiple
conflicts in mutating forms around the globe. Violent conflict will dominate the
headlines, but cultural and economic struggles will be steadier and ultimately more
decisive. The de facto role of the US armed forces will be to keep the world safe for our
economy and open to our cultural assault. To those ends, we will do a fair amount of
killing."
"Excerpts From Pentagon's Plan: 'Prevent the Re-Emergence of a New Rival':
"Our first objective is to prevent the re-emergence of a new rival, either on the
territory of the former Soviet Union or elsewhere, that poses a threat on the order of
that posed formerly by the Soviet Union.
This is a dominant consideration underlying the new regional defense strategy and
requires that we endeavor to prevent any hostile power from dominating a region whose
resources would, under consolidated control, be sufficient to generate global power.
These regions include Western Europe, East Asia, the territory of the former Soviet
Union, and Southwest Asia.
There are three additional aspects to this objective: First, the U.S. must show the
leadership necessary to establish and protect a new order that holds the promise of
convincing potential competitors that they need not aspire to a greater role or pursue a
more aggressive posture to protect their legitimate interests.
Second, in the non-defense areas, we must account sufficiently for the interests of the
advanced industrial nations to discourage them from challenging our leadership or seeking
to overturn the established political and economic order. Finally, we must maintain the
mechanisms for deterring potential competitors from even aspiring to a larger regional or
global role. An effective reconstitution capability is important here, since it implies
that a potential rival could not hope to quickly or easily gain a predominant military
position in the world."
... access to vital raw materials, primarily Persian Gulf oil"
GOT is an allegory that explores the nature of power. If you see China's destruction of
Washington it says more about you than the show. Firebombing of Dresden might be a more apt
analogy.
People always suffer when they allow corrupt sociopaths to gain power. That is as true
today as it was in Germany in 1930's and 40's.
The complaints about poor writing are just fan sadness at unexpected horrors that
actually make sense for the show. Loose ends created by these horrors will likely be
resolved in the last episode tonight.
WJ @13 thanks for the link, I am eternally hopeful that this particular thread gets pulled
on until it unravels.
One of my distinct memories of the immediate aftermath of 9/11 (I lived in NYC at the
time), was the trumpeting of the Post and other tabloids about 'the Dancing Arabs,' which
obviously fanned the flames of hatred towards the designated villains. Once it was revealed
that they were actually Israelis, then crickets until the whole thing was shoved down the
memory hole.
I'm going out today to buy a couple of Huawei 'phones'.
According to news reports since the moron in charge announced that he had signed an
executive order 'blacklisting' Huawei, those lovely humans at Google are denying Huawei
phones access to gmail and playstore. The android operating system is open source and still
available to Huawei.
Doubtless FB and M$ will follow suit. Getting rid of all the nasty stuff that spies on
users 24/7/365 now means that Huawei phones have all the advantages with none of the
disadvantages.
They put their own chips in newer models and I have no doubt will find enough bright
sparks to take over apps integration meaning that this divergence point will become a boon
not a hurdle. Even better a Huawei costs 60% of a comparable korean model and half the
price of the fbi backdoored american shit.
I really like thinking expressed by an un-named english politician in a Henry Jackson
Society report: ""Huawei has long been accused of espionage" – a claim repeatedly
denied by the firm – and notes that "while there are no definitely proven cases", a
precautionary principle should be adopted."
All politicians are crooks and liars, everybody says so, lets lock em all up right now,
no need for evidence or trial or any of that due process nonsense, the precautionary
principle should apply.
I have never seen a single episode of "Game of Thrones" and maybe that delves into
ethical complexities that typical western mass media avoids. I wouldn't know.
Having suffered through four seasons of Game of Thrones, after a degree in philology and
literature, I'd be happy to share my impressions with you. In Games of Thrones, the good
characters are regularly disembowled, choked and drowned to death. Or turn evil. The evil
characters grow in power and menace and rarely perish. The overwhelming message is that all
people and all power are evil. There is no good in the world or what good there is will be
quickly stomped out. Resistance is useless.
The main message is really that resistance is futile . If the powers that be can
condition the contemporary (and naturally idealistic) Western youth to accept that
hypothesis, any threat to their depredations and financial tyranny is rendered impotent. If
resistance is futile, said youth will simply have to accept how things are and try to stay
out of the way of tyrannical kings, rapacious queens, brutal captains of the guards and
wanton dragons. I.e. sit down and shut up while HRC, John Bolton, John Brennan and James
Clapper ruin the planet.
Despite impressive production values, excellent acting (for the most part) and majestic
locations, Game of Thrones is truly the most evil large scale creative work I've ever seen.
On a philosophical level, Game of Thrones has no redeeming features. At best an
impressionable mind might come away with a hedonist mindset, i.e. the traditional salve of
weak spirits, carpe diem .
PS. There's some very good comments at the tail end of the
Takedown of Heinz-Christian Strache including one of my own covering in some depth the
Austrian political background to this event. Worth revisiting if you only saw the early
comments.
Using populations per country from '03 we get the following conclusions:
of the 36 countries outside the US we get 33% of the world population where
less than 8% supported unilateral military action by American and her allies
and 57% supported under no circumstances
this list excludes 42 additional countries with another 40% of world population who have
had their governments overthrown or attempted to be overthrown by the US since WWII
In the US 33% supported unilateral action, 70% of congress voted for the unilateral
military action
Being that the invasion was illegal and unpopular, the Bush admin invented a 'coalition
of the willing to give the appearance of support.
The Trump admin needed to create a similar type of facade for the Venezuelan coup. Such
things are needed specifically because the move is so unpopular and illegal.
I suppose that is a valid theory. But as the viewer we know the motivations of Dany and
why in some small regard the people in King's Landing deserve a little roughing up.
Thomas Jefferson said: "I tremble for my countrymen because I know God is just..."
The difference here is that we judge Assad even though we don't see what he is truly
doing.
Here we see what Dany has done, mass slaughter, and think to ourselves...we kinda had it
coming.
Concerning your take on GoT: Isn't this really the thesis of Thucydides through and
through reflected in GoT almost to a T?
"The powerful do what they can and the weak suffer what they must." GoT is not disturbing to be nihilistic and shocking. It is holding up a mirror to
history. But the quality of the show has declined since they have come to the end of the road in
adapting the source material. The show has overtaken the books.
The take away quote
"
As of the end of March, overseas investors bought a net of 1.77 trillion yuan (about 260.3
billion U.S. dollars) of bonds at the country's interbank bond market, up 31 percent from a
year earlier, and held 5.4 trillion yuan of yuan-denominated financial assets, up 19
percent year on year, according to the central bank.
"
What us peasants don't know is the extent to which China will let foreign investment
influence their socialistic ways. That said, China is the new empire, private or public is
yet to be determined but guess where all the "smart" money in the world is going? The money
movements are a giant sucking sound that will leave America under the global economic
bus.
Or not and China maintains its socialistic ways including projecting them around the
world.
The movies Hollywood produced are often telling psychological conflicts as the central
story. Each character has a certain fixed attitude and the interacting of the characters
create the story. It does not matter if the setting is in antic times or in the far
future. In the end there are always the bad and the good guy slamming it out in a
fistfight.
The historic Chinese drama which I currently favor are based on sociological
storytelling. As they develop the stories form their characters. Their attitudes change
over time because the developing exterior circumstances push them into certain
directions. Good becomes bad and again good. The persons change because they must, not
because the are genetically defined. I find these kind of movies more interesting.
That's the difference between materialism (marxism) and idealism (kantism, hegelianism
and noekantism). Besides, an idealist tv series helps selling more merch and doing more
sequels, hence the capitalist preference for idealism.
The take away quote
"Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by
the United States."
Empire is having its hand slapped back in Venezuela, Iran, Syria, ???
Where are they going to get their war on?
I see empire as a war junkie and they are starting to twitch in withdrawals which is
dangerous but a necessary stage. Trumps latest tweets show that level of energy. The
spinning plates of empire are not wowing the crowds like before.....what is plan Z?
Hot tip, GOT is just a movie. Please, no more psychological insights.
What fans really need, is some REAL WORLD justice, something that's noticeably missing
in today's world.
I agree that the American Conservative article was weak - as b obviously thought. It has
the US trade war against China completely wrong. I side with b in his hunch that China will
win. My own view is that, as with everything the US has done lately, it already lost the
war before it even stepped into battle in the theater.
And let's counter the author's point, in the weak article, that China needs the US trade
surplus more than the US needs the imports from China. The author says that China has no
way to substitute for exports to the US. There's abundant recent analysis on this, showing
the relatively small part of China's economy that hinges on this trade, but here's a good
Sputnik interview that illustrates how easily China can simply absorb goods into its own
domestic market:
"...we have our colossal domestic market, which has no competitors throughout the world.
Our consumer and innovation markets provide us with a large number of advantages and
room, giving China an opportunity to make a manoeuvre. Therefore, their blockage gives
China a chance to become even stronger. We must express our appreciation to our mentor,
Trump, for this, for this lesson and for forcing China to figure out how to withstand the
threats on its own."
The US used to be an important nation to do business with - commercial, diplomatic,
military. But as it has become "agreement incapable", nations are forced to replace it.
This takes a little time and readjustment, but then the change is permanent.
Strangest thing of all that the US itself would do the forcing out of itself from the
world's trust.
Crown Prince Mohammed bin Salman discussed regional developments, including efforts to
strengthen security and stability, in a phone call with U.S. Secretary of State Mike
Pompeo, the Saudi Media Ministry tweeted on Sunday.
"We want peace and stability in the region but we will not sit on our hands in light
of the continuing Iranian attack," Jubeir said. "The ball is in Iran's court and it is up
to Iran to determine what its fate will be."
He said the crew of an Iranian oil tanker that had been towed to Saudi Arabia early
this month after a request for help due to engine trouble were still in the kingdom
receiving the "necessary care". The crew are 24 Iranians and two Bangladeshis .
Is this a veiled threat on the lives of these crew members?
Re@ 51 James, well Sputniknews is reporting that the Saudi's claim that the Houthis are
planning to attack 300 critical infrastructure facilities in Saudi Arabia and the United
Arab Emirates in the coming weeks so that might be the instigating event your concerned
about
Thanks for your kudos! As I've written previously, the political philosophers of the
nascent USA thought they would have a Natural Aristocracy ( here and
here ) somewhat based on a meritocratic system instead of the Old World's Inherited
Aristocracy based on blood relations and closed to anyone not within a very small circle.
Yet it was still an Aristocracy with all it inherent evils, and it is that vast assortment
of evils the US citizenry has yet to overcome in its supposed--idealized--quest for
self-government.
Recall that George Washington was deemed safe to become the first
president because he could be trusted not to proclaim himself king --something often
forgotten by students of US History.
I've often lamented on the nature of the 1787 Constitution because it allows any POTUS
to become a king with almost zero hindrances on the power wielded. Sure, compared with
other systems of government at the time, the USA's was revolutionary, but only down to the
waist to borrow a phrase from Gilbert & Sullivan. Madison's theory, IMO, was--other
than being Aristocratic--okay until his most important check/balance was removed--that of
the "dueling oval office" where the losing POTUS candidate was awarded the
Vice-Presidency--imagine Hillary Clinton as Veep with Trump in the driver seat! IMO,
the
12th Amendment fatally wounded Madison's construction of a government that arrived at
great decisions based on a consensus of genuine national interests instead of partisanship.
Arguing that action is the great fault that must be corrected doesn't get much play
nowadays. Indeed, it's very difficult to debate Constitutional Reform given the engineered
political climate since the current situation suits the Ruling Oligarchy just fine.
I hope everyone had an opportunity to click the link I provided to the series of
paintings known as The Course of Empire . ICYMI, here it is again .
Please note which Empire's being copied and compare that with the predominant architectural
theme in the Outlaw US Empire's Imperium. Creditors ruled and eventually destroyed that
Empire. That's one historical lesson that's totally omitted from the historiography of the
USA.
By and large, we know what and where the problems are. The fundamental question is, will
we ever get the opportunity to fix them?
Their disadvantage is that they have to import energy. So they need export if they do
not wish to run a trade deficit.
They do not necessarily need the US for this though if they can trade in Yuan.
b, it is generally fund raising time during this time for some publishers (i.e.
counterpunch etc) and I would like to send you something as well. Can you please post the
payment information. Thanks.
If you are interested in watching a film with a sociological approach to telling a story
and you are close to a cinema, Mike Leigh's "Peterloo" just started screening last Thursday
in Australia. The film is an exploration of British society during the Regency period (in
the early 19th century), the class attitudes and opinions prevalent then, and the
conditions and events that led to 60,000 - 100,000 labouring class people gathering at St
Peter's Field in Manchester in August 1819, and how it was viciously broken up by cavalry
and foot soldiers acting on orders of the aristocracy.
The film is at least 150 minutes long and is a highly immersive experience. There is not
much plot in the Hollywood sense of the term. I believe reviews have been mixed with most
film critics complaining about the film being too long and boring. But if you are prepared
to watch a film that uses a sociological approach to telling a narrative, then you'll agree
with me that the film actually isn't long enough.
Very interesting studies and the ideas that they might spawn. The near parallels of the
micro and macro as well as the flow patterns.
The culture I am immersed in (USA) is heavily weighted toward the dramatic and two
dimensional. Simply put, mass perspective engineering is geared to over simplify and
reinforce these views with media imprinting via hollywood, madison ave. etc. The lenses
through which impressions from the "outside world" pass through engineered to give the
desired results rather than expand consciousness or engender critical thinking. In short,
we are breeding for weakness and gullibility.
In regard to large scale dynamics resembling the physics of things like the laws of
thermodynamics, I am wondering if phenomena like those alluded to above might be engulfed
and influenced by these kinds of natural patterns. So for example: Looking past the drama
of sanctions, trade wars, and good guys vs. bad guys, wont the large scale movements caused
by these things begin to move according to a kind of physics?
I keep wondering what the result of this latest round of economic warfare will lead to.
If the USA continues to sanction, embargo and blockade (at the behest of banking cartels?)
will this not cause a mass exodus from dollar reserves, SWIFT, BIS and the like? I hear all
sorts of opinions, bushels of dis-info and I'm mostly at a loss as to what to think. We are
clearly nearing the end of the Bretton-Woods era so a reset is in order. The USA is a mere
6% of the world population and some would say at the end of it's due date as far an being
an "international influencer".
So if they and their EU poodles go ahead and sanction every nation who refuses to bend
the knee what's stopping these nations from simply bypassing these decrees and going about
their business? I get the sense that this is already happening quietly. Russia, China and
various partner nations are creating alternatives in many forms, be they interweb servers,
financial networks, OBOR, SCO and more I have never heard of.
Perhaps the ratcheting up of tensions could also be swept up in the turbulence of
thermodynamics? If sanctions become embargoes and then blockades, what happens to the
"compressions ratios in the Straits of Hormuz?
Well, I've come across a few advertisements, but I always thought it was some kind of
children's video game. I cannot imagine why anyone other than a socially stunted and
mis-developed American or Americanised adolescent could want to watch such infantile
deranged garbage.
If it is Hollywood, then you can be certain the intention is to manipulate the younger
generation to supporting and idolising their permanent wars. On the face of it, that indeed
appears to be the case.
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."
"... When tariffs went up from 0 to 10% on some product categories last year, many suppliers agreed to absorb half that amount (5%) in exchange for larger orders. The logic was as follows: higher orders lead to better deals with component suppliers and to higher production efficiencies, which means lower costs. ..."
"... Do you ship American wood for processing in China and re-exporting to the US? You might have issues getting that material into China as smoothly as before. And then, the US Customs office might give you a hard time when you bring the goods in, too! ..."
"... Who knows what non-monetary barriers the Chinese will erect. One can count on their creativity ..."
"... Several US companies asked our company to look for assembly plants in Vietnam and, in those cases where we found some options, they were much more expensive than China. There is a reason why China's share of hard goods production in Asia has kept growing in recent years -- competition is often non-existent. ..."
"... Now, with China's products suddenly much more expensive, what are these competing countries going to do? Won't they take advantage of it and push wages further up, at least for the export manufacturing sector? ..."
"... Mexico should be the clear winner of this trade war. They are next to the US, their labor cost is comparable to that of China, and many American companies have long had extensive operations there. ..."
Based on
allthe
articles I have read about the current geopolitical situation, I am not optimistic about
the affect of the US-China trade war on American importers. Dan Harris, who wrote "
the US-China Cold War start now, " announced that a "mega-storm" might be coming, and he
may be right.
Now, if things turn out as bad as predicted, and if tariffs apply on more goods imported
from China to the US -- and at higher rates -- what does it mean for US importers?
What
will the damage from the US-China trade war look like?
These are my thoughts about who or what is going to be hit hard by the ongoing 'trade
war:'
1. Small importers will be hit much harder than larger ones
If you work with very large Chinese manufacturers, many of them have already started to set
up operations outside of mainland China, for the simple reason that most of their customers
have been pushing for that.
They are in Vietnam, Malaysia, etc. And this is true in most industries -- from apparel to
electronics.
Do they still have to import most of their components from China? It depends on their
footprints. As I wrote before :
You set up a mammoth plant and you don't want your high-value component suppliers to be
more than 1 hour away from you, for just-in-time inventory replenishment? They can be
requested to set up a new manufacturing facility next to you.
2. A higher total cost of goods purchased from China
This one is obvious. If you have orders already in production, they will cost you more than
expected.
The RMB might slide quite a bit, and that might alleviate the total cost. I hope you have
followed my advice and started paying your suppliers in RMB , to benefit
from it automatically.
Beijing might also give other forms of subsidies to their exporters. They might be quite
visible (e.g. a higher VAT rebate) or totally 'under the table'.
3. Difficult
negotiations with Chinese suppliers
Can you say the tariffs are Beijing's fault, and so your suppliers should absorb the
tariffs? That's not going to work.
When tariffs went up from 0 to 10% on some product categories last year, many suppliers
agreed to absorb half that amount (5%) in exchange for larger orders. The logic was as follows:
higher orders lead to better deals with component suppliers and to higher production
efficiencies, which means lower costs.
When tariffs go from 10% to 35%, what else can US buyers give their counter-parties?
Payments in advance? Lower quality standards? I don't believe that.
4. Difficulties at
several levels in the supply chain
Do you ship American wood for processing in China and re-exporting to the US? You might have
issues getting that material into China as smoothly as before. And then, the US Customs office
might give you a hard time when you bring the goods in, too!
Who knows what non-monetary barriers the Chinese will erect. One can count on their
creativity
5. Short-term non-elasticity of alternative sources
There are a finite number of Vietnamese export-ready manufacturers that can make your
orders. And, chances are, their capacity is already full. If you haven't prepared this move for
months (or years), other US companies have. The early bird gets the worm
Same thing with Thailand, Indonesia, India, and so on, with the exception of apparel and
(maybe) footwear.
Several US companies asked our company
to look for assembly plants in Vietnam and, in those cases where we found some options, they
were much more expensive than China. There is a reason why China's share of
hard goods production in Asia has kept growing in recent years -- competition is often
non-existent.
6. Faster cost increases in other low-cost Asian countries
Now, with China's products suddenly much more expensive, what are these competing countries
going to do? Won't they take advantage of it and push wages further up, at least for the export
manufacturing sector?
There could be some 'silver linings' due to the trade war
It is not all bad news though. We may see these benefits caused by China and the USA
slugging it out too:
7. Many opportunities for Mexico
Mexico should be the clear winner of this trade war. They are next to the US, their labor
cost is comparable to that of China, and many American companies have long had extensive
operations there.
8. Rapid consolidation in the Chinese manufacturing sector
The fittest will survive. Many uncompetitive manufacturers and traders will fold. Consolidation
will accelerate. I often look at what happened in Japan and South Korea . Each of these countries
developed very fast and, when the going got tough, the export manufacturing sector got
devastated. Only the most competitive survived.
9. Relaxed enforcement of anti-pollution
regulations in China?
I'd bet that, if the tariffs hit hard, far fewer operations will get closed for
environmental reasons. Preserving employment and social peace will prevail.
A while ago we discussed the obfuscation of classical economics in order to elevate the Junk
Economics of Randian Neoliberalism. And with Trump's Trade War and the 2020 election cycle's
start, I think it wise to revisit what's proven to be a timeless Michael Hudson essay from
2010, "America's
China Bashing: A Compendium of Junk Economics" , which provided the ground work for the
subsequent book he published on the topic.
The following excerpt remains the underlying issue prompting Trump's Trade War with
China:
"The cover story is that foreign exchange controls and purchases of U.S. securities keep
the renminbi's exchange rate low, artificially spurring its exports. The reality, of
course, is that these controls protect China from U.S. banks creating free 'keyboard
credit' to buy out Chinese companies to buy out Chinese companies or load down its economy
with loans to be paid off in renminbi whose value will rise against the deficit-ridden
dollar. It's the Wall Street arbitrage opportunity of the century that banks are
pressing for, not the welfare of American workers ."
As the years between have shown, the Chinese aren't fools and probably know more about
economics than their politicized US counterparts, Trump especially included.
@ William Gruff with the dh-mtl update about "control" during the early part of last
century....I agree and thanks
@ karlof1 with the Michael Hudson link.....I put a comment up last night with a quote from
Xinhuanet
"
BEIJING, June 30 (Xinhua) -- China on Sunday rolled out revised negative lists for foreign
investment market access, introducing greater opening-up and allowing foreign investors to
run majority-share-controlling or wholly-owned businesses in more sectors.
"
It makes me worry about how much of "China" will be allowed to be bought/controlled by the
private finance folk. I have been wondering about this since 2008 when the US started running
the "printing presses" bigly enough to double the deficit in less than 10 years.....I didn't
get any of those trillions, did you? At some point I expect there to be a meeting of global
"big wigs" who say they own this or that and wonder how that meeting will turn out relative
to Bretton Woods.
I still see China throwing out a faux lifeline to the private finance folk that will be
reeled in after the transition to a China led world.....want to make it look like the Koch
brothers and Soros with their new peace tank are leading the parade.....
"... Mr. Lidow is among the semiconductor executives in the United States who have become concerned that the trade war with China -- particularly the Trump administration's ban on selling chips to some prominent Chinese customers -- won't just squeeze current revenue. He fears that recent events have convinced Chinese companies that American component makers can no longer be seen as dependable partners and are permanently shifting away from them. ..."
"... In May, President Trump ordered American companies on national-security grounds to stop selling components to companies like Huawei , China's big maker of mobile phones and networking equipment. And the administration placed five other Chinese entities on the same blacklist this month, including the computer maker Sugon and three subsidiaries. ..."
"... China has responded by saying it would put together its own "unreliable entities list," including many American tech companies. ..."
"... "The U.S. is in danger of becoming the vendor of last resort for China," said Walden Rhines, chief executive emeritus of Mentor, a unit of Siemens that sells software for designing chips ..."
SAN FRANCISCO -- Alex Lidow has sold semiconductors in China for decades, starting at a
company, called International Rectifier, that his father and grandfather founded in the Los
Angeles area in 1947.
Now Mr. Lidow runs Efficient Power Conversion, which makes chips that manage electrical
power in cars and other products. Efficient Power has a strong foothold in China, but has
lately run into resistance from customers there that he traces to moves in Washington.
Mr. Lidow is among the semiconductor executives in the United States who have become
concerned that the trade war with China -- particularly the Trump administration's ban on
selling chips to some prominent Chinese customers -- won't just squeeze current revenue. He
fears that recent events have convinced Chinese companies that American component makers can no
longer be seen as dependable partners and are permanently shifting away from them.
"In my 40 years in this business, I've had friends in China that viewed me as a trusted
supplier," Mr. Lidow said. "They can't now." His experience is part of the fallout affecting the American chip industry, one of the tech
sectors hardest hit by the tit-for-tat between the United States and China over trade and
national security.
In May, President Trump ordered American companies on national-security grounds to
stop selling
components to companies like Huawei , China's big maker of mobile phones and networking
equipment. And the administration placed
five other Chinese entities on the same blacklist this month, including the computer maker
Sugon and three subsidiaries.
Even if a new trade deal eases tensions -- Mr. Trump is set to meet with President Xi
Jinping of China in Osaka, Japan, on Saturday -- American chip executives and others said
lasting damage had already been done. They said Chinese officials and companies would step up
efforts to design and make more chips domestically. And Chinese customers seem likely to turn
to vendors from countries like Japan, South Korea and Taiwan if no homegrown chips are
available.
"The U.S. is in danger of becoming the vendor of last resort for China," said Walden
Rhines, chief executive emeritus of Mentor, a unit of Siemens that sells software for designing
chips
Already, big American chip makers have taken a financial hit from the China bans. Micron Technology, which sells two of the
most widely used varieties of memory chips, disclosed Tuesday that the Huawei ban had lowered sales in its most recent quarter
by nearly $200 million. Huawei is Micron’s largest customer, accounting for around 13 percent of its revenue.
"... "The problem, is that China knows time is short for the President and subsequently there is 'no rush' to conclude a 'trade deal' for several reasons: ..."
"... The pressure is on the Trump Administration to conclude a "deal," not on China. Trump needs a deal done before the 2020 election cycle AND he needs the markets and economy to be strong. ..."
"... corporate profits continued to come under pressure. As noted previously, corporate profits have declined over the last two quarters and are at the same level as in 2014 with the stock market higher by almost 60%. ..."
"... But, if you think China is going to acquiesce any time soon to Trump's demands, you haven't been paying attention. China has launched a national call in their press to unify support behind China's refusal to give into Trump's demands. To wit: ..."
"... "Lying behind the trade feud is America's intention to stifle China's development. The U.S. wants to be a permanent leader in the world, and there is no way for China to avoid the 'storm' through compromise. ..."
By agreeing to continue talks without imposing more tariffs on China, China gains ample
running room to continue to adjust for current tariffs to lessen their impact. More
importantly, Trump gave up a major bargaining chip – Huawei.
"One of the things I will allow, however, is -- a lot of people are surprised we send and
we sell to Huawei a tremendous amount of product that goes into a lot of the various things
that they make -- and I said that that's OK, that we will keep selling that product."
No, a lot of people weren't surprised, just Trump as there has been pressure applied by U.S.
technology firms to lift the ban on Huawei. While he may have appeased his corporate campaign
donors for now, Trump gave up one of the more important "pain points" on China's economy.
This gives China much needed room to run.
Let's review what
we said a couple of months ago as to why their will ultimately be no deal.
"The problem, is that China knows time is short for the President and subsequently there
is 'no rush' to conclude a 'trade deal' for several reasons:
China is playing a very long game. Short-term economic pain can be met with
ever-increasing levels of government stimulus. The U.S. has no such mechanism currently,
but explains why both Trump and Vice-President Pence have been suggesting the Fed restarts
QE and cuts rates by 1%. (Update: Trump
says the U.S. should have Mario Draghi at the helm of U.S. monetary policy.)
The pressure is on the Trump Administration to conclude a "deal," not on China. Trump
needs a deal done before the 2020 election cycle AND he needs the markets and economy to be
strong. If the markets and economy weaken because of tariffs, which are a tax on domestic
consumers and corporate profits, as they did in 2018, the risk off electoral losses rise.
China knows this and are willing to 'wait it out' to get a better deal.
As I have stated before, China is not going to jeopardize its 50 to 100-year economic
growth plan on a current President who will be out of office within the next 5-years at
most. It is unlikely, the next President will take the same hard line approach on China
that President Trump has, so agreeing to something that is unlikely to be supported in the
future is unlikely. It is also why many parts of the trade deal already negotiated don't
take effect until after Trump is out of office when those agreements are unlikely to be
enforced.
In the meantime, as noted in #3 above, corporate profits continued to come under pressure.
As noted previously, corporate profits have declined over the last two quarters and are at the
same level as in 2014 with the stock market higher by almost 60%.
... ... ...
But, if you think China is going to acquiesce any time soon to Trump's demands, you haven't
been paying attention. China has launched a national call in their press to
unify support behind China's refusal to give into Trump's demands. To wit:
"Lying behind the trade feud is America's intention to stifle China's development. The
U.S. wants to be a permanent leader in the world, and there is no way for China to avoid the
'storm' through compromise.
History proves that compromise only leads to further dilemmas. During previous trade
tensions between the U.S. and Japan, Japan made concessions. As a result, its political
stability and economic development were adversely affected, with structural reform being
suspended and hi-tech companies being severely damaged.
China, with a population of 1.4 billion, is the world's largest manufacturing base.
Industrial upgrading and hi-tech innovation are crucial to China's economic development.
China needs to leave more resources to its descendants by protecting the environment, and
reaping the dividends of further opening-up. These are the core interests of China, and it
will never give them up.
The only way for a country to win a war is through development, not compromise. To achieve
development, China will open its door wider to the world and fight to the end."
These are Xi Jinping's mandates, dictated directly from his party, for the meeting with the
United States president in Osaka.
The only possible outcome for Trump was exactly what happened. Nothing. Just an agreement to
talk more.
"If your enemy is secure at all points, be prepared for him. If he is in superior
strength, evade him. I f your opponent is temperamental, seek to irritate him. Pretend to be
weak, that he may grow arrogant. If he is taking his ease, give him no rest. If his forces
are united, separate them. If sovereign and subject are in accord, put division between them.
Attack him where he is unprepared, appear where you are not expected. "
China has been attacking the "rust-belt" states, which are crucial to Trump's 2020
re-election, states with specifically targeted tariffs. As noted by
MarketWatch:
"China has lashed back with tariffs on $110 billion in American goods, focusing on
agricultural products in a direct and painful shot at Trump supporters in the U.S. farm
belt."
While Trump is operating from a view that was a ghost-written, former best-seller, in the
U.S. popular press, Xi is operating from a centuries-old blueprint for victory in battle.
China clearly won this round, and the pressure is now squarely on Trump to get a deal done
before the 2020 election.
"... This story of lost American leadership and production is not unique. In fact, the destruction of America's once vibrant military and commercial industrial capacity in many sectors has become the single biggest unacknowledged threat to our national security. Because of public policies focused on finance instead of production, the United States increasingly cannot produce or maintain vital systems upon which our economy, our military, and our allies rely. Huawei is just a particularly prominent example. ..."
"... Higher budgets would seem to make sense. According to the 2018 National Defense Strategy, the United States is shifting away from armed conflicts in the Middle East to "great power" competition with China and Russia, which have technological parity in many areas with the United States. As part of his case for higher budgets, Mattis told Congress that "our military remains capable, but our competitive edge has eroded in every domain of warfare -- air, land, sea, space, and cyber." ..."
"... And yet, the U.S. military budget, even at stalled levels, is still larger than the next nine countries' budgets combined. So there's a second natural follow-up question: is the defense budget the primary reason our military advantage is slipping away, or is it something deeper? ..."
"... The loss of manufacturing capacity has been devastating for American research capacity. "Innovation doesn't just hover above the Great Plains," Mottl said. "It is built on steady incremental changes and knowledge learned out of basic manufacturing." Telecommunications equipment is dual use, meaning it can be used for both commercial and military purposes. The loss of an industrial base in telecom equipment meant that the American national security apparatus lost military capacity. ..."
"... "The middle-class Americans who did the manufacturing work, all that capability, machine tools, knowledge, it just became worthless, driven by the stock price," he said. "The national ability to produce is a national treasure. If you can't produce you won't consume, and you can't defend yourself." ..."
"... In the commercial sector, rebuilding the industrial base will require an aggressive national mobilization strategy. This means aggressive investment by government to rebuild manufacturing capacity, selective tariffs to protect against Chinese or foreign predation, regulation to stop financial predation by Wall Street, and anti-monopoly enforcement to block the exploitation of market power. ..."
Wall Street's short-term incentives have decimated our defense industrial base and
undermined our national security.
Early this year, U.S. authorities filed criminal
charges -- including bank fraud, obstruction of justice, and theft of technology -- against the
largest maker of telecommunications equipment in the world, a Chinese giant named Huawei.
Chinese dominance in telecom equipment has created a crisis among Western espionage agencies,
who, fearful of Chinese spying, are attempting to prevent the spread of Huawei equipment
worldwide, especially
in the critical 5G next-generation mobile networking space.
In response to the campaign to block the purchase of Huawei equipment, the company has
engaged in a public relations offensive. The company's CEO, Ren Zhengfei, portrayed Western
fears as an advertisement for its products, which are, he said, "so good that the U.S.
government is scared." There's little question the Chinese government is interested in using
equipment to spy. What is surprising is Zhengfei is right about the products. Huawei, a
relatively new company in the telecom equipment space, has amassed top market share because its
equipment -- espionage vulnerabilities aside -- is the best value on the market.
In historical terms, this is a shocking turnaround. Americans invented the telephone
business and until recently dominated production and research. But in the last 20 years, every
single American producer of key telecommunication equipment sectors is gone. Today, only two
European makers -- Ericsson and Nokia -- are left to compete with Huawei and another Chinese
competitor, ZTE.
This story of lost American leadership and production is not unique. In fact, the
destruction of America's once vibrant military and commercial industrial capacity in many
sectors has become the single biggest unacknowledged threat to our national security. Because
of public policies focused on finance instead of production, the United States increasingly
cannot produce or maintain vital systems upon which our economy, our military, and our allies
rely. Huawei is just a particularly prominent example.
When national security specialists consider preparedness, they usually think in terms of the
amount of money spent on the Pentagon. One of President Donald Trump's key campaign promises
was to aggressively raise the military budget, which he, along with Congress, started doing in
2017. The reaction was instant. "I'm heartened that Congress recognizes the sobering effect of
budgetary uncertainty on America's military and on the men and women who provide for our
nation's defense," then-defense secretary Jim Mattis said. Budgets have gone up every year
since.
Higher budgets would seem to make sense. According to the 2018 National Defense
Strategy, the United States is shifting away from armed conflicts in the Middle East to "great
power" competition with China and Russia, which have technological parity in many areas with
the United States. As part of his case for higher budgets, Mattis told Congress that "our
military remains capable, but our competitive edge has eroded in every domain of warfare --
air, land, sea, space, and cyber."
In some cases, our competitive edge has not just been eroded, but is at risk of being -- or
already is -- surpassed. The Chinese surge in 5G telecom equipment, which has dual civilian and
military uses, is one example. China is making key investments in artificial
intelligence, another area of competition. They even seem to be able to mount a rail gun on a naval ship ,
an important next generation weapons technology that the U.S. Navy has yet to incorporate.
And yet, the U.S. military budget, even at stalled levels, is still larger than the next
nine countries' budgets combined. So there's a second natural follow-up question: is the
defense budget the primary reason our military advantage is slipping away, or is it something
deeper?
The story of Huawei, and many others, suggests the latter.
♦♦♦
For over a century, America led the world in producing telecommunications equipment. The
American telecom industry, according to Zach Mottl of Atlas Tool Works, a subcontractor in the
industry, used to be a "crown jewel of American manufacturing." Mottl's company had been a
manufacturing supplier to AT&T and its Bell Labs from the early 1900s until the early
2000s. "The radar system was invented here. The transistor came out of Bell Labs. The laser. I
mean all of these high-tech inventions that have both commercial and military applications were
funded out of the research," Mottl told TAC . More than just the sexy inventions, there
was a domestic industrial sector which could make the equipment. Now, in a strategic coup for
our adversaries, that capability is gone.
Yet it wasn't one of those adversaries that killed our telecommunications capacity, but one
of our own institutions, Wall Street, and its pressure on executives to make decisions designed
to impress financial markets, rather than for the long-term health of their companies. In 1996,
AT&T spun off Bell Labs into a telecom equipment company, Lucent Technologies, to take
advantage of investors' appetite for an independent player selling high-tech telecom gear after
Congress deregulated the telecommuncations space. At the time, it was the biggest initial
public offering in history, and became the foundation of a relationship with financial markets
that led to its eventual collapse.
The focus on stock price at Lucent was systematic. The stock price was posted daily to
encourage everyone to focus on the company's relationship with short-term oriented financial
markets. All employees got a small number of "Founder's Grant Share Options," with executives
offered much larger slugs of stock to solidify the connection. When Richard McGinn became CEO
in 1997, he focused on financial markets.
Lucent began to buy up companies. According to two scholars , "The perceived
need to compete for acquisitions became a 'strategic' justification for keeping stock prices
high. This in turn demanded meeting or exceeding quarterly revenue and earnings targets,
objectives with which Lucent top executives, led by the hard-driving McGinn, became
obsessed."
Lucent got even more aggressive. McGinn's subordinate, an executive named Carly Fiorina,
juiced returns with a strategy based on lending money to risky startups who would then turn
around and buy Lucent equipment. Fiorina collected $65
million in compensation as the stock soared. And then, when the dot-com boom turned to
bust, the company, beset by accounting scandals designed to impress shareholders and the
financial markets, embarked on massive layoffs. CEO McGinn was among those laid off, but with a
$12.5 million severance package -- royal compensation for taking one of America's strategic
industrial assets down the road toward total destruction.
In the early 2000s, the telecom equipment market began to recover from the recession.
Lucent's new strategy, as Mottl put it, was to seek "margin" by offshoring production to China,
continuing layoffs of American workers and hiring abroad. At first, it was the simpler parts of
the telecom equipment, the boxes and assembly, but soon contract manufacturers in China were
making virtually all of it. American telecom capacity would never return.
Lucent didn't recover its former position. Chinese entrants, subsidized heavily by the
Chinese state and using Western technology, underpriced
Western companies. American policymakers, unconcerned with industrial capacity, allowed Chinese
companies to capture market share despite the predatory subsidies and stolen technology. In
2006, French telecom equipment maker Alcatel bought Lucent, signifying the end of American
control of Bell Labs. Today, Huawei, with state backing, dominates the market.
The erosion of much of the American industrial and defense industrial base proceeded like
Lucent. First, in the 1980s and 1990s, Wall Street financiers focused on short-term profits,
market power, and executive pay-outs over core competencies like research and production, often
rolling an industry up into a monopoly producer. Then, in the 2000s, they offshored production
to the lowest cost producer. This finance-centric approach opened the door to the Chinese
government's ability to strategically pick off industrial capacity by subsidizing its
producers. Hand over cash to Wall Street, and China could get the American crown jewels.
The loss of manufacturing capacity has been devastating for American research capacity.
"Innovation doesn't just hover above the Great Plains," Mottl said. "It is built on steady
incremental changes and knowledge learned out of basic manufacturing." Telecommunications
equipment is dual use, meaning it can be used for both commercial and military purposes. The
loss of an industrial base in telecom equipment meant that the American national security
apparatus lost military capacity.
This loss goes well beyond telecom equipment. Talking to small manufacturers and
distributors who operate in the guts of our industrial systems offers a perspective on the
danger of this process of financial predation and offshoring. Bill Hickey, who headed his
family's metal distributor, processor, and fabricator, has been watching the collapse for
decades. Hickey sells to "everyone who uses steel," from truck, car, and agricultural equipment
manufacturers to stadiums and the military.
Hickey, like many manufacturers, has watched the rise of China with alarm for decades.
"Everyone's upset about the China 2025 plan," he told TAC , referencing the current
Chinese plan causing alarm among national security thinkers in Washington. "Well there was a
China 2020 plan, 2016 plan, 2012 plan." The United States has, for instance, lost much of its
fasteners and casting industries, which are key inputs to virtually every industrial product.
It has lost much of its capacity in grain oriented flat-rolled electrical steel, a specialized
metal required for highly efficient electrical motors. Aluminum that goes into American
aircraft carriers now often comes from China.
Hickey told a story of how the United States is even losing its submarine fleet. He had a
conversation with an admiral in charge of the U.S. sub fleet at the commissioning of the USS
Illinois , a Virginia-class attack submarine, who complained that the United States was
retiring three worn-out boats a year, but could only build one and a half in that time. The
Trump military budget has boosted funding to build two a year, but the United States no longer
has the capacity to do high quality castings to build any more than that. The supply chain that
could support such surge production should be in the commercial world, but it has been
offshored to China. "You can't run a really high-end casting business on making three
submarines a year," Hickey said. "You just can't do it." This shift happened because Wall
Street, or "the LBO (leveraged buy-out) guys" as Hickey put it, bought up manufacturing
facilities in the 1990s and moved them to China.
"The middle-class Americans who did the manufacturing work, all that capability, machine
tools, knowledge, it just became worthless, driven by the stock price," he said. "The national
ability to produce is a national treasure. If you can't produce you won't consume, and you
can't defend yourself."
The Loss of the Defense Industrial Base
But it's not just the dual-use commercial manufacturing base that is collapsing. Our policy
empowering Wall Street and offshoring has also damaged the more specialized defense base, which
directly produces weaponry and equipment for the military.
How pervasive is the loss of such capacity? In September 2018, the Department of Defense
released findings of its analysis into its supply chain. The results highlighted how fragile
our ability to supply our own military has become.
The report listed dozens of militarily significant items and inputs with only one or two
domestic producers, or even none at all. Many production facilities are owned by companies that
are financially vulnerable and at high risk of being shut down. Some of the risk comes from
limited production capability. Mortar tubes, for example, are made on just one production line,
and some Marine aircraft parts are made by just one company -- one which recently filed for
bankruptcy.
At risk is everything from chaff to flares to high voltage cable, fittings for ships,
valves, key inputs for satellites and missiles, and even material for tents. As Americans no
longer work in key industrial fields, the engineering and production skills evaporate as the
legacy workforce retires.
Even more unsettling is the reliance on foreign, and often adversarial, manufacturing and
supplies. The report found that "China is the single or sole supplier for a number of specialty
chemicals used in munitions and missiles . A sudden and catastrophic loss of supply would
disrupt DoD missile, satellite, space launch, and other defense manufacturing programs. In many
cases, there are no substitutes readily available." Other examples of foreign reliance included
circuit boards, night vision systems, batteries, and space sensors.
The story here is similar. When Wall Street targeted the commercial industrial base in the
1990s, the same financial trends shifted the defense industry. Well before any of the more
recent conflicts, financial pressure led to a change in focus for many in the defense industry
-- from technological engineering to balance sheet engineering. The result is that some of the
biggest names in the industry have never created any defense product. Instead of innovating new
technology to support our national security, they innovate new ways of creating monopolies to
take advantage of it.
A good example is a company called TransDigm. While TransDigm presents itself as a designer
and producer of aerospace products, it can more accurately be described as a designer of
monopolies. TransDigm began as a private equity firm, a type of investment business, in 1993.
Its mission, per
its earnings call , is to give "private equity-like returns" to shareholders, returns that
are much higher than the stock market or other standard investment vehicles.
It achieves these returns for its shareholders by buying up companies that are sole or
single-source suppliers of obscure airplane parts that the government needs, and then
increasing prices by as
much as eight times the original amount . If the government balks at paying, TransDigm has
no qualms daring the military to risk its mission and its crew by not buying the parts. The
military, held hostage, often pays the ransom. TransDigm's gross profit margins using this
model to gouge the U.S. government are a robust 54.5 percent. To put that into perspective,
Boeing and Lockheed's profit margins are listed at 13.6 percent and 10.91 percent. In many
ways, TransDigm is like the pharmaceutical company run by Martin Shkreli, which bought rare
treatments and then price gouged those who could not do without the product. Earlier this year,
TransDigm
recently bought the remaining supplier of chaff and one of two suppliers of flares,
products identified in the Defense Department's supply chain fragility report.
Yet, Trandigm's stock price thrives because Wall Street loves monopolies, regardless of who
they are taking advantage of. Take this
analysis from TheStreet from March 2019, published after the latest Inspector General
report and directly citing many of the concerning facts from the report as pure positives for
the investor:
The company is now the sole supplier for 80% of the end markets it serves. And 90% of the
items in the supply chain are proprietary to TransDigm. In other words, the company is
operating a monopoly for parts needed to operate aircraft that will typically be in service for
30 years . Managers are uniquely motivated to increase shareholder value and they have an
enviable record, with shares up 2,503% since 2009.
Fleecing the Defense Department is big business. Its executive chairman W. Nicholas Howley,
skewered by Democrats and Republicans alike in a May 2019 House Oversight hearing for making up
to 4,000 percent excess profit on some parts and stealing from the American taxpayer, received
total compensation of over $64
million in 2013 , the fifth most among all CEOs, and
over $13 million in 2018 , making him one
of the most highly compensated CEOs no one has ever heard of . Shortly after May's hearing,
the company agreed to voluntarily return $16 million in overcharges to the Pentagon, but the
share price is at near record highs.
L3 Technologies, created in 1997, has taken a different, but also damaging, approach to
monopolizing Defense Department contracts. Originally, it sought to become "the Home Depot of
the defense industry" by going on an acquisition binge, according
to its former CEO Frank Lanza. Today, L3 uses its size, its connections within the government,
and its willingness to offer federal employees good-paying jobs at L3, to muscle out
competitors and win contracts, even if the competitor has
more innovative and better priced products . This practice attracted the ire of two
Republican congressmen from North Carolina, Ted Budd and the late Walter Jones, who found
in 2017 that L3 succeeds, in part, due to "blatant corruption and obvious disregard of American
foreign interest in the name of personal economic profit."
Like TransDigm, this isn't L3's first brush with trouble. It was
temporarily suspended from U.S. government contracting for using "extremely sensitive and
classified information" from a government system to help its international business interests.
It was the subject of a scathing Senate Armed Services Committee investigation
for
failing to notify the Defense Department that it supplied faulty Chinese counterfeit parts
for some of its aircraft displays. And it agreed to pay a
$25.6 million settlement to the U.S. government for knowingly providing defective weapon
sights for years to soldiers serving in Iraq and Afghanistan.
Yet, also like TransDigm, L3 has thrived despite its troubles. When the company was granted
an open-ended contract to update the Air Force's electronics jamming airplane in 2017,
Lieutenant General Arnold Bunch
outlined the Air Force's logic at a House Armed Services Subcommittee meeting. L3, he said,
is the only company that can do the job. "They have all the tooling, they have all the existing
knowledge, and they have the modeling and all the information to do that work," he said.
In other words, because L3 has a monopoly, there was no one else to pick. The system -- a
system designed by the financial industry that rewards monopoly and consolidation at the
expense of innovation and national security -- essentially made the pick for him. It is no
wonder our military capacities are ebbing, despite the large budget outlays -- the money isn't
going to defense.
♦♦♦
In fact, in some ways, our own defense budgets are being used against us when potential
adversaries use Wall Street to take control of our own Pentagon-developed technologies.
There's no better example than China's takeover of the rare earth metal industry, which is
key to both defense and electronics. The issue has frequently made the front page during the
recent trade war, but the seldom-discussed background to our dependence on China for rare
earths is that, just like with telecom equipment, the United States used to be the world leader
in the industry until the financial sector shipped the whole thing to China.
In the 1970s and 1980s, the Defense Department invested in the development of a
technology to use what are known as rare-earth magnets. The investment was so successful that
General Motors engineers, using Pentagon grants, succeeded in creating a
rare earth magnet that is now essential for nearly every high-tech piece of military equipment
in the U.S. inventory, from smart bombs and fighter jets to lasers and communications devices.
The benefit of DARPA's investment wasn't restricted to the military. The magnets make cell
phones and modern commercial electronics possible.
China recognized the value of these magnets early on. Chinese Premier Deng Xiaoping
famously said in 1992 that "The Middle East has oil, China has rare earth," to underscore
the importance of a rare earth strategy he adopted for China. Part of that strategy was to take
control of the industry by manipulating the motivations of Wall Street.
Wall Street's outsized control over defense contracting and industry means that every place
a foreign adversary can insert itself into American financial institutions, it can insert
itself into our defense industry.
At an Armed Services Committee hearing in 2018, Representative Carol Shea-Porter talked
about how constant the conflict between financial concentration and patriotism had been in her
six years on the committee. She recounted a CEO once telling her, in response to her concern
about the outsourcing of defense industry parts, that he "[has] to answer to stockholders."
Who are these stockholders that CEOs are so compelled to answer to? Oftentimes, China.
Jennifer M.
Harris , an expert in global markets with experience at the U.S. State Department and the
U.S. National Intelligence Council, researched a recent
explosion of Chinese strategic investment in American technology companies. She found that
China has systematically targeted U.S. greenfield investments, "technology goods (especially
semiconductors), R&D networks, and advanced manufacturing."
The trend accelerated, until the recent flare-up of tensions between the United States and
China. "China's foreign direct investment (FDI) stock in the U.S.
increased some 800% between 2009 and 2015," she wrote. Then, from 2015 to 2017, "Chinese
FDI in the U.S. climbed nearly four-fold, reaching roughly $45.6 billion in 2016 , up from just
$12.8 billion in 2014."
This investment runs right through Wall Street, the key lobbying group trying to ratchet
down Trump's tough negotiating posture with the Chinese. Rather than showing concern about the
increasing influence of a foreign power in our commerce and industry, Wall Street banks have
repeatedly followed Archie Cox down the path of easy returns.
In 2016, J.P. Morgan Chase agreed to pay a
$264 million bribery settlement to the U.S. government for creating a program, called "Sons
and Daughters," to gain access to Chinese money by selectively hiring the unqualified offspring
of high-ranking Communist Party officials and other Chinese elites. Several other banks are
under investigation for similar practices, including Citigroup and Goldman Sachs, who, not
coincidentally,
hired the son of China's commerce minister. It appears to have worked out for them. In
2017, Goldman Sachs
partnered with the Chinese government's sovereign wealth fund to invest $5 billion Chinese
government dollars in American industry.
In short, China is becoming a significant shareholder in U.S. industries, and is selectively
targeting those with strategic implications. Congresswoman Shea-Porter's discovery that defense
industry CEOs aren't able to worry about national security because they "[have] to answer to
shareholders" was disturbing enough. But the fact that it potentially translates as CEOs not
being able to worry about national security because they have to answer to the Chinese should
elevate the issue to the top of our national security discussion. This nexus of China, Wall
Street, and our defense industrial base may be the answer to why our military advantage is
ebbing. Even when American ingenuity can thrive, too often the fruits go to the Chinese.
In short, the financial industry, with its emphasis on short-term profit and
monopoly , and its willingness to ignore national security for profit, has warped our very
ability to defend ourselves.
How Did We Get Here?
Believe it or not, America has been here before. In the 1920s and 1930s, the American
defense industrial base was being similarly manipulated by domestic financiers for their own
purposes, retarding innovation and damaging the nation's ability to defend itself. And American
military readiness was ebbing in the midst of an increasingly dangerous world full of rising
autocracies.
Today it might be artificial intelligence or drones, but in the 1930s the key military
technology was the airplane. And as with much digital technology today, while Americans
invented the airplane, many of the fruits went elsewhere. The reason was similar to the problem
of Wall Street today. The American aerospace industry in the 1930s was undermined by fights
among bankers over who got to profit from associated patent rights.
In 1935, Brigadier General William Mitchell told Congress that the United States didn't have
a single plane that could go against a "first-class power." "It is a disgraceful situation and
is due," he said, "for one thing, to this pool of patents." The lack of aerospace capacity
reflected a broader industrial problem. Monopolists refused to invest in factories to produce
enough steel, aluminum, and magnesium for adequate military readiness, for fear of losing
control over prices.
New Dealers investigated, and by the time war broke out, the Roosevelt administration was in
the midst of a sustained anti-monopoly campaign. The Nazi war machine, like China today, gave
added impetus to the problem of monopoly in key technology-heavy industries. In 1941, an
assistant attorney general for the antitrust division, Norman Littell, gave a speech to the
Indiana State Bar Association about what he called "The German Invasion of American
Business."
The Nazis, he argued, used legal techniques, like patent laws, stock ownership, dummy
corporations, and cartel arrangements, to extend their power into the United States. "The
distinction between bombing a vital plant out of existence from an airplane and preventing that
plant from coming into existence in the first place [through cartel arrangements]," he said,
"is largely a difference in the amount of noise involved."
Nazis used their American subsidiary corporations to spy on U.S. industrial capacity and
steal technology, such as walkie-talkies, intertank and ground-air radio communication systems,
and shortwave sets developed by the U.S. Army and Navy. They used patents or cartel
arrangements to restrict the production of stainless steel, tungsten-carbide, and fuel
injection equipment. According to the U.S. military after the war, I.G. Farben, the Nazi
chemical monopoly, had influence over American production of "synthetic gas and oils,
dyestuffs, explosives, synthetic rubber ('Buna'), menthol, cellophane, and other products," and
sought to keep the United States "entirely dependent" on Germany for certain types of
electrical equipment.
The Nazis took advantage of an industrial system that was, like the current one, organized
along short-term objectives. But seeing the danger, New Dealers attacked the power of
financiers through direct financing of factories, excess profits taxes, and the breaking of the
power of the Rockefeller, Dupont, and Mellon empires through bank regulation and antitrust
suits. They separated the makers of airplanes from airlines, a sort of Glass Steagall for
aerospace. During the war itself, antitrust chief Thurman Arnold, and those he influenced,
sought to end international cartels and loosen patent rules in part because they allowed
control over American industry by the Nazis.
After the war, the link between global cartels and national security vulnerabilities was a
key driver of American trade and military strategy. America pursued globalization, but with two
differences from the form we have today. First, strategists sought to prevent the recurrence of
global cartels and monopolies. Second, they sought to become industrially intertwined with
allies, not rivals. While multinational corporations stretched across the West, they did not
locate production or technology development in Moscow or among strategic rivals, as we do today
in China.
Domestically, anti-profiteering institutions and rules protected against corruption,
especially important when the defense budget comprised a large chunk of overall American
research and development. The Defense Department's procurement agency -- the Defense Logistics
Agency -- was enormously powerful and oversaw procurement and supply challenges. The Pentagon
had the power to force suppliers of sole source products -- contractors that had monopolies --
to reveal cost information to the government. The financial health of defense contractors
mattered, but so did value to the taxpayer, a skilled defense industrial workforce, and the
ability to deliver quality products to aid in national defense.
A fragmented base of contractors and subcontractors ensured redundancy and competition, and
a powerful federal apparatus with thousands of employees with expertise in pricing and
negotiation kept prices reasonable. The Defense Department could even take ownership of
specialized tooling rights to create competition in monopolistic markets with specialized spare
part needs -- which is precisely where TransDigm specializes. This authority and expertise had
been carefully cultivated over decades to provide the material necessary to equip American
soldiers for World War II, the Korean and Vietnam wars, and the first Gulf war.
In the 1980s, while Ronald Reagan allowed Wall Street free rein elsewhere in the economy, he
mostly kept Wall Street from going after the defense base. But scholars began debating whether
it made sense to have such a large and expensive negotiating apparatus to deal with
contractors, or if a more "cooperative" approach should be taken. Business consultants
argued that the Pentagon could save money if it would simply be "a better customer, by
being less adversarial and more trusting" of defense contractors.
With the end of the Cold War, these arguments found new resonance. Bill Clinton took the
philosophical change that Reagan had pushed on the civilian economy, and moved it into the
defense base. In 1993, Defense Department official William Perry gathered CEOs of top defense
contractors and told them that they would have to merge into larger entities because of reduced
Cold War spending. "Consolidate or evaporate," he said at what became known as "The Last
Supper" in military lore. Former secretary of the Navy John Lehman noted, "industry leaders
took the warning to heart." They reduced the number of prime contractors from 16 to six;
subcontractor mergers quadrupled from 1990 to 1998. They also loosened rules on sole source --
i.e. monopoly -- contracts, and slashed the Defense Logistics Agency, resulting in thousands of
employees with deep knowledge of defense contracting leaving the public sector.
Contractors increasingly dictated procurement rules. The Clinton administration approved
laws changing procurement, which, as the Los Angeles Times put it, got rid of the
government's traditional goals of ensuring "fair competition and low prices." They reversed
what the New Dealers had done to insulate American military power from financiers.
The administration also pushed Congress to allow foreign imports into
American weapons through waivers of the Buy America Act, and demanded procurement officers stop
asking for cost data. Mass offshoring took place, and businesses could increase prices
radically.
This environment attracted private-equity shops, and swaths of the defense industry shifted
their focus from aerospace engineering to balance sheet engineering. From 1993 to 2000, despite
dramatic declines in Cold War military spending and declines in the number of workers in the
defense industrial base and within the military, defense stocks outperformed the S&P.
Today, the American defense establishment quietly finds itself in the same predicament it
did in the 1930s. Despite spending large amounts of money on weapons systems, it often gets
substandard equipment. It is dependent for key sources of supply on business arrangements with
potentially hostile powers. The problem is so big, so toxic, and so difficult that few
lawmakers even want to take it on. But the increasingly obvious danger of Chinese power means
we can no longer ignore it.
The Fix
Fortunately, this is fixable. Huawei's predatory pricing success has shown policymakers all
over the world what happens when we don't protect our vital industrial capacity. Last year,
Congress strengthened the Committee on Foreign Investment in the United States, the committee
that reviews foreign investment and mergers. The Trump tariffs have begun forcing a
long-overdue conversation across the globe about Chinese steel and aluminum overcapacity, and
Democrats like Representative Dan Lipinski are focused on reconstituting domestic manufacturing
ability.
Within the defense base itself, every example -- from TransDigm to L3 to Chinese
infiltration of American business -- has drawn the attention of members of Congress.
Representatives Ted Budd and Paul Cook are Republicans and Representatives Jackie Speier and Ro
Khanna are Democrats. They are not alone. Democratic Senator Elizabeth Warren and
Representative Tim Ryan have joined Khanna's demand for a TransDigm investigation.
Moreover, focus on production is bipartisan. One of the most ardent opponents of
consolidation in the 1990s is current presidential candidate Bernie Sanders, who in 1996
passed an amendment to block Pentagon subsidies for defense mergers, or what he called "Payoffs
for Layoffs." On the other end of the spectrum, Trump has refocused national security and trade
officials on the importance of domestic manufacturing.
Defense officials have also become acutely aware of the problem. In a 2015 briefing at the
Pentagon, in response to questions about Lockheed's acquisition of Sikorsky, then secretary of
defense Ash Carter
emphasized the importance of not having "excessive consolidation," including so-called
vertical integration, in the defense industry because it is "[not] good for the defense
marketplace, and therefore, for the taxpayer and warfighter in the long run." Carter's
acquisition chief, Frank Kendall,
also noted the "significant policy concerns" posed by the "continuing march toward greater
consolidation in the defense industry at the prime contractor level" and the effect it has on
innovation.
American policymakers in the 1990s lost the ability to recognize the value of production
capacity. Today, many of the problems highlighted here are still seen in isolation, perhaps as
instances of corruption or reduced capacity. But the problems -- diminished innovation,
marginal quality, higher prices, less redundancy, dependence on overseas supply chains, a lack
of defense industry competition, and reduced investment in research and development -- are not
independent. They are the result of the financialization of industry and of monopoly. It's time
for a new strategic posture, one that puts a premium not just on spending the right amount on
military budgets, but also on ensuring that financial actors don't capture what we do spend. We
must begin once again to recognize that private industrial capacity is a vital national
security asset that we can no longer allow Wall Street to pillage. By seeing the problem in its
totality, we can attack the power of finance within the commercial and defense base and restore
our national security capacity once again.
There are many levers we can use to reorder our national priorities. The Defense Department,
along with its new higher budgets, should have more authority to promote competition, break up
defense conglomerates, restrict excess defense contractor profits, empower contracting officers
to get cost information, and block private equity takeovers of suppliers. Congress could
reinstate the authority of the Defense Department to simply take ownership of specialized
tooling rights to create competition in monopolistic markets with specialized spare part needs,
a power it once had.
In the commercial sector, rebuilding the industrial base will require an aggressive
national mobilization strategy. This means aggressive investment by government to rebuild
manufacturing capacity, selective tariffs to protect against Chinese or foreign predation,
regulation to stop financial predation by Wall Street, and anti-monopoly enforcement to block
the exploitation of market power.
Policymakers must recognize that industrial capacity is a public good and short-term actors
on Wall Street have become a serious national security vulnerability. While private businesses
are essential to our common defense, the public sector must once again structure how we
organize our national defense and protect our defense industrial base from predatory finance.
For several decades, Wall Street has been organizing not just the financing of defense
contractors, but the capabilities of our very defense posture. That experiment has been a
failure. It is time to wake up, before it's too late.
Matt Stoller is a fellow at the Open Markets Institute. His book, Goliath: The
100-Year War Between Monopoly Power and Democracy, is due out this fall from Simon &
Schuster. Lucas Kunce spent 12 years in the United States Marine Corps, and is a veteran of the
Iraq and Afghanistan wars. The views presented are those of the authors and do not necessarily
represent the views of the Department of Defense or its components. This article was supported
by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the
responsibility of the authors.
Sobering read. However, it is likely that only a major war will spur legislators and
administrators into action. Until then Wall Street will reign and the US administrations will
keep threatening countries with sanctions if they buy equipment that prevents the US to
conduct an easy bombing campaign on them.
I've heard similar stories about the imminent collapse of the Russian Defense sector, they
can't make their own parts, they lack diversity of suppliers, there is a huge brain drain, no
customers (somewhat true since we practice extortion).
I'm not dismissing the author, actually quite the opposite and I am agreeing with you. The
secret ingredient is an actual sense of danger. The Russians are terrified, we pretend to be
terrified but know it's all threat inflation. If we had honest people in Congress proposing
targeted budgets for real needs rather than 'freedom of navigation' when we know it's power
projection then the fear of God might return to our habits. The author brought up the 20/30's
I bet WW2 gave us that fear again.
Dude, your government stopped being able to do anything this complicated somewhere around
1995. Your infrastructure is in shambles and diabetics are dying because of an insulin
monopoly that forces them to ration medication. The rope remark resembles you.
This is the longest litany about demise of American prowess in technology that I've ever read
in TAC so far. The story of destruction of Bell Labs, described in details by Matt Stoller is
very accurate: I have been eyewitness to it from 1983 and up to its gruesome end. Carly
Fiorina, one of the runners for President in 2016, delivered American icon coup-the-grace.
She even justified her claim on presidency on business experience: destruction of another
icon of American high-tech – Hewlett-Packard. Alas, there is the most fundamental
reason for the current situation in the 21-st century USA, was formulated 100+ years ago by
Vladimir Lenin: "For profit capitalists will be eager to sell us rope, with which we'll
hung them" .
Would anybody protest today that profit IS the Nature of capitalism ? And
more: those who substitute Reality with their wet dreams might be cured by watching
Democratic 2020 debates.
Great piece. There are lots of good articles here but not that many that tell something I
really didn't already know. Great perspective on the whole China issue. Amazing how sick our
financialized economy really is when you look under the hood.
This is excellent information. Hope folks on the Hill are reading this.
The Wall Street and finance industry depend on US military, long-term this is a disaster, but
they care only for short-term profits. Whoever thought that principles of free market apply
internationally, where other goverments are free to influence "free trade" in any way they
wish, while US goverment will do nothing is an idiot.
Large part of it is probably diversification and it does not affect the US exporters as they
also can diversify.
Notable quotes:
"... The bottom line is Trump and his misfit Cabinet didn't thoroughly think through all of the likely negative ramifications of "Making America Great Again" !! He impulsively makes decisions and when then fail - as they do often do - he blames others or creates diversionary chaos to change the subject. Trump's a fxxxxing overweight, repulsive imbecile, and the farmers are going to let him have it in 2020.....along with millions who rolled the dice him in 2016 but he crapped out on all of them..... ..."
"... What is happening to US cars in China? I know the market has taken a dump there, but are US cars losing market share as well? Are Chinese consumers shunning goods from US manufacturers? ..."
published new data Monday that shows
agricultural imports from the US have fallen, as Chinese buyers shift supply chains out of the
US to other countries because of the deepening trade war.
In the first five months of 2019, imports of agricultural products from the US crashed 55.3%
YoY . Much of decline was due to a 70.6% YoY decline of soybeans in the same period.
Chinese importers went to Brazil, Argentina, and ASEN countries (Thailand, Indonesia,
Malaysia, Singapore, Philippines, Vietnam, Brunei, Myanmar (Burma), Cambodia, and Laos). Data
showed imports from the EU, Australia, and Canada also jumped in the first five months as
Chinese buyers ditched American products.
The bottom line is Trump and his misfit Cabinet didn't thoroughly think through all of
the likely negative ramifications of "Making America Great Again" !! He impulsively makes
decisions and when then fail - as they do often do - he blames others or creates diversionary
chaos to change the subject. Trump's a fxxxxing overweight, repulsive imbecile, and the
farmers are going to let him have it in 2020.....along with millions who rolled the dice him
in 2016 but he crapped out on all of them.....
C'mon man, it's not a Trump thing, it's been the whole American policy since Ronald
Reagan. Trump didn't start the fire, he's just half-assing things the best he can.
We cannot withstand another year in which our most important foreign market continues to
slip away and soybean prices are 20 to 25%, or even more, below pre-tariff levels," said
John Heisdorffer, chairman of the American Soybean Association, in a statement published on
May 13.
Or.........what? You should've voted for Clinton and you'll vote for Bernie/Biden/Warren?
Come on man, spit it out. Or what?
What is happening to US cars in China? I know the market has taken a dump there, but are
US cars losing market share as well? Are Chinese consumers shunning goods from US
manufacturers?
From a report: Ren's downbeat assessment that the ban will hit revenue
by $30 billion , the first time Huawei has quantified the impact of the U.S. action, comes
as a surprise after weeks of defiant comments from company executives who maintained Huawei was
technologically self-sufficient. [...]
Huawei had not expected that U.S. determination to "crack" the company would be "so
strong and so pervasive," Ren said, speaking at the company's Shenzhen headquarters on
Monday.
Two U.S. tech experts, George Gilder and Nicholas Negroponte, also joined the session.
"We did not expect they would attack us on so many aspects," Ren said, adding he expects a
revival in business in 2021.
It was neoliberalism that moved production to China and created condition for the Chinese own companies to compete. Now Trump
goes against neoliberal dogma. So it is not accidental that he was under attack and Russiagate was launched to ensure his resignation.
Notable quotes:
"... in an editorial in the state-run People's Daily, Beijing has warned that China has "the strength and patience to withstand the trade war, and will fight to the end if the U.S. administration persists." ..."
"... China's controversial telecom giant, Huawei, filed a civil lawsuit against the US Commerce Department over the mishandling of telecommunications equipment seized by American officials, demanding its release. ..."
"... However, the equipment was not shipped back to China. It was "purportedly" seized en route and is currently sitting in Alaska, as US officials wanted to investigate whether the shipment required a special license . Such requests are usually processed within 45 days, but nearly two years have already passed since then. ..."
"... "The equipment, to the best of HT USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in its lawsuit, which was filed on Friday in federal court in Washington. ..."
"... Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because it was made outside the United States and was being returned to the same country from which it came. ..."
"... The lawsuit comes amid a bitter row between two world's largest economies, and Washington's crackdown on Huawei. In May, the Trump administration added Huawei to the entity list, barring it from buying needed U.S. parts and components without U.S. government approval. The US alleges that Huawei could be spying for the Chinese government, a claim which the company has repeatedly denied. ..."
"... Of course, Huawei is not the only Chinese tech company that the White House decided to put on its trade blacklist. On Friday, five Chinese organizations – supercomputer maker Sugon, three its affiliates, and the Wuxi Jiangnan Institute of Computing Technology – were added to entity list on the grounds that their activities are allegedly contrary to US national security and foreign policy interests. ..."
"... don't expect a breakthrough: as Goldman's trade deal odds index found last week... the probability of a breakthrough between the two nations is roughly one in five. ..."
It's the weekend, which means the trade war between the US and China moved to the front page of the local propaganda media (in both
the US and China). And while Trump has yet to slam Beijing, focusing this morning on the all time high in the market instead, China
has been busy and in an editorial in the state-run People's Daily, Beijing has warned that China has "the strength and patience
to withstand the trade war, and will fight to the end if the U.S. administration persists."
Echoing what China's notorious twitter mouthpiece Hu Xijin said yesterday, the editorial said that just days ahead of the much
anticipated G-20 summit in Osaka where Trump and Xi are set to meet, " the U.S. must drop all tariffs imposed on China if it wants
to negotiate on trade, and only an equal dialogue can resolve the issue and lead to a win-win", according to Bloomberg.
The communist party's official paper also said the US had failed to take into account the interests of its own people, and they
are paying higher costs due to the trade dispute. "Wielding a big stick of tariffs" also disregards the condition of the U.S. economy
and the international economic order, according to the editorial.
Beijing's official warning to the US ended as follows: if the U.S. chooses to talk, "then it must show some good faith, take account
of key concerns from both sides and cancel all tariffs."
And just to prove that China isn't a paper tiger whose threats will be confined to the local newspapers,
Reuters reported that overnight China's controversial telecom giant, Huawei, filed a civil lawsuit against the US Commerce
Department over the mishandling of telecommunications equipment seized by American officials, demanding its release.
In an almost absurd reversal, the company whose entire existence can be traced to stealing and reverse-engineering foreign technology
and
trampling over corporate ethics , the complaint alleges that the US government took possession of hardware, including an ethernet
switch and computer server, which was transported from China to an independent laboratory in California for testing and certification
back in 2017.
However, the equipment was not shipped back to China. It was "purportedly" seized en route and is currently sitting in Alaska,
as US officials wanted to investigate whether the shipment required a special license . Such requests are usually processed within
45 days, but nearly two years have already passed since then.
"The equipment, to the best of HT USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in
its lawsuit, which was filed on Friday in federal court in Washington.
Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because
it was made outside the United States and was being returned to the same country from which it came.
The company is not seeking any financial compensation and is not challenging the seizure itself, but is sending a message to Washington,
saying "post-seizure failures to act are unlawful", in effect charging the Trump admin with doing precisely what it, itself has been
accused of. Huawei wants to force the Commerce Department to decide whether an export license is really necessary and, if not, release
the withheld equipment.
The lawsuit comes amid a bitter row between two world's largest economies, and Washington's crackdown on Huawei. In May, the Trump
administration added Huawei to the entity list, barring it from buying needed U.S. parts and components without U.S. government approval.
The US alleges that Huawei could be spying for the Chinese government, a claim which the company has repeatedly denied.
Huawei CFO Meng Wanzhou, daughter of the company's founder, has been detained in Canada since December on a U.S. warrant. She
is fighting extradition on charges that she misled global banks about Huawei's relationship with a company operating in Iran.
Of course, Huawei is not the only Chinese tech company that the White House decided to put on its trade blacklist. On Friday,
five Chinese organizations – supercomputer maker Sugon, three its affiliates, and the Wuxi Jiangnan Institute of Computing Technology
– were added to entity list on the grounds that their activities are allegedly contrary to US national security and foreign policy
interests.
The fresh US blacklisting comes ahead of crucial talks between US President Donald Trump and Chinese President Xi Jinping in Osaka,
Japan, which are intended to ease tensions between the two sides. Still, don't expect a breakthrough: as
Goldman's
trade deal odds index found last week... the probability of a breakthrough between the two nations is roughly one in five.
A letter from over 600 US companies businesses in support of President Trump's tariffs on
approximately $300 billion of Chinese imports was scheduled to be submitted on Friday before
the Office of the United States Trade Representative (USTR), according to the Daily
Caller , which reviewed the document.
It is the intention of Coalition for a Prosperous America (CPA), Chief Economist, Jeff
Ferry to present the letter Friday morning during his testimony to the USTR. This letter
pushes back on the letter last week that asks Trump to stop the tariffs on China. Those
signers were mostly big-box retailers who manufacture their products in China.
This all comes as President Donald Trump said that he is considering slapping China with
more tariffs if Chinese President Xi Jinping does not meet with him during the G-20 summit in
late June. Since, the warning, the two have agreed to meet. However, Trump said if Xi does
not attend the event, he will immediately impose new
tariffs on $300 billion in
Chinese imports ,
including a number of consumer products. - Daily
Caller
In May, Trump raised tariffs on around $200 billion of Chinese goods from 10% to
25%. Three days later, China slapped around $60 billion in US goods with reciprocal tariffs.
"The global integration project with China, through liberalized trade, has failed. The
Communist Party of China has used its access to U.S. consumer and capital markets for a
predatory economic strategy to grow its state-owned enterprises, finance its military build up,
imprison its citizens in modern day concentration camps and challenge America's geopolitical
power," according to Coalition for a Prosperous America CEO Michael Stumo.
"Our American companies and workers have been weakened by this failed experiment. We want it
to stop," he added.
The Automotive Parts Remanufacturing Association (APRA) president, Joe Kripli. said, "for
years now the Chinese 'knock-off' of starters and alternators that have been entering the
country at ridiculously low cost and have been hurting the small [U.S.] remanufacturer that
is located in every state and has been in our communities since WWII. - Daily
Caller
"Fitzgerald USA is one of the few Made in America truck conglomerates. We recently started a
U.S. truck parts business as the trucking industry increasingly moves its operations to China.
America needs a strong manufacturing economy for jobs and national security. We support
President Trump and his use of tariffs on China," said Fitzgerald USA Director of Government
Relations, Jon Toomey.
Guess who didn't sign the letter? Apple - which is desperately trying to lobby the Trump
administration to ease the tariffs - arguing this week in front of the USTR that "U.S. tariffs
on Apple's products would result in a reduction of Apple's U.S. economic contribution," and
"weigh on Apple's global competitiveness
Cheap easy credit in USA has made us all debtors. The cheap money has been used to
purchase lots of cheap chinese **** from the large global publicly traded companies. The big
box stores partnered with American brands to move operations overseas and make **** real
cheap and sell those well known household brand names back to unsuspecting consumers.....to
the very people they have put out of a job. THIS is the largest redistribution of wealth in
the history of the planet. Free money, low paying jobs and cheap ****. As far as I am
concerned, if china steals a company's technology, cry me a ******* river. They deserve
it.
The super-capitalists as usual screw everybody else - the honest manufacturers, labour -
while destroying the fabric of society in their insane pursuit of profits for themselves and
their confreres.
Did Amazon also sign the petition? What about Facebook ,Google? I want to see the big
MNC's signing the letter. Let me see the country before profit there.
The key dynamic is low energy costs, cheap land, low corporate taxes and low shipping
costs to the market.
All four of those are in the US.
Factories will be built where the demand is located and there is and will be no longer any
advantage to produce products overseas.
Plants that used to take 1000 workers to run now take just 50 or less.
Automation would have impacted the work force in the US in 10 years but thanks to minimum
wage hikes it is happening right now and will grow exponentially in 2 years.
Why is it that folks put the blame on China? Our corporations are the ones that looked for
manufacturers that could make their product for less than American workers could.
Watch older episodes of Shark Tank and they all said time and time again that they have
contacts in China and could have the product made for peanuts....... That's how our
corporations make money.
Why don't we boycott Apple? We can't because it's in everyone's retirement portfolio one
way or another.
If the US was such a "free market" powerhouse, why not heed your own values instead of
doing protectionism? Answer: another myth destroyed that America is all about "free markets".
Add that to the mythology about being pro-dumbocracy, freedumb and all for international
"law".
(nytimes.com)
70
restricting China's access to American technology and stoking already high tensions as
President Trump and President Xi Jinping of China prepare to meet in Japan next week. From a
report: The Commerce Department announced that it would add four Chinese companies and one
Chinese institute to an "entity list," saying they posed risks to
American national security or foreign policy interests [Editor's note: the link may be
paywalled;
alternative source ] . The move essentially bars the entities, which include one of China's
leading supercomputer makers, Sugon, and a number of its subsidiaries set up to design
microchips, from buying American technology and components without a waiver from the United
States government.
The move could all but cripple these Chinese businesses, which rely on American chips and
other technology to manufacture advanced electronics. Those added to the entity list also
include Higon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics
Technology, and Wuxi Jiangnan Institute of Computing Technology, which lead China's development
of high performance computing, some of which is used in military applications like simulating
nuclear explosions, the Commerce Department said. Each of the aforementioned companies does
businesses under a variety of other names.
Blocking Chinese access to any particular technology just gives them an incentive to pour
massive resources into developing their own versions. They've learned that US companies are
not reliable suppliers. Same as many former allies have learned that being an ally of the US
is a double edged sword.
Cuts in sales to China by US companies means less money for US companies to invest in
developing advanced products. Don't be surprised if by 2030 China will be the sole supplier
of the worlds best, most advanced technology. Just look at what happened to the robotics
industry. Or better yet, go back to the previous century, when the US decided to unload their
steel mills to China at a huge discount to China to invest in financial instruments, then
whined like crazy that China was able to make steel cheaper because their new-to-them steel
mills had less debt to fund per to. Of steel produced.
If China had had to buy new steel mills, the cost of production per ton would have been
higher. But no, trading pieces of paper or bits in bank accounts was easier.
The Chinese hi-tech companies should thank the US for clearing out American products from
the
biggest market [datenna.com], so they can eventually enter the lucrative cycles of being
able to sell primitive products and re-invest the proceeds to create more advanced products,
without having to compete with the most advanced American products upfront, and in a few
short year they will produce more advanced ones.
Oh, don't the US know that Chinese supercomputers already cleared out of American chips
[wikipedia.org] and achieve top performance long time ago?
Dell Technologies Inc
., HP Inc. , Intel Corp. and Microsoft Corp. are joining forces to oppose
President Donald Trump's proposed tariffs on laptop computers and tablets among $300 billion in
Chinese goods targeted for duties.
The companies submitted joint comments opposing the tariff escalation, saying it would hurt
consumer products and industry, while failing to address China's trade practices. The tariffs
are poised to hit during the peak holiday and back-to-school sales period, they said.
"The tariffs will harm U.S. technology leaders, hindering their ability to innovate and
compete in a global marketplace," the companies said in comments posted online.
Dell, HP, and Microsoft said they account for about half of the notebooks and detachable
tablets sold in the U.S. Prices for laptops and tablets will increase by at least 19% -- about
$120 for the average retail price of a laptop -- if the proposed tariffs are implemented,
according to a
study released this week by the Consumer Technology Association .
The companies said they spent a collective $35 billion on research and development in 2018
alone, and tariff costs would divert resources from innovation while providing "a windfall" to
manufacturers based outside the U.S. that are less dependent on American sales.
The Trump administration is considering public comments on the proposed duties and
hearing testimony from more than 300 U.S. companies and trade groups through June 25. The
tariffs could be imposed after a rebuttal period ends July 2.
The U.S. and China said their presidents
will meet in Japan next week to relaunch trade talks after a month-long stalemate.
"... The facts of the US economy and politics show clearly the correctness of the analysis in China that any expectation of 'mercy' from the Trump administration will in reality lead to heightened attacks by the US. ..."
"... The medium-term trajectory of the US economy [is] to slow down during 2019 and 2020 – which is necessarily a negative factor for President Trump's chances of re-election in 2020 and which interacts with the adverse effects of US tariff policy on US consumers such as price rises and falls in prices to farmers. ..."
"... Trump administration already acknowledges in practice that its policies will be a US 'lose', that is they will inflict pain on the US economy, and it is merely attempting to ensure that the 'lose' for China is bigger than the 'lose' for the US. ..."
"... Bloomberg and others calculate that the losses in a full year of the trade war would be $600 billion. ..."
"... In addition to these tariff effects the Trump administration US is equally concerned about the consequences of consumer boycotts, or restrictions, on US companies which would be equivalent to those it has carried out against Huawei. ..."
"... 'Beijing has scope for retaliation. Levers at its disposal include blocking access to its market -- a move that Goldman Sachs analysts estimate could reduce Apple's earnings per share by nearly 30 per cent.' ..."
"... These specific examples clearly illustrate that in practice, despite its claims to the contrary, the Trump administration starts from the framework that its policies will inflict pain on the US economy, but that it will be able to limit this loss. China's route to success is therefore to inflict pain on the US economy to a point that is unacceptable for Trump in seeking re-election. ..."
"... 'If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the US is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses.' On this logic: 'Geopolitical primacy, not maximum prosperity for Americans' was 'the president's true objective.' ..."
"... Forces in China claiming that the Trump administrations attacks will be stopped by 'appeasement', or by appeals for mercy, are presenting the reverse of the truth – such policies will lead to the Trump administration becoming more aggressive. This flows inevitably from the fact that the Trump administration's policy is not to seek a 'win-win' for the US but to create a 'lose-lose' with the aim that the 'lose' in terms of economic pain for the US should be 'modest'. This logic of the Trump administration's position means that any weakening of China's position, any alleviation of the pain inflicted on the US, will lead to the Trump administration becoming more aggressive, not less. ..."
"... it is also clear that Trump's measure of what is bearable is not the interests of the US people, but whether it affects the President's chances of re-election. In summary, only if the economic pain suffered by the US is sufficiently severe that it endangers Trump's re-election chances will the Trump administration desist from its attacks on China. ..."
"... When the 'lose' or 'pain' in US financial markets is not great the Trump administration proceeds to attack China. When, on the contrary, China's reaction increases pain in US financial markets Trump acts more reasonably. That is, whenever the Trump administration feels in a stronger position it increases its attacks on China, whenever the Trump administration feels weaker due to the pain in US financial markets it acts more reasonably to China. ..."
"... But once the Trump administration embarked on the course of a lose-lose confrontation then such a struggle can only be won by China relying on its own strength. Sufficient pain must be inflicted on the Trump administration that it decides it is better to abandon the lose-lose. And the criteria by which it will judge whether the pain in the 'lose-lose' is bearable is the effect on its chances of re-election. ..."
'At least two other organizations have more power over [US financial] markets
than the White House. They are the US Federal Reserve and the Chinese Communist
Party. Trump does not directly control either of them.'
This brutal analysis is particularly significant as it is by one of the most
senior and accurate Western specialists on financial markets –
John Authers
, Senior Bloomberg Editor for Markets and former Chief Markets
Commentator for the
Financial Times
. It encapsulates the interaction of
economic and political problems facing President Trump. As will be seen it also
summarises the relative strengths of China and the US in the 'trade war',
dictates the US administration's tactics in attacking China, and determines the
policies which will prevent the Trump administration carrying out its attempt to
block China achieving its development goals.
Analysis of these real facts of US financial markets and policy strongly
confirms the assessment emphasised by China's President Xi Jinping in his recent
speech
in
Yudu County, the place being highly symbolic as it was the starting point for
China's famous Long March, that China has to rely on its own strength in
resisting this attempt by the US administration to prevent China achieving
prosperity and national rejuvenation.
While the situation of China itself in the trade/economic war is naturally the
most important issue there are of course two sides involved in this conflict –
the other aspect of the situation is within the US. Analysis of this, which forms
the subject of this article, shows clearly why the Trump administration refuses
to accept 'win-win' relations with China and what is the inevitable outcome of
this administration's 'lose-lose' logic. Such analysis in turn shows that
frequent comparisons made in China to the Long March of 1934-35, or to Mao
Zedong's famous
essay
'On Protracted War', are not simply rhetorical metaphors, or references
to the historical traditions of the Communist Party of China (CPC), but provide
an accurate framework to understand the situation.
The Trump administration made a very serious miscalculation in launching the
'trade war' with China. It believed that either, or both, the leadership of China
would submit to the Trump administrations threats or the Chinese population would
not be prepared for a serious struggle with the US. Both calculations have proved
entirely wrong. China's leadership did not surrender to but hit back against the
US attacks. Furthermore anyone who follows China's domestic discussion, on what
is now by far the world's largest internet community, knows that this line was
strongly supported by the Chinese population.
The difference to the historical comparisons now frequently used in China, of
course, is that this is an economic war and not a military one. Therefore, the
weapons are different, and it is necessary to analyse what are the pressure
points on the US, and what armaments are most powerful for China. In turn this
examination of the situation in the US economy fully confirms the analyses made
of the situation in China and the reaction of different social layers to the
present conflict with the US.
Trends in China and the US
Examining the Chinese side of the 'trade war' Wang Wen has presented an
excellent
analysis
of the reaction of different social strata in China to the Trump
administration's economic aggression. Its analysis can be noted:
'
The vast
majority of ordinary people are highly supportive of the state's policy of
counter-bullying in the United States, and the current fear of the US exists
mainly in some social elites.'
But it is particularly striking that this analysis of trends within China,
made by a Chinese citizen, is fully confirmed from another 'external' angle –
that of the situation in the US and the forces operating on the Trump
administration. The facts of the US economy and politics show clearly the
correctness of the analysis in China that any expectation of 'mercy' from the
Trump administration will in reality lead to heightened attacks by the US.
Trump's economic policy is determined by the coming US Presidential electio. The starting point of any analysis of the situation in the US is that
President Trump is already entirely aware of the most important date he faces – 3
November 2020, the next US Presidential election. Securing re-election is his
paramount goal and this therefore determines the shaping of the Trump
administration's policies. Three time frames are crucial for this.
The impact of events in financial markets, which can occur in a very short
time frame – in some cases minutes/hours and almost invariably having a strong
impact over a period of days to months.
The medium-term trajectory of the US economy [is] to slow down during 2019 and
2020 – which is necessarily a negative factor for President Trump's chances of
re-election in 2020 and which interacts with the adverse effects of US tariff
policy on US consumers such as price rises and falls in prices to farmers.
Attempts to slow China's economy in the medium/longer term, through forcing
or persuading it to abandon its socialist path of development.
All three time frames however confirm a fundamental reality – that while
China's relations with most countries, and indeed with some previous US
presidents, can be most successful based on 'win-win' this will not occur with
the Trump administration.
This is due to the fact that the Trump administration
already acknowledges in practice that its policies will be a US 'lose', that is
they will inflict pain on the US economy, and it is merely attempting to ensure
that the 'lose' for China is bigger than the 'lose' for the US.
The Trump administration's 'lose-lose' analysis
An illustration on a small scale of the Trump administration's understanding
of the need to attempt to limit the extent of economic pain on the US is its
recent announcement of $16 billion of subsidies to US farmers – the bill for
which will be financed by other US taxpayers as is increasingly understood in the
United States. As
CNN
noted: 'Just as Mexico was supposed to pay for the wall, but isn't, now
China is supposed to pay for President Donald Trump's plan to bail out US
farmers. Neither statement is true, of course.'
Affecting wider sections of the US population, calculations by the Western
economics company Oxford Economics, which has no connection with China, found:
'Chinese manufacturing lowered prices in the United States for consumer goods,
dampening inflation and putting more money in American wallets trade with China
saved these families up to $850 that year.' Regarding the overall impact on the
global economy, including the adverse effect on US allies,
Bloomberg
and others calculate that the losses in a full year of the trade
war would be $600 billion.
In addition to these tariff effects the Trump administration US is equally
concerned about the consequences of consumer boycotts, or restrictions, on US
companies which would be equivalent to those it has carried out against Huawei.
The
Financial Times
noted for example that the immediate goal of the US sanctions
against Huawei are not simply or primarily to stop the supply of chips and
software but to destroy the consumer market for Huawei's products in the West –
where customers want guaranteed access to Google dependent products: 'Google's
decision this week to stop selling its Android operating system to Huawei for new
handsets makes little difference in China, where Huawei should be able to
convince buyers to switch to its operating system, now under development.
But
customers are more wedded to Android in international markets. Independent
analyst Richard Windsor estimates it will lose all those sales.' But the
Financial Times simultaneously noted that consumer retaliation against China
would have a devastating financial effect on Apple, one of the US's core and most
valuable companies: 'Beijing has scope for retaliation. Levers at its disposal
include blocking access to its market -- a move that Goldman Sachs analysts
estimate could reduce Apple's earnings per share by nearly 30 per cent.'
These specific examples clearly illustrate that in practice, despite its
claims to the contrary, the Trump administration starts from the framework that
its policies will inflict pain on the US economy, but that it will be able to
limit this loss. China's route to success is therefore to inflict pain on the US
economy to a point that is unacceptable for Trump in seeking re-election.
US financial markets
A decisive reason that such pain for the US is possible is that while the sums
noted in relation to US consumers, farmers, and allies above sound large the
Trump administration can in fact deal with amounts such as $16 billion to
farmers. But even such sums as the $600 billion loss for the global economy are
small compared to potential impacts on the size of US financial markets. The loss
of $600 billion in a year for the global economy is less than the amount that can
be lost in US financial markets in a single day, while a loss of $16 billion can
occur in seconds.
Due to the sheer scale of US financial markets the Trump
administration does not remotely have the resources to control the more than
$30,000 billion US share market or the $16,000 billion US Treasury bond market.
Pain inflicted on the US in such financial markets is therefore on a scale which
is destabilising to the Trump administration.
Examination of all three time frames operating on the Trump administration
considered above would require three separate analyses or an inordinately long
article. Therefore, due to their sheer scale, this article examines only the
first, most short term, but extremely powerful of these issues – the impact of
the trade war on US financial markets.
The real situation facing US presidents
John Authers' blunt comment cited at the beginning of this article, reveals
accurately the real domestic economic situation of a US President – which is very
different to the frequent perception in China. Unlike China, under the US
governmental system the President has little direct control over the most
powerful levers of the economy – there is no large state owned economic sector
which can be instructed by the President to increase its activity, the Federal
budget is decided by the Congress not by the President, and interest rates are
controlled by the Federal Reserve which under US law cannot be instructed by the
President.
The new factor in the trade war which Authers drew attention to, which is also
outside the US President's control, is China itself. The facts amply confirm that
the impact of China's statements and actions on US financial markets is now very
large – as will be demonstrated.
Larry Summers, former US Treasury Secretary,
clearly spelt out this numerically in a
commentary
for the Washington Post: 'On Monday [13 May], China announced new
tariffs on $60 billion of US exports, and the United States threatened new
tariffs on up to $300 billion of Chinese goods. These actions were cited as the
principal reason for a decline of more than 600 points in the Dow Jones
industrial average, or about 2.4 percent in broader measures of the stock market.
With the total value of US stocks around $30 trillion, this decline represents
more than $700 billion in lost wealth.'
This $700 billion loss to US shareholders directly resulted from China's
response to President Trump's announcement he was raising US tariffs against
China from 10% to 25%. To illustrate this direct impact Authers' accurately noted
the difference on US share markets between the week following Trump's
announcement of raising tariffs against China, during which there was no
announcement of a precise Chinese response, and the US financial markets'
reaction when China announced its counter tariffs: 'It's fair to say that Wall
Street did not anticipate China's retaliation to US tariffs. Last week, the
negative reaction to President Donald Trump's announcement of new tariffs on
China was oddly muted. On Monday, after China's response was announced just
before the market opened, the S&P 500 fell by more than it had done in the entire
previous week.'
Authers similarly noted the increasing skill of China's response and its
impact on US markets: 'The problem is that China knows how to respond. China
knows it can attack the presidential weak spot by acting in a way that damages
the Dow. Hence, it not only retaliated with tariffs of its own, but announced
them just as the New York market was about to open, at night in China, for
maximum effect.'
As already noted, the $700 billion loss in a single day on US share markets
was larger than the projected loss to the world economy for an entire year due to
the trade war – and over 40 times the $16 billion bill for Trump's subsidies to
US farmers. But even this sum is small compared to losses on US financial markets
that can occur due to others of China's economic actions. As
Authers
noted: 'In the last five years, the event that scared the US market
the most, by a wide margin, was the surprise Chinese yuan devaluation in 2015.'
The impact of this RMB devaluation was clear. Between 10 August and 24 August
2015, only 14 days, the RMB's exchange rate fell by 3.0%. The US S&P500 tracked
the RMB down falling by 11.2% by 25 August. In terms of current valuations of US
share markets this was equivalent to a loss of $3.8 trillion – more than six
times the total projected loss to the global economy of the trade war in a year,
or over 200 times Trump's subsidies to farmers.
The real aim of Trump's policy
This identification of the degree of pain which can be inflicted by China on
US financial markets, and on the US economy, is crucial because Trump's tariff
policies cannot, indeed are not intended to, improve the situation of the US
itself. Bloomberg columnist
Noah Smith
summarised the Trump administration's real aim very accurately
under the self-explanatory headline 'The Grim Logic of Trump's Trade War With
China – Maximizing American prosperity probably isn't the goal.' Apart from
comprador apologists for the US within China, noted by Wang Wen, this logic of
Trump's policy is by now well understood in China. But, nevertheless, it is worth
quoting this Bloomberg analysis at length as it summarises very accurately from a
US perspective the logic of the Trump administration:
'The trade war has cost to the US. Economists have shown that the actual burden
of tariffs has fallen mostly on American consumers -- in other words, the prices
consumers pay for imported goods has risen And higher prices on capital goods
and intermediate goods is raising expenses for US manufacturers, making them less
competitive. Meanwhile, Chinese retaliation has hurt US farmers
'So with losses mounting, it looked like there was little reason to continue
the trade war. Yet Trump is doubling down. Why?
'If Trump wants to slow China's ascent as a superpower, a trade war might be
an effective way to do it. If the harm to the US is modest and the costs for
China are severe and lasting, Trump might conclude that the former are acceptable
losses.' On this logic: 'Geopolitical primacy, not maximum prosperity for
Americans' was 'the president's true objective.'
In other words, as was already shown in the case of farm subsidies, the Trump
administration quite accurately does not believe that tariffs and other forms of
economic aggression against China aid US economic prosperity – on the contrary
they cause economic pain. But it decides to inflict this pain on US citizens and
companies in order to pursue neo-con policies trying to block China's prosperity
and national rejuvenation. But this policy requires that 'the harm to the US is
modest.' The problem is that the more tariffs are imposed , and above all if
China retaliates, the greater the pain not only for US financial markets but for
US consumers – that is US voters. As Authers noted: 'Meanwhile, the US can still
impose more tariffs, but the goods it has chosen to attack have been largely
invisible to consumers. Any further tariffs will take it into consumer products
where price rises will be visible and painful, and might even, again, act as a
spur to raise [interest] rates.' The effect on US financial markets, as already
noted, can be far more severe than the direct effect of the tariffs.
Why win-win will not work with the Trump administration
Understanding the Trump's administrations real aim shows not only why its goal
is not to improve the economic position of the US economy or US citizens but
simultaneously makes clear why its policies will not be stopped by appeals to
reason or 'win-win'. Forces in China claiming that the Trump administrations
attacks will be stopped by 'appeasement', or by appeals for mercy, are presenting
the reverse of the truth – such policies will lead to the Trump administration
becoming more aggressive. This flows inevitably from the fact that the Trump
administration's policy is not to seek a 'win-win' for the US but to create a
'lose-lose' with the aim that the 'lose' in terms of economic pain for the US
should be 'modest'. This logic of the Trump administration's position means that
any weakening of China's position, any alleviation of the pain inflicted on the
US, will lead to the Trump administration becoming more aggressive, not less.
This makes clear while most countries seek a 'win-win' with China, and can
therefore rightly be approached on this basis, and indeed this forms the basis of
China's foreign policy, this will not work with the Trump administration because
it is not seeking a 'win' – it is merely seeking that the 'lose' for the US it
knows will occur should not be sufficiently large to threaten Trump's
re-election.
It follows from this situation that the only thing that will deter the Trump
administration, and force it off its path of attacks on China, is if the 'lose'
for the US is bigger than it had anticipated – that is if the economic pain is
too large to be bearable from the point of view of the interests of the Trump
administration. From what has already been analysed, it is also clear that
Trump's measure of what is bearable is not the interests of the US people, but
whether it affects the President's chances of re-election. In summary, only if
the economic pain suffered by the US is sufficiently severe that it endangers
Trump's re-election chances will the Trump administration desist from its attacks
on China.
The only 'win' which the Trump administration takes into account is,
therefore, if the 'lose/pain' of the confrontation with China is seen as
endangering Trump's re-election chances and the 'win' is then simply the
lessening of that pain to a point where it is no longer seen as endangering
Trump's election campaign.
Confirmation of the forces acting on the Trump administration
This situation of the Trump administration which flows from its 'lose-lose'
logic is fully confirmed even in the extremely short term by the chronology of
President Trump's own personal responses to events in US financial markets in
announcing the increase in tariffs against China from 10% to 25%.
On 5 May Trump announced on
twitter
the raising of tariffs against China from 10% to 25%, there was no
immediate announced countermeasure by China, and the S&P 500 US share index
fell by only 0.5% on the following day.
In contrast on 13 May China announced counter tariffs and the S&P 500 fell
by 2.4% in a single day – costing US shareholders $700 billion as Larry
Summers noted.
For the rest of the following week the Trump administration attempted to
claim that trade talks would be resuming, and that Treasury Secretary Mnuchin
would probably be visiting Beijing in the near future – the S&P500 recovered
by 1.7%.
Having achieved this recovery in US financial markets President Trump then
initiated a new attack on China by requiring US companies to have permission
from the US government to sell components and software to Huawei.
China then responded to this strongly on 23 May. As the
Wall Street Journal
noted: ' The Dow Jones Industrial Average fell 286
points Thursday after a Chinese official said the US should "adjust its wrong
actions" if it would like to continue negotiations. The losses pulled the Dow
industrials into the red for the week, continuing a dismal stretch as it
hurtled toward its fifth straight weekly loss -- which would be its longest such
losing streak since 2011. '
In response to this fall on US financial markets President Trump then
immediately softened his rhetoric by
announcing
at a press conference that there was a 'good possibility' that
trade negotiations with China would get back on track and that issues with
Huawei might be settled in that deal.
The short term pattern was therefore extremely clear. When there was no
reaction from China, US financial markets did not fall, and Trump continued his
aggression against China. When, on the contrary, China responded strongly, US
financial markets fell and Trump attempted to present a picture he was lessening
his attack on China.
In addition to these short-term movements analysed above the same process over
a longer term also explains the dynamic of the 'hardening' and 'softening' of the
Trump administration's positions in the course of its negotiations with China.
During 2018, when the US economy was experiencing economic strengthening,
during a normal upswing of a business cycle, and with a strong share market,
Trump acted aggressively to China – launching the first set of anti-China
tariffs and threatening to expand them to a wider range of goods and increase
their rate to 25%.
Then in late 2018 the US economy began to slow, the Federal Reserve was
raising interest rates, and the US share market fell. In response to this, at
the beginning of 2019, Trump 'softened' his position – postponing the raising
of US tariffs against China from 10% to 25%.
When the US economy appeared to recover in the first quarter of 2019, with
the Federal Reserve suspending increases in interest rates, and the share
market rose, Trump then announced new aggressive actions against China by
raising tariffs from 10% to 25%.
This therefore clearly reflects the 'lose-lose' framework in which the Trump
administration operates. When the 'lose' or 'pain' in US financial markets is not
great the Trump administration proceeds to attack China. When, on the contrary,
China's reaction increases pain in US financial markets Trump acts more
reasonably. That is, whenever the Trump administration feels in a stronger
position it increases its attacks on China, whenever the Trump administration
feels weaker due to the pain in US financial markets it acts more reasonably to
China.
What is the Trump administration's bottom line?
While the above clearly shows why the Trump administration will not respond to
a 'win-win' framework, but only to economic pain, to avoid any misunderstanding
it should be made clear that it does not lead to the conclusion that the US and
China are locked in a 'war to the death'. All the evidence is that President
Trump is less interested in the long-term interests of the US than most
Presidents. The precise economic pain which is unacceptable to his administration
is that which would lead to endangering his re-election in 2020.
A relevant comparison which helps understand this dynamic is that is to a real
war, not just a trade one, which the US lost – the Vietnam war. Vietnam's tactics
in this were skilful in that political impacts guided military goals. The two
largest Vietnamese offensives of the war, the Tet Offensive in 1968 and the
Easter Offensive in 1972, were launched in US presidential election years.
Neither resulted in US military defeat but the political damage done to US
presidents ensured Vietnam's victory – Johnson was forced to abandon as hopeless
any attempt to run for re-election as president after Tet, and Nixon was so
convinced that his position as president would be threatened by the war that he
started a progressive US military withdrawal after 1968 and decided on a total US
withdrawal of US forces after the 1972 Easter Offensive.
In short, the 'bottom
line' for Vietnam's victory against the US was not total military defeat of the
US, which was never achieved, but inflicting such pain on US presidents that to
safeguard their own position they were forced to withdraw. The military struggle
in Vietnam was the means by which the decisive political victory in the US was
achieved.
But the precondition for that US political defeat was the military struggle in
Vietnam. If Vietnam had ceased inflicting pain on the US, both economic in terms
of the gigantic cost of the war and in terms of losses of American forces, then
the US instead of withdrawing would have increased its attacks on Vietnam. This
can be clearly seen in the opposite case in which the US achieved a great victory
– the destruction of the USSR. Gorbachev attempted to appease the US and beg for
mercy. The US did not lessen but increased its attacks as a result – culminating
in the catastrophic disintegration of the USSR itself, characterised by Putin as
'the greatest geopolitical catastrophe of the [20th] century'.
After this
tremendous defeat of Russia this again did not lead to a lessening but to further
intensification of attacks on Russia by the US – incorporating almost all of
Eastern Europe and large parts of the former USSR into NATO and launching of
attacks on Russia's position in its strategically decisive neighbour of Ukraine.
The strategic conclusion of the present US attacks on China fully confirms the
speech by Xi Jinping
emphasising
that the most important thing is to rely on ourselves. China has not been seeking
a confrontation with the US, a lose-lose. On the contrary China has been seeking
a win-win. But once the Trump administration embarked on the course of a
lose-lose confrontation then such a struggle can only be won by China relying on
its own strength. Sufficient pain must be inflicted on the Trump administration
that it decides it is better to abandon the lose-lose. And the criteria by which
it will judge whether the pain in the 'lose-lose' is bearable is the effect on
its chances of re-election.
Fortunately, the present struggle is an economic war and not a real war. The
'small arms' in that economic war are not rifles and revolvers but tariffs
against farmers and the subsidies these require, its medium weapons are consumer
boycotts, its heavy artillery are such issues as the impact on US financial
markets analysed above. It is a measure of the gigantic historical progress made
by China since 1949 under the People's Republic that it now only has to deal with
economic attacks by the Trump administration – for a century before that China
had to deal with actual military invasions.
The sacrifices made by the heroes of the Long March were far greater than
anything the people of China face today in the economic attacks by the Trump
administration. But the comparisons made by Xi Jinping to the Long March are
entirely apposite and not at all merely references to the CPC's historical
tradition.
The Kuomintang's Fifth Encirclement Campaign, the origin of Long March, was
designed by the KMT to destroy and annihilate the forces opposing it – why it is
also called the 'Fifth Extermination Campaign'. It was purposeless to have
attempted to appease or beg for mercy from the KMT, which was determined to
destroy the forces which later created the New China. Any appeasement, or appeal
for mercy, would have been met by the KMT crushing and massacring the forces they
opposed. Only resistance to the KMT created the possibility to later create the
People's Republic of China and lay the basis for China's national rejuvenation.
Similarly, the Trump administration is determined to block China's national
rejuvenation. As already shown, there is no point to attempt to appease it or beg
for mercy from it, this will merely lead to it becoming more aggressive. The
ultimate aim of the neo-cons at present directing the Trump administration's
policies is to block China's national rejuvenation and the final way to ensure
that is to ensure that that China should suffer the same historical catastrophe
as the USSR under Gorbachev.
Who is the 'elite' of Chinese society?
Analysis in China shows it is ordinary people who have understood the
aggressive actions of the Trump regime and supported the firm positions against
this taken by President Xi Jinping and other CPC leaders.
It is some parts of the 'social elite' which have entirely misunderstood the
situation and believed that appeasement and appeals for mercy would lead to the
Trump administration lessening its attack on China. The latter forces are the
exact opposite of an 'intellectual elite' – because to be an intellectual elite
means to see the situation accurately and, as seen, they are entirely in error.
It is the ordinary people of China who have shown they are the 'intellectual
elite' in accurately understanding the Trump administration and supporting the
positions taken by the CPC leadership. Those who wrongly analysed the situation
may or may not be a social elite but they are an intellectual 'non-elite' – those
who fail to see the situation accurately and have naïve illusions.
Conclusion
The analysis of the situation of the US economy and financial markets
therefore fully confirms the analysis made by others of the situation in China.
It shows why the Trump administration cannot be dealt with on the basis of
'win-win' but only on the basis of China's strength and through ensuring that the
Trump administration suffers severely in the 'lose-lose' path it has
unfortunately chosen. Only after the US administration has found that it suffers
pain from its present path will it be possible to return to a 'win-win' framework
between China and the US.
* * * The Chinese version of this article appeared at
Guancha.cn
.
President Donald Trump has announced that he will decide whether or not to add another $300
billion in tariffs on imports from China, in addition to the $200 billion he has already
imposed, and that he will do so in the two weeks following the G20 summit in Osaka. Trump's
"Art of the Deal" pressure tactics are familiar. He wants to try to make China give even
greater concessions, perhaps following a frosty meeting between the two leaders on the
sidelines of the G20, or perhaps no meeting at all.
China, however, is in no mood to make concessions.
Behind Trump's impulsiveness can be glimpsed a profound shift in U.S. trade policy, and in
US diplomacy, which has transformed the nature of international relations, with particularly
disturbing implications in the case of U.S.-China ties.
Donald Trump, acting on the advice of U.S. trade representative Robert Lighthizer and
Secretary of the Treasury Steven Mnuchin, is making demands of China -- or for that matter
Mexico, Germany, or France -- in a unilateral manner. He has attempted to immediately implement
tariffs and other forms of punishment (such as bans for reasons of national security in the
case of Huawei phones) without any institutional consultative process.
The U.S. constitution has a "commerce clause" that clearly assigns to Congress the power "to regulate
commerce with foreign
Nations, and among the several states, and with the Indian Tribes." Since 2002, the trade
promotion authority (an upgraded version of the fast-track authority established in 1974) gives
the president the right to negotiate trade agreements that Congress can vote for or against,
but cannot amend.
Over the last 20 years, fast-tracking has become the center of trade policy to a degree that
undermines the balance of powers and the constitution.
Although the executive's usurpation of trade authority has a long history, only now is the
president making such a transparent move to exclude the legislature -- not to mention economic
experts, let alone citizens -- from the formulation of trade policy. That means that a handful
of people can make decisions that impact every aspect of the U.S. economy.
Newspapers rarely mention the role of Congress in trade negotiations with China. It's almost
as if the various congressional committees involved in formulating trade policy have no role in
this process.
Equally striking is the absence from the policy debate of multilateral institutions that
address trade issues according to common practices and international law. For instance, the
World Trade Organization was established in 1993 with an explicit mandate to address trade and
tariff issues. The WTO and its trade experts once played a central role in U.S. trade
discussions -- when U.S. policy ostensibly conformed to established global norms, and
Washington even set new models for the world to follow.
Trump's unilateral demands of China make it crystal clear that Trump, and Trump alone, is
empowered to decide trade policy. What institutions and mechanisms remain to assure that the
president's authority in trade negotiations will not be abused and that trade is conducted with
the long-term interests of the country in mind?
But it goes further than that. Now Trump is demanding "detailed and enforceable commitments"
from China as a condition for a trade deal, suggesting that the United States alone determines
whether or not China is conforming with the agreement. Such an approach makes sense in
Washington these days. After all, the U.S. Commerce Department
imposed an export ban on the Chinese telecommunications company ZTE last year because it
did not pay fines for violating U.S. sanctions against sales to North Korea and Iran. In other
words, the United States thinks it can unilaterally set sanctions and punish violators without
any consultation with multilateral institutions.
This step goes beyond what the Chinese can tolerate.
"China is not a criminal. Nor is it making any mistakes. Why does the US want to supervise
us?" remarked Professor Wang Yiwei of Renmin University of China in a
recent interview , "If there's a supervision team to oversee the implementation, just like
what happened to ZTE, it is definitely directed at sovereignty and can't be accepted."
These "enforceable commitments" are offensive to China for a reason. This approach to trade
seems little different from the sanctions regimes that the United States put in place against
Iraq before its military invasion, or against Iran as part of an increasing military buildup
that could end in a military conflict. Moreover, the increased U.S. military drills off the
Chinese coast has given the trade negotiations process a negative spin.
The recent comments about the political protests in Hong Kong by secretary of state Mike
Pompeo suggest that those tariffs could quickly become sanctions -- which require even less
adherence to international norms.
And then, in the midst of all that tension, the U.S. military released an
Indo-Pacific Stategy Paper that refers to Taiwan as a "country," the first time the United
States has done so officially in 40 years. The agreement between the United States and the
People's Republic of China, after the normalization of diplomatic relations, required that the
United States not recognize Taiwan as a country, and the People's Republic of China has stated
explicitly that military action was an option in the case of U.S. interference in the Taiwan
question.
The combination of these actions threatens to erase all established norms between the two
nations.
The United States is now considering ending agricultural exports to China, and China is
considering cutting off the sales of rare earth elements to the United States. The latter are
essential for the guidance systems and for sensors in missiles and advance fighter planes. A
F-35 Fighter, for instance, requires 920 pounds of rare earth elements like neodymium iron
boron magnets and samarium cobalt magnets,
according to the Asia Times .
The risk of a rapid acceleration in tensions is no longer theoretical. Remember: the U.S.
decision to end the sale of scrap metal and copper to Japan in 1940, followed by the oil
embargo on August 1, 1941, transformed a trade war into a real war.
Trade should remain separate from security concerns. Moreover, it should not be the
plaything of a small number of men in the White House. The United States and China need to open
a broad dialogue on common concerns, from climate change and rapid technological evolution to
the growing concentration of wealth globally. That dialogue should rely more on citizen-led
dialogues and scholar-led conferences in order to move beyond the narrow negotiation process
that has brought the two countries to the brink of war.
le"> Tariffs raise the cost of goods. Higher generate the opportunities for alternative
sources as well as incentivize domestic production. Never forget that the higher price of
domestic production is offset by the reduction in the costs associated with domestic
unemployment. The reduction of wealth leaving the nation is a primary goal and responsibility
of the federal government. As is maintaining a secure border and civil and economic well
being of it's citizens.
Enjoyed that report. It's refreshing to see a seemingly non-biased examination of Chinese
Economic and Geopolitical relationships. Enjoying the improved air in quality Beijing.
For Donald Trump, tariffs are a substitute for diplomacy, just as harassment in his
personal life is a substitute for normal human interaction
Trump has two tools at his disposal as president. The first is his mouth: the
insults and threats that he issues verbally or by Twitter.
The second is the tariff. Trump has imposed trade restrictions left and right,
on allies and adversaries, for economic and political reasons, as part of a long-term offensive and out of
short-term pique.
If Trump could use tariffs even more indiscriminately, no doubt he would. He
would delight in slapping trade penalties on the Democratic Party, on Robert Mueller, on the mainstream media, on
all the women who have accused him of harassment, even on the First Lady for
slapping away his hand
at the airport in
Tel Aviv.
Trump the man
favored the legal suit
as his attack of
first resort; Trump the president has discovered the tariff.
With his penchant for naming names, Trump
calls himself
"Tariff Man," as if
boasting of a new superhero power. It's all-too-reminiscent of the cult film
Mystery Men
where the superpowers
are either invisible or risible (Ben Stiller's character, Mr. Furious, for instance, gets really
really
angry).
Trump uses tariffs like a bad cook uses salt. It covers up his lack of
preparation, the poor quality of his ingredients, the blandness of his imagination. It's the only spice in his
spice rack.
The latest over-salted dish to come out of the White House kitchen is the
president's threat to impose a 5 percent tariff on all Mexican goods on June 10. The threat has nothing to do with
what Mexico has done economically (that's a different set of threatened tariffs). Rather, it's all about
immigration. This time, Trump
will keep inflating
the cost of Mexican
goods "until such time as illegal migrants coming through Mexico, and into our Country, STOP." The tariffs will,
supposedly, rise 5 percent every month until they reach 25 percent in October.
Trump promised as a candidate that Mexico would pay for the wall he wanted to
construct along the southern border. Now, it seems, Mexico will pay for the lack of a wall as well.
The escalation is quite clear. What Mexico has to do to avoid these tariffs is
not.
"So, there's no specific target, there's no specific percent, but things have to
get better," Chief of Staff Mick Mulvaney
told Fox News Sunday
. "They have to get
dramatically better and they have to get better quickly."
Such is the usual Sunday morning quarterbacking that happens with White House
officials as they scramble to explain the inexplicable to a baffled news media.
Although they remain in the dark about what's expected of them, Mexican leaders
have warned
that they will apply
counter-tariffs if necessary and that the United States will suffer economically from such a tariff war.
These are not idle threats. Mexico is the third largest U.S. trading partner.
Even congressional Republicans, desperate to avoid this spat, are talking about trying to block the tariffs. Trump
has called them
"foolish" to do so. He
plans to move forward anyway.
Full Spectrum Offensive
Mexico is only the latest country to feel the wrath of Tariff Man.
In 2018, Trump
used Section 201
of the Trade Act to
impose tariffs on solar cells and washing machines, targeting primarily East Asian countries. Shortly thereafter,
he upped his game by assessing a 25 percent tariff on all steel imports, with Canada, Mexico, and the EU getting
hit the hardest.
China, however, has borne the brunt of Trump's animosity. In early May, the
Trump administration announced a surge in tariffs from 10 percent to 25 percent on $200 billion worth of Chinese
goods. He has also threatened to apply tariffs to the remaining $325 billion worth of Chinese goods entering the
country.
The escalation tactics don't seem to have done much to improve the prospects of
a trade deal between the two countries. China has naturally countered with its own tariffs.
When Trump lashed out against countries competing against the U.S. steel
industry, one of the major exceptions was Australia. That probably won't last long. Just before his Mexico
decision, the president was planning on imposing a tariff on Australian aluminum as well. His advisors
managed to dissuade him
, at least
temporarily.
Canada and Mexico, meanwhile, continue to get a pass on the steel tariffs as
long as the two countries sign a replacement deal for NAFTA. But Trump's latest move against Mexico may
throw that pending agreement
into
jeopardy.
Push Back
The threat and even the reality of retaliatory tariffs seem to have little
effect on Trump. He likes such geopolitical games of chicken. Congressional opposition only whets his appetite for
more confrontation, for he holds even his Republican allies in contempt.
He disregards the more level-headed advice of economic mandarins -- as well as
seven former ambassadors
to Mexico --
because he relishes flouting conventional wisdom in favor of his own unconventional stupidity. If farmers in swing
states protest that the markets for their soybeans have dried up, Trump will just authorize
another massive government purchase
of
their product -- and suddenly prisoners all over America will be surprised by tofu and edamame on their cafeteria
menus.
Republican voters
overwhelmingly support
Trump's trade
policies -- and the president really doesn't care a fig about anyone else.
The only pushback that might have some influence with Trump might be the
business community. The auto sector
is forecasting
billions of dollars in
costs associated with the Mexico tariffs. The Chamber of Commerce, which has come up with a more precise
annual price tag
for U.S. consumers of
$17.3 billion for a tariff level of 5 percent, is
considering
a legal challenge.
If the stock market goes into bearish hibernation, then the president is out of
luck.
Tweeted
Ian Shepherdson, the chief
economist at Pantheon Macroeconomics, "he's going to have to blink on tariffs, because the market can't live with
this level of crazy."
Shepherdson is wrong. The market has lived with this kind of crazy for more than
two years. And there are plenty of people who see profit in precisely the kind of volatility that Trump has
brought to financial markets.
When Trump went on a fundraising tour of New York recently, some big-name
financiers leapt at the opportunity to fete the president. Howard Lutnick, the head of Cantor Fitzgerald,
predicted
in 2017 that Trump would
provide a big bump for the world of finance (and, therefore, his own bottom line). Last month, as a reward for
that bump, Lutnick
invited
Trump to his triplex penthouse in
Manhattan and raised over $5 million toward his reelection.
That's the kind of crazy that the market is entirely comfortable with.
Misunderstanding Trade
Tariffs make sense for certain countries.
For instance, East Asian countries used tariffs very successfully to protect
their infant industries -- steel, shipbuilding, information technology -- against the overwhelming market advantages
of more advanced economies. Those tariffs raised the price of imports and encouraged consumers to buy domestic.
Tariffs can be part of a smart industrial policy of picking potential economic winners.
Tariffs can also protect a way of life -- Japanese rice culture, Mexican tortilla
makers, Vermont dairy farmers. Without some kind of trade protection, cheaper goods from outside will completely
overwhelm domestic producers and destroy long-standing traditions. Of course, there are other methods of
preserving such traditions, from government price supports to geographical designations (think: champagne).
Trump's tariffs have nothing to do with either of these aims. U.S. steel is not
an infant industry in need of protection. Trump doesn't care about protecting traditional lifestyles. He has
neither a progressive industrial policy of picking winners and losers in the economy nor a conservative approach
to ensuring the integrity of communities.
For Donald Trump, tariffs are a substitute for diplomacy, just as harassment
in his personal life is a substitute for normal human interaction. Tariff Man can think of only one way of dealing
with other countries: grabbing them by their trade policies until they squeal.
He believes, mistakenly, that trade is zero-sum (if they lose, American
wins). He also labors under the misconception that the U.S. Treasury somehow grows fat with the proceeds of
tariffs (it doesn't). He is as ignorant of the relations among nations as he is of the relations among people.
Tariff Man's superpower is even more ridiculous than that of Mr. Furious. It's
worse than impotent. It's self-defeating. Let's hope that principle applies ultimately to the 2020 elections as
well.
Share this:
"... Trump's declaration of economic war against China is like everything he does - impulsive, ill-considered, ill-prepared, and without any coherent strategy or series of tactics to achieve that strategy. ..."
"... NOTE - I am not pro-China, but anti-stupid, anti-disorganized, and anti-clueless, which is how everything gets done in the Trump WH, especially since his "economic advisors" really do not know anything about economics. ..."
Last month, "Avengers: Endgame" became the highest-grossing American film in the history of
China. It was a seminal moment, suggesting the partnership between China and Hollywood, which over the years has
moved in fits and starts, was finally firing on all cylinders. But the $614 million that Disney-Marvel booked may
turn out to be an outlier.
As the United States ups the stakes in a trade war, there are growing signs that China is quietly
retaliating against the U.S. entertainment business.
Beijing is now constricting Hollywood's ability to peddle its product in the country, say four
people who conduct business in China or closely monitor its relations with Hollywood.
"I don't want to use the words 'total freeze,' but it's real," said John Penotti, the producer of
"Crazy Rich Asians" and head of SK Global who specializes in Asian productions. "They're not saying it officially,
but the industry is operating as if it's close to a total shutdown."
In contrast to many countries, distribution in China requires government approval, and according
to these sources, the Chinese government is unlikely to offer distribution slots to more than a small handful of
movies. The latest Spider-Man, Secret Life of Pets and Toy Story movies appear likely to get the nod, but most other
summer and even fall hopefuls face being locked out of the world's second-largest film market.
Hollywood relies on China to power its foreign box office, which in turn powers its film revenue,
and the standoff reflects how much of a conundrum China represents for Hollywood.
The availability of so many overseas ticket-buyers at a time of intense entertainment competition
at home has been a boon for U.S. studios. But at the same time, the mercurial ways of Chinese regulators and the ways
that market penetration is subject to geopolitical crosswinds also make the nation a vexing place for studios to do
business.
If the trade war wears on and the market remains cut off, it could result in a reduction of the
budgets of studio movies, since it's Chinese yuan that make them possible.
"I think this poses a dire situation for Hollywood," said Aynne Kokas, a professor at the
University of Virginia and author of "Hollywood Made In China," about the complicated relationship between the two
entities. "There definitely will be a trickle-back effect. It's a very dangerous financial position to be reliant on
Chinese box office to recoup profits."
The Chinese market has become a place of increasing importance to the American movie business.
As the country has rapidly built theaters -- it now has more than 65,000 screens, a dozenfold increase compared to a
decade ago -- it has become a cash cow for American studios.
Three of Hollywood's top five movies at the worldwide
box office last year -- "Avengers: Infinity War," "Jurassic World: Fallen Kingdom" and "Aquaman" -- each collected more
than a quarter of their overseas dollars in China.
Other movies owe the country even more of their success. The underwater adventure "The Meg"
notched 40 percent of its foreign total in China, while Steven Spielberg's gamer-themed hit "Ready Player One"
approached 50 percent. China could become the biggest film market as soon as 2020,
according to
PricewaterhouseCoopers.
But to keep the dollars flowing, studios need those distribution slots. And that's where matters
get dicey.
China officially has a quota allowing in several dozen Hollywood movies per year -- 38 in
2019, 35 the year before. Those numbers are up by more than 20 percent in the past five years.
The Film Bureau and its China Film Group division determine what movies are given a distribution
slot. But with blackout periods, 11th-hour allowances and other unpredictable factors, even those who study the
market say it can be impossible to parse what makes the cut. And lately, with the trade war raging, few movies are.
Vanamali, 6 hours ago
As they say, "Everything is fair in love and war" - the Chinese are using whatever means they have at their disposal
Trump is using Tariffs to hurt the Chinese economy and business and the Chinese of course are going to retaliate with
whatever weapon they have
But gotta love the Trumptards "logic" - "They need our exports, without them they will starve, there will be rioting in
the streets" and "We are doing them a big favor by importing their products, if we shut off our market, their companies
will collapse, massive unemployment, there will be rioting in the streets" Bizarre "logic"
jayster, 12 hours ago (Edited)
Trump's declaration of economic war against China is like everything he does - impulsive, ill-considered, ill-prepared,
and without any coherent strategy or series of tactics to achieve that strategy.
China will defend its interests and retaliate as necessary, especially as they know Trump is an absolute moron.
NOTE - I am not pro-China, but anti-stupid, anti-disorganized, and anti-clueless, which is how everything gets done in the
Trump WH, especially since his "economic advisors" really do not know anything about economics.
ES175GC 12 hours ago
Trump is such a vengeful, hating person that it wouldn't surprise me at all that he deliberately wants to hurt all those
Hollywood liberals who despise him so much. "When I get hit, I hit back 10 times harder" is a famous Trump saying.
He operates on a juvenile level, as we all know, like a spoiled whining brat who has to get even with anyone who slights him.
It makes perfect sense that Trump will do everything he can to destroy Hollywood's business with China.
buhaobob, 12 hours ago
I agree except your premise that Trump would do this deliberately would require that Trump have a plan, and he has
demonstrated that his attention span is about the same as that of the average goldfish.
Zop1066, 15 hours ago (Edited)
We certainly do not need Chinese government influence in Hollywood or in any US media, period. Several films recently have
shied away from any even marginally critical reference to China for fear of losing Chinese box office receipts or Chinese
investment.
And the Chinese investors have not even tried to hide that they do indeed influence film scripts to suit the Chinese
government. Enough of that. Best they keep their money and invest perhaps in even harsher great wall internet controls,
internment camps, and super creepy internal population controls.
That'll sure keep the cinema in China boring and nonthreatening. Certainly wouldn't want anyone there to think for themselves
and question their government, no siree.
"... Threats are cheap, but Mr. Trump can't really follow through without turning farmers, Wall Street and the stock market, Walmart and much of the IT sector against him at election time if his tariffs on China increase the cost of living and doing business. His diplomatic threat is really that the US will cut its own economic throat, imposing sanctions on its own importers and investors if China does not acquiesce. ..."
"... China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama got. And doesn't he deserve it more? After all, he is helping to bring Eurasia together, driving China and Russia into an alliance with neighboring counties, reaching out to Europe. ..."
President Trump has threatened China's President Xi that if they don't meet and talk at the
upcoming G20 meetings in Japan, June 29-30, the United States will not soften its tariff war
and economic sanctions against Chinese exports and technology.
Some meeting between Chinese and U.S. leaders will indeed take place, but it cannot be
anything like a real negotiation. Such meetings normally are planned in advance, by specialized
officials working together to prepare an agreement to be announced by their heads of state. No
such preparation has taken place, or can take place. Mr. Trump doesn't delegate authority.
He opens negotiations with a threat. That costs nothing, and you never know (or at least, he
never knows) whether he can get a freebee. His threat is that the U.S. can hurt its adversary
unless that country agrees to abide by America's wish-list. But in this case the list is so
unrealistic that the media are embarrassed to talk about it. The US is making impossible
demands for economic surrender – that no country could accept. What appears on the
surface to be only a trade war is really a full-fledged Cold War 2.0.
America's wish list: other countries' neoliberal subservience
At stake is whether China will agree to do what Russia did in the 1990s: put a Yeltsin-like
puppet of neoliberal planners in place to shift control of its economy from its government to
the U.S. financial sector and its planners. So the fight really is over what kind of planning
China and the rest of the world should have: by governments to raise prosperity, or by the
financial sector to extract revenue and impose austerity.
U.S. diplomacy aims to make other countries dependent on its agricultural exports, its oil
(or oil in countries that U.S. majors and allies control), information and military technology.
This trade dependency will enable U.S. strategists to impose sanctions that would deprive
economies of basic food, energy, communications and replacement parts if they resist U.S.
demands.
The objective is to gain financial control of global resources and make trade "partners" pay
interest, licensing fees and high prices for products in which the United States enjoys
monopoly pricing "rights" for intellectual property. A trade war thus aims to make other
countries dependent on U.S.-controlled food, oil, banking and finance, or high-technology goods
whose disruption will cause austerity and suffering until the trade "partner" surrenders.
China's willingness to give Trump a "win"
Threats are cheap, but Mr. Trump can't really follow through without turning farmers, Wall
Street and the stock market, Walmart and much of the IT sector against him at election time if
his tariffs on China increase the cost of living and doing business. His diplomatic threat is
really that the US will cut its own economic throat, imposing sanctions on its own importers
and investors if China does not acquiesce.
It is easy to see what China's answer will be. It will stand aside and let the US
self-destruct. Its negotiators are quite happy to "offer" whatever China has planned to do
anyway, and let Trump brag that this is a "concession" he has won.
China has a great sweetener that I think President Xi Jinping should offer: It can nominate
Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama
got. And doesn't he deserve it more? After all, he is helping to bring Eurasia together,
driving China and Russia into an alliance with neighboring counties, reaching out to
Europe.
Trump may be too narcissistic to realize the irony here. Catalyzing Asian and European trade
independence, financial independence, food independence and IT independence from the threat of
U.S. sanctions will leave the U.S. isolated in the emerging multilateralism.
America's wish for a neoliberal Chinese Yeltsin (and another Russian Yeltsin for that
matter)
A good diplomat does not make demands to which the only answer can be "No." There is no way
that China will dismantle its mixed economy and turn it over to U.S. and other global
investors. It is no secret that the United States achieved world industrial supremacy in the
late 19 th and early 20 th century by heavy public-sector subsidy of
education, roads, communication and other basic infrastructure. Today's privatized,
financialized and "Thatcherized" economies are high-cost and inefficient.
Yet U.S. officials persist in their dream of promoting some neoliberal Chinese leader or
"free market" party to wreak the damage that Yeltsin and his American advisors wrought on
Russia. The U.S. idea of a "win-win" agreement is one in which China will be "permitted" to
grow as long as it agrees to become a U.S. financial and trade satellite, not an independent
competitor.
Trump's trade tantrum is that other countries are simply following the same economic
strategy that once made America great, but which neoliberals have destroyed here and in much of
Europe. U.S. negotiators are unwilling to acknowledge that the United States has lost its
competitive industrial advantage and become a high-cost rentier economy. Its GDP is
"empty," consisting mainly of the Finance, Insurance and Real Estate (FIRE) rents, profits and
capital gains while the nation's infrastructure decays and its labor is reduced to a prat-time
"gig" economy. Under these conditions the effect of trade threats can only be to speed up the
drive by other countries to become economically self-reliant.
The crux of the "trade" dispute is never discussed: the Chinese refusal to allow the
international financial services sector to penetrate the Chinese economy and operate freely.
Get it? The Chinese won't let the Jews in to loot the place and the Jews are pissed.
Trumpstein, the cryto Jew, has promised his sponsors to rectify the situation. The Chinese
witnessed what happened when Yeltsin allowed the IMF to parachute Jeffrey Sachs and his Jew
Boys into Russia in 1991 Jews looted the place mercilessly, calling it democracy and
capitalism, and Russia is still recovering. The Chinese have a bright future, as long as they
keep the Jews out.
I agree.
I am afraid spokes person Trump and those he is speaking for have it wrong. They believe
external trade is interfering with the La-Zi-Faire fat cat monopoly powered corporations the
CPI (congress, president and Israeli governance represent.
Few western companies can compete because only monopoly endowed Global corporations are
allowed or licensed to compete. Individual ability, the creative mind of the lone rangers
with highly disruptive inventions and ideas, are not allowed access to the knowledge or money
to play. Making people pay for sleazy operating systems when better ones are free, allowing
big corporations to hack the data of everyone, and on and on.
Even when a person finds a way to play and actually produces a product or concept, the
financial condition of the inventor is so weak or the barriers to promote his product is so
strong that as soon as the idea or product is patented or copyrighted it somehow absorbed
into one of the monopoly powered giants; in other words, competition is only allowed if the
competitor gives the profits to one of the monopoly powered giants. China should be
complaining, at least their competitors can produce, in the USA governed America unlicensed
competition is denied.
Copyright, patents, standardized testing and licensing every breath have terminated
competition in America.
America still competes with Americans as long as the business does not compete with the
global corporations.
The problem Trump thinks he can solve, is not sourced in India, China, Iran, Russia, or
any other nation. The problem is at home, in government policy, laws that turn capitalistic
competition into monopolistic fat-cat wealth storing private domain havens. Education by
degree and license by examination and standardization of performance are used to restrict
competition. Education, is a bureaucracy and no matter its efficiency; a degree cannot
provide competitive performance. The USA governance over America has served only the interest
of monopoly endowed corporations and their oligarch owners and investors. Trump is trying to
overcome foreign competition, by threat and blocking maneuvers, to deny foreigners the fruits
of their competitive successes I do not believe he can be successful. Already the Russian and
Chinese have developed a new currency and banking system to circumvent the Trump block. Work
around-s are in progress everywhere.. Soon even the USA will not be allowed to compete I
fear.
It is not a matter of where the competition comes from, its that the monopoly powers have
used the behavior enforcing rule making capacity of the USA to deny native American
creativity; creativity that America needs to be competitive. USA policy continues to be to
enrich a few by channeling and encapsulating all effort within the confines of the monopoly
holders instead of encouraging every back yard to be a new competitor. It will be many years
before Americans will be able to compete..
What Trump is now demanding reminds me of the brutally efficient system that Trump grew up
in: New York City business. (Author Tom Wolfe has a great line in his book The Bonfire Of The
Vanities that the strange, unrelenting background droning sound one hears in NYC is that of
"people constantly braying for money").
New York City real estate in particular is an area of business that is so brutally
competitive, unscrupulous , and backstabbing that it is best described as war under another
name. It is a business arena where a close friend one day can turn into a staunch enemy the
next. Trust is rare.
New York real estate, in fact, brings to mind the old saying about sausage making: You
would never eat it if you saw it being made. Yet deals are made. In fact, a lot of them. This
is the milieu Trump comes from.
Trump isn't one of those more genteel, old-time American negotiators of prior years the
author of this article speaks fondly of. These are the very same people who so readily agreed
to disasters like NAFTA or allowed, for instance, Or allowed Japan to levy two hundred
percent duties on things like American made Harley Davidson motorcycles while the USA was
pressured (or bribed) to apply few if any comparable duties on Japanese motorcycles or
automobiles (or virtually anything else Japan sold in the USA). These toothless. genteel
types also stood back for decades and allowed Japan to use red tape (like obscure safety
regulations for instance) to make it almost impossibly difficult to sell American products
like automobiles in Japan.
These very same US negotiators, politicians, and bureaucrats have more recently stood back
and allowed China to absolutely devastate American manufacturing.
Screw China, It's now payback time. The Chinese are shaking in their boots because the
previously hoodwinked and comatose Americans are finally waking up. No more wimpy Obama or
Bush looking out for our interests. It is now Truly Scary Trump instead.
Wait until the negotiations are concluded to see if they are successful. The sausage that
comes out of them might be very appealing for the first time in many, many decades.
" His diplomatic threat is really that the US will cut its own economic throat, imposing
sanctions on its own importers and investors if China does not acquiesce "
I get that the US financial system is up to no good with their positions on China but the
criticisms Trump made of China are correct. They have lots of tariffs on finished goods from
the US. They require technology transfer to do business there. Their government and industry
are tied at the hip and they are manipulating their currency. All these things are true and
if we keep trading with them with the same terms we have been we would lose ALL our
industrial infrastructure. Now we hear over and over how we can't build anything but the
Chinese went from being dirt farmers to the largest industrial power in a fairly short period
of time. Could we not do the same at least for our own countries market? Certainly global
trade destruction between countries is not a good thing but we'd be fools to keep on as we
are now. At some point when you dig a hole you have to stop to get yourself out.
I don't think we have a choice if we wish to continue to be an industrialized country. All
those that say China will do fine without us are not taking into account how all the other
countries who are being handled the exact same way as we are, are going to handle China's
trade with them. Will they keep allowing China to have large tariffs on their products while
they Chinese ship whatever they wish into theirs? I'm not so sure they will. If the US starts
refusing the Chinese free entry without reciprocal trade then I can easily see others
following our lead.
We should have stopped this many years ago but as bad as the situation is now it will only
get worse if we don't act.
Let them remove their tariffs. We should take every single anti-trade act and tariff they
have on us, weigh them on China and "then" negotiate. If they don't wish to it's their
country they can do what they please and so can we.
"The crux of the "trade" dispute is never discussed: the Chinese refusal to allow the
international financial services sector to penetrate the Chinese economy and operate freely.
Get it? "
Absolutely. Like inviting a handful of worms into your apple -- economy hollowed out in an
eye blink.
However, there is another side to this "trade dispute" coin.
FIRE want to economicly destroy China. The neocon', MIC, security sector wants to destroy
China's 2025 plan to become high-tech world leaders. 5G, AI, semi conductors etc are some of
the areas that China's public/private sectors are voraciously pushing. Hence, the
(wonderfully "free market") US attacks on Heiwai.
These short term US gambles are more than likely to pay off by the medium-long term
undermining of US hegemony via Eurasian integration led by China & Russia.
And all the time we are left wondering whether the US will choose the "Samson Option" rather
than accept reduced status. (Insane with power lust, the US can't even accept "first among
equals")
The US is making impossible demands for economic surrender – that no country could
accept. What appears on the surface to be only a trade war is really a full-fledged Cold
War 2.0
.
Typical mobster protection racket threats. Now the US has moved from waging military wars
on behalf of their Jewish owners to aggressively push their neoliberal economic warfare for
them. The facade for promoting democracy and human rights is no longer required.
And to call attempts at starving the population and murdering children by denying them
essential medicines as has happened in Iraq and now is going on in Iran and Venezuela, a Cold
War 2.0 is a gross understatement. It is a flagrant act of war. America is launching a war of
attrition on the world and who better to spearhead that war than an idiot manipulated by
Zionist Jews? The fact that many countries remain silent is testament to their surrender. But
China may prove to be a different proposition.
"the United States achieved world industrial supremacy in the late 19th and early 20th
century" That is a myth. The US may have had the highest GDP because it was the leader in
manufacturing, as China is now, but Europe and in particular Germany was far ahead of the US
in technology and science. If you compare China to the US today the situation is very similar
to comparing the US to Germany before 1939. Germany was far ahead of the US in the number of
Nobel Prizes received thru 1945 and very few of the Americans that did receive the Nobel
Prize were native born. The US received a few Nobel Prizes starting in the 1940's because
some recent European immigrants that became US citizens received it for work they had done in
Europe. The three biggest technological breakthroughs of WW II were the jet, the rocket and
the atomic bomb. Germany invented the jet, built the first modern rockets and the German
scientist Otto Hahn split the atom in 1939 (for which he received the Nobel Prize in 1944)
kicking off the USA's atomic bomb project and Germany's limited attempt. The people that
eventually achieved success in the US were almost all recent European immigrants (Bethe,
Teller, etc.), many being Jewish.
I basically agree with the rest of the article. I believe Trump's tactics make sense. The
problem is it's too late. The US economy can't be fixed by anyone. The US has 22 trillion
dollars in debt and will never be able to pay it back. The dollar is going to take a deep
dive within the next few years and it will lose its status as the reserve currency. I believe
this based upon what people like Peter Schiff, Paul Craig Roberts, David Stockman and Ron
Paul say.
I think the two biggest events of the last 75 years were WW II, completely changing the
countries that run the world and the emergence of a backwards and dirt poor China to become
an economic powerhouse and I think they will get stronger.
The US is making impossible demands for economic surrender – that no country could
accept.
Yes country. If the world was one big free trade area, it there were no bloks or even no
countries in the sense we understand them then the population of the would be wealthier, on
average. But countries are not primarily economic units, even if one can look at them as
such.
Nation states exist and have the emergent quality that they to survive against other
nation states and the best way to do that is to gain extra power relative to other states, or
at least maintain their position. Why would America agree to terms of trade that do not
maintain its position relative to China.
U.S. negotiators are unwilling to acknowledge that the United States has lost its
competitive industrial advantage
There is no absolute standards by which such an advantage could be judged. The terms of
trade that are finally settled on will be a compromise and reflect the interests of both, and
the total balance of forces between the two.
The combination of both nations will make it extremely difficult for Washington to impose
its hegemonic agenda without serious repercussions as two of the world's leading military
forces seek to increase the level of co-operation between their nations.
Trump's Trade Tariff Theatre 2018 results:
Country/Trade Balance/2018 vs. 2017
Mexico: trade DEFICIT -$81.5 billion; up 14.9% from 2017;
Canada: trade DEFICIT -$19.8 billion; up 15.8% from 2017;
China: trade DEFICIT -$375.6 billion; up 11.6% from 2017;
South Korea: trade DEFICIT -$17.9 billion; down 22.4% from 2017;
Japan: trade DEFICIT -$67.7 billion; down 1.8% from 2017
Germany: trade DEFICIT -$68.3 billion; up 7.2% from 2017;
France: trade DEFICIT -$16.2 billion; up 5.8% from 2017;
Kingdom of Saudi Arabia: trade DEFICIT -$10.5 billion; up 313.3% from 2017;
Russia: trade DEFICIT -$14.1 billion; up 40.9% from 2017;
Asia: trade DEFICIT -$622.2 billion; up 8.8% from 2017;
Europe: trade DEFICIT -$202.4 billion; up 16.6% from 2017;
World: trade DEFICIT -$795.7 billion; up 10.4% from 2017
To all of the "free traders", the media ,and academia ,i have this simple question:
why i cant purchase a Toyota work van(the best and must popular of the world),neither here in
the USA nor abroad and bring it in?
how come that even in Cuba there are more of those Toyota work van than here in all
continental USA.
In 25 year i has to purchase more than 6 work vans,and like Penelope i have been waiting for
the Toyota ,and still waiting.
They ,the free traders,did not has allowed not even one.
The problem with the zio/US is the control of the US by the zionists and this control is
derived via the zionist privately owned FED and IRS that they got installed in 1913 and then
came the debt and wars and the hijacking of the foreign policy by the satanic zionists and
the US gov was started on a down hill slide pushed started by the zionists!
The trade policy of the zio/US has turned Russia into the largest grain exporter in the
world and turned Russia into an agriculture miracle , this can be shown by watch videos of
Russian agriculture on youtube. Germany is also in Russia building cars and other industrial
products for Russia thus bypassing the zio/US trade sanctions and last but not least Russia
is trading in non dollars in trade with more and more countries such as China thus
effectively rendering the dollar non and void in international trade.
So the people of the zio/US can thank their zionist masters for the demise of America and
true to form the zionist parasites are killing their American host
Join Mike Maloney as he examines the latest moves in the US/China trade war, and visits
some compelling arguments from the Foundation for Economic Education.
The "Chinese dragon" of the last two decades may be faltering but it is still hailed by
many as an economic miracle. Far from a great advance for Chinese workers, however, it is the
direct result of a consolidation of power in the hands of a small clique of powerful
families, families that have actively collaborated with Western financial oligarchs.
"Threats are cheap, but Mr. Trump can't really follow through without turning farmers, Wall
Street and the stock market, Walmart and much of the IT sector against him at election time
if his tariffs on China increase the cost of living and doing business. "
Tariffs are taxes and both governments like collecting taxes.
Farmers. Farmers sell a commodity so if they cannot sell to China one result is they will
sell to other customers while China buys more from other producers.
Cost of living. DC does not care. There is a solid inflation lobby in the fed that
supports increasing the cost of living.
"Walmart and much of the IT sector against him." I am not buying it.
Well, more accurate to say that Germany and Britain invented the jet engine independently
of each other. Just as they both invented radar independently of each other as well.
As it is, the post-war jet engine was based primarily on the British design of Frank
Whittle, though some of the German ideas were also later incorporated.
Huawei Technologies Co Ltd has told Verizon Communications Inc that
the U.S. carrier should pay licensing fees for more than 230 of the Chinese telecoms equipment
maker's patents and in aggregate is seeking more than $1 billion, a person briefed on the
matter said on Wednesday.
Verizon should pay to "solve the patent licensing issue," a Huawei intellectual property
licensing executive wrote in February, the Wall Street Journal reported earlier. The patents
cover network equipment for more than 20 of the company's vendors including major U.S. tech
firms but those vendors would indemnify Verizon, the person said. Some of those firms have been
approached directly by Huawei, the person said.
The patents in question range from core network equipment, wireline infrastructure to
internet-of-things technology, the Journal reported. The licensing fees for the more than 230
patents sought is more than $1 billion, the person said.
Huawei has been battling the U.S. government for more than a year. National security experts
worry that "back doors" in routers, switches and other Huawei equipment could allow China to
spy on U.S. communications. Huawei has denied that it would help China spy.
Companies involved, including Verizon have notified the U.S. government and the dispute
comes amid a growing feud between China and the United States. The licensing fee demand may be
more about the geopolitical battle between China and the United States rather than a demand for
patent fees.
Huawei and Verizon representatives met in New York last week to discuss some of the patents
at issue and whether Verizon is using equipment from other companies that could infringe on
Huawei patents.
Verizon spokesman Rich Young declined to comment "regarding this specific issue because it's
a potential legal matter."
However, Young said, "These issues are larger than just Verizon. Given the broader
geopolitical context, any issue involving Huawei has implications for our entire industry and
also raise national and international concerns."
Huawei and U.S. wireless carriers T-Mobile US Inc and AT&T Inc did not respond to
Reuters' requests for comment. Sprint Corp declined to comment.
The United States last month put Huawei on a blacklist that barred it from doing business
with U.S. companies on security grounds without government approval, prompting some global tech
firms to cut ties with the world's largest telecoms equipment maker.
Washington is also seeking the extradition of Huawei Chief Financial Executive Meng Wanzhou
from Canada after her arrest in Vancouver last December on a U.S. warrant.
China has since upped the pressure on Canada, halting Canadian canola imports and in May
suspended the permits of two major pork producers.
(Reporting by Arjun Panchadar in Bengaluru and David Shepardson in Washington; Editing by
Anil D'Silva, Sriraj Kalluvila and Sandra Maler)
On June 4th the Chinese government issued a travel alert for Chinese tourists thinking of
visiting the United States, a day after it issued a similar advisory to Chinese students
thinking of studying in the US over concerns for their safety and security.
Chinese in the US are reporting harassment and interrogations by US immigration authorities
and many now have the impression they are not welcome in the US.
The Global Times , speaking on behalf of the government stated:
The Chinese people find it difficult to accept the fact that they are being taken as
thieves. The US boasts too much superiority and has been indulged by the world. Due to its
short history, it lacks understanding of and respect for the rules of countries and laws of
the market.
The Americans of the early generations accumulated prosperity and prestige for the US,
while the current US administration behaves like a wastrel generation by ruining the world's
respect for the US."
... ... ...
The situation has become so tense that the Global Times on June 6,th in an op ed by Wei
Jianguo, said:
China is able to withstand US maximum pressure, due to the country's economic resilience,
and Chinese people's resolute determination. Suffering from a century of humiliation, the
Chinese nation has been accustomed to such pressure, as shown in the War of Resistance
against Japanese Aggression, as well as the Korean War or the War to Resist US Aggression and
Aid Korea. The unity of Chinese people is a vital reason for the country's fundamental
victory in history."
The Peoples' Daily stated, "America is the enemy of the world."
Trump is not a thinker, and never was. He is an impulsive narcissist. So the question is
whether the USA committed a blunder by unleashing open trade war with China, the war which now
extent the Cold War 2 to another nation (cementing emerging alliance between Russia and China
which is a death sentence to the USA global hegemony) and where the USA faces very resilient and
inventive opponent. And they will lose even if they win.
I actually am amazed by the level of reclines and arrogance the USA democratic is such topic.
I do not see multiyear preparation, mobilization of engineering talent and resources that is
needed for successfully procuring such a war. It looks like completely impulsive decision
partially based on the attempt to get some additional concessions from China. That attempt which
spectacularly failed and fueled very dangerous for the USA a wave of Chinese nationalists within
mainland china.
The key issue here is that is current stage of neoliberal decine the USA can't rely on
loyalty of its own key players and citizets ("greed is good" is the motto of neoliberalism; plus
Chinese have probably a very good access to Taiwan high technology industry, the access which is
impossible to cut). Such a low level loyalty previously existed just before the USA collapse,
when the CIA was able to tranfere to the West a mid level cipher officer from KGB headquarters (
Sheymov defected to
the United States in May 1980) and recruit at least one general (Kalugin). Actually KGB was at
the center and the main driving force of neoliberal counterrevolution in Russia (Trojan Horse so
to speak), as under Andropov they switch sides. So they were naturally allied with CIA at this
point
the point is that it does not take too much efforts for foreign intelligence agency now to
recruit the US citizens as the collapse of neoliberal ideology creates fertile ground for such an
efforts, much like the collapse of Bolsheviks ideology did for the USA. Some can just volunteer
appalled by the actions of neoliberal empire. In this sense cases of Manning and Snowen should
serve the US administration a stern warning sign that it is a very dangerous to rock the boat if
the country experience a collapse of imperial ideology (Neoliberalism). In this case the trade
war might be more difficult then they think.
China has more people and produce per year more engineers in STEM. So the USA does not hoild
allthe cards. it it has some advantages over the USA in the long term. Also the current
technologies are pretty established and "innovation" is often is limited to shriking the silicon
die and adding more core for CPUs.
Actually Intel CPUs have a horrible really outdated CISC instruction set and there might be
chance to use different instruction set with better overall chanracteristics. Only the billions
that Intel get from sales allow it to outpace the rivals. Failed stqrtup Transmeta, for exampel,
in late 1990th tried to emulate it via RISK. If throwing out emulation layer speeds up things
twice or more, why not to use this path giving enough man power, money and level of animosity
toward the USA?
The mechanism would "prevent and resolve national security risks", Xinhua said. Details
would be released soon, it added.
The announcement comes amid a souring of relations with the US after the most recent round
of trade negotiations ended without a deal in May.
Since then, the Trump administration has blacklisted Chinese telecommunications equipment
maker Huawei, while China has threatened to punish foreign companies that cut off ties with
Huawei by listing them as "unreliable".
The new Chinese regulations could prove similar to US export controls on strategic
technologies. Those controls -- covering military equipment, some encryption technologies, and
some dual-use products -- have long irked China. Chinese negotiators have often claimed that
their trade surplus could be trimmed if the US would relax controls on high-tech goods.
The mechanism will be developed by the National Reform and Development Commission under the
guidelines of China's national security law ,
passed in 2015, Xinhua said.
"This is a major step to improve [China's system] and also a move to counter the US
crackdown," tweeted Hu Xijin, editor-in-chief of the Global Times, a nationalist tabloid that
is sometimes used to float ideas that are not official policy. "Once taking effect, some
technology exports to the US will be subject to the control." Last month, the NDRC implied it
would block exports of rare earths , a material
with many strategic applications. After the trade talks broke down in May, Chinese president Xi
Jinping visited a manufacturer of rare earths magnets, used in electric vehicles and other new
technology applications, as a reminder that China holds some trump cards of its own.
READ Massages and free fish help east Europe tackle labour shortages
Rare earth are used in smartphones, lasers, instrument panels, wind turbines and MRI
machines and more than 90 per cent of hybrid and electric cars.
"... Now, each of the two superpowers appears to be crafting new economic weapons to aim at the other. What was once a fraught, but deeply enmeshed, trade relationship is threatening to break apart almost entirely, raising the specter of a new geopolitical reality in which the world's two superpowers would compete for economic influence and try to freeze each other out of key technologies and resources. - New York Times ..."
"... "This is now extremely delicate [time] because the Trump administration, through its brinkmanship tactics, has destabilized the entire relationship, commercial and otherwise," according to China expert Scott Kennedy - senior adviser at the Washington-based Center for Strategic and International Studies who studies Chinese economic policy. ..."
Beijing put big tech on notice last week, threatening 'dire
consequences' if companies such as Microsoft, Dell and Samsung comply with the Trump
administration's ban on sales of key American technology to Chinese companies, according to the
New York
Times . Any companies which cooperate with the new policy ' could face permanent
consequences ,' according to the Times. Chinese authorities also suggested using DC lobbyists
to resist the government's moves.
China - which is already
ditching Microsoft Windows for military applications - held a flurry of meetings on Tuesday
and Wednesday after tech firms for discussions amid the backdrop of Beijing's planned blacklist
of blacklisting
of US firms on an "unreliable entities list."
Also participating in meetings were semiconductor companies Arm of Britain and SK Hynix of
South Korea, according to the report, which cites a KPMG estimate that around 60% of all
semiconductors sold are connected to China's supply chain, so maybe by that new computer sooner
than later.
The breakneck unraveling of the world's most important trade relationship has left
companies and governments around the world scrambling . While the dispute had already been
nettlesome for Chinese-U.S. relations, the sudden ban on Huawei last month caught many by
surprise , raising the stakes by striking at the heart of China's long-term technological
ambitions.
Now, each of the two superpowers appears to be crafting new economic
weapons to aim at the other. What was once a fraught, but deeply enmeshed, trade relationship
is threatening to break apart almost entirely, raising the specter of a new geopolitical
reality in which the world's two superpowers would compete for economic influence and try to
freeze each other out of key technologies and resources. - New York
Times
"This is now extremely delicate [time] because the Trump administration,
through its brinkmanship tactics, has destabilized the entire relationship, commercial and
otherwise," according to China expert Scott Kennedy - senior adviser at the Washington-based
Center for Strategic and International Studies who studies Chinese economic policy.
More broadly, the warnings also seemed to be an attempt to forestall a fast breakup of the
sophisticated supply chains that connect China's economy to the rest of the world .
Production of a vast array of electronic components and chemicals, along with the assembly of
electronic products , makes the country a cornerstone of the operations of many of the
world's largest multinational companies. - New York
Times
"The Chinese government has regularly resorted to jawboning multinationals to try to keep
them in line when there are disputes between China and others that could lead these companies
to reduce their business in China."
For example, in 2015 Xi dropped by Seattle before heading to meet with President Obama.
While there, he had a chat with Amazon executives and Chinese tech executive in order to woo
them on the prospect of future business, while the Obama administration was reportedly trying
to push back against China's anticompetitive trade practices .
That said, China is far less likely to succeed this time around , according to Kennedy, who
says that " American companies aren't going to violate American laws, especially in such a
high-profile context where their actions are scrutinized."
"The companies are between a rock and a hard place, but that hard place will win out."
Three Chinese government bodies are involved in the recent discussions; the National
Development and Reform Commission (China's central economic planning agency), the Ministry of
Commerce and the Ministry of Industry and Information Technology. The Times posits that the
fact that the three are all involved suggests the meetings came from the top-down in an attempt
to rally support for Huawei - which was not specifically named.
" There is a strong perception in Beijing that the U.S. government is intent on blunting
China's technology rise , and that if this process is not slowed or stopped, the future of
China's entire digital economy is at risk," said Eurasia Group head of geotechnology, Paul
Triolo, adding "Mr. Xi and the party will be seen as unable to defend China's economic future"
it Huawei's 5G rollout is derailed by the Trump administration.
As the trade relationship between the United States and China has broken down, fears have
risen in China that major companies will seek to move production elsewhere to avoid
longer-term risks . In the meetings this week, Chinese officials explicitly warned companies
that any move to pull production from China that seemed to go beyond standard diversification
for security purposes could lead to punishment , according to the two people. - New York
Times
"China Threatens 'Dire Consequences' If Tech Giants Comply With Trump Ban"
"And US Threatens Jail If They Don't"
Love it love it love it. Reminds me of the great line from Pride & Prejudice, "You're
mother will never speak to you again if you marry him, and I (your father) will never speak
to you again if you don't."
In R&D spending, China ranks 2nd place after US. China has over 8M new grads each
year. Do you really believe stealing can make a country great. The trade war is about
suppressing a new rising power of technology and economy.
There's a whole lot more to what China is up to than buying and selling. They've been
working on how to rule the whole earth for 5000 years and the CCP thinks maybe now is the
time. Here's a brief history of Chinese power games. They play for keeps. https://www.newenglishreview.org/custpage.cfm?frm=189701&sec_id=189701
China's fightback strategy is simple: Force non-us corporations to abandon us-sourced
technologies, and, hence, non-us corporations will not be bound by US laws, and, hence, won't
subject to us blackmail laws.
The strategy already worked. ARM's founder said it will have to abandon US-sourced
technology ( eventually abandon US-located headquarters) to keep the Chinese market, and, so
other non-us corporations, such as Europe, Japanese, or Korean based corporations will have
to follow. They have no other feasible choices.
In short, the world is divided into two groups: US group and non-us group. Congratulations
to Trump: He has succeeded in isolating US from the world.
First step is to encourage, urge and force non-us corporations to make the choice using
the gigantic china market.
Second step is to drive out us corporations at the time when there is alternative for
US-made parts. Whenever US corporation is not the sole supplier, then China will declare that
any product containing that part will be forbidden in the Chinese market. And, to make the
situation even worse for US-sourced technology, any parts produced by non-us corporations
using US-sourced technology will not be allowed in the Chinese market.
This is the reverse of the entity list.
In this game, one that has a bigger market prevails. China just happened to have 1.4
billion consumers while US has less than 0.4 billion. China wins. By poisoning American
sourced technology, China will succeed in isolating US corporations.
You seem to be confused. ARM created a separate joint venture in China called ARM mini
China that will license existing tech to China as a way to circumvent US rules. However, this
creates a Chinese ARM license separate from the rest of the world. So it is China that is
actually separated from further innovation outside of China.
The Roman Emperor Caligula is best known for appointing his horse to one of the vacant
consulships. Given the current quality of professional politicians on offer in the western
world, he does not seem as crazy as he once was thought to be.
But he is also known for something else-- the phrase "Oderint dum Metuant" -- which is
Latin for "Let them hate (us), so long as they fear (us)."
Not my favorite motto but I'll take it over "Here's my wallet. Don't you like me now?"
"... The US has decided that China can't be allowed to become a technological power any more than it is now. It's fine if all they do is make T-shirts, and low-tech crap, but anything more advanced then a digital alarm clock can not be allowed. ..."
"... Anytime you weaponize something (the dollar), countermeasures will be invented to neutralize that weapon........only a matter of time. ..."
"... We're so balls deep in debt la la land now that having a conversation about wealth creation via production feels a lot like making balloon animals while wearing a clown suit. ..."
"... Much More Than a Trade War ..."
"... it signals the implosion of America's tinsel, derivative-based economy ..."
"... the high dive of the middle class into serfdom ..."
"... Politicians here in the US are desperate for me to believe it is all China's fault. Not the lying, stealing politicians and MBAs that have stolen my future but China. I am not buying it. Even if China has stolen America's wealth, who let them? Who helped and got rich? That's right, US politicians and MBAs. ..."
"... The only reason why this is a trade war in the first place, is because we're attempting to undo the shitty deals signed by Bill Clinton. Let this be a lesson: Don't sign shitty deals. No matter how much they donate to your campaign. ..."
"... Asking this of a politician is like asking a leech to stop living off blood. ..."
I watch Fox News Sunday and today all of the usual suspects were blaming Trump for
everything under the sun--including committing crimes and needing to be put in jail. It bears
repeating that they said the same things about Reagan and his trade wars--which benefited
Americans immensely.
Trump will win unless the Dems can get rid of him. China is a paper tiger and always has
been.
They are a totalitarian communist state and as such are a sworn enemy of the US and its
historic peoples. They must be taken down and that is not hyperbole--they never should have
been allowed to trade with the civilized world in the first place without first shutting down
the Kims in Norkland and dismantling their communist state.
Russia would have been more in
order in 1992 than China. ******* Clintons.
(Those companies and organizations which have contributed to and/or financed the creation
of the Chinese Communist Party's ultra-Orwellian system for command and control: Social
Credit System.)
Microsoft, Cisco, Apple, Yahoo, Narus
Rockefeller Foundation, MIT, Princeton University, University of Texas System,
Northwestern University, Oregon State Treasury, et al.
Recommended Reading:
The People's Republic of the Disappeared --- by Michael Caster
Bullets and Opium --- by Liao Yiwu
The People's Republic of Amnesia --- by Louisa Lim
Recommended Viewing:
In the Name of Confucius --- DVD (Jia Kongzi, Zhi Ming)
Free China - Free China --- DVD (Zi You Zhongguo)
The Sun Behind the Clouds [Tibet's Struggle for Freedom] --- DVD
Is it so hard to understand that the chinks KNOW that the yuan is trash and that's why
both the CB and the public are stacking gold. They're preparing for what comes next.
According to Jim Willie, that will be an Asian gold trade note as proposed by the PM of
Malaysia.
"China and its citizens would greatly benefit from eliminating barriers."
It's too bad they never did this, but now it no longer matters. The US has decided that
China can't be allowed to become a technological power any more than it is now. It's fine if
all they do is make T-shirts, and low-tech crap, but anything more advanced then a digital
alarm clock can not be allowed.
China would do best to forget about the US and hope that it can make due with it's
domestic market. With 1.3 billion people this seems like it should be possible.
They need dollars to buy US goods and services. They also need them to buy oil from
Saudis. They have dollar based loans that require payment in dollars.
"The United States has discovered the Achilles heel of China. The same one Japan had in
the 80s when it seemed that it was going to invade the world. Its dependence on the US dollar
to maintain its large domestic imbalances, a very fragile house of cards of excess capacity,
real estate bubble and unproductive spending."
Oh, yeah. .......we just "figured" that one out. It's not like we haven't used that scheme
on.......well, EVERYONE. Even our own citizens are slaves to a debt dollar system. It is all
we got left......well that and the A-bomb. But at the same time, it is our biggest weakness
because if we can't get the world to expand dollar debt, 5 hen we will have to do it
ourselves. Hence the, "China is not the largest holder of US bonds in the world, not even
close. It's the
US . In fact, China has already reduced part of its holdings in US bonds and yields fell
."
We are the largest holder of our own debt.....and can print up what we need to buy what is
necessary to drive yields down. But at some point it will be like playing monopoly with
yourself......a zero sum game. Anytime you weaponize something (the dollar), countermeasures
will be invented to neutralize that weapon........only a matter of time.
Indeed. Anyone pushing that narrative is part of the totalitarian regime or is dumb as a
bag of hammers. Either way, they lose all credibility in my opinion.
The author has never been to China to know anything about it, much less write about it,
and he knows even less about the trade relationships of the two countries.
For instance, He says: " China has a trade deficit with most of its other partners"....
WRONG!!!! It is the U.S. who has the deficits with other countries, not China! China
has a manufacturing economy, not a consumer economy, so the trade balance is in its favor, as
manufacturing economies are in demand and have very little deficit.
And the author also reveals his biases about China by saying: "China's Achilles heel has
been to try to be a reserve currency whilst maintaining capital controls and increasing state
intervention...." What do you think the U.S. Federal Reserve does, if it is not the very same
thing? Weren't they the ones who sets interest rates, control the rates of inflation,
dictating the supply of money, and doing economic bailouts to the banks in 2008 and 2009 with
our money?
Secondly, he is just regurgitating the same old propaganda already put out about China,
and really doesn't provide anything new. Why can't ZH find better writers to publish than
this?
You are correct. China usually runs surpluses. But not with everyone.
In 2018, China posted a trade surplus of USD 351.76 billion, the lowest since 2013, as
exports increased 9.9 percent, its strongest performance in seven years, while imports were
up 15.8 percent. The biggest trade surpluses were recorded with Hong Kong, the US, the
Netherlands, India, the UK, Vietnam, Singapore and Indonesia. China recorded trade deficits
with Taiwan, South Korea, Australia, Germany, Brazil and South Africa.
"China's Achilles heel has been to try to be a reserve currency whilst maintaining
capital controls and increasing state intervention...."
This is impossible. One cannot institute strong capital controls and have a reserve
currency at the same time. China knows this and has never tried to become the reserve
currency.
yeah, they said they'd work on "migration" into their country, and try to do something
about those staged caravans..but what they didn't do is say they'd stop their citizens from
invading the US like they have been doing for decades, and they didn't say they'd secure
their side of the border between the US and Mexico. So, how is the border more secure
exactly? Oh, and they didn't say they'd pay for a wall.
These same games go on, round and round, between both parties, with people twisting
everything, including nothing burgers and actual defeats into some kind of bizarre "winning"
********, to avoid legitimate criticism of their idol in the White House. Trumpets and
Obamabots are peas in a pod in more ways than they realize, but watch out, you'll get an eye
jab if you walk between them, with all the fingers pointing.
Winning, like alcohol, is addictive. Sometimes you find yourself all out of booze, so you
find yourself taking swigs of Aqua Velva. Lots of Aqua Velva heads around here.
Same old script: China bad. China steals. China need to shape up or else. USA good. USA too soft on China. USA will be great again when China surrenders to US
slavery. Think that about sums up these articles.
I agree. The "investor" class. And by that i do not mean all investors, just the non
productive LEECHES at the top playing games with fake "financial instruments"
They are non producers. They are lampreys. Same as on the bottom. I have absolutely no
problem with rich people. I am blessed to hang with many self made millionaires who are all
about designing / manufacturing unique products sold all over the world. They produce wealth
and a product, not by skimming.
We're so balls deep in debt la la land now that having a conversation about wealth
creation via production feels a lot like making balloon animals while wearing a clown
suit.
But.... it actually works. There will ALWAYS be a market for well engineered quality
products . ALWAYS.
Don't chase that race to the bottom. That is what was sold to the Us
Consooooooooooooooooooooooooooomer (**** I hate that name, I am not a consumer) for the last
thirty year. They bought the ****, they own it. **** em, let 'em choke on the icrapple and
other swarf.
Ha.
I am not balls deep in debt. My total life debt so far is $800. USA incorporated... THEY
have debt. That is not my debt.
Politicians here in the US are desperate for me to believe it is all China's fault. Not
the lying, stealing politicians and MBAs that have stolen my future but China. I am not buying it. Even if China has stolen America's wealth, who let them? Who helped and got rich? That's
right, US politicians and MBAs.
Yes, we have Democrat and Republican pols at the federal level spending this country into
decline by trillions, and financing it all with inflation, which is why we're paying higher
prices for virtually everything now, than we've ever paid.
The only reason why this is a trade war in the first place, is because we're attempting to
undo the shitty deals signed by Bill Clinton. Let this be a lesson: Don't sign shitty deals.
No matter how much they donate to your campaign.
BEIJING, June 9 (Xinhua) -- For years, non-U.S. transnational firms, vying to carve a niche
in the global market with cutting-edge technologies or products, often find themselves fronting
an opponent far more powerful and brutal than any commercial rival they have ever contested
with -- the U.S. government.
Many foreign entities, whose business may seem irrelevant to the United States, have been
forced by Washington with threats of sanctions to comply with U.S. domestic laws and
regulations.
"After so many years fancying itself as the champion of the Rule of Law, the U.S. seems to
be making headway in forging a world under the rule of law," said Zhou Qing'an, an analyst of
international relations at China's Tsinghua University. "Only it's the American law of the
jungle."
WEAPONIZED JURISDICTIONAL SYSTEM
In recent years, the U.S. government has slapped sanctions on and posed threats to an
increasing array of foreign entities under the pretext of infringements of its tailor-made
rules and regulations concerning anticorruption, taxation, investment and arms exports,
crafting a long-range weapon with its jurisdictional system, the very foundations undergirding
a country's authority.
Citing Cuba as an example of the U.S. jurisdictional overreach, Mauricio Santoro, head of
the Department of International Relations at the State University of Rio de Janeiro, said that
for many times, the United States has enacted new laws and regulations to justify its
punishments on foreign companies having commercial contacts with Cuba, a country that has long
been taken as a thorn in the flesh by Washington.
In the latest round of sanctions against the Caribbean country, Washington activated Title
III of the Helms-Burton Act, which put companies operating on properties confiscated by the
Cuban government at risk of being sued in U.S. courts.
It's not just the entities from countries deemed by the United States as rivals or
competitors that were exposed to the arbitrary abuse of Washington's jurisdictional power.
Firms of its allied countries which refuse to yield to the U.S. supremacy can also find
themselves under fire of such an overstretched jurisdictional "weapon."
In 2014, the U.S. Department of Justice fined Alstom, a French power and transportation
conglomerate, 772 million U.S. dollars, alleging the French company has broken America's
Foreign Corrupt Practices Act, which eventually led to the partial acquisition of Alstom by
General Electric, its arch rival in the United States.
Last month, the U.S. Commerce Department put Huawei, a Chinese company that has taken the
lead in 5G technology, and its affiliates on a blacklist that requires the federal government
approval for any sale and transfer of U.S. technologies to the Chinese firm.
Up to now, the United States is still lobbying other countries to exclude Huawei from 5G
networks construction over groundless accusations of spying.
"What is the most effective way to win a losing race? You change the rules and draw a foul
on your competitors, rude but effective," Zhou explained with a metaphor. "That is exactly what
the United States is doing to its competitors, even allies."
UNABASHED INTERNATIONAL DARWINIST
For decades, the United States has been touting itself as the flag-bearer of "freedom,
equality, justice and humanity," but in recent words and deeds, the Washington government is
exposing itself as an international Darwinist who sees the world as a jungle where the powerful
preys on the vulnerable.
By overstretching its jurisdiction and applying unilateral sanctions, the United States is
challenging the sovereignty of other countries, said Philippe Bonnecarrere, a French senator,
denouncing the U.S. extraterritorial jurisdiction as power logic.
Echoing the senator's words, Swaran Singh, professor at School of International Studies in
Jawaharlal Nehru University, noted that extending jurisdiction of U.S. domestic laws beyond its
border "has no legal standing whatsoever."
"It's only its position of power in international system that has allowed the United States
to arbitrarily impose its domestic laws abroad while rejecting several other universally
recognized international laws and norms," said the professor.
However, it is also the "universally recognized international laws and norms," which the
United States once paid, even sacrificed so much to build several decades ago and now is
turning its back on, that helped the country build its advantages over other countries.
Thanks to economic globalization, large European firms all have capital from different
countries, including the United States, and due to Washington's threat of sanctions, they have
to comply with American rules, said Bonnecarrere.
Even though an international Darwinist's obsession with the jungle law can not be changed
overnight, if the past is any prologue, "the obsession with power relations," as the French
senator put it, "is mortifying."
BACKLASHES FROM ALL AROUND
In a world where multilateralism and win-win cooperation are still the mainstream of the
times, an international Darwinist with zero-sum mentalities like the United States is bound to
face backlashes from within and outside the country.
David S. Cohen, a former deputy director of the CIA and former undersecretary of U.S.
Treasury Department, warned in an article published in April that the U.S. sanctions will not
only weaken countries being punished, but "breed resentment and alienate would-be international
partners."
"In the long run, it works against U.S. foreign policy interests and threatens the American
economy," said the article.
As the world's biggest economy, the United States enjoys "an outsize role in business
transactions around the world." The U.S. extraterrestrial jurisdiction, a typical prelude to
economic sanctions, would certainly cast a bigger shadow over the whole world.
Managing Director of the International Monetary Fund (IMF) Christine Lagarde said earlier
this week that the existing and potential tariff hikes resulted from the U.S.-initiated trade
tensions with China could reduce global gross domestic product (GDP) by 0.5 percent in
2020.
Earlier this year, The Economist sounded a warning in an article for Washington. "Far from
expressing geopolitical might, America's legal overreach would then end up diminishing American
power," it said.
(Xinhua reporters Tang Ji and Ying Qiang in Paris, Hu Xiaoming in New Delhi, Zhou Xingzhu in
Brasilia contributed to the story.)
"... Across-the-board rivalry with China is becoming an organising principle of US economic, foreign and security policies. ..."
"... An effort to halt China's economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives might still win out. But that is far less likely if China's natural rise is threatened. ..."
"... The tragedy in what is now happening is that the administration is simultaneously launching a conflict between the two powers, attacking its allies and destroying the institutions of the postwar US-led order. ..."
The disappearance of the Soviet Union left a big hole. The "war on terror" was an inadequate replacement. But China ticks all boxes.
For the US, it can be the ideological, military and economic enemy many need. Here at last is a worthwhile opponent. That was the
main conclusion I drew from this year's Bilderberg meetings.
Across-the-board
rivalry with China is becoming
an organising principle of US economic, foreign and security policies.
Whether it is Donald Trump's organizing principle is less important. The US president has the gut instincts of a nationalist and
protectionist. Others provide both framework and details. The aim is US domination. The means is control over China, or separation
from China.
Anybody who believes a rules-based multilateral order, our globalised economy, or even harmonious international relations, are
likely to survive this conflict is deluded. The astonishing
white paper on the
trade conflict
, published on Sunday by China, is proof. The -- to me, depressing -- fact is that on many points Chinese positions are right.
The US focus on
bilateral imbalances is economically illiterate. The view that theft of intellectual property has caused huge damage to the US
is
questionable . The proposition that China has grossly violated its commitments under its 2001 accession agreement to the World
Trade Organization is hugely exaggerated.
Accusing China of cheating is hypocritical when almost all trade policy actions taken by the Trump administration are in breach
of WTO rules, a fact implicitly conceded by its determination
to destroy the
dispute settlement system .
A dispute over the terms of market opening or protection of intellectual property might be settled with careful negotiation. Such
a settlement might even help China, since it would lighten the heavy hand of the state and promote market-oriented reform.
But the issues are now too vexed for such a resolution. This is partly because of the bitter breakdown in negotiation. It is still
more because the US debate is increasingly over whether integration with China's state-led economy is desirable. The fear over Huawei
focuses on national security and technological autonomy.
[Neo]liberal commerce is increasingly seen as "trading with the enemy".
A framing of relations with China as one of zero-sum conflict is emerging. Recent remarks by Kiron Skinner, the US state department's
policy planning director (a job once held by cold war strategist George Kennan) are revealing. Rivalry with Beijing,
she suggested at a
forum organised
by New America , is "a fight with a really different civilisation and a different ideology, and the United States hasn't had
that before".
She added that this would be "the first time that we will have a great power competitor that is not Caucasian". The war with Japan
is forgotten.
But the big point is her framing of this as a civilizational and racial war and so as an insoluble conflict. This cannot be accidental.
She is also still in her job. Others present the conflict as one over ideology and power.
Those emphasising the former point to President Xi Jinping's Marxist rhetoric and the reinforced role of the
Communist party . Those emphasising the latter point to China's rising economic might. Both perspectives suggest perpetual conflict.
This is the most important geopolitical development of our era. Not least, it will increasingly force everybody else to take sides
or fight hard for neutrality. But it is not only important. It is dangerous. It risks turning a manageable, albeit vexed, relationship
into all-embracing conflict, for no good reason. China's ideology is not a threat to liberal democracy in the way the Soviet Union's
was. Rightwing demagogues are far more dangerous.
An effort to halt China's economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the
Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives
might still win out. But that is far less likely if China's natural rise is threatened.
Moreover, the rise of China is not an important cause of western malaise. That reflects far more the indifference and incompetence
of domestic elites. What is seen as theft of intellectual property reflects, in large part, the inevitable attempt of a rising economy
to master the technologies of the day. Above all, an attempt to preserve the domination of 4 per cent of humanity over the rest is
illegitimate.
This certainly does not mean accepting everything China does or says. On the contrary, the best way for the west to deal with
China is to insist on the abiding values of freedom, democracy, rules-based multilateralism and global co-operation. These ideas
made many around the globe supporters of the US in the past.
They still captivate many Chinese people today. It is quite possible to uphold these ideas, indeed insist upon them far more strongly,
while co-operating with a rising China where that is essential, as over protecting the natural environment, commerce and peace.
A blend of competition with co-operation is the right way forward. Such an approach to managing China's rise must include co-operating
closely with like-minded allies and treating China with respect.
The tragedy in what is now happening is that the administration is simultaneously launching a conflict between the two powers,
attacking its allies and destroying the institutions of the postwar US-led order.
Today's attack on China is the wrong war, fought in the wrong way, on the wrong terrain. Alas, this is where we now are.
This is end of the classic neoliberal globalization and the start of isolation of the USA
from China and forming an alternative, led by China trading block, unless the deal is reached.
WTO rules were the door openers, which allowed Google and Facebook pollute millions of
smartphones outside the USA. By rejecting them the USA start the process of self-isolation. Now
local government who were afraid to act might want to get even and you can get a stronger
backlash then anticipated.
The only factor here is that while the USA citizens are afraid of their own government
snooping more then snooping by Chinese's government, the same is true to many foreign countries
too. Citizens of those countries move to Gmail because they care less about the USA snooping then
the snooping of their local government by the local webmail providers. This is a widespread
illusion. They should use foreign based ISP for that.
Removal of Facebook is actually a big plus which increases attractiveness of Huawei phones.
But truth be told the value of smartphone is exaggerated. Combination of a tablet and basic flip
flop phone works even better. The same but to lesser extent is true with Google spying
applications, especially Gmail. Only complete idiot uses Gmail as Web client, as Gmail is the
central point of collection of data for both Google and the US government (actually all "Five
eyes" goverments). It is like giving keys for you home or apartment to them. Not the Microsoft is
much better. Using your own Internet Service Provider (ISO) is the best option in the current
environment. It also allows more effectively to combat spam. Unless you want to be a bug under
microscope -- no Google on you your phone is a good, sound policy
Notable quotes:
"... These actions add to the potential fallout for American companies to reckon with. US tech enterprises will lose out on sales to Huawei ..."
"... Restrictions could boomerang back on Google and Facebook, which count on their apps being widely installed around the world to collect data and sell advertising against. And then there's the potential for damaging retaliation by China, which could blacklist important US companies like Apple that do business there. ..."
"... And if the crackdown lasts (an important if -- some expect the Huawei restrictions to be lifted should a trade deal be reached) and the Chinese telecom comes out intact, it could emerge even stronger, having been forced to develop new technology in-house. If the American blacklist fails to strangle Huawei, it could come out stronger and more innovative than it was before. ..."
The US crackdown on Huawei was bound to have unintended consequences. Some of them are
starting to come to the surface.
The Trump administration is looking to shut out the Chinese telecom company from selling its
technology in the US, as well as banning American firms from selling products to the company.
Now Google, which banned Huawei from updates of its ubiquitous Android operating system, is
warning that the restriction could become a national security issue, according to the
Financial Times
(paywall). That's because Huawei, the world's No. 2 handset maker, will likely move quickly to
develop its own parallel version of Android, which could have more software bugs and be more
susceptible to hacking.
That's just one of many potential consequences as the US clampdown ripples through
everything from semiconductor supplies to ambitions for self-driving cars. The American
government blacklisted Huawei for long-simmering
espionage concerns after trade talks between the world's two largest economies broke down.
The Trump administration has since given companies a 90-day window to adjust to the new
restrictions.
In the meantime, chipmakers including Qualcomm, Intel, and Xilinx are reportedly
halting sales of technology (paywall) to Huawei. The embattled Chinese company has
responded by stockpiling chips and components and ramping up its development of
alternatives.
Facebook, which has more than 2 billion users around the world, will no longer allow its app
to come preinstalled on Huawei phones,
according to Reuters . Huawei phone buyers can still download the app from the Google Play
store for now, but that option will go away if Google's relationship with the Chinese company
is severed.
These actions add to the potential fallout for American companies to reckon with. US tech
enterprises will lose out on sales to Huawei, and the ban could also slow the implementation of
new technologies around the world. The rollout of self-driving cars, for instance, may get a
boost from 5G gear, and Huawei appears to be the only supplier that can provide reliable 5G kit
widely and at low cost. Restrictions could boomerang back on Google and Facebook, which
count on their apps being widely
installed around the world to collect data and sell advertising against. And then there's
the potential for
damaging retaliation by China, which could blacklist important US companies like Apple that
do business there.
And if the crackdown lasts (an important if -- some expect the Huawei restrictions to be
lifted should a trade deal be reached) and the Chinese telecom comes out intact, it could
emerge even stronger, having been forced to develop new technology in-house. If the American
blacklist fails to strangle Huawei, it could come out stronger and more innovative than it was
before.
In a series of provocative actions, the United States is making clear it is prepared to
fight a war to block Beijing's rise as an economic and geostrategic competitor.
The "cold war" between the United States and China took a major step toward becoming a "hot"
war over the weekend at the annual Shangri-La defense summit in Singapore. The Financial
Times, not known for hyperbole, wrote that "The growing dispute between the US and China on
trade and technology is increasing the risk of military conflict or outright war."
At the summit, representatives of the Pacific nations that would be caught in the crossfire
of such a conflict warned of the imminent possibility of a new Pacific war.
"Our greatest fear, therefore, is the possibility of sleepwalking into another international
conflict like World War One," said Philippines Defense Minister Delfin Lorenzana. "With the
untethering of our networks of economic interdependence comes growing risk of confrontation
that could lead to war."
US officials used the summit to continue their efforts to encircle China militarily and
strangle it economically, with acting US Defense Secretary Patrick Shanahan declaring China to
be "the greatest long-term threat to the vital interests of states across this region."
Just days earlier, Vice President Mike Pence, addressing the graduating class at West Point,
predicted war in the Pacific, in Europe and in the Americas within the graduates'
lifetimes.
"It is a virtual certainty that you will fight on a battlefield for America at some point in
your life Some of you will join the fight on the Korean Peninsula and in the Indo-Pacific,
where North Korea continues to threaten the peace, and an increasingly militarized China
challenges our presence in the region. Some of you will join the fight in Europe, where an
aggressive Russia seeks to redraw international boundaries by force. And some of you may even
be called upon to serve in this hemisphere.
"And when that day comes, I know you will move to the sound of the guns and do your duty,
and you will fight, and you will win."
The United States' actions are extraordinarily reckless and provocative. Seeing a challenge
to its dominance, it is seeking to use every tool at its disposal, including military force, to
compel China's submission to its will. The United States is simultaneously escalating conflicts
around the world -- including its regime change operation in Venezuela and its dispatch of
additional troops to the Middle East to "counter" Iran -- to shore up its flagging global
hegemony through military means.
Chinese Defense Secretary Wei Fenghe responded to the US threats with militarist bluster of
his own, saying, "Should anybody risk crossing the bottom line, the [People's Liberation Army]
will resolutely take action and defeat all enemies." He warned the United States against
encouraging Taiwanese separatism, declaring, "If anyone dares to split Taiwan from China, the
Chinese military has no choice but to fight at all costs."
The divisions between the United States and China are centered on the Chinese state
initiative called "Made in China 2025." The plan envisions a substantial expansion of Chinese
industry into high-value-added and high-technology manufacturing, areas traditionally dominated
by the United States and its allies.
In recent decades, Chinese companies have made substantial developments in the
high-technology sector, including robotics, mobile phones and IT infrastructure. This
development was expressed most directly in the growth of Huawei, the Chinese mobile phone and
telecommunications firm, which was on track to become the world's leading smartphone maker by
the end of the year.
Last month, the United States moved to effectively destroy Huawei as a global competitor to
Apple and Samsung by banning US companies from selling it software and components. Google
locked the company out of the Android operating system and associated services, while Broadcom
and Qualcomm announced they would no longer sell the company chips it needs to continue
production.
The move enjoys broad bipartisan support beyond the Trump White House. There is an emerging
consensus within the American ruling class that China must be prevented from becoming a global
technological, and thus military, peer of the United States.
The growth of US-China tensions has overshadowed the 30th anniversary of the Tiananmen
Square massacre. At the summit, Wei defended the bloody crackdown against the 1989 protests by
workers and students, declaring the protests were "political turmoil that the central
government needed to quell, which was the correct policy."
He continued, "Due to this, China has enjoyed stability, and if you visit China you can
understand that part of history."
But three decades of "stability" -- the effective transformation of China into a gigantic
sweatshop for American and world capitalism -- have come at a tremendous cost. China is not an
imperialist country. It remains dependent on foreign corporate investment and finance. Now, it
is once again in the crosshairs of a nuclear-armed United States determined to go to any
lengths to secure its global hegemony.
In the immediate aftermath of the Tiananmen Square massacre, the International Committee of
the Fourth International wrote, "The repression in China is being carried out in the direct
interests of the imperialists. In attacking the Chinese workers, the bureaucracy is acting as
their agent, seeking to restore 'labor discipline' and to repress the mass opposition of the
working class to the policies of capitalist restoration and the rampant exploitation and social
inequality which it has engendered."
While publicly condemning the massacre, the first Bush administration secretly made clear to
the Chinese government that the event was an "internal affair" and affirmed the value of the
Sino-American relationship "to the vital interests of both countries."
The ICFI statement continued, "Imperialism gloats over the broken bodies of the Chinese
workers, seeking to exploit them for the purpose of crude anticommunist propaganda, while at
the same time calculating that the brutal state repression will translate into higher rates of
exploitation and even greater profits from the tens of billions of dollars worth of direct
investment and joint ventures already operating on Chinese soil."
This is precisely what happened. Following Deng Xiaoping's Southern Tour of 1992, in which
he encouraged Chinese entrepreneurs to "get rich," US investment in China ballooned, leading to
a profit bonanza for American corporations, along with the fantastic enrichment of the upper
echelons of the Chinese Communist Party, through the exploitation of the Chinese working
class.
The arguments by leading Chinese figures that an accommodation and partnership with US
imperialism would offer a peaceful road toward China's national development have proven to be a
pipe dream.
If Chinese officials accept US demands, it will be a massive blow to the Chinese economy,
causing mass unemployment and engendering protests and political turmoil. But to stand up to
the United States means, sooner or later, to fight a war between nuclear powers, in which
millions dead on both sides would be an optimistic scenario.
Thirty years after the Tiananmen Square massacre, all the arguments that the laws of
imperialism identified by Lenin after the outbreak of World War I had been superseded by
globalization and technological development have proven false. The capitalist system, riven by
a new scramble for a re-division of the world, is hurtling toward a new world war.
The only thing standing between humanity and this catastrophe is the international working
class. It is urgently necessary for the workers of China, the United States and the whole world
to unify their struggles in a common fight against the capitalist system, which is the root
cause of imperialist war. This means building sections of the International Committee of the
Fourth International in China and all over the world as the vanguard of a working class
movement against imperialist war.
The US trade war against China, which started just over a year ago, has now escalated to a
full-scale economic confrontation backed by the military might of American imperialism.
The rapid acceleration of the US drive against China and its increasingly bellicose
character was underscored in a major speech delivered by the acting US Defense Secretary
Patrick Shanahan on the weekend.
Over the past month, the US has hiked tariffs on hundreds of billions of dollars worth of
Chinese goods, threatened the imposition of new imposts on all Chinese imports and virtually
black banned the telecoms giant Huawei from the supply of US-made components in an attempt to
cripple its global operations.
Speaking at the annual Shangri-La Dialogue in Singapore, organised by the International
Institute for Strategic Studies, which included participants from China, Shanahan delivered a
40-minute blast against Beijing in which he emphasised US readiness to use military power to
secure its interests.
The speech coincided with the release of an Indo-Pacific Strategy Report by the US Defense
Department accusing China of seeking "Indo-Pacific hegemony in the near-term and, ultimately
global pre-eminence in the long-term."
The report called China a "revisionist" power that sought to undermine the international
system from within, attempting to exploit its benefits while eroding the values and principles
of the "rules-based order" -- the standard reference to US dominance.
While claiming that the US "does not seek conflict," Shanahan said "we know that having the
capability to win wars is the best way to deter them." The US had already committed $125
billion for "operational readiness and sustainment" for the next financial year and is
preparing to allocate an additional $104 billion for research and development of emerging
technologies.
"This finding will boost the depth and capacity of our armed forces, and also help expand
our training -- including with allies and partners -- to improve mission readiness critical to
meeting this region's challenges" he said.
The read out of his remarks provided by the Defense Department said the Indo-Pacific was
"our priority theatre." The US Pacific Command had four times more assigned forces than in any
other area, with more than 370,000 service members devoted to the region.
The US had "more than 2000 aircraft, providing the ability to project power across the vast
distances of this region" together with "more than 200 ships and submarines to ensure freedom
of navigation."
The integrated character of the US offensive -- on the economic, diplomatic, political and
military fronts -- was emphasised in remarks clearly directed against China.
"[Some] actors undermine the system by using indirect, incremental actions and rhetorical
devices to exploit others economically and diplomatically, and coerce them militarily. They
destabilise the region, seeking to reorder its vibrant and diverse communities towards their
exclusive advantage."
This characterisation most closely fits the actions of the United States, extending over
decades -- from the dropping of two atomic bombs on Japan in the dying days of World War Two,
the launching of the Korean War in 1950 in which an estimated 2.5 million people lost and the
Vietnam War in which killed more than three million.
US intervention has not been confined to military action. In the wake of the Asian financial
crisis of 1997-98, the International Monetary Fund, at the direction of Washington, imposed an
economic "restructuring" program across the region which plunged it into a crisis, equivalent
in scope and depth to the Great Depression of the 1930s.
The enduring image of that intervention is the photograph of IMF managing director Michel
Camdessus standing over seated Indonesian president Suharto as he signed a so-called IMF
bailout program to impose what was known as the "Washington consensus."
Economic devastation resulted in Indonesia and across the region as "structural adjustment"
was imposed. Indonesian real wages feel by 30 percent, the incidence of poverty doubled and
more than 20 million workers were made jobless. Unemployment rates in South Korea and Malaysia
tripled.
In the years since then, the IMF policies -- directed by the US Treasury Department -- have
been branded as a "mistake." They were anything but. The economic firestorm was a consciously
directed operation.
At that point the US feared its economic supremacy in the region was being threatened by
Japan. When the crisis broke in July 1997, with the devaluation of the Thai baht, setting off
currency devaluations and a financial crisis across Southeast Asia, Tokyo intervened with a
proposal to set up a $100 billion Asian Monetary Fund in order to safeguard its economic
interests in the region.
This was forcefully rejected at a September 1997 meeting of the IMF and G7 in Hong Kong.
Faced with the prospect of a conflict with the US, Japan withdrew its proposal, opening the way
for the imposition of Washington's "restructuring" demands, based on the breaking up of the
economic and financial ties between the countries of the region and Japan.
However, the Asian crisis was to bring about a major economic shift in which China was to
become the major global manufacturing centre. Following Deng Xiaoping's southern tour in 1992,
foreign capital flowed into the country, secure in the knowledge that, as the Tiananmen Square
Massacre of June 1989 and the far broader suppression of the working class in all the major
industrial centres had demonstrated, the regime would act as the guarantor of its profit
interests.
By the end of the 1990s, China had become integrated into the global circuit of capital and
on that basis its entry into the World Trade Organisation (WTO) was backed by the Clinton
administration. After China's admission into the WTO in 2001, the flow of global capital
increased as the regime committed itself to further market opening.
The policy of the US was grounded on the premise that collaboration with China would be
encouraged so long as it remained a producer and assembler of consumer goods, boosting the
profits of US and other corporations that used it as a base for their manufacturing operations.
A new term was coined to describe this collaboration "Chimerica."
However, the eruption of the global financial crisis in 2008, centred in the US financial
system, marked another major turning point, with far-reaching consequences in China as more
than 23 million workers lost their jobs. Fearful of an eruption in the working class, the
Chinse regime undertook a massive stimulus program, spending more than $500 billion and opening
up credit for the provision of vast infrastructure projects.
This policy, based on a rapid expansion of credit, could not continue indefinitely and under
President Xi Jinping a new turn was initiated. In order to maintain economic growth and prevent
a crisis that would call into question the legitimacy of the regime, a new policy had to be
initiated.
This was the origin of the "Made in China 2025" plan in which China would move up the value
chain, not only producing cheap consumer goods and relying on infrastructure spending but also
moving into the development of high-tech manufacturing in areas such as telecommunications,
health and pharmaceutical products and artificial intelligence.
This, however, is regarded by the US as an existential threat to its global economic and
military dominance, which, as the latest strategic report by the Defense Department and the
speech by Shanahan has underscored, it is determined to crush by all means necessary including
war.
"... The short-term impact on China could be smaller than previously expected. Factories that sold only to the United States have developed new markets over the past year. Even if those factories stop exporting to the U.S., they will not go bankrupt immediately. It helps that the service sector is experiencing a labor shortage and could absorb some slack. For example, in China a delivery man sometimes makes more than an average office worker. ..."
"... Shipments to the United States and shipping prices have dropped since the new tariffs were announced. ..."
"... Researchers at the New York Fed have determined that the new round of tariffs on Chinese products will cost the typical American household an additional $831 per year. ..."
"... "China has been slaughtering USA" It is American corporations not China. ..."
"... “The Communist Party didn’t fight Japan,” said the sprightly 97-year-old, who once served as a translator with the storied Flying Tigers aviation brigade. “They made up a whole bunch of stories afterward, but it was all fabricated.” ..."
...The main takeaway from our notes below: The Chinese are buckling up for a long ride.
Beijing is preparing for a protracted standoff. The leadership has concluded that the
intention of U.S. negotiators is not just to resolve trade imbalances but also prevent China
from moving up the value chain, a key long-term objective for the Chinese.
Tariffs on the remaining $300 billion of Chinese products would hurt China, but the
United States would also feel the pain. Profit margins for consumer goods manufacturers
average less than 5 percent. U.S. importers would either have to pay the tariffs, charge
their customers more, or find suppliers elsewhere.
The short-term impact on China could be smaller than previously expected. Factories
that sold only to the United States have developed new markets over the past year. Even if
those factories stop exporting to the U.S., they will not go bankrupt immediately. It helps
that the service sector is experiencing a labor shortage and could absorb some slack. For
example, in China a delivery man sometimes makes more than an average office
worker.
Huawei will not be a part of any negotiations. Beijing thinks that Huawei is more of a
political issue and would be targeted whether or not they make concessions on trade.
... ... ...
There has been a significant shift in the way that Beijing manages nationalist sentiment
inside China. Until May the government had been trying to contain hawkish views on the
U.S.-China relationship, but now they are just letting it grow. (See
Now China's Got Its Own Anti-U.S. Trade War Song .) Not only does this demonstrate that
Beijing does not expect any short-term solution, because the negative sentiment will make it
difficult for President Xi to make concessions, it also allows China to harden its diplomatic
position given popular domestic sentiment.
As for whether the Chinese are front-loading shipments to the United States to avoid
pending tariffs, port data and local analysts indicate this has not yet happened.
Shipments to the United States and shipping prices have dropped since the new tariffs
were announced. The pending tariffs could cause some front loading, but it would be hard
to beat the latest round of tariffs because they were imposed a few days after the
announcement. Only products shipped before the new tariffs' effective date are exempt.
The consequences of a protracted trade war are manifold. The economic impact includes a drag
on economic growth, import price inflation which will allow U.S. domestic and other foreign
policy makers to raise prices, and the knock-on effects to other trading partners as the
shuffle begins to find new sources and markets for different products. Researchers at the
New York Fed have determined that the new round of tariffs on Chinese products will cost the
typical American household an additional $831 per year. Trade barriers between the world's
economic superpowers will slow global growth and put political pressure on all affected
governments, stoking increasing nationalism and protectionism overseas while increasing
inflation and reducing living standards at home.
The investment implications of a protracted trade war are still playing out. We have seen
how sensitive markets have been to the trade news, with a strong risk-off bias resulting from
adverse developments in the fourth quarter. While volatility will continue, there is no
indication that the Chinese will attempt to liquidate their large holdings of U.S. Treasury
securities. To do so would only drive down the value of the dollar, which would run counter to
Beijing's desire for a weaker yuan. There is also no imminent change to monetary policy from
the Federal Reserve as a result of trade saber-rattling, but if the financial markets begin to
spiral out of control because of tariffs, then we could see a repeat of 1998, when the Fed
eased as a result of the Asian financial crisis. With neither side apparently willing to step
back from the brink, investors should be discounting a higher probability for a drawn-out
fight.
... ... ...
The conclusions are obvious. Unless the current trajectory is quickly changed, the Chinese
are digging in for a long fight. The cost to the United States will be high; the cost to the
Chinese will be higher. The only question is who will endure and be the most innovative in this
battle of wills. As I have written before in "No One Wins a Trade War," the short-term costs
are likely to outweigh the long-term benefits regardless of who "wins."
Comments
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1. Guggenheim Partners is based in Chicago and represent Obama's point of view
2. Apr 4, 2018 Scott Minerd predicted at 50% plunge in the stock market
3. Once again Scott predicting a 50% drop in the market in 2020
4. April 29, 2019 Scott predicted a rate hike by the Fed
The Long march is a propaganda piece hoping people will invest more in their bond mutual
funds. Scott should spend a lot less time on TV and more time in the office.
The longer this trade war goes on the more and more unstable the Chinese economy will
become. Because the current tariffs on China are small peanuts to the remaining $200+ billion
which will shut down their electronics industry.
Agreed with the second point, that they are finding new markets and shifting production
line to new place. A new leather goods factory just opened in Cambodia, majority owner is a
Chinese friend, rest is a Cambodian business group. His products are in every major markets,
and third party label for our brand names. Business as usual for him, he can’t close
his China shops because he lives there.
You don’t get the point. We are printing worthless paper to exchange the actual
products, such as computers, furniture and machines. We don’t “eat” money,
we consume products. To an extent that we can maintain dominance is to innovate and turn into
“affordable” products domestically and overseas.
Now all the foreigners including
not white anglo saxon protestant waking up and will circumvent dollars/sterlings,
that’s bad trend. Germany and Russian would be pleased.
Umm.. If you want to gauge the effect of the Chino - Mericah Trade Tariff Circus, then it
doesn't get real until Trump goes after the mid-point trans shipment points....all those
mutually accessible ports of call that have equal access to both party's...Geeezzze, is
everyone working for CNN, Clown News Network......Trump and Friends are just going to set up
different ways to ship goods into and out of the Merikah.... it's that simple!!!!!
The LAST man brave enough to publish anything critical of Chicoms throws in the towel. Not
worth the prison terms, the violence, the relentless state attacks on journalists and their
families. Totalitarian cuks with their asshat trolls. Glad Trump will starve them out with
tariffs. Be happy never to trade with China until their people throw out the commie murderous
imperialists - let them do business with their like-minded asshat buddies in Moscow -
Staged arrest with planted drugs, beaten upon arrest, protesters immediately arrested
(even though they protested one at a time to avoid the law making group protests illegal -
the mark of every totalitarian regime). THIS is your brave PUTIN. Cannot allow any TRUTH
about his corrupt kleptostate, lest Russians finally have ENOUGH of the rape and thievery
that pillages their national assets and resources for the oligarchs' gain, with their lips on
Putin's sphincter as he gives them a reach around.
Tell me again how GREAT China and Russia are, and how the USA sucks. We don't arrest and
kill our journalists. In fact, they are allowed to stage absurd, fact-free assaults on the
ruling party without end.
I'll take freedom over tyranny every time.
Proud-Christian-White-American-Man , 1 hour ago
link
Laugher NYC: Best post of the afternoon! This is the type of post that makes Zero Hedge
comments worth reading.
Proud-Christian-White-American-Man , 1 hour ago
link
"As I have written before in “
No One Wins a Trade War ,” the short-term costs are likely to outweigh the
long-term benefits regardless of who “wins.""
Translation: The US should give up fighting the trade war and go back to losing the
trade war. Americans don't want to withstand short term pain , so just give up and surrender
to the Chinese communist government.
Reality Check: If the US stays the course then the following will happen:
New factories will open up to replace the Chinese suppliers.
More US workers will be employed with rising wages.
The US will reopen critical industries like rare earths making the US much more
militarily secure.
Existential menaces like Fentanyl exported from China will be drastically
reduced.
"New Long March" Cross Rubicon─Save/Lose. The CCP Didn’t Fight Imperial Japan; the KMT Did. While the KMT military defended China against Japan during WWII, the CCP built up strength
for the civil war.
This was not by accident but by design. The CCP had a choice: it could have prioritized
defending the country against Japan during the war, or it could have prioritized seizing
control of China from those who did fight the Japanese. It chose the latter. Meanwhile, by
choosing to actually try to defend China against Japan during the war, the Nationalists
handed the country to the CCP afterwards.
Which is why Xi and the CCP’s decision to create a national observance day to honor
its defense of China during the second Sino-Japanese War represents the height of hypocrisy.
It’s one thing to try to suppress all information exposing the Party’s failings,
which killed millions of Chinese, while demanding Japan take a correct view of history (which
Tokyo should do). It’s another thing altogether to falsely claim credit for one of the
defining moments of your country’s modern history. And it’s really something
unprecedented to create a national holiday to honor your Party for doing something it
consciously avoided; namely, putting China’s defense over the CCP itself.
Classy.
✅ China gives little credit — and less help — to Kuomintang vets who
fought in WWII
“The Communist Party didn’t fight Japan,” said the sprightly
97-year-old, who once served as a translator with the storied Flying Tigers aviation brigade.
“They made up a whole bunch of stories afterward, but it was all
fabricated.”
Most independent historians agree that it was the forces of the Kuomintang, led by
Mao’s archrival, Chiang Kai-shek, that led the anti-Japanese struggle and suffered the
vast majority of casualties.
Following the war’s end, the exhausted and divided Kuomintang were defeated by
the communist s in a renewed civil war and fled to Taiwan, cementing Mao’s claim to
having defeated imperialism, unified the country and overthrown the old feudal order.
“This joint victory over the external enemy and the internal one, including the
landlord class, is a fundamental component of (the party’s) founding myth,” said
Harvard University China scholar Anthony Saich.
Proud-Christian-White-American-Man , 1 hour ago
link
B-Bond: Interesting history background. The commies have always been the cowards waiting
to pounce on an exhausted opponent. Same formula in Russia 1917. The Czar exhausted his
soldiers in WWI which opened the door for Lenin to cowardly sneak in on a sealed train
courtesy the German government. That treachery only got the Germans a very temporary victory
in the Treaty of Brest Litovsk for a few months. Post war, the commies came close to
overthrowing the new Weimar republic. That's what happens when you make deals with a Godless
murderous cult based on hate and envy called communism.
So, if I understand this correctly one globalist stooge contacted a bunch of other
globalist stooges and asked them to confirm his pre-conceived talking points.
Big surprise, they were happy to do so. As usual, they blather about no winners in a trade
war-- then launch into an explanation of how badly the US consumer will lose and how
beneficial this will ultimately be to China. That sure sounds like an apportionment of trade
war winners and losers if you ask me.
What emerges is a picture of cynical beneficiaries of the current global order trying to
frighten the Americans into giving up by harping upon the costs, yet trying to assuage their
national pride by suggesting that giving up will actually be scored as a draw, which is the
best result they can ever hope for due to the fact that there are no winners and losers in a
trade war.
Yet it is China who is comparing this event to the Long March -- not a time of glory but
of acknowledgement of crushing defeat and gigantic sacrifice to set the table for a future
triumph. They seem to understand that they could lose this war if they are not fanatically
dedicated to victory. They sure as **** aren't telling their people that nobody wins a trade
war. Wonder why this dichotomy exists?
Well, Scott Guggenheim can tell you. It's because HE LOSES if Trump wins. Him and his
profitable Chinese pals. They'd all have to go out and find a new gig rather than keep
sucking off their current comfy one.
Creative destruction starts with knocking **** down and it is high time and beyond that we
knocked this **** down. Even if it puts Scott and his buddies on the unemployment line.
Proud-Christian-White-American-Man , 1 hour ago
link
Cheap Chinese Crap:" So, if I understand this correctly one globalist stooge contacted a
bunch of other globalist stooges and asked them to confirm his pre-conceived talking
points." Good cogent analysis of Scott Guggenheim's real motivation. it's the old WIFFM mentality.
What's In It For Me. If Scott is such a cheerleader for the Chinese, then it might be time for him to move to
China and 'enjoy' his social credit score.
It's not about who wins but about who looses. Chinese are used to hardship, not the Americans. Even if the pain is greater
for Chinese, it will be political suicide in the USA for their administration to pursue this policy....
A centrally planned, in huge debt, social credit focused country like China, will NOT
survive the long term damage. They have one billion plebes to feed and keep happy. Think T Square.
The business of China is business. The business of the US is war. China is better situated to endure a long fight. They've made themselves self sufficient,
have ambitious economic plans with the Belt and Road initiative, and are sitting on a
mountain of gold. The US depends on an economic hegemony that is dwindling and doesn't think long term. The US empire is in a managed decline
The Chinese can manufacture anything. The US can't say that. Their agricultural technology is second to none and their energy sector is advancing by
leaps and bounds. They are innovative, the US has lost it's innovative curiosity. Too many
public education mouth breathers staring at their TVs and phones to be bothered with
thinking. Just the way the state like it.
Chinese investment in Africa is solving their raw materials and energy issues, hence the
Belt and Road initiative. People think that building roads and ghost cities in the African
desert is a bad idea, but they know the desert is greening and are thinking long term. The
US, on the other hand, sends troops.
"Their agricultural technology is second to none..." Stop reading there.
China can not come close to feeding itself, and its agritech is decades behind the US. TFP
ranking, growth..by any measure, China's ag sector, while it has improved, is far behind the
US.
Population growth and the "growing middle class" has also reversed the growth in ag
acreage, while fewer young Chinese are going in to farming. Even with the most optimistic
growth projections from CHINA itself, it won't reach even 75% of its needs domestically by
2030, far less if growth continues to slow.
If China pisses off enough of the world, it will once again starve. That's one way to
control population growth.
Why are all these Democrats and RINOs siding with China instead of Americas?
Simple. It's because like China -- Joe Biden, Sen. Mitch McConnell, Rep. Justin Amash, the
U.S. Chamber of Commerce, etc., etc., they have all been bought off with Chinese money.
The dumb American Political Sellouts have been bought with U.S. dollars. Now how dumb is that, when the Thief that is buying your favor, plucks it out of your
right pocket to hand you the loot.
"Why are all these Democrats and RINOs siding with China instead of Americas?"
It's simple. They are not Nationalistic. They are complete Globalist sell outs . In their
book, USA comes LAST. Anything that weakens mom and pop USA makes them stronger.
Click bait investment firm with Chinese investments that are not going well, so he wants
your support. This should be an add off the the side not a FEATURE Tylers.
This is a GOOD thing. We have lost our manufacturing to China (and Asia) to benefit Wall
street and the globalist and the Rich. There is no solution except to have these tariffs.
With our government taxes and structure there is no way we can have 1 or 2 dollar wages. It
might take an adjustment, but we MUST stop this cheap stuff from coming in. Sad but
True>
Good luck pinning your hopes on Trump for bringing jobs back lol. Why would you want those
jobs back anyway, I thought you had a ton more job openings than needed?
Please, this is not a trade war, this is a trade reset, it is needed to make MAGA. China is dependent on foreign trade to be successful. Well over 40% of their economy is dependent on exporting.
Trump knows the central bank economy is on a path to total destruction. He knows that soon
we will have a global reset. Anything he can do to weaken China now will ensure they continue
to be weak at the time of the reset. By diverting the USA supply chain away from China by
bringing it back to the USA or getting new suppliers from other nations he is helping to
ensure a better position for the USA at the time of the reset.
Yes, this is no trade war, it is a trade reset...people are being filled with propaganda
like the wording "trade war" even though the truth is right there in front of them...it is a
big puzzle, just need to find the pieces and they then fit like a glove (not OJ'S glove) and
you have the real truth...
Only 18% of Chinese GDP is export. Of this, only 18% goes to the U.S. So less than 4% of
Chinese GDP is export to the U.S. The fact that you could not set such records straight makes
the rest of your post pointless.
Researchers at the New York Fed have determined that the new round of tariffs on Chinese
products will cost the typical American household an additional $831 per year.
Why is it these so called experts never say what doing nothing HAS cost the American
household...like lost jobs?
Correct, NOT doing this has cost Americans billions in lost earnings / revenue over the
last 30 years. They certainly don't want to factor THAT wet mess into the equation.
US Secretary of State Mike Pompeo doubled down on vilification of Сhinese telecoms giant Huawei as "an
instrument of government" suggesting that the company was a national security threat by acting as an
agent for Beijing.
Like his boss, President Trump, and many others in Washington, Pompeo seems blind to an alternative
glaring reality. The US government is the consummate instrument of American corporations. Its
congenital service to corporate profit-making is the real national security risk to American citizens
and a global security threat for all people of the world due to the wars that Washington unswervingly
pursues on behalf of US corporate interests.
The irony could not be richer. President Trump has
banned Huawei from US markets by executive order on the grounds that the company's smartphones could
be spying devices for the Chinese government. This move by a nation whose government espionage
agencies were
exposed
using every US telecom, tech and social media company as a conduit for their global
harvesting of private citizens' data as well as that of foreign heads of state.
Moreover, the White House claim that Huawei is an instrument of Beijing state authorities is a
risible form of guilt projection. The Trump administration's ban on Huawei is nothing more than US
government abusing its state power to hamper a Chinese competitor from outperforming American tech
corporations. Huawei's products are reputedly cheaper and smarter than US rivals. Some observers also
point out that the Chinese technology is invulnerable to hacking by the American spy agency, the NSA,
further adding to its consumer appeal. Outperformed on market principles, the US government takes a
legalistic, propagandistic sledge hammer to smash Huawei from the marketplace in order to bestow an
unfair advantage to inferior American corporations.
So, just who exactly is being an instrument for whom?
Governments in all nations of course use their legislative, fiscal and policy resources to try to
build up key companies for their national economic development. It's standard practice throughout
history and the world over. Governments can use subsidies and grants to boost companies, or tariffs to
shield them from foreign competition.
The US, however, is a stellar example of how government intervenes strenuously at every stage in
the market to benefit private corporations. Without massive injections of public money for grants, tax
deductions, subsidies, and so on, American corporations would not have risen to the scale they have,
as Michael Parenti documents in 'Democracy for the Few'. This relationship, of course, negates the
myth of US "
free market capitalism
." In reality, American corporations are publicly supported
entities whose profits go to private shareholders. The overarching agent for this process of
centrally-planned corporate capitalism is the American government.
From its earliest days as a European colony, it was the newfound federal authorities who rolled
back frontiers with the native Americans through genocidal wars in order to benefit cattle and cereal
companies, mining magnates, transport and telecoms, oil firms, and firearms manufacturers.
In its young years as an imperial power, it was Washington that organized and dispatched federal
troops to wage wars in the Caribbean and Latin America – all for the sole benefit of Wall Street and
the expanding agro-industry. Retired Marine Major General Smedley Butler, in his 1930s book 'War is a
Racket', described the American military as a henchman for US corporate profits. But without the
government acting as recruiter, financier and commander-in-chief, the US Army could not function as a
henchman for the corporations.
Let's take a few specific examples in history to illustrate the instrumental role of the US
government in advancing or defending corporate interests. In 1953, President Eisenhower authorized the
coup in Iran organized by the CIA and Britain's MI6. A main objective of that intervention was to
seize Iranian oil. Five US corporations subsequently exploited the Iranian feast, until the revolution
in 1979 kicked them out along with the American puppet dictator, Shah Mohammad Reza Pahlavi. It's a
fair bet that current military threats from the Trump administration against Iran are prompted by a
strategic desire to reclaim American corporate interests.
In 1954, Guatemala's elected leader Jacobo Arbenz set out to nationalize underused agricultural
land to benefit the rural poor. His land reforms involved expropriating properties belonging to the
American-owned United Fruit Company, as William Blum details in 'Killing Hope.' Acting on United's
interests, Washington intervened with a CIA-backed coup against Arbenz, which subsequently led to
decades of mass murder of indigenous Guatemalans under US-backed military dictatorships.
Following the Cuban revolution in 1959, one of the main protagonists for US military invasion of
the island and for covert sabotage operations was the American soft drinks industry, headed up by
Coca-Cola and Pepsi. They feared the nationalization of sugar plantations by the Castro government
would hit their profits.
There are also
suggestions
that President John F Kennedy may have been assassinated by powerful US state forces,
working in cahoots with American corporate interests, because he didn't adopt a sufficiently
aggressive policy towards Cuba after the Bay of Pigs fiasco in 1961. Related to JFK's assassination
was his reluctance to go to war in Vietnam in the early 1960s, which big oil companies and weapons
manufacturers were all avidly pushing. His successor, the Texan Senator Lyndon Baines Johnson, who was
close to both industries, duly obliged by paving the way for all-out war in Indochina after 1964. Up
to two million Vietnamese were killed, as were some 58,000 US troops. Millions more maimed. The
corporations made huge profits from the decade-long slaughter. But the US economy began a long descent
that continues today from incurring fiscal debts over Vietnam, which prompted Washington to abandon
the gold standard, and heralded the age of funny money with the dollar acting as an overrated
international reserve currency.
Many more examples could be cited to illustrate how US government – both the White House and
Congress – are agents for corporate profits, often to the horrendous detriment of international peace
and the common good of ordinary Americans.
The 2003 war on Iraq – killing over one million civilians and maiming tens of thousands of
Americans – was widely seen as a pretext for grabbing Iraqi oil for US corporations like Halliburton,
for whom then vice president Dick Cheney was previously an executive board member.
The present warmongering towards Venezuela by Washington is openly touted by White House National
Security Advisor John Bolton as being about US corporate lust for the country's oil reserves – which
are reckoned to be the biggest on the planet.
Out of the top 12 corporate financial
donors
to politicians in Washington, three of them are weapons companies: Boeing, Lockheed Martin,
and Northrop Grumman; a fourth is oil titan Exxon-Mobil. There is an obvious correlation between
corporate bidding and foreign policies embarked on by US governments which leads to conflict and wars,
which in turn repays these corporations with soaring profits.
The American government is the best instrument that corporate money can buy.
Thus, when Trump, Pompeo and other Washington political (and media) prostitutes pontificate and
rail against Huawei, just remember: these talking heads are bought and paid for – lock, stock and
barrel.
Like this story? Share it with a friend!
The statements, views and opinions expressed in this column are
solely those of the author and do not necessarily represent those of RT.
Technoimperialism is effective, but what it Huawei can switch to some derivative CPU and
chipsets?
Notable quotes:
"... Authored by Fan Yu via The Epoch Times, ..."
"... A wide-ranging ban similar to the one imposed on Huawei and its affiliates would effectively bar other foreign companies whose products contain at least 25 percent U.S.-sourced technology from supplying the Chinese. ..."
"... What does this mean in practice? More companies may begin to adopt localized R&D and manufacturing practices. Instead of Chinese factories supplying the world when labor costs were low, localized operations to directly supply the China market may be set up. ..."
"... Around 33.2 percent of American companies operating in China are delaying or cancelling investments in China altogether, according to the most recent American Chamber of Commerce in China survey released on May 22. If the tariffs are more permanent in nature, U.S. companies will likely move production outside of China, which is increasingly seen as a prudent choice given rising political instability within China and growing labor costs. ..."
"... If Bibi ask Chump to drop the tariffs on China for the security of Israel, What do you think will be Chump's answer? ..."
During the Cold War ,
around half of the world ran on the technologies, machinery, and political ideologies developed
by the Soviet Union. The other half - the free world - adopted those of the United States and
its allies.
As trade war
tensions between the United States and China escalate, could we be on the cusp of a new
version of the cold war, one which is driven by technology and finance?
Since U.S. President Donald Trump has deemed Chinese telecommunications giant Huawei Technologies as a national
security threat and barred it from purchasing key U.S. equipment, Beijing has engaged in an
escalating tit-for-tat that could have lasting ramifications on the technology industry going
forward.
And Huawei may just be the beginning. Several other Chinese companies are being considered
to join the blacklist with Huawei.
If a technology cold war does come to pass, it would significantly alter the existing
technology landscape, dismantle global supply chains, and cleave off the global trade network that has underpinned
China's rise as a global economic power .
Decoupling of the Global Supply Chain
Global consumers are used to seeing this familiar description donning Apple products'
packaging for years: "Designed by Apple in California. Assembled in China."
That's the model followed by most technology companies during the past few decades. American
companies develop new technologies and products in the United States, which are assembled by
comparatively cheap labor in China, and then shipped for sale globally.
Going forward, purchase orders would likely need to be rerouted.
A wide-ranging ban similar to the one imposed on Huawei and its affiliates would
effectively bar other foreign companies whose products contain at least 25 percent U.S.-sourced
technology from supplying the Chinese.
What does this mean in practice? More companies may begin to adopt localized R&D and
manufacturing practices. Instead of Chinese factories supplying the world when labor costs were
low, localized operations to directly supply the China market may be set up.
Around 33.2 percent of American companies operating in China are delaying or cancelling
investments in China altogether, according to the most recent American Chamber of Commerce in
China survey released on May 22. If the tariffs are more permanent in nature, U.S. companies
will likely move production outside of China, which is increasingly seen as a prudent choice
given rising political instability within China and growing labor costs.
Another 35.5 percent of respondents are adopting an "In China, for China" approach to
mitigate the impact of tariffs , according to the AmCham survey. That refers to manufacturing
products to be sold in China, within China. That strategy may be broadened in a full-on
technology cold war, as research and innovation may also need to be localized and companies may
need to erect internal information barriers.
Losers, Big and Small
Chinese companies will be the main losers -- there are no existing domestic replacements for
many U.S.-sourced components. For example, Huawei's chip-making arm HiSilicon currently derives
its Kirin chip architecture on license from UK-based semiconductor firm ARM Holdings. But in
May, ARM notified Huawei that it would stop licensing its chip designs to HiSilicon due to
having certain U.S.-sourced origins.
Huawei also lost access to Google's Android software platform, which is the main operating
system running on all Huawei smartphones. As of the end of May, the U.S. Commerce Department
gave Huawei a temporary, 90-day license to provide security patches to existing phones.
In addition, Huawei has been suspended from the Wi-Fi Alliance, an industry standard-setting
body for technology protocols.
These events don't just hobble Huawei -- they effectively ground its ambitions to a halt.
Without access to these technologies, there's simply no way for Huawei to reach its goal of
overtaking Samsung as the world's No. 1 smartphone supplier. And on the networking front,
Japan's SoftBank became the latest potential customer to reject Huawei for 5G networking
equipment, announcing on May 31 that it would be turning to European telecom giants Nokia and
Ericsson instead.
Should similar bans extend to other Chinese companies -- many of which have far smaller
operational support and balance sheets than Huawei -- many of them could cease operations
altogether.
Comments
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China's empire is growing and the US empire s shrinking. Unfortunately many can't grasp
that and will deny it till the end instead of accepting it and working with the next world
power. All empires come to an end.
Our economy is a consumer based economy not a manufacturing based economy like it once
was. Can we return to a manufacturing based economy? Not sure if Americans are ready to push
their kids into getting a job at the factory making boots, footballs, washing machines......
instead of swaying them into going to college. Don't forget, someone has to work in the
factories if we are going to make stuff.
If you study high wage manufacturing driven economies like Germany, you will notice that
the productivity of their workers is sky high (as it has to be in order to remain
competitive). The plants are highly automated. Workers are very well trained and have expert
skills in keeping the production line running at peek pace and quality.
Frankly, I just don't think American workers have what it takes to adopt that kind of
model.
Not with the education system we have now....the Fed has killed off the industrial trades,
and everyone thinks they will can spend $100,000 a year for an education to sit behind a desk
and play solitaire......or become a politician.
Someone has to fix the machines and get their hands dirty. Not all our kids are IT
'coders'. Now we want the gooberment to give them 'free' college for a 'diversity degree' and
they graduate with NO SKILLS and no knowledge. So we drug up our youth with drugs imported by
China and open the flood doors for worker bees. Sounds like a plan.
The free world flourished during the cold war. it was great for the West. Technology
advanced by leaps and bounds and the middle class grew. Nothing bad about this at all.
So you believe Epoch Times, a Falun Gong publication? What's missing in the article is the
most obvious: the trade war will force China to climb the value chain a lot quicker. The most
like scenario is that China will become a high-tech manufacturing powerhouse before much, if
anything, is moved back to U.S.
What would make any sane person believe that stopping the ARM license would stop them
being made in China? Has that ever worked for anything else, ever?
their tech will fall behind as the US advances. Same thing happened with the Soviet Union
once they ran out of Germans and US tech. By '91, they were woefully behind the West--like 35
years.
There was never anything wrong with Research in the USSR, Development was their problem, now as Russia again they remain at the leading edge of Research, and seem to have finally gotten a handle on Development. They have never been behind in Research, any serious scientist in the West can and will read Russian just to keep up.
Its been that way all my life, the US seems to have
forgotten it though, because they believe they're exceptional and only they can do
research.Hubris will kill you.
The Russians are pulling way ahead because of that Ubermensch stupidity, laughing the whole time at it. That smirk of Putins, its there for a reason.
What would make any sane person believe that stopping the ARM license would stop them
being made in China?
No kidding. For instance, take this statement:
Chinese companies will be the main losers -- there are no existing domestic replacements
for many U.S.-sourced components.
Propaganda via lies of omission. This could easily be turned around to say:
American companies will be the main losers -- there are no existing domestic
replacements for many Chinese-manufactured "U.S.-sourced" components.
But hey, the Epoch Times is a propaganda mill for the Falun Gong cult which the Chinese
government banned 20 years ago, so it's kind of the anti-China equivalent of The
Gatestoned Institution .
the chinese domestic market is the new big dog on the block. it is big enough to dictate
what the rest of the world will use. the hubris of the usa is arrogance squared. the
consequences are potentially damning to usa tech. this is the dumbest move in business and
geopolitical history.
The West is in for a big surprise. China has technologically advanced neighbors (Russia,
India) and a host of countries who want to do business who are also technologically advanced.
The Silk Road is well advanced to supplant trade with North America. Germany is already in
place in Russia and China and will not lose sleep with the loss of North America. It is the
US that has the most to lose.
They cannot see past their own jingo. The Chinese just thanked Trump at the Moscow summit, for forcing them to do what inertia
stopped them doing years ago. Seems like its already backfiring, and now full dedollarization is now the official
agenda. Yuan futures in most everything, convertible to gold, were just announced at one press conference. The ruble looks around -95% undervalued right now.
umm--you do know that it wasn't so long ago that Russia defaulted on all of its loans,
right? and that no one with a brain is going back into that market again, right?
No worries, the PTB in our fed government (both sides) and the globalists want cheap labor
from the illiterates that are allowed to flood our country and Europe. We will look much like
the cheap labor in China. I find it funny that 'open border' morons like the D's demand
$15/hour min wage laws for flipping a hamburger. They are nuts. Can't have it both ways.
No they didn't, they were disconnected from Gargoyle Play.Android is open source and HW played a big part in its development. Maybe more than Gargoyle.. This kind of disinformation discredits the whole article, the author is a no nothing
hack, probably Mosley moonlighting from his janitors job.
My small anecdotal experience was back in 2008 when I worked for a US Company who made
large components for nuclear projects. Like AP1000. Within a year of my working there, we
were hosting the chinese and actually sending our engineers and quality people to live in
China for 6 months at a time to TEACH THEM HOW TO MAKE THE PRODUCT. The quality people came
back disgusted because they didn't care about 'tolerances'. I have since left there, but it
was eye opening how US companies willingly sell our technology to them.
In the meantime, the corp bosses built a huge addition onto our building with luxurious
soundproof walls/doors/windows to move in. Big bucks stuff. No expense spared.
Not really, the Chi-Com government OWNERSHIP of businesses is dramatic.
When a chinese government entity (think strawman, shell company, a "holding
company") answerable and subservient to the state party apparatus owns the majority of
any company's stock and/or gives it direction from on high, it cannot be said to be "a
private company". At least not by any kind of western standard of the meaning of the word
"private".
They're trying to fake people out (and succeeding to some degree) as the western mind may
misinterpret it as merely being crony-socialism but in fact it's communist via the shell
corps.
What you describe sounds like fascism i.e. capitalism is allowed, private companies are
allowed but are directly answerable to government.
Anyways you look at it, China has a strong capitalist element. They have private property
now. They have billionaires as a result of these companies FFS. They have a stock market .
They have realestate developers. That's no longer 'communism'.
The largest corporations are government owned and a "private company" is not given
direction by any government entity in what to supply or in what quantities to supply to "the
market", there are no government mandated quotas.
And you are confused (or being evasive) about what socialism and capitalism are, fascism
& communism are both Marxist.
With capitalism, the market decides all, from pricing to profits to wages and companies
rise & fall on what is sold into that market ...thats why rickshaws never caught
on here because people didn't have to eat their horses for meat and we eventually produced
affordable cars for transport...lol.
Need I remind you that the CCP means the Chinese Communist Party?
Perhaps they need some better capitalist marketers to "rebrand" their, ahem,
operation ;-)
"... China assembled an "unreliable entities list" for retaliation against foreign companies, individuals and organizations that "do not follow market rules, violate the spirit of contracts, blockade and stop supplying Chinese companies for noncommercial reasons, and seriously damage the legitimate rights and interests of Chinese companies." ..."
"... And out of nowhere, Trump warned Mexico to stop the immigrant flow in 10-days or face tariffs. Global CEOs who were rushing to rearchitect their China supply chains, digested the risk that these investments could be instantly devastated by some future tariff - imposed to achieve Americas geopolitical objectives - and they prepared to warn shareholders they're putting new investment on hold. As the US treasury yield curve inverted, with 3mth bills at 2.34% and 10yrs at 2.12%. Which of course, is one of the most reliable warnings of looming recession. ..."
"... "Tariffs are being used as a proactive, combative tool. The GDP hit will be at least double. Modelling these tariffs require more complex frameworks." ..."
"... " Global trade was already in the process of fracturing ," added the strategist. "Now Huawei can't use Google's operating system." Their phones are as good as paperweights. "But do you really want to bet that Huawei can't spend the next 6mths building a competing operating system?" We're entering a world of competing superpowers. " The overall impact will be to operate economies with redundant technologies, fewer efficiencies, lower ROEs, lower ROAs. And ironically, or perhaps by design, it'll be bad for profits, but okay for labor ." ..."
Submitted by Eric Peters, CIO of One River Asset Management
"Don't say we didn't warn you!" declared the China People's Daily. And historians rushed to remind us that Beijing used the phrase
in advance of their 1962 border war with India and 1979 war with Vietnam.
China assembled an "unreliable entities list" for retaliation against foreign companies, individuals and organizations that "do
not follow market rules, violate the spirit of contracts, blockade and stop supplying Chinese companies for noncommercial reasons,
and seriously damage the legitimate rights and interests of Chinese companies."
Pence responded by warning Beijing we could double tariffs. "Engaging in activities that run afoul of US sanctions can result
in severe consequences, including a loss of access to the US financial system," warned the US Treasury's undersecretary for terrorism
– you see, the Europeans are building systems to circumvent American sanctions. Today, those sanctions are directed at Iran, Russia,
North Korea, Venezuela, but tomorrow they may be directed at China.
Naturally, the Europeans threatened only themselves - 1,500-year habits are hard to break. Germany and France fought bitterly
over who would become European Commission President. Brussels warned Rome to honor its obligation to contain its growing debt. Italy's
Salvini threatened to launch a parallel currency – step #1 in the process to abandon the euro and default.
And out of nowhere, Trump warned Mexico to stop the immigrant flow in 10-days or face tariffs. Global CEOs who were rushing to
rearchitect their China supply chains, digested the risk that these investments could be instantly devastated by some future tariff
- imposed to achieve Americas geopolitical objectives - and they prepared to warn shareholders they're putting new investment on
hold. As the US treasury yield curve inverted, with 3mth bills at 2.34% and 10yrs at 2.12%. Which of course, is one of the most
reliable warnings of looming recession.
Framework
"Economists generally use tax frameworks to evaluate the trade war," said my favorite strategist. "They calculate a -0.4% hit
to GDP, which is not such a big deal. But they're using the wrong tool." Tax frameworks treat tariffs as a tax. They then model
how a nation's currency adjusts to the tax, how corporate profit margins shrink to absorb the tax, and how consumers shoulder the
remaining burden. "Tariffs are being used as a proactive, combative tool. The GDP hit will be at least double. Modelling these tariffs
require more complex frameworks."
"If all of the affected nations simply agreed to adopt new tax regimes, then the tax framework would work fine," continued my
favorite strategist. "But the world has built specialized supply chains. So if Nation A tries to hurt Nation B, and Nation B is
part of critical supply chains that impact Nation A, then there are many things B can do to harm A in non-linear ways." Banning
rare earth metal exports is a small example. "Once Apple locks down their product production for Nov 2019 release, China knows exactly
how to push that past Feb 2020."
" Global trade was already in the process of fracturing ," added the strategist. "Now Huawei can't use Google's operating system."
Their phones are as good as paperweights. "But do you really want to bet that Huawei can't spend the next 6mths building a competing
operating system?" We're entering a world of competing superpowers. " The overall impact will be to operate economies with redundant
technologies, fewer efficiencies, lower ROEs, lower ROAs. And ironically, or perhaps by design, it'll be bad for profits, but okay
for labor ."
"... "It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides," according to the white paper, which also listed details of what it described as U.S. backtracking. ..."
"... As Vice Commerce Minister Wang Shouwen, who led the working-level team in the negotiations, said China is willing to work with the US to find solutions, but the latter's strategy of maximum pressure and escalation can't force concessions from China: "When you give the U.S. an inch, it takes a yard", he said. ..."
And, as of this weekend, we now appear to be in the "despondent acceptance" phase (unlike
the Kubler-Ross model, acceptance precedes anger and nuclear war), because as Xinhua reported
overnight, China is now laying the blame squarely on the US for the breakdown of trade talks
between the world's two biggest economies, but hinted at its willingness to resume stalled
negotiations with Washington while rejecting any attempt to force concessions from Beijing.
In a
white paper on China's official position on the trade talks released by the State Council
Information Office on Sunday, Beijing made it clear the US government "should bear the sole and
entire responsibility" for the current stalemate, and hit back at allegations that Beijing had
backtracked from its earlier promises.
The trade war has not " made America great again," the white paper said, but has done
serious harm to the U.S. economy by increasing production costs, causing higher prices hikes,
damaging growth and people's livelihoods, as well as creating barriers to U.S. exports to
China.
"It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues,
will only make things worse for all sides," according to the white paper, which also listed
details of what it described as U.S. backtracking.
"The Chinese government rejects the idea that threats of a trade war and continuous tariff
hikes can ever help resolve trade and economic issues," according to the white paper. "Guided
by a spirit of mutual respect, equality and mutual benefit, the two countries should push
forward consultations based on good faith and credibility in a bid to address issues, narrow
differences, expand common interests, and jointly safeguard global economic stability and
development," it said, according to
Bloomberg .
As Vice Commerce Minister Wang Shouwen, who led the working-level team in the
negotiations, said China is willing to work with the US to find solutions, but the latter's
strategy of maximum pressure and escalation can't force concessions from China: "When you give
the U.S. an inch, it takes a yard", he said.
Meanwhile, when asked about US firms’ complaints that customs clearance was taking longer since the start of the trade war, he advised companies to contact the relevant authorities. “If certain firms are faced with specific issues, they can talk to local commerce departments,” he said.
On the increasingly touchy matter of exports of rare earth minerals, Wang repeated Beijing’s comments of the past week. “With the world’s richest rare earth resources we are willing to satisfy the normal needs of other countries,” he said. “But it’s unacceptable if other countries use rare earths imported from China to suppress China’s development.”
But in what could be the worst news for bulls who are clutching at any straw now to indicate an improvement in diplomatic relations, when asked about the possibility of a summit between Xi and Trump on the sidelines of the Group of 20 summit in Osaka, Japan later this month – as suggested by the American president in May – Wang said he had no information on the matter, according to the SCMP.
Shi Yinhong, an adviser to China’s State Council and a specialist in US affairs at Renmin University in Beijing, said that despite the pressure from the US, Beijing had shown restraint in its efforts to fight back... which it has indeed, suggesting that Trump's read of the calculus - one according to which China has more to lose than gain from taking trade war to the next level - is the correct one.
“In the areas of trade and technology, China has less leverage than the US, but it has kept its retaliatory measures within these areas,” he said. “If it extended its efforts to areas like North Korea and Iran, it could do much greater damage to Trump.”
The punchline: when addressing the chances of the two sides achieving a breakthrough in their trade negotiations by the time of the G20 summit, Shi said: “The difference is too wide and would be impossible for them to bridge in a month.”
"... Meanwhile on Thursday a Chinese Foreign Ministry spokesman responded to the White House position at a moment Pompeo keeps up the pressure campaign on European allies, saying, the US has not offered proof that Huawei's products present a security risk. ..."
"... "We hope that the United States can stop these mistaken actions which are not at all commensurate with their status and position as a big country," said spokesman Geng Shuang, according to Reuters. ..."
"... And Huawei, for its part, is reportedly taking steps to block its employees from taking part in technical meetings with American contacts, which has even included sending home American employees that were based at its Chinese headquarters in Shenzen. ..."
Secretary of State Mike Pompeo has again put Germany and the rest of Europe on notice regarding China's controversial
telecom giant Huawei, warning they could be cut off from crucial US intelligence sharing over Huawei's 5G networks now
being built.
Pompeo issued the ultimatum following a meeting with German Foreign Minister Heiko Maas on Friday, saying the decision
on whether to allow Huawei equipment would have severe consequences, according to
Reuters
. His
words came at the start of a five-day European tour: "They [Germany] will take their own sovereign decisions, [but we]
will speak to them openly about
the
risks
... and in the case of Huawei the concern is
it
is not possible to mitigate those anywhere inside of a 5G network
," Pompeo
said
.
Germany, alongside the UK and France, has refused to budge amidst the ratcheting pressure from the US over worries that
China's intelligence is using its next generation networks as "back door" for aggressive telecommunications
eavesdropping.
Pompeo told the news conference further:
"(There
is) a risk we will have to change our behavior in light of the fact that we can't permit data on private citizens or
data on national security to go across networks that we don't have confidence (in)."
As we reported previously the Trump administration
first
notified its Berlin counterparts
of the intelligence sharing concerns in early March, when US Ambassador to Germany
Richard A. Grenell told Germany's economics minister in an official letter that the European ally and intelligence
partner "wouldn't be able to keep intelligence and other information sharing at their current level if Germany allowed
Huawei or other Chinese vendors to participate in building the country's 5G network."
It was noted at the time the warning is
"likely
to cause alarm among German security circles"
amid persistent terror threat, largely the result of Merkel's
disastrous "Open Door" policies which allowed over 1 million middle eastern immigrants into he country. And yet it
appears Germany's national security state establishment has remained unmoved, or at least unable to prevail over
Merkel's government.
Meanwhile on Thursday a Chinese Foreign Ministry spokesman responded to the White House position at a moment Pompeo
keeps up the pressure campaign on European allies, saying, the US has not offered proof that Huawei's products present a
security risk.
"We hope that the United States can stop these mistaken actions which are not at all commensurate with their status and
position as a big country," said spokesman Geng Shuang, according to Reuters.
And Huawei, for its part, is
reportedly
taking steps to block
its employees from taking part in technical meetings with American contacts, which has even
included sending home American employees that were based at its Chinese headquarters in Shenzen.
"... The long, dense economic relationship appears to have passed its peak, writes Patrick Lawrence. ..."
"... The fallout from these mutually imposed taxes on trade will be considerable all by itself. Global supply chains will inevitably be disrupted -- a potential threat to worldwide economic stability. U.S. importers are expected to start shifting purchases away from China in favor of alternative suppliers with lower cost structures. American investors are likely to reconsider the mainland as a production platform, in many cases diverting investment dollars elsewhere. ..."
"... In the financial markets, this process is termed "decoupling." The long, dense economic relationship between the U.S. and China, the reasoning runs, appears to have passed its peak. ..."
"... With bilateral trade talks stalled, both sides have begun to indicate -- directly or by inference -- that they are now prepared to draw blood. Once the long-term damage begins, as appears increasingly likely, it is difficult to see how there will be any turning back from it. ..."
"... The only known back door into Huawei systems was created by the National Security Agency, which hacked its servers at some point between 2010 and 2012; this was revealed in the documents Edward Snowden made public in mid -- 2013. In effect, the U.S. accuses China of doing what it has already done. ..."
"... "When it comes to policy caprice motivated by paranoia and Deep State lies, the attack on Huawei is in a class all by itself," David Stockman, the former White House budget director, wrote on his blog earlier this month. "The whole case has been confected by Washington-domiciled economic nationalists who think prosperity stems from the machinations of the state and that state-sponsored 'national champions' are essential to winning the race for global economic and technological dominance." ..."
"... Last week the president suggested that the Huawei dispute can be negotiated as part of a broader agreement on trade. At the same time, Dan Coats, the director of national intelligence, has been crisscrossing the country to warn U.S. companies, universities, and other institutions of the perils of doing business with China. Coats's focus is on the high-technology sector. ..."
"... There are two lessons to draw from this spectacle. Trump's position on Huawei gives the game away: If the company is truly a national security threat, it makes no sense to offer it as a chip to be bargained in trade talks with Beijing. Equally, Coats's barnstorming tour is a clear indication that the national security apparatus is actively seeking to cast China as a strategic threat to the U.S. -- as the Pentagon declared it to be in a defense review earlier this year. ..."
"... Turning off the supply of rare earths is not the "nuclear option" China may consider it, as there are alternative suppliers. At the same time, the mainland accounts for nearly three-quarters of world supplies. When it blocked sales to Japan during a diplomatic dispute in 2010, prices rose precipitously and there was mayhem among manufacturers dependent on Chinese supplies. ..."
"... Xi made a remark in Jiangxi that is not to be missed. "We are now embarking on a new Long March," he said, referencing the famous retreat Mao led after Chinese Nationalists defeated the Red Army in 1934. "And we must start all over again." ..."
"... Unless Washington opens to a more cooperative partnership with Beijing -- an unlikely prospect -- this could be the moment China begins to displace the U.S. as the preeminent power in the western Pacific. ..."
"... The US has to regain a real economy and stop the insane military spending. Regardless of China. ..."
"... ‘”Trump’s position on Huawei gives the game away: If the company is truly a national security threat, it makes no sense to offer it as a chip to be bargained in trade talks with Beijing.” Absolutely the case. Trump has been caught before in this same kind of contradictory stance, as with tariffs on steel and aluminum. ..."
"... Trump seems to think he can command the wind and the waves. He has an immense ego, and there is the fact that he is a good deal less clever than he thinks he is. ..."
"... Trump believes that by intimidation and threats, he can make something happen that cannot happen through the ordinary operations of the economies. In this we see him most like the thugs that came to run a number of European countries in the 1930s. ..."
"... Trump’s “MAGA” is nothing more than thinking you can make that heart-warming post-WWII slogan, “the American Dream,” come alive again, many decades later and in an entirely different set of circumstances. “The American Dream” was based in a world where almost every competitor was prostrate from war while America remained relatively unscathed. So, America supplied, for a while, a huge share of the world’s demands, but its share has been declining ever since. ..."
"... Naturally, many Americans want to believe otherwise. Trump’s base – the nation’s Wal-Mart shoppers and the residents of its huge gulag of trailer parks – certainly does, and its hopes comes tinged with everything from superstition to religiosity. ..."
"... America’s elites, the members of its power establishment, do not believe in the same way, but they are deeply concerned about America’s relative decline. ..."
"... They do believe that America’s still great remaining strength can be used to extract concessions from the world without sacrificing anything at home and without sacrificing its role as the center of world empire, a role that comes with many perks and privileges ..."
"... One thinks of the infamous German industrialists and bankers’ – as well as notable American ones – early support for Hitler, although I do not mean to say the situations are identical. ..."
"... You can try fighting by the methods Trump is using, but those methods risk, through acts like the blithe laying on of massive new tariffs and sanctions, not only reduced economic activity in the world, they risk ultimately real wars. ..."
"... The real pity is that Trump at his core is not that much different from the rest of the fools who have been leading this country for the past several decades. He’s just “old school” in his style: he doesn’t wear soft kid gloves whilst attempting to strangle his geopolitical competitors the way all his chums before him did, the sonorous Barack Obama included. ..."
"... Constant warfare is a big part of US consumption. ..."
"... It is becoming increasingly clear that the US is subject to an arms industry racket which is draining its resources and ruining its real potential. ..."
"... We are becoming a country of idle over-weight vets running around on motorcycles wearing red MAGA hats, supported by billionaires, while the rest toil. ..."
"... This will likely come to a head sooner rather than later, and the conflict can be understood in broader terms as between a hegemonic global model and a multi-polar global model ..."
"... While confidence that such measures can inflict enormous harm is justified, the corresponding confidence that America’s preeminent position atop the world’s economic structures is not subject to challenge or change is misguided. The challenge has been ongoing for over five years now, and the change will likely appear suddenly. The preference would be for the U.S. guided to a soft landing into a multi-polar world, but Washington’s policy hawks seem committed to rolling the dice. ..."
"... Washington’s policy setters are gangsters who operate largely through intimidation, extortion and racketeering. ..."
"... This trade war sounds dangerous – didn’t the Smoot Hawley tariffs precipitate the great depression? And the inevitable economic war (even if it is a faux war based on lies, driven by the neocons) could well lead to a real war if we let it….. ..."
"... But trade wars are easy to win! Our very smart cheeto-in-chief has told us. You wouldn’t doubt him would you? ..."
"... The US has abdicated their manufacturing and innovative technologies, shutting down heavy industry under Reagan and Bush I (replacing it with a “service economy”) while outsourcing high end technology and offshoring technical jobs, initially to China mostly under Clinton and Bush II. ..."
"... It’s tempting to conclude that tariffs and action against Huawei are part of the same strategy. I don’t think they are. The tariffs are playing to Trump’s voter gallery. ..."
"... So long as the Chinese can find a way to save face AND give face to Trump, compromise is possible. Huawei is about the Deep State being unable to access Huawei’s facilities. Its a double bluff. The NSA etc (via 5 Eyes) have great access to western controlled telecoms. ..."
The long, dense economic relationship appears to have passed its peak, writes Patrick
Lawrence.
Special to Consortium News
P resident Donald Trump's trade war with China is swiftly taking a decisive turn for the
worse.
Step by step, each measure prompting retaliation, a spat so far limited to tariff increases,
now threatens to transform the bilateral relationship into one of managed hostility extending
well beyond economic issues. Should Washington and Beijing define each other as adversaries, as
they now appear poised to do, the consequences in terms of global stability and the balance of
power in the Pacific are nearly incalculable.
The trade dispute continues to sharpen. Later this week Beijing is scheduled
to raise tariffs already in place on $60 billion worth of American exports -- the latest in
a running series of escalations Washington set in motion nearly a year ago. Two weeks later the
U.S., having increased tariffs on $200 billion worth of Chinese products earlier this month, is
to consider imposing levies on an additional $325 billion worth of imports from the
mainland.
The fallout from these mutually imposed taxes on trade will be considerable all by
itself. Global supply chains will inevitably be disrupted -- a potential threat to worldwide
economic stability. U.S. importers are expected to start shifting purchases away from China in
favor of alternative suppliers with lower cost structures. American investors are likely to
reconsider the mainland as a production platform, in many cases diverting investment dollars
elsewhere.
For its part, China is already rotating its gaze westward toward the Middle East and Europe.
As if to underscore the point, the East Hope Group, a large Chinese manufacturer, announced
late last week that it plans to
invest $10 billion in Abu Dhabi's industrial sector. Beijing is already drawing Western
Europe into its trillion-dollar Belt
and Road Initiative . In time, Europe could begin to replace the U.S. as a source of the
foreign investment capital China needs.
Decoupling
In the financial markets, this process is termed "decoupling." The long, dense economic
relationship between the U.S. and China, the reasoning runs, appears to have passed its
peak.
With bilateral trade talks stalled, both sides have begun to indicate -- directly or by
inference -- that they are now prepared to draw blood. Once the long-term damage begins, as
appears increasingly likely, it is difficult to see how there will be any turning back from
it.
Two weeks ago, the White House issued an executive order barring
purchases of telecommunications equipment from any foreign company deemed to pose a threat to
U.S. national security. It also requires American companies to obtain licenses before exporting
U.S. telecoms technology to such firms. While an administration official described the order as
"company and country agnostic," it is all but explicitly intended to damage the global position
of Huawei, the highly competitive Chinese company that is a leader in cellular telephone sales
and 5G telecommunications networks.
Huawei has long been in Washington's sights. Chief among the allegations against it , the
company is accused of providing China with a "back door" into its telecoms networks, so
allowing Beijing to spy on any entity using Huawei equipment. The U.S. has never provided
evidence of this, and both Huawei and Beijing vigorously deny any such arrangement. The
only known back door into Huawei systems was created by the National Security Agency, which
hacked its servers at some point between 2010 and 2012; this was revealed in the documents
Edward Snowden made public in mid -- 2013. In effect, the U.S. accuses China of doing what it
has already done.
"When it comes to policy caprice motivated by paranoia and Deep State lies, the attack
on Huawei is in a class all by itself," David Stockman, the former White House budget director,
wrote on his blog earlier this month. "The whole case has been confected by
Washington-domiciled economic nationalists who think prosperity stems from the machinations of
the state and that state-sponsored 'national champions' are essential to winning the race for
global economic and technological dominance."
Contradictory Narrative
There is little question that freezing Huawei out of the U.S. market and depriving it of
U.S. -- made components will do damage, in all likelihood lasting, to the company. The
Eurasia Group terms the administration's executive order "a grave escalation with China
that at a minimum plunges the prospect of continued trade negotiations into doubt." But as it
has on other policy questions, the Trump administration is tripping over its own contradictory
narratives at this point.
Last week the president suggested
that the Huawei dispute can be negotiated as part of a broader agreement on trade. At the same
time, Dan Coats, the director of national intelligence, has been crisscrossing the country
to
warn U.S. companies, universities, and other institutions of the perils of doing business
with China. Coats's focus is on the high-technology sector.
There are two lessons to draw from this spectacle. Trump's position on Huawei gives the
game away: If the company is truly a national security threat, it makes no sense to offer it as
a chip to be bargained in trade talks with Beijing. Equally, Coats's barnstorming tour is a
clear indication that the national security apparatus is actively seeking to cast China as a
strategic threat to the U.S. -- as
the Pentagon declared it to be in a defense review earlier this year.
Beijing has so far shown restraint in its responses, but there are signs it is stiffening
its spine. On Friday it issued a draft of its own set of
tighter regulations governing potential cyber-security breaches.
Xi Jinping had earlier visited a rare-earth processing facility in Jiangxi Province -- a
move read as the Chinese leader's subtle suggestion that Beijing may consider blocking exports
of minerals that are essential components in a variety of high-tech devices.
Turning off the supply of rare earths is not the "nuclear option" China may consider it,
as there are alternative suppliers. At the same time, the mainland accounts for nearly
three-quarters of world supplies. When it blocked sales
to Japan during a diplomatic dispute in 2010, prices rose precipitously and there was
mayhem among manufacturers dependent on Chinese supplies.
Xi made a remark in Jiangxi that is not to be missed. "We are now embarking on a new Long
March," he said, referencing the famous retreat Mao led after Chinese Nationalists defeated the
Red Army in 1934. "And we must start all over again."
With formal talks lapsed for the time being, there is now no shortage of signaling from
either Washington or Beijing. But Xi, China's most assertive leader since the Great Helmsman,
appears to understand the moment as larger than mere gestures. U.S. -- China relations have
entered a decisive phase. America cannot win in a long-term confrontation with China.
Unless Washington opens to a more cooperative partnership with Beijing -- an unlikely
prospect -- this could be the moment China begins to displace the U.S. as the preeminent power
in the western Pacific.
Patrick Lawrence, a correspondent abroad for many years, chiefly for the International
Herald Tribune , is a columnist, essayist, author, and lecturer. His most recent book is "Time
No Longer: Americans After the American Century" (Yale). Follow him @thefloutist . His web site is www.patricklawrence.us.
Support his work via www.patreon.com/thefloutist .
If you value this original article, please considermaking a donationto Consortium News so we can bring you more stories like this
one.
dean 1000 , May 31, 2019 at 11:12
The Empire the US built and acquired after WWII could not last no matter who is president.
We have been advised of this coming reality for 30 or 40 years. Washington can’t adjust
b/c it is controlled by a two party system that is owned by the 10%.
Since wall street bought a bunch of manufacturing companies and exported them to China the
US hasen’t had a real economy. It has been one bubble economy after another. A stock
bubble, tech bubble, dot com bubble, and a killer 8 trillion $ housing bubble, and a
completely unnecessary bank bailout.
The US has to regain a real economy and stop the insane military spending. Regardless of
China.
Zhu , May 31, 2019 at 06:14
Trump, in effect, is walling the US off from the rest of the world, as Ming-Qing dynasty
China did until 1911.it turned out badly for Chinese people. It’s likely to turn out
badly for the US.
Truth , May 29, 2019 at 17:27
One solution to rare minerals is to break the illegal clinton & bush era mining
agreements around the Grand canyon and Nevada which has turned our resources into cash from
russia and canada into the pockets of the deep state “elected” in D<C and
these states. It would be nice if every now and then a real journalist who publishes a full
story would get a complete story published. Consortium does better than most but still needs
to step up their game.
An article that includes explaining why all NAFTA and trade agreements since Kennedy have
been total sellouts of USA in exchange for party owned companies of the "elected"
‘”Trump’s position on Huawei gives the game away: If the company is
truly a national security threat, it makes no sense to offer it as a chip to be bargained in
trade talks with Beijing.” Absolutely the case. Trump has been caught before in this same kind of contradictory stance, as with tariffs on
steel and aluminum.
I think the truth is that he is a man ready to use any gimmick to get what he wants,
regardless of logic or facts or principle. Another way to say that is to speak of a criminal
mentality.
It is exactly what the mob has always done in making someone an offer they can’t
refuse. “Don’t want to pay protection money? Well, don’t be surprised if
your joint gets burned down.”
Trump essentially wants to transfer huge amounts of trade surplus from China to the United
States, not by any change in the economic activity or policies of the two countries but by
fiat.
But of course, the world doesn’t work that way.
The United States’ trade deficits are its own doing, not China’s. The United
States doesn’t save, and it doesn’t tax adequately. It consumes, and a productive
country like China is only too pleased to supply what it wants. That makes a flow of goods in
one direction and a flow of money in the other. Economics 101.
Trump seems to think he can command the wind and the waves. He has an immense ego, and
there is the fact that he is a good deal less clever than he thinks he is.
Trump believes that by intimidation and threats, he can make something happen that cannot
happen through the ordinary operations of the economies. In this we see him most like the
thugs that came to run a number of European countries in the 1930s.
He genuinely does not understand – or if he understands, he doesn’t care
– what is behind the surpluses and deficits and just insists that they will be changed
as a matter of his personal will. Does that not remind us of anyone from history?
At any rate, it comes down to his admiring “the strong man” and believing he,
and he alone, can play that role for the United States. And there are more than a few
Americans that believe him too. After all, the great American journalist and historian who
documented the rise and fall of the Nazis, William L. Shirer, once said that he thought the
United States might be the first country to go fascist voluntarily. He based that thought on
his observation of many attitudes and beliefs and trends in the United States.
Trump’s “MAGA” is nothing more than thinking you can make that
heart-warming post-WWII slogan, “the American Dream,” come alive again, many
decades later and in an entirely different set of circumstances. “The American
Dream” was based in a world where almost every competitor was prostrate from war while
America remained relatively unscathed. So, America supplied, for a while, a huge share of the
world’s demands, but its share has been declining ever since.
In today’s world, all the old competitors have not only come roaring back, but a lot
of new ones have come into being, and that reality is the future.
Naturally, many Americans want to believe otherwise. Trump’s base – the
nation’s Wal-Mart shoppers and the residents of its huge gulag of trailer parks –
certainly does, and its hopes comes tinged with everything from superstition to
religiosity.
America’s elites, the members of its power establishment, do not believe in the same
way, but they are deeply concerned about America’s relative decline. They have been
working away for years on the problem, as in their past bashing of Japan or China, but they
are not ready to work for fundamental change in America, as, for example, in its tax and
savings structures and its grotesque inequalities.
They do believe that America’s still great remaining strength can be used to extract
concessions from the world without sacrificing anything at home and without sacrificing its
role as the center of world empire, a role that comes with many perks and privileges. And
while most of them do not like Trump’s style or background, I think for now they are
willing to see whether he can get the ugly job done. One thinks of the infamous German
industrialists and bankers’ – as well as notable American ones – early
support for Hitler, although I do not mean to say the situations are identical.
You can try fighting by the methods Trump is using, but those methods risk, through acts
like the blithe laying on of massive new tariffs and sanctions, not only reduced economic
activity in the world, they risk ultimately real wars.
Even if they don’t go so far as war, they are shaking up some fundamental post-WWII
arrangements that America is going to miss. Decades-old allies, like some of those in Europe,
are beginning to re-think their relationship with such a hostile, single-minded America and
to glance around in other directions, as towards the very China Trump attacks and towards
Russia, a country whose openness to business would have resembled a miracle under the
communists and whose wealth of natural resources offers altogether new opportunities.
Realist , May 30, 2019 at 01:32
The real pity is that Trump at his core is not that much different from the rest of the
fools who have been leading this country for the past several decades. He’s just
“old school” in his style: he doesn’t wear soft kid gloves whilst
attempting to strangle his geopolitical competitors the way all his chums before him did, the
sonorous Barack Obama included.
The problem that bothers the US policy makers is real: what to do about the balance of
payments deficit? The Trump team seems to be nit-picking areas where imports can be reduced,
for instance by blocking Chinese tech exports.
All of these moves are nonsense because they
miss the real problem: the US economy has a long standing structural quandary. It devotes so
much of its resources to flashy, ornamental and useless defense high tech weapons and gismos
that it is running itself into the ground.
It is becoming increasingly clear that the US is
subject to an arms industry racket which is draining its resources and ruining its real
potential. What needs to be done is to cut the military budget in half and redirect the
resources to improving the infrastructure of the country and making investment once again
profitable inside the USA. Where is the politician who dares make these proposals? Wake up
America. We are becoming a country of idle over-weight vets running around on motorcycles
wearing red MAGA hats, supported by billionaires, while the rest toil.
bardamu , May 29, 2019 at 00:07
It is strange to discuss confrontation with China only in terms of trade deals so soon
after Obama’s “pivot to Asia,” Trump’s militarism with respect to
North Korea, and the militarism of both the Obama and Trump regimes as regards Russia and
also through western and central Asia, which are clearly areas in which China has no less
natural interest than the United States.
Among these, surely tariffs are the least of most anyone’s worries.
jaycee , May 28, 2019 at 16:27
This will likely come to a head sooner rather than later, and the conflict can be
understood in broader terms as between a hegemonic global model and a multi-polar global
model.
The hegemonic global model has been an American project since the demise of the Soviet
Union, usually presented in euphemism – “globalization”, the
“exceptional” nation, the “rule-based international system”, etc. In
recent years, US politicians have overstepped by a reckless use of the international
financial system to deter designated adversaries.
Presently moving through Congress are bills
designed to use sanctions (“maximum pressure”) to attack both Russia’s Nordstream natural gas pipeline to Europe and China’s claims in the South China Sea.
While confidence that such measures can inflict enormous harm is justified, the corresponding
confidence that America’s preeminent position atop the world’s economic
structures is not subject to challenge or change is misguided. The challenge has been ongoing
for over five years now, and the change will likely appear suddenly. The preference would be
for the U.S. guided to a soft landing into a multi-polar world, but Washington’s policy
hawks seem committed to rolling the dice.
Realist , May 28, 2019 at 17:41
Washington’s policy setters are gangsters who operate largely through intimidation,
extortion and racketeering. If you look up the definitions of those words you will see they
describe to a tee what the American government does. Shutting down Nordstream (and all the
other sanctions over transparently absurd claims) is meant entirely to damage the Russian
economy and destabilise the country’s government, plus to steal away customers in the
energy sector.
They are protecting nobody’s “rights of navigation” in the
South China Sea, rather they are telegraphing to Bejing that Chinese trade with the world can
be shut down on a moment’s notice by Uncle Sam, specifically they are trying to put the
kibosh on the Chinese “Belt and Road Initiative.” The cusses in Washington have
gone so far as to tell Canada that it does not have control over the Northwest Passage, long
considered to be within its internal waters–you know, all those islands connected by
ice for most of the year. Hence forth, Washington decreed that they are international waters
and that it would control them. If that’s being a good neighbor to a country that has
supported your every crazed demand for over 200 years, the “Great White North”
needs to get a restraining order from the World Court against Uncle Sam, plus they need to
find better friends elsewhere on the planet.
I tend to substitute the euphemism “rogue nation” for those others.
Excellent comment.
Realist , May 28, 2019 at 16:22
India, Vietnam, and the Philippines will thank China for the opportunity to manufacture
schlock for sale at Wal*Mart and for the major investments that new Chinese shareholders will
have made in their companies. These countries will now have wares to trade along the Belt and
Road linking all of Eurasia where everyone keeps getting richer by the day. Since people the
world over, except for congenitally retarded neocons, know a good deal when they see one, all
these countries will start telling Uncle Sam to cram it when he keeps demanding they sanction
their new found friends and trading partners because freedom and democracy, Putin and the
other names on Sam’s shit list. They’ll start deciding that all those American
bases give them no clout, no influence, no pay-off and no security… nothing useful at
all, unless prosecuting the crimes and repairing the damage caused by the garrison soldiers
provides local entertainment. It will be time to relocate those rat-holes to the American
side of Trump’s Wall.
Will the silver lining be new American self-sufficiency in manufacturing? The development
of needed resources using new innovative technologies? A plethora of jobs at good pay for
working American men and women? Will American oligarchs once again begin investing in America
itself? If you can arrange that with American greenbacks now buying a tenth as many Yuans,
Euros, Yen, Rupees, Rubles and even Pesos than they once did because Trump decided to
“shake things up,” maybe you can sell all those treasuries needed to run the
government in Washington to the Tooth Fairy.
It’s not true that “you can never go
home again:” just watch the dollars come flooding back to North America when the whole
rest of the world stops trading in them. This whole bit of history should be engaging to
watch on some future television show similar to James Burke’s
“Connections.”
If only Barack Obama had eased up on the extreme Trump bashing at
that White House Correspondents’ Dinner.
Harpo Kondriak , May 28, 2019 at 20:13
“Watch those dollars come flooding back” – when the real fun starts.
Those that don’t understand why there has been little inflation from the bank bailouts
will get their answer. And they won’t like it.
Seamus Padraig , May 28, 2019 at 14:46
As a life-long protectionist, I always believed that our foolish dependence on imports
would ultimately end in tears, and it is now clear how right I was. Just to think: we could
have saved ourselves all this trouble and misery simply by voting down NAFTA and declining to
extend Most-Favored Nation trade status (as it used to be called) to China 25 years ago. But
now, putting our industry back on track is really gonna hurt. Pity …
Zhu , May 31, 2019 at 06:39
Any US reindustrialization is likely employ robots. The homeless will just keep on
increasing.
Godfree Roberts , May 28, 2019 at 12:29
“Europe could begin to replace the U.S. as a source of the foreign investment
capital China needs.”?
China is the leading recipient of FDI but its need for foreign capital is rapidly diminishing
and it is the world leader in IP
Zhu , May 31, 2019 at 06:40
A fair amount of foreign investment is laundered bribe money from China.
evelync , May 28, 2019 at 11:28
This trade war sounds dangerous – didn’t the Smoot Hawley tariffs precipitate
the great depression?
And the inevitable economic war (even if it is a faux war based on lies, driven by the
neocons) could well lead to a real war if we let it…..
I can’t help but secretly imagine that perhaps the retaliation that Patrick Lawrence
writes about – namely China’s shift to other trade partners – happens
smoothly and quickly enough to deprive our neocons of their super power resources to put an
end to what Charles Misfeldt in his comments refers to as Crooks, liars, thieves, cowards and
traitors running things…..errr ruining things.
I know that’s not the answer because it could be devastating too.
It’s up to the electorate to shift away from the ideologues, both neoliberal and
neocons.
But will we demand better government?
Most politicians in power have been too afraid to challenge the idea of
“exceptionalism” which is used to keep the primitive war machine going.
Thanks for the article and the interesting and informative comments….much
appreciated…
Jeff Harrison , May 28, 2019 at 11:19
But trade wars are easy to win! Our very smart cheeto-in-chief has told us. You
wouldn’t doubt him would you?
Actually, one wonders why anyone takes the US and its accusations seriously. Especially by
the European vassal states. Yes, your equipment/software will have a backdoor if the US wants
one there. That much is clear from the Snowden releases. And a Reuters report this morning
gives a hint at how it’s done. Huawei apparently is continuing to make the mistake of
sending things out via FedEx. Magically, two of the parcels wound up in the US without the
benefit of Huawei changing their shipping request. Huawei would never have known if they
hadn’t looked at the routing of the parcel after they got it. Hopefully, there
wasn’t any sensitive information in the documents routed to the US because it’s a
sure thing that the USG now has copies of them. Same for the European vassals. Angela
Merkel’s phone hacked. Electronic interception equipment installed on undersea
telephone cables. That’s before we get to the NSA office in all the telecoms spying on
us. Most of the world’s telecommunications run through the US. So, not only do we get
to listen in on a phone call from Paris to Des Moines, we get to listen in on one from Paris
to Shanghai.
And the European vassals continue to toe the American line albeit a bit more
reluctantly.
michael , May 28, 2019 at 11:15
The US has abdicated their manufacturing and innovative technologies, shutting down heavy
industry under Reagan and Bush I (replacing it with a “service economy”) while
outsourcing high end technology and offshoring technical jobs, initially to China mostly
under Clinton and Bush II.
Short-term profits soared with the cheaper labor, but giving away
high end technologies leading to innovations for China was resoundingly stupid. Chinagate was
(is) much more dangerous than Russiagate to National Security.
Having given away
America’s capabilities to China, no amount of negotiating will “level the playing
field” . We can no longer compete with China not because of labor costs, but because of
the improvements the Chinese have made in so many fields over twenty years, while America sat
stagnant (except of course for overpriced weapons and surveillance tools to watch American
citizens).
Zhu , May 31, 2019 at 06:47
The US has always imported its Einsteins and Teslas. We Americans are educated to be
cannon fodder in wars of vanity. At best, we’re educated to be Trump – Romney
style connivrrs and crooks.
Historically, when two hegemonic powers clash the result is always war. What we are
witnessing between Washington and Beijing today is no different. But Washington will not
allow China to ‘displace the US as the preeminent power in the western Pacific.’
The trade war will become world war. https://www.ghostsofhistory.wordpress.com/
does not have a valid certificate (Firefox warned me).
Charles Misfeldt , May 28, 2019 at 08:44
I look at this picture and see all the representative’s on America’s side of
the table are conservative scumbags who have no intention of engaging in behavior that
benefits myself or the majority in America. Crooks, liars, thieves, cowards and
traitors…
MichaelWme , May 28, 2019 at 06:55
“a spat so far limited to tariff increases”
Not quite. The US has announced that any Chinese person travelling outside of China can be
arrested, as it had Meng Wanzhou arrested in Canada for selling Huawei phones to Iranians.
China threatened to execute 3 Canadians in retaliation, so Canada released Ms Meng from
prison and put her under house arrest while the legal processes of extradition are now
thought to require many years.
China hasn’t executed the 3 Canadians, and Ms Meng is in
her C$20 million home, and is likely to remain there for the foreseeable future. What
happened to Ms Meng can happen to any Chinese executive who travels outside China to the EU
or the Americas or Japan.
E Wright , May 28, 2019 at 04:50
It’s tempting to conclude that tariffs and action against Huawei are part of the
same strategy. I don’t think they are. The tariffs are playing to Trump’s voter
gallery.
So long as the Chinese can find a way to save face AND give face to Trump,
compromise is possible. Huawei is about the Deep State being unable to access Huawei’s
facilities. Its a double bluff. The NSA etc (via 5 Eyes) have great access to western
controlled telecoms.
They don’t want to lose that access by allowing an outside
operator, so they accuse Huawei of what they are doing, on the assumption that Beijing does
what they do.
A January 2018 Bloomberg article suggests that Chinese officials may reduce their purchases
of U.S. government bonds. It is very unlikely that China can do so in any meaningful way
because doing so would almost certainly be costly for Beijing. And even if China took this
step, it would have either no impact or a positive impact on the U.S. economy.
China reduced its holdings of U.S. debt in March by about $20.5 billion, bringing its
overall ownership down to $1.12 trillion.
There was some more detailed coverage of this not long ago, probably on Strategic Culture.
China has largely stopped buying US treasuries for a few years now, and more recently has
been very slowly reducing its holdings. It has to recycle its US dollars from its exports to
the US somehow - instead of buying US treasuries and thereby funding the US military
encirclement of China, it is using them for infrastructure investments in Eurasia under BRI -
much of that is denominated in US dollars.
So that Carnegie Endowment crap is nothing but mindless bullshit propaganda*. No wonder
the US fails in everything it tries to do these days - these are the sort of idiots who
"advise" the US government what to do!!
As to that troll - B's advice is always this: Don't feed the trolls
* Disclaimer - I haven't read the troll's links, nor do I intend to.
Russia has largely eliminated its holdings of US treasuries. Many other countries have
also reduced their holdings, including several US allies (eg Japan, if I recall correctly).
Many countries in Eurasia now have huge gold reserves instead, which is a much better bet -
not just Russia and China but also Kazakhstan, for example.
China reduced its holdings of U.S. debt in March by about $20.5 billion, bringing its
overall ownership down to $1.12 trillion.
Those U.S. Treasuries fluctuations are very likely following trade movements rather
than political intentions. As commented before, China's enormous exports require large-scale
FX handling and USTs are the easiest way to do that.
It's not a credible political threat to sell those off, as the next wave of 'QE' money
printing is imminent and it will specifically target USTs (per Bloomberg article two days
ago, with projected Fed balance sheet to soon grow beyond the recent peak). In other words,
anything China might sell will be absorbed by the Federal Reserve with freshly printed money.
In the scheme of the money printing madness, another trillion USD is not a large
amount.
Why has Russia then sold their USTs? Probably for fear of being disconnected from the
SWIFT system and being stuck with worthless paper. In any case Russia's total divestment of
their entire UST stock didn't register in the ebb and flow of the market.
President Trump loves to blame China for the job losses that have devastated American
workers under globalization. But the truth is that Trump is blaming the wrong party. Trump's
reckless trade war against China is misguided and amounts to a colossal charade that will not
solve the actual problem.
Yes, it is true that numerous American manufacturing jobs have been shipped overseas to
China, thereby leaving American workers jobless and suffering. But China did not steal these
jobs.
No. These jobs were given to China. It was all legal and legitimate. China merely accepted
the gift.
What would anyone expect China to do? Accepting these jobs was a perfectly rational course
of action.
China was an underdeveloped nation with a large population of poor people willing to work
for a fraction of the hourly wages of American workers. And then corporations came along and
presented China with an attractive offer: We would like to build manufacturing plants in China
and hire droves of your unemployed people to work there. What was China supposed to do?
Naturally, China said yes.
This is hardly stealing.
Are You Tired Of The Lies And Non-Stop Propaganda?
It is true that these new jobs in China were intended to displace American workers. But does
that concern belong to China? Does China have the responsibility to care for the well-being of
American workers? Is China supposed to prioritize American workers over its own workers?
Of course not.
China is supposed to look out for itself and for its own workers, not for American workers.
Thus it was perfectly proper for China to allow the manufacturing plants to be built in China
and employ Chinese workers. China did not steal these jobs.
So if China is not at fault, then who is to blame for the devastation caused to American
workers?
The answer is plain to see, and it lies within our own shores. The fault belongs squarely
with corporate America.
It was corporate America that made these decisions. Corporate America decided to close their
American plants and open new plants in China. Corporate America decided to lay off multitudes
of American workers and ruin entire American communities.
And who profited from the destruction to American workers? It was the wealthy executives and
shareholders of American corporations. They earned millions of dollars for themselves by
cutting the costs of their workforce.
This is part of the larger trend of economic inequality that is eroding the entire middle
class in America. Wealth is being shifted away from the workers down below and transferred up
into the hands of the wealthy executives and shareholders at the top.
Trump blaming China is nonsense. China is not at fault. To be sure, China is hardly an angel
and indeed engages in improper trade practices. But even if China agreed to whatever
bone-headed demands Trump is seeking, the problem still would not be solved. The truth is that
America cannot possibly compete against China on labor costs. The standard of living is much
lower in China and thus Chinese workers are willing to accept wages far below living wages in
America. So corporate America will continue to transfer more and more jobs to China and
elsewhere. If we do not address this fundamental economic reality, then we will never solve the
problem.
Trump blaming China has an insidious aspect to it as well. Focusing all the ire upon China
is a grand misdirection that conceals the true culprit, namely, the super-rich corporate
executives and shareholders in America.
This is part of Trump's standard playbook. Trump falsely proclaims to be fighting for
blue-collar workers, when in truth, Trump acts entirely in favor of the rich at the top.
Surprisingly, this seems to work. Some of the hard-working Americans who are being crushed
by Trump's idiotic trade war and who should be denouncing Trump, nonetheless praise him for
standing up to China, believing that Trump is fighting for blue-collar jobs. It is painful to
witness such good people falling victim to Trump's despicable con job.
In order to actually save the middle class, we need to focus on the true cause of the
problem. We must direct our great powers of reform where they belong -- upon the wealthy
executives and shareholders of corporate America who caused this problem in the first
place.
The nature of the problem is that corporate America has no incentive to protect American
workers. In fact, corporate America has every incentive to harm American workers by shifting
their jobs overseas.
So the financial incentives must be reconfigured. If corporate America is going to ship
American jobs overseas, it must not be permitted to pocket all the profits themselves and leave
their displaced workers with nothing. Instead, corporations that send jobs offshore must be
required to sufficiently compensate their displaced American workers. Executives and
shareholders must not be permitted to enrich themselves unless and until their workers are
financially secure.
Our society must favor people over profits, not profits over people.
This article was
originally published by "
Salon " -
Amid the escalating economic war between the
US and China, discussions have intensified on how Beijing might stand up to the economic
power of America,
especially given that the global economy is increasingly dependent
on the US dollar as the main currency for international trade, and the closing of US markets
could do some serious damage to China's export-oriented companies. China's main foreign-policy
publication, the
Global Times
, points to three trump cards that Beijing could use
to at least level the playing field in its fight with the Trump administration and cause
appreciable harm to the US economy, possibly forcing its opponent to temporarily scale back
its ambitions.
According to an
article
in the
Global Times
by a professor at the Renmin University of China, the three
trump cards are:
1) banning the export of rare earths to the US;
2) blocking US companies' access to Chinese markets; and
3) using China's portfolio of US Treasury bonds to bring down the US government debt
market.
Each of these trump cards are worth looking at in detail,
both in terms
of their impact on the US economy and also in terms of any possible retaliation from the
US and the repercussions for the global economy as a whole.
Banning the export of rare earths to the US would actually be a pretty serious
blow for US electronics manufacturers and, indeed, US high-tech manufacturers generally.
This is because rare earths are a key raw material for the production of smartphones, various
chips, and other high-value-added products that are the biggest cash cows of US companies
such as Apple and Boeing.
President Donald Trump during a meeting with Chinese Vice Premier Liu He over trade
talks in the Oval Office, February 22, 2019
Reuters, an agency one could hardly accuse of sympathising with Beijing,
reports
: "The United States has again decided not to impose tariffs on rare earths and
other critical minerals from China, underscoring its reliance on the Asian nation for a
group of materials used in everything from consumer electronics to military equipment."
China does not exactly have a monopoly on such materials, but the market would
definitely be in short supply
without Chinese exports, with all the price implications
that would bring. Moreover, it is likely that some deficit positions will be impossible
to close no matter how much money is involved.
Not everything is that simple, however. Should such a ban be introduced, then
Beijing will encounter certain technical difficulties.
If sanctions are only imposed
on US companies, then they will still be able to purchase the necessary materials through
Japanese or European straw buyers, making the embargo pointless. But if China imposes a
total export ban, then it won't just be US companies that suffer but European ones as well,
leading to EU reprisals against Chinese exporters to Europe. This would be very painful
for China, especially given the economic war with the US that is making access to European
markets invaluable to the Chinese economy.
It appears that a ban on rare earth exports is a powerful weapon, but its use will require
the utmost delicacy and serious diplomatic efforts to avoid any extremely unpleasant side
effects.
The second trump card mentioned by the
Global Times
is blocking US
companies' access to the fast-growing and extensive Chinese market.
This should
be looked at from a political, rather than economic, point of view (although the latter
may seem logical). The aim of such restrictive measures is not to inflict unacceptable damage
on the US economy, but to make the full might of America's corporate lobbying machine work
against Donald Trump and support his political opponents.
According to
the S&P Dow Jones Indices, Asia only accounts for around 14 per cent of
the sales of S&P 500 companies. If we assume that China makes up the majority of this, then
not even a complete closure of the Chinese markets would be a disaster. There are a few
important details, however.
First,
China is the only (and final) market for sales growth for many US
companies.
So if China closes, the graphs at business presentations won't be
showing any kind of growth.
Second,
China plays a key role in many production chains that end with sales
in the US and other markets
. A loss of access to Chinese production would therefore
severely damage the competitiveness of American companies on the world (and even on
the US) market, especially if their European and Japanese competitors retain complete
access to China's production facilities.
As a result, the profits of US companies and the future of the American stock
market (which is a key political barometer given that many Americans have invested their
savings in shares) would be at risk.
It might be possible to offset these problems
by transferring production to other Asian countries with cheap labour and favourable terms,
but this couldn't be done quickly and it would be risky, given that Trump is waging trade
wars with everyone from the European Union to loyal US allies such as Japan and India. In
light of this,
US companies will have a huge incentive to prevent Trump from being elected
for a second term, and the lobbying and political capabilities of that part of the US corporate
sector that will suffer the most from this trump card could really play a key role in the
political victory of Trump's opponents.
The third trump card involves China dumping its portfolio of US Treasury bonds.
The
Global Times
writes: "China holds more than $1 trillion of US Treasury bonds.
China made a great contribution to stabilizing the US economy by buying US debt during the
financial crisis in 2008. The US would be miserable if China hits it when it is down." One
can conclude from this that
Beijing will most probably save dumping its portfolio
of US treasury bonds for dessert – in that it will have the biggest impact when the US stock
market is experiencing its next crisis.
China's Vice Premier Liu He (left) speaks during a meeting with President Donald
Trump (right) in the Oval Office of the White House on February 22, 2019
The move is not likely to cause catastrophic damage in and of itself (although the value
of US bonds will definitely fall), but if it is done at the moment when America is most
vulnerable, then China's portfolio may well end up being the straw that breaks the camel's
back.
Beijing is not displaying a particularly cocksure attitude.
As the
Global Times
' editor-in-chief quite rightly notes on
Twitter
:
"Most Chinese agree that the US is more powerful than China and Washington holds
initiative in the trade war. But we just don't want to cave in and we believe there
is no way the US can crush China. We are willing to bear some pain to give the US a
lesson."
As China lays its trump cards on the table, the world's globalised economy will
creak and collapse.
Globalisation is going backwards, and chances are we'll
end up with a completely different economic system that has more protectionism. Instead
of a global market, there will be several large regional markets with their own rules, dominant
currencies, technical standards, and financial systems.
Just as the US attack on Huawei is shortsighted
and will have serious consequences for USA,
the same would apply to China if they were to
reciprocate.
China wants to boost international
trade, not harm it, so they will work around
the bans to promote trade with others (long
term strategic play), not go head to head. I
suspect China may do something small just for
domestic optics, but the smart play is to let
the consequences of US actions play out on US
businesses, whilst boosting import substitution
and alternative supply chains.
I don't believe rare earth exports will be
banned (they may be restricted a bit as part
of a long term protection of domestic supply)
and I don't expect US Treasuries to be dumped
(buying at any scale had already ceased).
This isn't about backing one side over the
other - I just think one party is going to play
this smarter than the other.
This is a copy paste article. Why are all
these so called articles parrotting the same
line: Rare earth monopoly, whereas in
reality, they can' t even name the product
of dependency and how much it would cost to
find a different supplier.
If sanctions are only imposed on US
companies, then they will still be able to
purchase the necessary materials through
Japanese or European straw buyers, making
the embargo pointless. But if China imposes
a total export ban, then it won't just be US
companies that suffer but European ones as
well, leading to EU reprisals against
Chinese exporters to Europe. This would be
very painful for China, especially given the
economic war with the US that is making
access to European markets invaluable to the
Chinese economy.
If that is all the options they have,
they got nothing!
China watchers,
economists, and investors have been forming
battle-lines for years as they debate the
true strength and sustainability of China's
economy and its role as a global player.
Those of us that paint a picture of future
collapse and a day of reckoning are often
accused of spreading "doom-****" when we
claim that the Chinese have masked over
their dire situation by continually
expanding credit.
In January, Beijing injected a staggering
$685 billion in new credit into its
financial system and the money continues to
leak out causing assets to rise across the
globe. Today China continues to prop up the
unpropable, and yes, while no such word
exists, when it comes to China's economy it
should, for "unpropable" describes the
financial collapse that can only be
postponed but not stopped.
The article
below argues that this will have a major
impact in currency markets going forward.
Big Bad Wolf, 5G can wait, it's a luxury not
a necessity. Our networks run plenty fast
and, like Europe, we can pay higher prices
for a local workforce. China works due to
slave labor, if the people there wake up
they are done. That's why a complete
security state is necessary. Nip that
awareness in the bud. Now, go back to
Germany and celebrate Islam.
We'll just starve the rats out. China has
zero hold over us, there is nothing that
they make or export that cannot be
replaced. Will prices of some goods rise,
yes, but at the end of the day we don't need
them as much as they need us.
3 dumb cards. Strategical US dumb thinking.
US have a very short term strategy. That's
easy to understand. US will have elections
in 1.5 years and the campaign for election
is knocking at the door. China has a long
term strategy. China do not have elections.
Those US guys simply do not understand this.
rare earths (RE). Look at Russia. It
provides US with rocket engines and take
US cosmonauts to ISS. Why? To slower the
research. If Ru will not sale, the US
will accelerate the development of space
ships. So will do China with RE. They
will provide RE, maybe it will increase
the price a bit.
blocking US companies' access to
Chinese markets. Why you should do this?
China needs some US products which do
not have replacements or are protected
by IP laws. And to be clear. It is also
easier to import legally a product and
reverse engineer it, that to acquire it
illegal or spying in other countries
dumping US Treasury. Russia had far
more less US Treasury. They gradually
dump them not to interfere with the
market price. They do not want to loose
large amounts of money. But if China
sells all of them together US dollar may
crash and with it all China's financial
assets. What if US will print trillions
of dollars? US will loose, but also
China.
US is still the larger economy. Those
measures are affordable only if China is far
ahead of US. All this dumb cards will
backfire in less than 5 years. US sanctions
just showed the week points in China's
development. They will address them in order
to neutralize the effects. What should they
do? They have to look north and do what
Russia did. They will invest in software,
research, they will substitute the products.
They should just develop themselves
independent from US system. Also they will
gradually sale dollars and US Treasury.
1) banning the export of rare earths to the
US; (Hurts China exporters too)
2) blocking US companies' access to Chinese
markets; (US companies pull back US dollar
invested)
3) using China's portfolio of US Treasury
bonds to bring down the US government debt
market. (US buys back without a problem).
If China depends on this 3 matters, then it
has no Trump Cards,
President Xi's trade war is a threat, no
doubt. China's trade war against the United
States has resulted in hollowed out cities
where a once strong manufacturing sector
supported communities across the nation.
Have no illusions, this war that Xi is
waging against America is something that has
hurt us for thirty years and will likely
continue to do so. Best to fight back now
while we still can.
China will do none of these -- neoliberalism
is the reason. The key to imploding the
amerikan rat regime is to STOP buying
amerikan goods and especially services of
ANY kind...... much of the stuff is junk
anyway and can be replaced with far higher
quality goods and services available from
other states and nations.
Banning the export of rare earths to
the US....Not everything is that simple,
however. Should such a ban be
introduced, then Beijing will encounter
certain technical difficulties. If
sanctions are only imposed on US
companies, then they will still be able
to purchase the necessary materials
through Japanese or European straw
buyers, making the embargo pointless.
But if China imposes a total export ban,
then it won't just be US companies that
suffer but European ones as well,
leading to EU reprisals against Chinese
exporters to Europe. This would be very
painful for China, especially given the
economic war with the US that is making
access to European markets invaluable to
the Chinese economy.
Alternatively, China could impose quotas
on its exports to Japan and Europe based on
their current need of rare earth. It'll be
their prerogative if they want to re-export
to the US at (much higher) price. OR they
could use the US trademarked brute, thuggish
method of sanctioning those who dare to do
business with the US.
The second trump card mentioned by
the Global Times is blocking US
companies' access to the fast-growing
and extensive Chinese market. This
should be looked at from a political,
rather than economic, point of view
(although the latter may seem logical).
The aim of such restrictive measures is
not to inflict unacceptable damage on
the US economy, but to make the full
might of America's corporate lobbying
machine work against Donald Trump and
support his political opponents.
It takes more than corporate sponsorship
to get a presidential hopeful nominated.
It's really up to Deep State - the very same
Deep State that has allowed Trump launch and
take the trade war as far as he has now.
Trump's defeat in the poll would only
indicate Deep State's defeat in the trade
war with China. But the election of a new
president will not change the game. The
entire experience has left a bad taste in
China's mouth. They know about the shadow
government and no figure head will be able
to tame the angry dragon now. They could
demand the lasts of these corporations to
move and invest in China if they want access
to the 1.5 billion people's market. This
will facilitate more technology transfers or
the so-called "theft."
The third trump card involves China
dumping its portfolio of US Treasury
bonds. The Global Times writes: "China
holds more than $1 trillion of US
Treasury bonds. China made a great
contribution to stabilizing the US
economy by buying US debt during the
financial crisis in 2008. The US would
be miserable if China hits it when it is
down." One can conclude from this that
Beijing will most probably save dumping
its portfolio of US treasury bonds for
dessert – in that it will have the
biggest impact when the US stock market
is experiencing its next crisis.
Understanding that China may likely dump
their holdings, other nations (Japan, the
UK, Ireland, etc) might rush to dump theirs
before China gets the chance to have their
"dessert." Nobody wants to be left holding
the bag (of worthless treasury notes). So
it's not China's act of dumping that will
trigger the avalanche. It's the fear that
they might. So far, they are saying they
won't and giving no indication they would
for good reasons. They don't want to start
the panic now.
The Chinese have a fourth Trump
card..........stop doing business with the
U.S. all together. The U.S. does this with
Venezuela and it works very well at
collapsing the economy of the country.
The 5th option would be to get OPEC to stop
trading oil in dollars. Just that alone
would make the U.S. currency worthless, and
bring America to its knees. 9 of the
14 OPEC nations are already toying with the
idea of doing just that.
(Bloomberg) -- U.S. President Donald Trump's
decision to blacklist Huawei Technologies
Co. is making it more expensive to fatten up
China's seafood.
Futures on rapeseed meal,
which is used to feed China's massive
aquaculture industry, posted their longest
winning streak since October on expectations
supplies will tighten. The world's top fish
producer has stopped buying Canadian
rapeseed, also known as canola, for the
coming months -- a time when China usually
boosts purchases.
"There have so far been no purchases of
Canadian canola for arrival between April to
August," said Hou Xueling, an analyst at
Everbright Futures Co. That means "the bulls
could drive up prices to an unimaginable
level."
China, the largest buyer of Canadian
canola, typically increases imports from
April to August to make rapeseed meal. This
period is the peak demand season for its
fish farming sector, Hou said. The official
China National Grain and Oils Information
Center also confirmed that the Asian country
hasn't bought any Canadian canola for the
coming months.
The ongoing diplomatic spat after
Canada's arrest of Huawei's Chief Financial
Officer Meng Wanzhou late last year on a
U.S.
"I have been making this point for some time, that immigration leading to lower average
IQs, while bad, cannot logically lower scientific productivity because in absolute numbers
the talented fraction remains unaffected. There are still the same numbers of smart
people."
I wouldn't say that at all; or at least I would say the situation isn't quite what you may
think of it. Changing demographics* can certainly change economic/scientific/national policy,
perhaps disastrously so. Karlin's piece ends with an ominous reference to the Brazilian
president, but it just as easily might have been someone like America's AOC and her very
unwise 100% green energy in 10 years scheme. Changing demographics means more AOC's and more
turns at the economic disaster roulette wheel. In a democracy (or a representative republic),
it's easy for a lower IQ population to impose its disastrous ideas on the higher IQ former
majority; hence, the election of Hugo Chavez in Venezuela and the resultant economic
dysfunction.
In the future, not only will China produce quality scientific research, but efficiencies
conferred by its cultural and ethnic homogeneity may allow its corporations to out compete
American companies to a much greater degree than mere scientific discovery might otherwise
suggest. Additionally, China's economy will be so large that its companies will be able to
afford the massive R&D costs required for making ever more difficult discoveries. Their
smaller global competition likely won't be able to match spending, so China's corporations
could one day become far more dominant than you might anticipate. After all, it's really
about who can best exploit new discoveries and not just about who makes them first.
Otherwise, ancient China would have ruled the world; they invented paper, gunpowder, and the
compass.
Huawei was maybe 3% of the global smartphone market in Q4 of 2011 but it is set to pass
both Samsung and Apple in marketshare within the next five years. You see a bit of this
cultural/linguistic/ethnic homogeneity = efficiency phenomenon with the video game industry,
specifically in regards to competition between Sony and the much larger, but more
multicultural and less efficient Microsoft. Japan's Sony corporation dominates Microsoft in
sales just like their car companies dominate their American competition; GM was recently
chased out of Europe because it couldn't compete and none of these companies can sell
anything in Japan.
Also, notice that the EU core area has a white European population probably on par with
the white European-American population, but the US still has the greater share of scientific
discovery. I would posit this has much to do with the efficiency conferred by language
homogeneity in the United States (English) -- among other things. China in the future will
enjoy many of the same efficiencies the US has now, in terms of both language and culture.
And this is why India isn't as dynamic as some have predicted. Despite having a "smart
fraction", it is a low trust society deeply divided by color and class. Its leadership,
imposed by the lower IQ fraction, is also somewhat inept. The same fate awaits the United
States under current demographic trends.
*Has there been a single example of a global superpower in modern history that has lost
its ethnic majority but still retained functional status and prosperity over the long term?
Maybe Singapore (but they weren't a superpower), although I admittedly know little about that
country. Austria-Hungary? In any case, I would suspect the sample size here is far too small
to make any definitive prediction about the future of scientific discovery and resultant
economic success for the United States of America.
While the decision hasn't been made official, it was reported earlier this month by Canadian
military magazine Kanwa Asian Defense , which noted that Beijing won't just jump over to Linux
- and will instead develop their own over fears of US surveillance (and of course, in
retaliation for Huawei's blacklisting).
Thanks to the Snowden, Shadow Brokers, and Vault7 leaks, Beijing officials are well aware
of the US' hefty arsenal of hacking tools , available for anything from smart TVs to Linux
servers, and from routers to common desktop operating systems, such as Windows and Mac.
Since these leaks have revealed that the US can hack into almost anything, the Chinese
government's plan is to adopt a "security by obscurity" approach and run a custom operating
system that will make it harder for foreign threat actors -- mainly the US -- to spy on
Chinese military operations. -
ZDnet
The new OS will be developed by a newly established "Internet Security Information
Leadership Group" as reported by the
Epoch Times , citing Kanwa.
The group does not trust the "UNIX" multi-user, multi-stroke operating system either ,
which is used in some of the servers within the People's Liberation Army (PLA), Kanwa
reported. Therefore, Chinese authorities ordered to develop an operating system dedicated to
the Chinese military.
The group also believes that the German-developed programmable logic controller (PLC),
used in 70 percent of China's industrial control system today, poses huge risks to China's
national security . In its opinion, China is not a "network superpower," but merely a
"network giant," Kanwa reported. Therefore, Chinese authorities have laid out plans to
upgrade China's network -- to become more advanced in cyber technology. -
Epoch Times
Huawei, meanwhile, is dropping Android OS for its own operating system, code-named HongMeng.
It should be ready to launch in late 2019 domestically, and sometime in 2020 for international
markets, according to TechRadar .
Google announced on May 20 that it would partially cut off Huawei devices from using the
Android operating system, however the Mountain View - based company was given an extension
until August 19 by the White House. Other tech companies which have blacklisted Huawei include
Qualcomm, ARM, Micron and several tech industry standards organizations such as Bluetooth, SD
and WiFi alliances.
"Huawei knew this was coming and was preparing. The OS was ready in January 2018 and this
was our 'Plan B'. We did not want to bring the OS to the market as we had a strong relationship
with Google and others and did not want to ruin the relationship. Now, we are rolling it out
next month," said Huawei's Managing Director and VP of the Middle East Enterprise Business
Group.
The OS,
which could be called Ark OS when launched , is expected to be compatible with mobile
phones, computers, tablets, TVs, connected cars, smartwatch, smart wearables and others.
All applications that work with Android are expected to work with this new OS without any
need for further customization, Elshimy claims, adding that users will be able to download
apps from the Huawei AppGallery. - TechRadar
It is unknown whether apps available via Google's Play Store will be carried in Huawei's
store.
NEW HAVEN, Conn. (Project Syndicate) -- "When governments permit counterfeiting or copying
of American products, it is stealing our future, and it is no longer free trade." So said
President Ronald Reagan, commenting on Japan after the Plaza Accord was concluded in
September 1985.
Today resembles, in many respects, a remake of this 1980s movie, but with a
reality-television star replacing a Hollywood film star in the presidential leading role --
and with a new villain in place of Japan.
Back in the 1980s, Japan was portrayed as America's greatest economic threat -- not only
because of allegations of intellectual-property theft, but also because of concerns about
currency manipulation, state-sponsored industrial policy, a hollowing out of U.S.
manufacturing, and an outsize bilateral trade deficit.
In its standoff with the U.S., Japan ultimately blinked, but it paid a steep price for
doing so -- nearly three "lost" decades of economic stagnation and deflation. Today, the same
plot features China.
Notwithstanding both countries' objectionable mercantilism, Japan and China had something
else in common: They became victims of America's unfortunate habit of making others the
scapegoat for its own economic problems.
Like Japan bashing in the 1980s, China bashing today is an outgrowth of America's
increasingly insidious macroeconomic imbalances. In both cases, a dramatic shortfall in U.S.
domestic saving spawned large current-account and trade deficits, setting the stage for
battles, 30 years apart, with Asia's two economic giants.
Deficits made in America
When Reagan took office in January 1981, the net domestic saving rate stood at 7.8% of
national income, and the current account was basically balanced. Within two and a half years,
courtesy of Reagan's wildly popular tax cuts, the domestic saving rate had plunged to 3.7%,
and the current account and the merchandise trade balances swung into perpetual deficit.
In this important respect, America's so-called trade problem was very much of its own
making. Yet the Reagan administration was in denial. There was little or no appreciation of
the link between saving and trade imbalances. Instead, the blame was pinned on Japan, which
accounted for 42% of U.S. goods trade deficits in the first half of the 1980s.
Japan bashing then took on a life of its own with a wide range of grievances over unfair
and illegal trade practices. Leading the charge back then was a young deputy U.S. trade
representative named Robert Lighthizer. Fast-forward some 30 years and the similarities are
painfully evident.
Predictable decline in savings
Unlike Reagan, President Donald Trump did not inherit a U.S. economy with an ample
reservoir of saving. When Trump took office in January 2017, the net domestic saving rate was
just 3%, well below half the rate at the onset of the Reagan era. But, like his predecessor,
who waxed eloquently of a new "morning in America," Trump also opted for large tax cuts --
this time to "make America great again."
The U.S. national savings rate has fallen from 7.8% of GDP when Reagan took office to just
2.8% today. The result was a predictable widening of the federal budget deficit, which more
than offset the cyclical surge in private saving that normally accompanies a maturing
economic expansion. As a result, the net domestic saving rate actually edged down to 2.8% of
national income by late 2018, keeping America's international balances deep in the red --
with the current-account deficit at 2.6% of gross domestic product and the merchandise trade
gap at 4.5% in late 2018.
And that's where China assumes the role that Japan played in the 1980s. On the surface,
the threat seems more dire.
After all, China accounted for 48% of the U.S. merchandise trade deficit in 2018, compared
to Japan's 42% share in the first half of the 1980s. But the comparison is distorted by
global supply chains, which basically didn't exist in the 1980s.
Data from the OECD and the World Trade Organization suggest that about 35%-40% of the
bilateral U.S.-China trade deficit reflects inputs made outside of China but assembled and
shipped to the U.S. from China. That means the made-in-China portion of today's U.S. trade
deficit is actually smaller than Japan's share of the 1980s.
Like the Japan bashing of the 1980s, today's outbreak of China bashing has been
conveniently excised from America's broader macroeconomic context. That is a serious mistake.
Without raising national saving -- highly unlikely under the current U.S. budget trajectory
-- trade will simply be shifted away from China to America's other trading partners.
With this trade diversion likely to migrate to higher-cost platforms around the world,
American consumers will be hit with the functional equivalent of a tax hike.
Lighthizer as clueless today as he was then
Ironically, Trump has summoned the same Robert Lighthizer, veteran of the Japan trade
battles of the 1980s, to lead the charge against China. Unfortunately, Lighthizer seems as
clueless about the macro argument today as he was back then.
In both episodes, the U.S. was in denial, bordering on delusion.
Basking in the warm glow of untested supply-side economics -- especially the theory that
tax cuts would be self-financing -- the Reagan administration failed to appreciate the links
between mounting budget and trade deficits.
Today, the seductive power of low interest rates, coupled with the latest strain of voodoo
economics -- Modern Monetary Theory -- is equally alluring for the Trump administration and a
bipartisan consensus of China bashers in the Congress.
The tough macroeconomic constraints facing a saving-short U.S. economy are ignored for
good reason: there is no U.S. political constituency for reducing trade deficits by cutting
budget deficits and thereby boosting domestic saving.
America wants to have its cake and eat it, with a health-care system that swallows 18% of
its GDP, defense spending that exceeds the combined sum of the world's next seven largest
military budgets, and tax cuts that have reduced federal government revenue to 16.5% of GDP,
well below the 17.4% average of the past 50 years.
This remake of an old movie is disconcerting, to say the least. Once again, the U.S. has
found it far easier to bash others -- Japan then, China now -- than to live within its means.
This time, however, the movie might have a very different ending.
I use both. Up to Ubuntu with Mint. Plus Raspbian and Android.
But, for somethings, you can't beat Microsoft for ease of use and interoperability. I rip
and transcode my DVDs in Windows 7. I use Microsoft Office '13. Browse using Firefox, Thor
and Chrome. And I have some specific audio processing tools that only exist in Windows.
And if you are a Chinese military or other intelligence professional with access to a
"SIPR" class network it probably would be safe bet that US manufactured computer systems
and networking gear has been appropriately "modified" not to use those chipsets since long
before the "deal" of "deals" was made with the Yankee Dog ( http://www.911research.wtc7.net/wtc/groundzero/cleanup.html
) to send the remaining American technical manufacturing labor force out on the
street!...
Rinse and repeat for India's government intel and military professionals as well!....
Doesn't deal with the hardware back doors, but its a start. I do believe they have their own o/s already waiting after Kaspersky got banned a few years ago for finding both the hardware and s/w backdoors.
That hard disk firmware that called home was a classic.
Oh, yes. They're going to develop their own OS, just like Huawei. What ********. Huawei
will use vanilla android and China will pull an Apple, and rebrand Linux. But it sounds good,
to say you're going to crank out a brand new operating system, like it's a CRUD web app.
"... Since Apple gets 20% of its revenue from China and manufactures its iPhones (which generated 60% of its total 2018 revenue) there, few companies are as exposed to Beijing's retaliation. Apple has already been suffering in the region, seeing sliding revenue as consumers buy more phones from Huawei and other local brands. ..."
"... Citi warns that independent due diligence reveals " a less favorable brand image desire for iPhone and this has very recently deteriorated." As a result, Citi is materially lowering its sales and EPS estimates below consensus as China represents 18% of Apple sales "which we believe could be cut in half. " ..."
"Apple's iPhone, iPad, and Mac systems are at risk of experiencing demand
destruction due to collateral damage from the sales ban to Huawei."
U.S. companies such as Apple and Nike, which rely on China for a major part of their growth
and which have targets painted on their backs as Beijing and Washington ratchet up trade-war
tensions, are "bracing for China's retaliatory wrath" according to
Bloomberg
.
While Beijing has yet to formally retaliate after Trump blacklisted Huawei,
Chinese state media last week said China is "well armed to deliver counterpunches," without
giving specific details. And as companies await China's next move, there is rising, if
unwelcome, suspense over what form retaliation might take. Companies might "just have to
read the tea leaves on how their business operations are being treated,'' Erin Ennis, senior
vice president of the U.S.-China Business Council, said in an interview with Bloomberg
Television on Saturday.
As Bloomberg notes, one option China could use is from the 2017 "template" when relations
with South Korea deteriorated over Seoul's decision to deploy a missile shield. The
government curbed travel to South Korea, hurting cosmetics companies that rely on Chinese
tourists, while local authorities shut most of Lotte Shopping's China stores, alleging fire
safety violations. Consumers boycotted South Korean products, dealing a devastating blow to
Hyundai Motor sales. A similar pattern of action took place during the 2013 trade feud with
Japan which escalated over territorial disagreements in the East China Sea.
... ... ...
Since Apple gets 20% of its revenue from China and manufactures its iPhones (which generated 60% of its total 2018 revenue)
there, few companies are as exposed to Beijing's retaliation. Apple has already been suffering in the region, seeing sliding revenue
as consumers buy more phones from Huawei and other local brands. According to relatively optimistic research by Wedbush analyst Dan
Ives, blowback from Trump's Huawei ban could cost Apple about 3% to 5% of its iPhone sales in China.
... ... ...
Citi warns that independent due diligence reveals "
a less favorable brand image desire for iPhone and this has very
recently deteriorated."
As a result,
Citi is materially lowering its sales and EPS estimates below consensus as
China represents 18% of Apple sales "which we believe could be cut in half.
"
The article is devoid any technical substance and operated with value threat notion. As such this attempt of to spread FUD.
In this case the USA are fighting to preserve their technological edge by trying to destroy the leading China company which became a
competitor to domestic firms.
Control of Wi-Fi network is damaging to the targeted nation security. The question is: who would allow such a control? All
measures will be deployed against foreign powers exploitation.
But what about control of telecoms and putting NSA equipment directly in telecom data centers like the NSA practices
domestically and in vassal countries, for example, in Ukraine. And they manages to spy of Angela Merkel phone in Germany. Please
note that Germany is one of the most sophisticated technically nations in the world.
Notable quotes:
"... The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm's purchasing of U.S. technology. Google's parent, Alphabet, suspended some of its business with Huawei , Reuters reported. ..."
"... The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing's growing military might under President Xi Jinping. Strengthening cyber operations is a key element in the sweeping military overhaul that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. The United States has accused China of widespread, state-sponsored hacking for strategic and commercial gain. ..."
"... "Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger," the company said in a statement in response to questions from Reuters. Such moves, it said, would only limit "customers in the U.S. to inferior and more expensive alternatives." ..."
n early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a
destructive digital war game.
The operatives – agents of the Australian Signals Directorate, the nation's top-secret eavesdropping agency – had been given a
challenge. With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment
installed in the 5G network, the next-generation mobile communications technology, of a target nation?
What the team found, say current and former government officials, was sobering for Australian security and political leaders: The
offensive potential of 5G was so great that if Australia were on the receiving end of such attacks, the country could be seriously
exposed. The understanding of how 5G could be exploited for spying and to sabotage critical infrastructure changed everything for
the Australians, according to people familiar with the deliberations.
Mike Burgess, the head of the signals directorate, recently explained why the security of fifth generation, or 5G, technology was so
important: It will be integral to the communications at the heart of a country's critical infrastructure - everything from electric
power to water supplies to sewage, he said in a March speech at a Sydney research institute.
Washington is widely seen as having taken the initiative in the global campaign against Huawei Technologies Co Ltd, a tech
juggernaut that in the three decades since its founding has become a pillar of Beijing's bid to expand its global influence. Yet
Reuters interviews with more than two dozen current and former Western officials show it was the Australians who led the way in
pressing for action on 5G; that the United States was initially slow to act; and that Britain and other European countries are
caught between security concerns and the competitive prices offered by Huawei.
The Australians had long harbored misgivings about Huawei in existing networks, but the 5G war game was a turning point. About six
months after the simulation began, the Australian government effectively banned Huawei, the world's largest maker of telecom
networking gear, from any involvement in its 5G plans. An Australian government spokeswoman declined to comment on the war game.
After the Australians shared their findings with U.S. leaders, other countries, including the United States, moved to restrict
Huawei.
The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the
use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm's
purchasing of U.S. technology. Google's parent, Alphabet,
suspended
some of its business with Huawei
, Reuters reported.
Until the middle of last year, the U.S. government largely "wasn't paying attention," said retired U.S. Marine Corps General James
Jones, who served as national security adviser to President Barack Obama. What spurred senior U.S. officials into action? A sudden
dawning of what 5G will bring, according to Jones.
"This has been a very, very fast-moving realization" in terms of understanding the technology, he said. "I think most people
were treating it as a kind of evolutionary step as opposed to a revolutionary step. And now that light has come on."
The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing's growing
military might under President Xi Jinping. Strengthening cyber operations is a key element in the sweeping military overhaul
that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. The United
States has accused China of widespread, state-sponsored hacking for strategic and commercial gain.
If Huawei gains a foothold in global 5G networks, Washington fears this will give Beijing an unprecedented opportunity to
attack critical infrastructure and compromise intelligence sharing with key allies. Senior Western security officials say
this could involve cyber attacks on public utilities, communication networks and key financial centers.
In any military clash, such attacks would amount to a dramatic change in the nature of war, inflicting economic harm and
disrupting civilian life far from the conflict without bullets, bombs or blockades. To be sure, China would also be
vulnerable to attacks from the U.S. and its allies. Beijing complained in a 2015 defense document, "China's Military
Strategy," that it has already been a victim of cyber-espionage, without identifying suspects. Documents from the National
Security Agency leaked by American whistleblower Edward Snowden showed that the United States hacked into Huawei's systems,
according to media reports. Reuters couldn't independently verify that such intrusions took place.
However, blocking Huawei is a huge challenge for Washington and its closest allies, particularly the other members of the
so-called Five Eyes intelligence-sharing group – Britain, Canada, Australia and New Zealand. From humble beginnings in the
1980s in the southern Chinese boom town of Shenzhen, Huawei has grown to become a technology giant that is deeply embedded
in global communications networks and poised to dominate 5G infrastructure. There are few global alternatives to Huawei,
which has financial muscle – the company reported revenue for 2018 jumped almost 20 percent to more than $100 billion – as
well as competitive technology and the political backing of Beijing.
"Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger," the company said in a
statement in response to questions from Reuters. Such moves, it said, would only limit "customers in the U.S. to inferior
and more expensive alternatives."
For countries that exclude Huawei there is a risk of retaliation from Beijing. Since Australia banned the company from its
5G networks last year, it has experienced disruption to its coal exports to China, including customs delays on the Chinese
side. In a statement, China's foreign ministry said it treated "all foreign coal equally" and that to assert "China has
banned the import of Australian coal does not accord with the facts."
Tension over Huawei is also exposing divisions in the Five Eyes group, which has been a foundation of the post-Second World
War Western security architecture. During a trip to London on May 8, U.S. Secretary of State Mike Pompeo issued a stark
warning to Britain, which has not ruled out using Huawei in its 5G networks. "Insufficient security will impede the United
States' ability to share certain information within trusted networks," he said. "This is exactly what China wants; they want
to divide Western alliances through bits and bytes, not bullets and bombs."
Chinese President Xi Jinping (left) is shown around the offices of Huawei in London by company founder Ren Zhengfei in 2015. Ren
has rejected allegations that Huawei would engage in espionage on behalf of the Chinese government. REUTERS/Matthew Lloyd/Pool
Employees work on a mobile phone production line at Huawei's factory campus in the southern Chinese city of Dongguan. Huawei has
eclipsed telecom equipment giants Ericsson and Nokia in terms of market share. REUTERS/Tyrone Siu
Huawei's 74-year old founder, Ren Zhengfei, is a former officer in China's military, the People's Liberation Army. "Mr. Ren
has always maintained the integrity and independence of Huawei," the company said. "We have never been asked to cooperate
with spying and we would refuse to do so under any circumstance."
In an interview with Reuters at the company's headquarters in Shenzhen, Eric Xu, a deputy chairman, said Huawei had not
allowed any government to install so-called backdoors in its equipment - illicit access that could enable espionage or
sabotage - and would never do so. He said 5G was more secure than earlier systems.
"China has not and will not demand companies or individuals use methods that run counter to local laws or via installing
'backdoors' to collect or provide the Chinese government with data, information or intelligence from home or abroad," the
Chinese foreign ministry said in a statement in response to questions from Reuters.
Washington argues that surreptitious backdoors aren't necessarily needed to wreak havoc in 5G systems. The systems will rely
heavily on software updates pushed out by equipment suppliers - and that access to the 5G network, says the United States,
potentially could be used to deploy malicious code.
So far, America hasn't publicly produced hard evidence that Huawei equipment has been used for spying.
Asked whether the United States was slow to react to potential threats posed by 5G, Robert Strayer, the State Department's
lead cyber policy diplomat, told Reuters that America had long been concerned about Chinese telecom companies, but that over
the past year, as 5G loomed closer, "we were starting to talk more and more with our allies." Banning Huawei from 5G
networks remains "an end goal," he said.
"... The sort of result that's to be expected from a Fire-Aim-Ready approach to policy making ..."
"... They're trying real hard to take a large company out of business without any evidence of said company doing anything wrong. Never even looked at them before but this definitely makes me want to get a Huawei phone next. And to stay well clear of everything from any US based company. ..."
"... Nothing here is really Huawei's fault - they're just the coincidental closest target to impact point of a greater trade war. All the posturing against Huawei specifically is just that - posturing. ..."
"... Basically it's because Mr. President is paranoid and somewhat crazy. A sane president would not be so childish, ..."
"... It's an empire in decline fighting the was for global supremacy, the democrats are just as crazy, not that I like Trump ..."
"... It's often said that wounded animals are the most dangerous. That's what this looks like to me. The US empire might be near dead, but one swipe of its huge tail can still break you if you get in the way. ..."
"... The US will never be as dominant as it was in the decades after WW II, but that was a one shot deal mainly because it had the only large industrial base that hadn't been blown to smithereens by the end of the war. ..."
"... Indeed. And how much have we heard about backdoors in Cisco and others here of late - it's a multiple, not a percentage. They all need a bit of pointing and laughing in a sense. IIRC, the telnet "backdoor" required one to be inside the LAN already...while the other baddies the Reg has reported on did not. ..."
No cybersecurity rules means networks are destined to be balkanized
... ... ...
One possible consequence, Steven Weber, professor of political science and international relations at UC Berkeley, told The Register
, is a world where boundaries are shaped more by technology standards than geographic features.
That is to say, we may be headed toward nationalized technology stacks that don't interoperate and nationalized supply chains.
This defeats the entire purpose of an open internet
... ... ...
Google has suspended Huawei's license to use its Android mobile operating system. The decision prevents the Chinese company from
adding Google services like Gmail, Google Maps, Play Store and other Google apps to new devices, though existing ones
will continue to function . It also complicates
security updates and all but guarantees Huawei will forge ahead with its rumored fork of the Android Open Source Project.
Microsoft has pulled the Huawei MateBook X Pro from its online store; Huawei devices are no longer available at BestBuy.com. At
Amazon.com, however, Huawei laptops, tablets and phones can still be had.
Huawei forward
Huawei could open up a branch company in the USA. Design, program, manufacture, and market those USA products as a USA company.
Nothing left to target.
Of course, still sending the profits home.
Re: Huawei forward
Also Chinese investors could buy a significant number of shares of US companies, making them suspect of Chinese affiliation, and
the US government will be faced with the dilemma of closing US companies. Re: Huawei forward
Trump conveniently forgets..
Anything that doesn't accord with his very, very limited world view. He also tends to forget which lies he told last time and
will happily contradict himself.. Re: Huawei forward
Unless the Chinese govt rolls over and declares Trump the winner of his trade war, apparently. If that happens, all the security
worries will blow away like a fart in the wind.
How does that work, exactly? Well, since Trump has never bothered to spell out what he wants the Chinese to do, he can declare
victory at any moment, but he wants a statement of surrender to show the faithful.
They're trying real hard to take a large company out of business without any evidence of said company doing anything wrong.
Never even looked at them before but this definitely makes me want to get a Huawei phone next. And to stay well clear of everything
from any US based company.
Nothing here is really Huawei's fault - they're just the coincidental closest target to impact point of a greater trade war.
All the posturing against Huawei specifically is just that - posturing.
But that's not the same as saying the greater trade war is without merit. It absolutely makes a difference how overall trade
between the US and China is structured, and a certain segment of our market has been saying for a long time that we had the short
end of the stick here and needed to change things. Even the El Reg author acknowledged that.
Of course it's much more complex to ask whether this tactic is actually going to fix anything, or just make things worse. Your
mileage may vary.
And I can imagine that if you are neither an American nor a Chinese citizen, then you don't really stand to gain anything from
this fight no matter who wins, so it's understandable if you're more frustrated than anything else. I don't blame anyone for not
wanting to jump into a fight that doesn't affect them - just remember that it does affect someone else.
It will be interesting to see what the Chinese targets are going to be. Probably GM and farmers since that hits Trump's base
- just as electioneering starts for 2020.
Then wait for Boeing to be really suffering from the 737Max before announcing a ban on Boeing in China (airbus manufacture there)
There is a lot of 'good ole boy' stuff that goes into every Airbus plane no matter where it is made so Trump could easily stop
Airbus from operating in China.
China could retaliate by treatening to start calling in all the US Debt that it carries. That will sink the DOW in a flash.
The Trump bubble will burst and he'll be impeached (well that's what I hope)
The Yuan could easily replace the USD as the world's currency.
Trump had better watch out or this will end badly for him. His grasp of history relating to trade wars can probably be measured
on a pinhead.
It's often said that wounded animals are the most dangerous. That's what this looks like to me. The US empire might be near
dead, but one swipe of its huge tail can still break you if you get in the way.
I seem to remember the same being said in the 80s when it was Japan that had the huge trade advantage over the US. Now granted
China is FAR larger and will easily overtake the US as world's largest economy without its per capita GDP needing to exceed 30%
of the US's, but like Japan did with its aging population China has some demographic challenges awaiting it when the parents of
the two "one child" generations reach retirement age, which is just beginning.
The US will never be as dominant as it was in the decades after WW II, but that was a one shot deal mainly because it had the
only large industrial base that hadn't been blown to smithereens by the end of the war.
Indeed. And how much have we heard about backdoors in Cisco and others here of late - it's a multiple, not a percentage. They
all need a bit of pointing and laughing in a sense. IIRC, the telnet "backdoor" required one to be inside the LAN already...while
the other baddies the Reg has reported on did not.
What makes the Huawei router telnet backdoor (now patched) unusual is that for 8 long years GCHQ has been code-reviewing Huawei
products in a dedicated department. Didn't that include routers?
Japanese CPU designer Arm has a facility in Austin, Texas, USA, that validates Arm-compatible and licensed chip designs for
customers around the world, including those in China, and thus is restricted by the White House's latest crackdown.
Moral of this story. Don't do business with the US, they will turn on you whenever it's financially beneficial for them and
unilaterally break deals, without any means for recourse.
An unreliable partner. Like any other bully, best to let them play in the sandbox by themselves.
What is interesting is that Huawei got some fundamental patents in connection to 5G, without licensing these patents there
will be no 5G role out, and Nokia and Ericsson are at least 1 year behind Huawei in development of 5G ...
This is political, and is being used by Trump to get China to move on the Trade agreement, which he want to "fix", but it might
end up causing the rollout of 5G to be delayed by years.
"What are the Chinese going to do - sue them in Federal court ?"
What could happen is that Huawei starts to sue every competitor, in every market the competitor sells in, whose competing products
use the components they're not allowed to use on the basis of unfair competition, illegal government subsidy or whatever fits
in the jurisdiction. There are a lot more courts around the world than Federal courts.
As if the US is goi g to honour those patents when it's no longer convenient.
International law is for everyone else, just look at the US' violations of the the Venezuan embassy in Washington and railroading
the UN's investigation into US war crimes.
We have a US govt that thinks that 'might makes right'. Literally the definition of a rogue state.
"The 'backdoor' that Bloomberg refers to is Telnet, which is a protocol that is commonly used by many vendors in the industry
for performing diagnostic functions. It would not have been accessible from the internet," said the telco in a statement to The Register,
adding: "Bloomberg is incorrect in saying that this 'could have given Huawei unauthorized access to the carrier's fixed-line network
in Italy'.
Remember it was Bloomberg that published the article about motherboards that were made in China having an extra chip that 'leaked'
stuff back to china.
Apple and Supermicro were the main targets (amongst others).
Both companies undertook extensive investigations and found no evidence of these chips.
Despite repeated appeals Bloomberg refused to relase their evidence to the world.
To me this implies that it was a bit of fiction designed to make certain stocks go down so that shorters could make a killing.
People may take it for granted that their 'phones work everywhere but it was not ever thus. I used to have to borrow a tri-band
'phone for visits to the US. My normal mobile worked everywhere except the US. Later on I had the same problem with South Korea.
There was a time (back in the analogue TV days) when a TV bought in one European country wouldn't work in many of the others.
Digital TV is based on common underlying compression standards. (Although, even here there is scope for creating artificial incompatibilities.)
Unfortunately there is no common transmission standard, although DVB satellite transmission schemes are fairly widely adopted.
People can now move almost anywhere in the world reasonably cheaply. Some of their gadgets are useless outside their home country.
Many of these problems are caused by "special interest groups", manufacturer inspired protectionism and plain political stupidity.
People can now move almost anywhere in the world reasonably cheaply. Some of their gadgets are useless outside their home
country.
Many outside electrical gadgets have problems in the USA. They use a different voltage and AC frequency from that used by developed
countries. Happily, that means that their stuff doesn't work outside the "land of the fee".
The Trump administration has started a trade war with China, which has responded in kind. Trade wars eventually come to an
end even if it takes a long time. The "Cold War" with the Soviet Union was carried out as both an arms race, and a trade war and
while that took 45 years to conclude, it did end.
Masking the US/China trade war as a security issue doesn't work very well. Threatening to stop the sale of mobile phones using
a US designed open source operating system because of concerns about security holes in a yet to be rolled out 5g core network
is a weak argument. If there are 5G issues, why not 4G?. Where is the evidence, given that Huawei have set up a joint venture
with GCHQ to examine the core network software.? Is this another "Weapons of Mass Destruction" report where we are asked to believe
without evidence. We all ended up with egg on our collective faces then. Tony Blair's reputation was, and still is, trashed. May's
reputation could similarly ............ (Ok, I concede that would be a stretch!)
The weakest part of the argument is that it denies itself a way out when the trade war ends (or is suspended). Donald and Xi
could come to a truce tomorrow (a beautiful victory?) but that would leave the declared security issues unresolved. If the US
removes the trade ban on Huawei surely they will be letting Chinese spying tools into strategic national networks. What about
the mobile phones?. They are said to be a security risk now because the US (parroted by 5 eyes) says so. That won't magically
disappear because the US and China come to an agreement on steel imports. Will the UK and other countries who have followed the
lead of the US similarly change track when the US and China make up. ?
We are following our special relationship partners down a deep rabbit hole based on the assertions of some highly suspect political
operators.
Well said. Much of this problem is due to the deregulation of Corporate financials. I'm not a finance person so am not sure
that's the correct term. What I'm talking about is at the time of globalization/free trade when RRSPs were allowed to participate
in corporate stock outside of national scope. Such was the case in Canada at the time. Since then, these corporations outsource
as much work as possible to developing economies to reduce cost and most no longer have any R&D worth mentioning, all in the name
of increasing profit for the Ponzi/Pyramid scheme that is the deregulated stock market and that is effect of changing the corporate
tax burden. Since the late 1970s corporations have been able to increasingly buy their own taxation system, it seems. The more
regulated, or in authoritarian regimes financially controlled, corporations still seem to have effective R&D.
The above boils down to the populace having been duped by bad faith politicians. As much I don't like Trump and his crazy train
this all started a long time before him.
Actually, the politicians themselves were duped by the bad faith bankers and in general people who got compensated in options.
It can even look like good intentions.
The deregulation that allowed for evil things like CDS (being able to buy fire insurance on your neighbor's house...without
his knowledge, and even get a can of gasoline in the deal) - was sold as a way to make getting loans easier for minorities so
they could buy homes and have a stake in society - a good thing that would result in less crime and violence and more self-policing.
What it actually was is more interesting - in the insurance biz it's illegal to sell insurance to other than the entity directly
involved, and there are also regulations that the insurance company has to keep the buck to pay claims in hand - this was all
missing from the Frank-Clinton removal of Glass Steagall.
The road to hell is indeed paved with good intentions, or at least can be sold as such.
In hindsight, we know that some of the financialization tech new instruments invented as a result by Blythe Masters of JP Morgan
and some others developed in the City of London turned out to be "weapons of financial mass destruction".
There was plenty of blame to go around (in this case the left side of the aisle started the ball rolling, but...no one was
at all innocent). From the banks making loans that were obviously never going to be paid off - no need to care as now Goldman
Sachs, AIG, JP Morgan, and of course Deutsche bank were standing there buying the loans to sell tranches at a profit - to the
people taking those loans, to the people buying the tranches of them....
If so I think it is time for China to take Taiwan back.
That wouldn't the US modus operandus. There'd need to be a false flag operation like the USS Liberty (but done without exposing
it's actually a false flag.
USS Liberty a false flag operation - ahh setting up a US intelligence vessel to be shot up by the Israelis. How did rhapsody
work or were they hit by US aircraft in disguise?
Wow. The Americans have certainly let their paranoia show immensely
But this move of what they have done is bassically similar to what the USA were claiming Huawei and China could do shutting
off 5G services because of their kit
America certainty have a paranoid schizophrenia mental illness building
"Are you now or were you ever a member of the Communist party" questions of the 1950's. The reds under every bed paranoia of
that age is alive and kicking.
Yeah, I had to answer that one for a security clearance in the '70's myself. One wonders how Brennan, Chief of CIA for the
previous admin, was an avowed communist yet still managed to get that job?
His role in the current thrashing is interesting to say the least.
Brennan is not an "avowed communist". That lie came about based on the fact that he voted for Gus Hall, the Communist Party
presidential candidate in 1976. There is no evidence that Brennan himself was ever a member of the Communist Party or even that
his political viewpoint is communist generally.
But that his political enemies consider calling him a communist to be an effective attack says a lot about American paranoia.
Ok: Trump is a nasty, corrupt, ignorant child and his motivations in this are probably as petty and wrong as is ever the case.
And you can't ignore the fact that this is happening in the context of a wider trade war, which, while it may have some logical
underpinnings (China does steal and cheat on a an epic scale) is also contaminated by the Orange Idiot's floundeing incompetence
and wayward spite.
So I am no apologist for Trump or his toxically incompetent administration: it may actually be almost as vile as the Chinese
regime at this point in time.
But the fact that the attack on Huawei is being mounted by people who are stupid, ignorant and explicitly odious doesn't mean
it is the wrong thing to do.
I've said before that it is irrelevant whether Huawei has been caught producing dodgy hard- or software and I have framed my
point in terms of capabilities and intentions: emphasising that capabilities are what count here.
It's simply this: China has an authoritarian, undemocratic, repressive, ofttimes murderous regime; it ruthlessly oppresses
minorities among its citizens; practises draconian censorship; has shown every sign of territorial aggressiveness and growing
military adventurism; is building up its armed forces at a worrying rate; is becoming ever wealthier and more powerful; and has
the ability both in technological know-how and in industrial capacity to supply a sizeable fraction of the free world's communications
and computing infrastructure. With no checks or balances or transparency, the Chinese state could compel any of its companies
to do whatever it wishes ("Make this happen for us, and keep your mouths shut about it, or next month you will be executed for
corruption"), and every aspect of its behaviour in the last 20 years proves that it will use technology -- a wonderful equaliser
in the world of asymmetric warfare -- for its own ends, lying, stealing and cheating at every turn. I don't see how this is even
a controversial statement by this point.
So the question is not what China intends, but what it can do, and this ought to worry us very badly. Given everything
we know of China's government, it would be suicidally stupid to gift it with power, influence or any kind of entry into
our just-about-free societies.
As the west wakes up to the threat of China, actual conflict becomes ever more likely (I would personally suggest, inevitable,
unless regime change occurs, which seems most improbable). China will become ever more strongly motivated to resort to technological
sabotage and espionage. Right now we don't want China stealing data on our (for example) nuclear submarine fleet. If it comes
to conflict, we don't want them bricking those boats while they're still dockside.
So Huawei is just the start. China certainly could use its companies for malign ends: so we must act protectively, as if it
is doing so, and will do so in the future.
"So the question is not what China intends, but what it can do"
This goes against pretty much every standard the Western world stands for. China COULD compel Huawei to put in backdoors. But
then again Huawei kit is probably the most closely-studied kit in the world, and it is trivially easy to compare firmware releases
to make sure that the kit you have is running the same version as a trusted reference version. It might be more difficult to check
that the hardware you get isn't a one-off specially modified version instead of the standard one, but the organisations likely
to be targeted in this way are either big enough to have the resources for deep checks or would not be buying Huawei kit anyway.
For the vast majority of commercial customers and 100% of retail customers, having eg GCHQ check out the kit is a perfectly
acceptable safeguard, indeed one which they do not even get from other vendors' kit (eg Cisco) which might be backdoored with
other countries' spying malware.
A, buy kit from china and check it for backdoors, weaknesses, vulnerabilities.
C, buy kit from a company HQ in Finland (but with chips made all over the world) and don't bother checking for any flaws, vulnerabilities
etc but trust it implicitly cos Finns are really nice people.
And therein is the problem. It is not pres Trump, he is only supporting the US 3 letter agencies and they are the ones with
the big problem. Their problem is that they want to put backdoors in Huawei networking equipment but if they do that it
means that the Chinese government will have samples of the US spying software and there is the big problem. The 3 letter agencies
can only see one way out of that and it is banning Huawei equipment, in their eyes that makes the problem go away and leaves their
spying on the population as normal using the so called American equipment.;
"deal with longstanding issues like government favoritism toward local companies"
How is it that that can be a point of contention ? Name me one country in this world that doesn't favor local companies.
These people company representatives who are complaining about local favoritism would be howling like wolves
if Huawei was given favor in the US over any one of them.
I'm not saying that there are no reasons to be unhappy about business with China, but that is not one of them.
Here's the problem. Lets say the sake of argument Huawei is not guilty of
putting spyware in their 5G stuff. How would they prove it? They basically given out there
source code, and apart from such slack security features nothing was found, but that was
apparently no enough.
Apart from proving a negative there is nothing they can do. I'm not saying that China is not
a repressive regime, but to be honest I don't think they have the resources to filter out the
juicy bits of the 5G traffic, and have enough on their hands just monitoring their internal
massive population without having to take on the US as well. And why should they, since the NSA
is already doing such a great job of it already.
The problem is that the great Orange one and is motley collection of right wing hawks are
thinking that is what i would do in China's place and getting themselves lathered up in a right
wing frenzy where they see reds under every bed.
If China was smart (and they are), what they should do is announce that all Apple phones are
banned in China and all Chinese companies are not allowed to do business with Apple, until
Apple can prove they do not provide back doors for the US government in their equipment. I
wonder what effect a 10% drop in apple share price and all those pension funds that depend on
them will have
..and we're all going to be poorer for it. Americans, Chinese and bystanders.
I was recently watching the WW1 channel on youtube (awesome thing, go Indy and team!) - the
delusion, lack of situational understanding and short sightedness underscoring the actions of
the main actors that started the Great War can certainly be paralleled to the situation
here.
The very idea that you can manage to send China 40 years back in time with no harm on your
side is bonkers.
"... The ban might actually provide a bit of a boost to other software developers, if it prompts users to look beyond the Google offerings that came with their phone and seek out some alternatives. In most cases, the alternatives are far better. ..."
Currently everybody else is losing. Forcing other countries (supposedly friends and
allies) to abandon equipment of one manufacturer for that of your own company is not very
nice and for us quite expensive. And that is not even factoring in the known fact that some
of these manufacturers had backdoors in their equipment - for which actual proof exists. So
considering our own national security we should forbid companies to do business with e.g.
Cisco...
Powerful is not the same as lawful, no matter what those in positions of power might claim
or like to imagine.
Is this a distinction worth making? Yes, because otherwise law enforcement officers come
to think that their word is law, and that they are themselves above the law. The result of
that is a police state.
Probably true. Huawei are probably just collateral damage in the inevitable socio-economic
conflict between the US and China. The US is used to running the world (not especially well
if you ask me). China with four times the population and an economy about the same size as
the US that is growing much faster doesn't actually seem to have that much interest in
running the world. But since the US is run by folks with no principles, poor memories, few
useful skills,and no planning ability whatsoever, I have to guess that the Chinese will "win"
in the long run.
Pretty irritating that Huawei is simply leverage while the US and China thrash out a trade
deal.
I have a Mate 10 Pro and the best phone I've had, was planning to go for the Mate 30 Pro
when it comes out.
Reckon I still will, I've already been reducing dependence on Google before this happened
anyway. I'll have to shift my business email over to ProtonMail like I already do with my
personal accounts. I'm trying out OSM instead of gmaps. I've already ditched gplay music.
Just need Proton calendar which is in development and that's another service binned off.
Not sure what's going to happen with apps I've bought through Google and have active subs
though...
The problem isn't the apps you use, there certainly are equivalents of the Google ones.
But they still mostly rely on the Google Play API to interface with your phones devices and
storage mechanisms. OSM is a pretty good replacement for gmaps, but will be of little use
without Google Location Services.
Will the ban actually prevent anyone using a Huawei device from accessing a Google service
(eg. Gmail) or just prevent them from downloading the official Google apps to do so? I
suspect the latter as the first would seem impossible to police. In which case there are
better alternatives out there.
The ban might actually provide a bit of a boost to other software developers, if it
prompts users to look beyond the Google offerings that came with their phone and seek out
some alternatives. In most cases, the alternatives are far better.
For email, try AquaMail. Easily handles my many email addresses split across Gmail, own
domains using Google's mailservers, Yandex and own domains using Yandex's mailservers.
OSMAnd+ provides as good mapping as Google Maps (better in remote and off-road areas), is
much more customiseable and you can download entire country maps to your phone, without
pissing about with Google Maps's silly area selection download. And its navigation is pretty
decent, lthough it lacks the Googley stuff like weather and nearest junk food shop
listings.
Wire is an encrypted messaging/video-calling/VOIP app, offering everything Hangouts (or
whatever Google's offering is called this week) does.
Yandex browser or Kiwi browser are Chrome but with added support for extensions
PulseSMS is text messaging with built in backup and the ability to send and receive SMS
through your phone from your laptop.
You can put backdoor in the router. The problem is that you will never be able to access it.
also for improtant deployment countires inpect the source code of firmware. USA is playing dirty
games here., no matter whether Chinese are right or wrong.
They're not necessarily silos. If you design a network as a flat space with all interactions
peer to peer then you have set yourself the problem of ensuring all nodes on that network are
secure and enforcing traffic rules equally on each node. This is impractical -- its not that if
couldn't be done but its a huge waste of resources. A more practical strategy is to layer the
network, providing choke points where traffic can be monitored and managed. We currently do
this with firewalls and demilitarized zones, the goal being normally to prevent unwanted
traffic coming in (although it can be used to monitor and control traffic going out). This has
nothing to do with incompatible standards.
I'm not sure about the rest of the FUD in this article. Yes, its all very complicated. But
just as we have to know how to layer our networks we also know how to manage our information.
For example, anyone who as a smartphone that they co-mingle sensitive data and public access
on, relying on the integrity of its software to keep everything separate, is just plain asking
for trouble. Quite apart from the risk of data leakage between applications its a portable
device that can get lost, stolen or confiscated (and duplicated.....). Use common sense. Manage
your data.
"... The real issue is the semiconductors - the actual silicon. ..."
"... China has some fabs now, but far too few to handle even just their internal demand - and tech export restrictions have long kept their leading edge capabilities significantly behind the cutting edge. ..."
"... On the flip side: Foxconn, Huawei et al are so ubiquitous in the electronics global supply chain that US retail tech companies - specifically Apple - are going to be severely affected, or at least extremely vulnerable to being pushed forward as a hostage. ..."
Internet, phones, Android aren't the issue - except if the US is able to push China out of
GSM/ITU.
The real issue is the semiconductors - the actual silicon.
The majority of raw silicon wafers as well as the finished chips are created in the US or
its most aligned allies: Japan, Taiwan. The dominant manufacturers of semiconductor equipment
are also largely US with some Japanese and EU suppliers.
If Fabs can't sell to China, regardless of who actually paid to manufacture the chips,
because Applied Materials has been banned from any business related to China, this is pretty
severe for 5-10 years until the Chinese can ramp up their capacity.
China has some fabs now, but far too few to handle even just their internal demand - and
tech export restrictions have long kept their leading edge capabilities significantly behind
the cutting edge.
On the flip side: Foxconn, Huawei et al are so ubiquitous in the electronics global supply
chain that US retail tech companies - specifically Apple - are going to be severely affected,
or at least extremely vulnerable to being pushed forward as a hostage.
"... The British aerospace sector (not to be confused with the company of a similar name but more Capital Letters) developed, amongst other things, the all-flying tailplane, successful jet-powered VTOL flight, noise-and drag-reducing rotor blades and the no-tailrotor systems and were promised all sorts of crunchy goodness if we shared it with our wonderful friends across the Atlantic. ..."
"... We shared and the Americans shafted us. Again. And again. And now *they* are bleating about people not respecting Intellectual Property Rights? ..."
"Without saying so publicly, they're glad there's finally some effort to deal with longstanding issues
like government favoritism toward local companies, intellectual property theft, and forced technology
transfers."
The British aerospace sector (not to be confused with the company of a similar name but more Capital
Letters) developed, amongst other things, the all-flying tailplane, successful jet-powered VTOL flight,
noise-and drag-reducing rotor blades and the no-tailrotor systems and were promised all sorts of crunchy
goodness if we shared it with our wonderful friends across the Atlantic.
We shared and the Americans shafted us. Again. And again. And now *they* are bleating about people not
respecting Intellectual Property Rights?
And as for moaning about backdoors in Chinese kit, who do Cisco et al report to again? Oh yeah, those
nice Three Letter Acronym people loitering in Washington and Langley...
A claimed deliberate spying "backdoor" in Huawei routers used in the core of Vodafone
Italy's 3G network was, in fact, a Telnet -based remote debug interface.
The Bloomberg financial newswire reported this morning that Vodafone had found
"vulnerabilities going back years with equipment supplied by Shenzhen-based Huawei for the
carrier's Italian business".
"Europe's biggest phone company identified hidden backdoors in the software that could have
given Huawei unauthorized access to the carrier's fixed-line network in Italy,"
wailed the newswire.
Unfortunately for Bloomberg, Vodafone had a far less alarming explanation for the deliberate
secret "backdoor" – a run-of-the-mill LAN-facing diagnostic service, albeit a hardcoded
undocumented one.
"The 'backdoor' that Bloomberg refers to is Telnet, which is a protocol that is commonly
used by many vendors in the industry for performing diagnostic functions. It would not have
been accessible from the internet," said the telco in a statement to The Register ,
adding: "Bloomberg is incorrect in saying that this 'could have given Huawei unauthorized
access to the carrier's fixed-line network in Italy'.
"This was nothing more than a failure to remove a diagnostic function after
development."
It added the Telnet service was found during an audit, which means it can't have been that
secret or hidden: "The issues were identified by independent security testing, initiated by
Vodafone as part of our routine security measures, and fixed at the time by Huawei."
Huawei itself told us: "We were made aware of historical vulnerabilities in 2011 and 2012
and they were addressed at the time. Software vulnerabilities are an industry-wide challenge.
Like every ICT vendor we have a well-established public notification and patching process, and
when a vulnerability is identified we work closely with our partners to take the appropriate
corrective action."
Prior to removing the Telnet server, Huawei was said to have insisted in 2011 on using the
diagnostic service to configure and test the network devices. Bloomberg reported, citing a
leaked internal memo from then-Vodafone CISO Bryan Littlefair, that the Chinese manufacturer
thus refused to completely disable the service at first:
Vodafone said Huawei then refused
to fully remove the backdoor, citing a manufacturing requirement. Huawei said it needed the
Telnet service to configure device information and conduct tests including on Wi-Fi, and
offered to disable the service after taking those steps, according to the document.
El Reg understands that while Huawei indeed resisted removing the Telnet
functionality from the affected items – broadband network gateways in the core of
Vodafone Italy's 3G network – this was done to the satisfaction of all involved parties
by the end of 2011, with another network-level product de-Telnet-ised in 2012.
Broadband network gateways in 3G UMTS mobile networks are described in technical detail in
this Cisco (sorry)
PDF . The devices are also known as Broadband Remote Access Servers and sit at the edge of
a network operator's core.
Plenty of other things (cough, cough, Cisco) to panic about
Characterising this sort of Telnet service as a covert backdoor for government spies is a
bit like describing your catflap as an access portal that allows multiple species to pass
unhindered through a critical home security layer. In other words, massively over-egging the
pudding.
Many Reg readers won't need it explaining, but Telnet is a routinely used method of
connecting to remote devices for management purposes. When deployed with appropriate security
and authentication controls in place, it can be very useful. In Huawei's case, the Telnet
service wasn't facing the public internet, and was used to set up and test devices.
Look, it's not great that this was hardcoded into the equipment and undocumented – it
was, after all, declared a security risk – and had to be removed after some pressure.
However, it's not quite the hidden deliberate espionage backdoor for Beijing that some
fear.
Twitter-enabled infoseccer Kevin Beaumont also shared his thoughts on the story,
highlighting the number of vulns in equipment from Huawei competitor Cisco, a US firm:
For example, a pretty bad remote access hole was discovered in some Cisco
gear , which the mainstream press didn't seem too fussed about. Ditto hardcoded root
logins in Cisco video surveillance boxes. Lots of things unfortunately ship with insecure
remote access that ought to be removed; it's not evidence of a secret backdoor for state
spies.
Given Bloomberg's previous history of trying to break tech news, when it claimed that tiny
spy chips were being secretly planted on
Supermicro server motherboards – something that left the rest of the tech world
scratching its collective head once the initial dust had settled – it may be best to take
this latest revelation with a pinch of salt. Telnet wasn't even mentioned in
the latest report from the UK's Huawei Cyber Security Evaluation Centre, which savaged
Huawei's pisspoor software development practices.
While there is ample evidence in the public domain that Huawei is doing badly on the
basics of secure software development, so far there has been little that tends to show it
deliberately implements hidden espionage backdoors. Rhetoric from the US alleging Huawei is a
threat to national security seems to be having the opposite effect around the world.
With Bloomberg, an American company, characterising Vodafone's use of Huawei equipment as
"defiance" showing "that countries across Europe are willing to risk rankling the US in the
name of 5G preparedness," it appears that the US-Euro-China divide on 5G technology suppliers
isn't closing up any time soon. ®
Bootnote
This isn't shaping up to be a good week for Bloomberg. Only yesterday High Court judge Mr
Justice Nicklin
ordered the company to pay up £25k for the way it reported a live and ongoing
criminal investigation.
"... The US Department of Commerce said it would put Huawei on its so-called Entity List, meaning that the American companies will have to obtain a licence from the US government to sell technology to Huawei. At the same time, US president Donald Trump signed an executive order declaring the US telecoms sector faced a "national emergency" -- giving the commerce department the power to "prohibit transactions posing an unacceptable risk" to national security . ..."
"... "The US has basically openly declared it is willing to engage in a full-fledged technology war with China," he said. ..."
"... Huawei has few alternatives for critical semiconductors to Qualcomm, which would likely be denied an export license if the US follows through on its threat of putting Huawei on the "Entity List" (the second most stringent category, but still sufficient for the US to bar licensing). One is Murata, but Japan has joined the US ban on Huawei 5G products, and would presumably fall in line if the US were to ask Japan to tell Murata not to sell semiconductors to Huawei. ..."
"... On top of that, Ethiopian Air's forceful criticism of the 737 Max gives China air cover. Unlike Lion Air, which is widely seen as a questionable operator, readers who fly emerging economy carriers give Ethiopian Air high marks for competence and safety. One even wrote, "I have flown Ethiopian Air. It's certainly far better than Irish-owned and operated Ryan Airlines (even though the latter has white pilots with nice Irish accents)." ..."
"... Chinese interests have made large investments many countries in Africa, so it's conceivable it could get other countries on the continent to follow its lead. Admittedly, China plus those countries collectively may not be large enough to do considerable damage to Boeing. But this action would break the hegemony of the FAA as certifier for US manufacturers, and that could prove crippling in the long run. ..."
The White House and US Department of Commerce took steps on Wednesday night that would in effect ban Huawei from selling technology
into the American market, and could also prevent it from buying semiconductors from suppliers including Qualcomm in the US that are
crucial for its production .
The US Department of Commerce said it would put Huawei on its so-called Entity List, meaning that the American companies will
have to obtain a licence from the US government to sell technology to Huawei. At the same time, US president Donald Trump signed
an executive order declaring the US telecoms sector faced a "national emergency" -- giving the commerce department the power to "prohibit
transactions posing an unacceptable risk" to national security .
Paul Triolo, a technology policy expert at Eurasia Group, a risk consultancy, said it was a "huge development" that would not
only hurt the Chinese company but also have an impact on global supply chains involving US companies such as Intel, Microsoft and
Oracle.
"The US has basically openly declared it is willing to engage in a full-fledged technology war with China," he said.
Huawei has few alternatives for critical semiconductors to Qualcomm, which would likely be denied an export license if the
US follows through on its threat of putting Huawei on the "Entity List" (the second most stringent category, but still sufficient
for the US to bar licensing). One is Murata, but Japan has joined the US ban on Huawei 5G products, and would presumably fall in
line if the US were to ask Japan to tell Murata not to sell semiconductors to Huawei.
The advantages of China going after Boeing, as opposed to making life miserable for US technology companies, would be considerable.
Targeting, say, Microsoft would be an obvious tit for tat. By contrast, China was the first country to ground the 737 Max, and its
judgment was confirmed by other airline regulators and eventually the FAA. China does not have a credible competitor to Boeing, so
it could wrap continued denial of certification of the 737 Max in the mantle of being pro-safety, even if independent parties suspected
this was a secondary motive.
On top of that, Ethiopian Air's forceful criticism of the 737 Max gives China air cover. Unlike Lion Air, which is widely
seen as a questionable operator, readers who fly emerging economy carriers give Ethiopian Air high marks for competence and safety.
One even wrote, "I have flown Ethiopian Air. It's certainly far better than Irish-owned and operated Ryan Airlines (even though the
latter has white pilots with nice Irish accents)."
Chinese interests have made large investments many countries in Africa, so it's conceivable it could get other countries on
the continent to follow its lead. Admittedly, China plus those countries collectively may not be large enough to do considerable
damage to Boeing. But this action would break the hegemony of the FAA as certifier for US manufacturers, and that could prove crippling
in the long run.
Another issue that hasn't gotten the attention it warrants is that Boeing appears to lack the stringent software development protocols
necessary for "fly by wire" operations. Boeing historically has relied on pilots being able to reassert control over automated functions';
Airbus has "fly by wire" systems as far more prominent and accordingly the expectation and ability of pilots to override these systems
is lower.
However, many articles noted that MCAS took the 737 further into a fly-by-wire philosophy than it had been before. Yet Boeing
was astonishingly lax, having only two angle of attack sensors, of which only one would be providing input to MCAS, and then on an
arbitrary-seeming basis.
By contrast, the Airbus philosophy stresses redundancy, not only in hardware -- they use not three but four angle of attack sensors
-- but in software, and even software development. "Two or more independent flight control computing systems are installed using
different types of microprocessors and software written in different languages by different development teams" and verified using
formal methods (" Approaches
to Assure Safety in Fly-By-Wire Systems: Airbus Vs. Boeing ").
Microsoft will reportedly become the latest tech giant to 'suspend' its relationship with
Huawei, according to
the South China Morning Post .
One week after Washington first imposed strict limits on Huawei and its affiliates that will
make it almost impossible for American firms buy Huawei products or sell American-made
components to the company, a handful of chipmakers, telecoms companies and tech firms
(Alphabet) have reportedly scaled back or severed their relationship with Huawe.
Though Microsoft said yesterday that it hadn't made a decision, the SCMP reported Friday
morning that Microsoft had decided to stop accepting new orders from Huawei for operating
systems and other content-related services: Windows operating systems for laptops and other
content-related services. The US software giant has already removed Huawei laptops from its
online stores.
Just one more prime example why no companies should use Microsoft software.
The issue is clear as a bell. Become dependent on a US supplier and the Gov of the USSA
could cut off your contracts with impunity. That risk is too high for any manufacturing
entity.
I am not a fan of Linux. I do not like the way it manages memory. Also while it has gotten
better, it remains something of an unmade bed in that much of the software doesn't work
particularly well. But the same cold be said for Microsoft. How many times does Windows
OFFICE have to lock up before you comprehend the nightmarish patch system which has become
Windows?
GNU meaning not Unix never developed into a GUI. Ghost BSD looks interesting, BSD PC has
limited compatibility but UNIX is flatly superior in how it handles memory. Unix is
brilliant. I also love Open Office, it is better than Microsoft Office and you can save all
your files to the Microsoft format if you want. Open Office is perfect transitional software
and FREE! Why are school districts paying microsoft instead of using Open Office.
Win 10 is invasive garbage. I don't want anything managing my computer
"automatically".
Huawei is a real wakeup call for the world... the US is an unreliable trader. They can
never be trusted. This is not just about that lunatic Turmp. If AOC ever got to the White
House she could do the same under the New Green Deal NATIONAL SECURITY EMERGENCY.
The Constitution gave Congress the exclusive power over Commerce but over time, the
Congress delegated more and more power to the Exec with this kind of dreadful outcome.
Founding Fathers wanted checks and balances. But here you have one person, interrupting
commerce and contracts with the stroke of a pen that has never been approved by Congress.
That is simply too much risk.
The Chinese like anyone else make mistakes. BUT CHINA does not repeat the same mistake
twice unlike the USSA that seems to be caught in the revolving door of mistakes.
Better that this happens early in the life of Huawei than much later. China could actually
lead the world into the adaptation of open source destroying both Microsoft, Google and Apple
at the same time. Remember Apple took BSD and then made proprietary changes. That is the
APPLE OS which is much more stable than anything Windows ever made.
While people knock apple Iphone for cost, the Apple laptops are very stable and
essentially virus and worm immune. For a novice users that's why Apples are great.
I have had Unix based machines run for years with never being turned off, always rock
stable. It is head and shoulders above everything. FreeBSD
Here is a UNIX GUI. I know nothing about these guys but will check it out. A non power
user only needs a solid browser, and a good word processor, Open Office works with BSD.
Personally I don't think Apple should be grouped with Google and microsoft. I don't see as
Apple has done anything wrong other than selling their products at a premium to the novices.
That's not a crime and novices benefit. So quit packaging Apple in with Google and
Microsoft.
BTW, Blackberry OS is Unix based. It is a canadian company so likely a US poodle.
Huawei were attacked because they are a threat to Apple, not to "our national
security." The only thing Trump cares about are the profits of big companies.
Yes, but the real question is did you cut ties with the NBA, Nike, grape Kool-Aid,
McDonald's, Popeye's, your parole officer, KFC, crotch-grabbing, your six illegitimate
children and the local welfare office?
I knew Nokia was doomed when it partnered with Microsoft. They should have instead
partnered with and help fund the Open Source Software community. By now, we'd have
spectacular phones, free of logjams of spyware, bloatware, and ads.
Now you have Windoze PC's with logjams of spyware, bloatware, and ads. Well, unless you
hack it to make it a Workable PC. It's weird having to Hack your own PC to make it sane.
Why shouldn't Corning glass or Micron flash memory be sold to Huawei for use in phones
bound for Europe? Huawei sells 30 times more phone in Europe than USA. I bought Huawei phone
in Norway and I think is my best phone ever, I use Samsung Galaxy Note 9 in USA, but I carry
the Huawei for photos and for WiFi calls from Norway. Try to do wifi calls from the Galaxy
using Starbucks wifi and then using the same wifi try Huawei, you would see the difference
right away.
The US is going to sanction itself into economic irrelevance as the rest of the world says
F you. We only have two friends now, Israel and KSA. Nice work, Donnie.
"... However, nothing in the actual piece talks about security concerns. (I point this out because I perceive a trend towards such misleading summaries and headlines which contradict what the actual reporting says.) ..."
"... These companies do not have security concerns over Huawei. But the casual reader, who does not dive down into the actual piece, is left with a false impression that such concerns are valid and shared. ..."
"... South China Morning Post ..."
"... This move by Google-USG is mostly a propaganda warfare move. Huawei doesn't depend on smartphone sales to survive. It's American market was already small, while China's domestic market is huge. China is not Japan. ..."
"... Trump's heavy handed move against Huawei will backfire. The optic is unsettling; the US looks to be destroying a foreign competitor because it is winning. ..."
"... Until the reserve currency issue favoring the "exceptional" nation changes, the economic terrorism will continue.. ..."
"... What is funny in all these stories, is that there is little to no Huawei equipment (not the end-user smart phone, home router and stuff, but backbone routers, access equipment,..) anywhere in the US -- they are forbidden to compete. Most telcos are quite happy to sell in the US, as the absence of these Chinese competitors allows for healthy margins, which is no longer true in other markets. ..."
"... The US is trying desperately to quash tech success / innovation introduced by others who are not controlled by (or in partnership with) the US, via economic war, for now just politely called a trade war - China no 1 adversary. ..."
"... Attacking / dissing / scotching trade between one Co. (e.g. Huawei) and the world is disruptive of the usual, conventional, accepted, exchange functioning, and throws a pesky spanner in the works of the system. Revanchard motives, petty targetting, random pot-shots, lead to what? ..."
"... The war against Huawei is only one small aspect within the overall Trade War, which is based on the false premise of US economic strength. Most of the world wants to purchase material things, not financial services which is the Outlaw US Empire's forte and most of the world can easily forego. Trump's Trade War isn't going as planned which will cause him to double-down in a move that will destroy his 2020 hopes. ..."
However, nothing in
the actual piece talks about security concerns. (I point this out because I perceive a trend towards such misleading summaries
and headlines which contradict what the actual reporting says.)
The British processor company ARM, which licenses its design to Huawei, cites U.S. export controls as the reason to stop cooperation
with Huawei:
The conflict is putting companies and governments around the world in a tough spot, forcing them to choose between alienating
the United States or China .
Arm Holdings issued its statement after the BBC reported the firm had told staff to suspend dealings with Huawei.
An Arm spokesman said some of the company's intellectual property is designed in the United States and is therefore " subject
to U.S. export controls ."
Additionally two British telecom providers quote U.S. restrictions as reason for no longer buying Huawei smartphones:
BT Group's EE division, which is preparing to launch 5G service in six British cities later this month, said Wednesday it would
no longer offer a new Huawei smartphone as part of that service. Vodafone also said it would drop a Huawei smartphone from
its lineup. Both companies appeared to tie that decision to Google's move to withhold licenses for its Android operating software
from future Huawei phones.
These companies do not have security concerns over Huawei. But the casual reader, who does not dive down into the actual
piece, is left with a false impression that such concerns are valid and shared.
That the Trump administration says it has security reasons for its Huawei ban does not mean that the claim is true. Huawei
equipment is as good or bad as any other telecommunication equipment, be it from Cisco or Apple. The National Security Agency
and other secret services will try to infiltrate all types of such equipment.
After the sudden ban on U.S. entities to export to Huawei, chipmakers like Qualcomm temporarily stopped their relations with
Huawei. Google said that it would no longer allow access to the Google Play store for new Huawei smartphones. That will diminish
their utility for many users.
The public reaction in China to this move was quite negative. There were many calls for counter boycotts of Apple's i-phones
on social media and a general anti-American sentiment.
The founder and CEO of Huawei, Ren Zhengfei, tried to counter that. He gave a
two hour interview (vid, 3 min excerpt with subtitles)
directed at the Chinese public. Ren sounds very conciliatory and relaxed. The Global Times and the South China Morning
Post only have shortexcerpts
of what he said. They empathize that Huawei is well prepared and can master the challenge:
I do not believe this is precisely what will happen. Huawei already has its licenses purchased. In addition they could decide
to disrespect the IP if this was the case.
Huaweis's suppliers in Japan, South Korea, Taiwan (ROC), and Britain are examining if they can continue to make business with
Huawei, while some have already declared a suspension in cooperation.
The issue is that these non-American companies nonetheless use some American components of technology, and if they proceed
they will be sanctioned by the US themselves.
It is the same reason why Russia's Sukhoi did not in the end sell its SSJ-100 airliners to Iran -- East Asian tech companies
can hardly be expected to be more gung-ho on defying the US than Russia's leading defense plant......
@p #2 - Huawei surely has their processors *as of now*.
That - if USA would not ban Huawei (HiSilicon) processors, because of using that ARM technology. Thing is, Huawei would be
isolated from next-generation ARM processors. They are locked now in their current generation.
Even Qualcomm today, for what I know, bases their processors on ARM's "default" schemes, instead of doing their development
"from scratch", in a totally independent way. It would push for slow but steady decline as "top" smartphone vendor into "el cheapo"
niche.
Boeing is the counter-part in the contest to destroy Huawei. China has great leverage over Boeing's future. It is the nation with
the biggest market now and downstream for 10-20 years. China need planes, thousands of them.
As for Huawei's chief doubting the prowess of the Chinese students, he only needs to look at the rapidity of the conversion
of his nations' economy to a 98% digital economy. All that conversion was done by local, entrepreneurial innovators in the software
and hardware tech sector. It happened only in China and completely by Chinese young people who had phones and saw the future and
made it happen.
It has been Chinese minds building Chinese AI on Chinese Big Data.
Yes, they need Russian technologists and scientists. Those Russian minds in Russia, in Israel, in South Korea are proven difference
makers.
The need China now has will meet the solution rapidly. For five years, the Double Helix of Russia-China has been coming closer
in education and R&D institutes in both nations. China investors and Chinese sci-tech personnel are in the sci-tech parks of Russia,
and Russians are in similar facilities in China. More will happen now that the Economic War against China threatens.
Huawei will have solutions to replace all US components by the end of the year. It will lose some markets. but it will gain
hugely in the BRI markets yet to be developed.
In the long run, the US makers will rue the day Trump and his gang of Sinophobes and hegemonists took aim at Huawei and China's
tech sector.
This move by Google-USG is mostly a propaganda warfare move. Huawei doesn't depend on smartphone sales to survive. It's American
market was already small, while China's domestic market is huge. China is not Japan.
Besides, it's not like Europe is prospering either. Those post-war days are long gone.
And there's no contradiction between what the CEO said and the Government line: both are approaching the same problem from
different points of view, attacking it from different fronts at the same time. "Patriotism" is needed insofar as the Chinese people
must be prepared to suffer some hardships without giving up long term prosperity. "Nationalism" ("politics") is toxic insofar
as, as a teleological tool, it is a dead end (see Bannon's insane antics): the Chinese, after all, are communists, and communists,
by nature, are internationalists and think beyond the artificial division of humanity in Nation-States.
Talking Digital and security in the same sentence is laughable.... NOTHING Digital is 'secure',,, never has,,, never will.
Digital destroys everything it touches. At present, excepting for now the low wage States, it is destroying economies ever
so slowly one sector at a time. This has nothing to do with security and everything to do with the dying West, especially the
USA which is trying desperately to save what's left of its production whether it be 5G, Steel plants or Nord Stream. The West
created China when it happily allowed and assisted Western corporations to move the production there in order to hide the inflation
that was being created for wars and welfare and now has to deal with the fallout which eventually will be their undoing.
A full-blown trade war was probably inevitable, driven by geopolitical concerns as much or more than economics.
One wonders what each of China and US has been doing to prepare. It seems like the answer is "very little" but since it's USA
that is driving this bus, I would think that USA would've done more to prepare (than China has).
PS It's not just Boeing. China also supplies the vast majority of rare earth minerals.
Her captivity and probable imprisonment in the US explain his attitude. She is a high profile pawn. The US must convict her
in order to justify what they have done to her so far. She may not serve time, in the US prisons, but she will be branded a guilty
person, guilty of violating the Empire's rules (laws).
Imagine Ivanka in the same situation. Her daughter singing in Mandarin would be little help. The Trump Family will be a number
one target for equal treatment long after "45" leaves office.
The US Empire is wild with Power. All of that Power is destructive. And all the globe is the battlefield, except USA. But History
teaches that this in-equilibrium will not last long.
We've seen how Europe caved to US pressure to stop trading with Iran. Now Japan and others are caving to pressure to stop trading
with China. There is already pressure and negotiation to stop Nordstream. And all of the above leads to questions about Erdogan's
resolve.
Trump's heavy handed move against Huawei will backfire. The optic is unsettling; the US looks to be destroying a foreign competitor
because it is winning.
The ramifications of trade war with China (where the supply and manufacturing chain of most consumer electronics is these days)
is disruptive. Trump has created uncertainty for many manufacturers since there is Chinese part content is just about everything
these days. Some manufacturers might relocate production to the US but most will try to simply decouple from the US entirely.
Exposure to the US is really the problem not exposure to China.
The trade war with Iran was also unlikely to persist. But it has persisted, and deepened as European poodles pretended to resist
and then pretended not to notice that they didn't.
A new Bloomberg opinion piece agrees with that view
No, it doesn't b. You say USA trade war will fail because it lacks international support. Bloomberg says USA should get international
support to make it more effective. The difference is that it is highly likely that USA will get international support. It already
has support from Japan.
USA has proven that it can effectively manipulate it's poodle allies. Another example is Venezuela where more than two dozen
countries recognized Guido only because USA wanted them to.
<> <> <> <> <> <> <>
It's not Trump but the US Deep State that causes US allies to fall in line. Any analysis that relies on Trump as President
is bound to fail as his public persona is manipulated to keep Deep State adversaries (including the US public) off-balance.
Like President's before him, Trump will take the blame (and the credit) until another team member is chosen to replace him
in what we call "free and fair elections".
What is funny in all these stories, is that there is little to no Huawei equipment (not the end-user smart phone, home router
and stuff, but backbone routers, access equipment,..) anywhere in the US -- they are forbidden to compete. Most telcos are quite
happy to sell in the US, as the absence of these Chinese competitors allows for healthy margins, which is no longer true in other
markets.
So the Huawei ban hits first and foremost the US' partners.
China can only undo the US-exceptionalsim if and when it can visibly project military power. The only way to achieve
that is tt has to make great haste in building a few fleets of aircraft carriers, fregats and destroyers, etc. It must
build a grand, visibly magnificent Chinese Navy.
Modi wins in India, another victory for the world oligarchs. Exactly mimicking conditions in the U$A. Media and governmental
capture by the uber wealthy...
The US is trying desperately to quash tech success / innovation introduced by others who are not controlled by (or in partnership
with) the US, via economic war, for now just politely called a trade war - China no 1 adversary.
Afaik, the entire smart-phone industry is 'integrated' and 'regulated' by FTAs, the WTO, the patent circuit, the Corps. and
Gvmts. who collaborate amongst themselves.
Corps. can't afford to compete viciously because infrastructure, aka more encompassing systems or networks (sic) are a pre-requisite
for biz, thus, Gvmts. cooperate with the Corps, and sign various 'partnerships,' etc.
sidebar. Not to mention the essential metals / components provenance, other topic. see
Attacking / dissing / scotching trade between one Co. (e.g. Huawei) and the world is disruptive of the usual, conventional,
accepted, exchange functioning, and throws a pesky spanner in the works of the system. Revanchard motives, petty targetting, random
pot-shots, lead to what?
As I wrote in the Venezuela thread, major US corps are already belt tightening by permanently laying off managers, not already
cut-to-the-bone production staff, and another major clothing retailer is closing its 650+ stores. And the full impact of Trump's
Trade War has yet to be felt by consumers. As Wolff, Hudson and other like-minded economists note, there never was a genuine recovery
from 2008, while statistical manipulation hides the real state of the US economy. One thing that cannot be hidden is the waning
of revenues collected via taxes which drives the budget deficit--and the shortfall isn't just due to the GOP Congress's tax cuts.
The war against Huawei is only one small aspect within the overall Trade War, which is based on the false premise of US economic
strength. Most of the world wants to purchase material things, not financial services which is the Outlaw US Empire's forte and
most of the world can easily forego. Trump's Trade War isn't going as planned which will cause him to double-down in a move that
will destroy his 2020 hopes.
Data for 2019 is probably slightly different, but the trends should keep on. That data also does not separate Android-based
phones from non-Android phones. So, segmenting Android into Google and China infrastructures would mean
1) Huawei retains a $152B market - China
2) Huawei retains an unknown share in $87B market - APAC
3) Huawei loses a $163,9B market - all non-China world.
At best Huawei looses 40,7% of world market. That if all APAC population would voluntarily and uniformly drop out of Google
services into Huawei/China services (which they would not). At worst Huawei retains 37,7% of the marker (if APAC population would
uniformly follow Google, which they would not either).
"... Since the end of the Cold War, the American government has become increasingly delusional, regarding itself as the Supreme World Hegemon. As a result, local American courts have begun enforcing gigantic financial penalties against foreign countries and their leading corporations, and I suspect that the rest of the world is tiring of this misbehavior. Perhaps such actions can still be taken against the subservient vassal states of Europe, but by most objective measures, the size of China's real economy surpassed that of the US several years ago and is now substantially larger , while also still having a far higher rate of growth. Our totally dishonest mainstream media regularly obscures this reality, but it remains true nonetheless. ..."
"... Provoking a disastrous worldwide confrontation with mighty China by seizing and imprisoning one of its leading technology executives reminds me of a comment I made several years ago about America's behavior under the rule of its current political elites: ..."
"... Normal countries like China naturally assume that other countries like the US will also behave in normal ways, and their dumbfounded shock at Ms. Meng's seizure has surely delayed their effective response. In 1959, Vice President Richard Nixon visited Moscow and famously engaged in a heated "kitchen debate" with Premier Nikita Khrushchev over the relative merits of Communism and Capitalism. What would have been the American reaction if Nixon had been immediately arrested and given a ten year Gulag sentence for "anti-Soviet agitation"? ..."
"... But Bolton's apparent involvement underscores the central role of his longtime patron, multi-billionaire casino-magnate Sheldon Adelson, whose enormous financial influence within Republican political circles has been overwhelmingly focused on pro-Israel policy and hostility towards Iran, Israel's regional rival. ..."
"... Although it is far from clear whether the very elderly Adelson played any direct personal role in Ms. Meng's arrest, he surely must be viewed as the central figure in fostering the political climate that produced the current situation. Perhaps he should not be described as the ultimate puppet-master behind our current clash with China, but any such political puppet-masters who do exist are certainly operating at his immediate beck and call. In very literal terms, I suspect that if Adelson placed a single phone call to the White House, the Trump Administration would order Canada to release Ms. Meng that same day. ..."
As most readers know, I'm not a casual political blogger and I prefer producing lengthy
research articles rather than chasing the headlines of current events. But there are
exceptions to every rule, and the looming danger of a direct worldwide clash with China is
one of them.
Consider the arrest last week of Meng Wanzhou, the CFO of Huawei, the world's largest
telecom equipment manufacturer. While flying from Hong Kong to Mexico, Ms. Meng was changing
planes in the Vancouver International Airport when she was suddenly detained by the Canadian
government on an August US warrant. Although now released on $10 million bail, she still
faces extradition to a New York City courtroom, where she could receive up to thirty years in
federal prison for allegedly having conspired in 2010 to violate America's unilateral
economic trade sanctions against Iran.
Although our mainstream media outlets have certainly covered this important story,
including front page articles in the New York Times and the Wall Street Journal
, I doubt most American readers fully recognize the extraordinary gravity of this
international incident and its potential for altering the course of world history. As one
scholar noted, no event since America's deliberate 1999
bombing of China's embassy in Belgrade , which killed several Chinese diplomats, has so
outraged both the Chinese government and its population. Columbia's Jeffrey Sachs
correctly described it as "almost a US declaration of war on China's business
community."
Such a reaction is hardly surprising. With annual revenue of $100 billion, Huawei ranks as
the world's largest and most advanced telecommunications equipment manufacturer as well as
China's most internationally successful and prestigious company. Ms. Meng is not only a
longtime top executive there, but also the daughter of the company's founder, Ren Zhengfei,
whose enormous entrepreneurial success has established him as a Chinese national hero.
Her seizure on obscure American sanction violation charges while changing planes in a
Canadian airport almost amounts to a kidnapping. One journalist asked how Americans would
react if China had seized Sheryl Sandberg of Facebook for violating Chinese law especially if
Sandberg were also the daughter of Steve Jobs.
Indeed, the closest analogy that comes to my mind is when Prince Mohammed bin Salman of
Saudi Arabia kidnapped the Prime Minister of Lebanon earlier this year and held him hostage.
Later he more successfully did the same with hundreds of his wealthiest Saudi subjects,
extorting something like $100 billion in ransom from their families before finally releasing
them. Then he may have finally over-reached himself when Washington Post columnist
Jamal Khashoggi, a Saudi dissident, was killed and dismembered by a bone-saw at the Saudi
embassy in Turkey.
We should actually be a bit grateful to Prince Mohammed since without him America would
clearly have the most insane government anywhere in the world. As it stands, we're merely
tied for first.
Since the end of the Cold War, the American government has become increasingly delusional,
regarding itself as the Supreme World Hegemon. As a result, local American courts have begun
enforcing gigantic financial penalties against foreign countries and their leading
corporations, and I suspect that the rest of the world is tiring of this misbehavior. Perhaps
such actions can still be taken against the subservient vassal states of Europe, but by most
objective measures, the size of China's real economy surpassed that of the US several years
ago and is now substantially larger ,
while also still having a far higher rate of growth. Our totally dishonest mainstream media
regularly obscures this reality, but it remains true nonetheless.
Provoking a disastrous worldwide confrontation with mighty China by seizing and
imprisoning one of its leading technology executives reminds me of
a comment I made several years ago about America's behavior under the rule of its current
political elites:
Or to apply a far harsher biological metaphor, consider a poor canine infected with the
rabies virus. The virus may have no brain and its body-weight is probably less than
one-millionth that of the host, but once it has seized control of the central nervous
system, the animal, big brain and all, becomes a helpless puppet.
Once friendly Fido runs around foaming at the mouth, barking at the sky, and trying to
bite all the other animals it can reach. Its friends and relatives are saddened by its
plight but stay well clear, hoping to avoid infection before the inevitable happens, and
poor Fido finally collapses dead in a heap.
Normal countries like China naturally assume that other countries like the US will also
behave in normal ways, and their dumbfounded shock at Ms. Meng's seizure has surely delayed
their effective response. In 1959, Vice President Richard Nixon visited Moscow and famously
engaged in a heated "kitchen
debate" with Premier Nikita Khrushchev over the relative merits of Communism and
Capitalism. What would have been the American reaction if Nixon had been immediately arrested
and given a ten year Gulag sentence for "anti-Soviet agitation"?
Since a natural reaction to international hostage-taking is retaliatory international
hostage-taking, the newspapers have reported that top American executives have decided to
forego visits to China until the crisis is resolved. These days, General Motors sells more
cars in China than in the US, and China is also the manufacturing source of nearly all our
iPhones, but Tim Cook, Mary Barra, and their higher-ranking subordinates are unlikely to
visit that country in the immediate future, nor would the top executives of Google, Facebook,
Goldman Sachs, and the leading Hollywood studios be willing to risk indefinite
imprisonment.
Canada had arrested Ms. Meng on American orders, and this morning's newspapers reported
that a former
Canadian diplomat had suddenly been detained in China , presumably as a small
bargaining-chip to encourage Ms. Meng's release. But I very much doubt such measures will
have much effect. Once we forgo traditional international practices and adopt the Law of the
Jungle, it becomes very important to recognize the true lines of power and control, and
Canada is merely acting as an American political puppet in this matter. Would threatening the
puppet rather than the puppet-master be likely to have much effect?
Similarly, nearly all of America's leading technology executives are already quite hostile
to the Trump Administration, and even if it were possible, seizing one of them would hardly
be likely to sway our political leadership. To a lesser extent, the same thing is true about
the overwhelming majority of America's top corporate leaders. They are not the individuals
who call the shots in the current White House.
Indeed, is President Trump himself anything more than a higher-level puppet in this very
dangerous affair? World peace and American national security interests are being sacrificed
in order to harshly enforce the Israel Lobby's international sanctions campaign against Iran,
and we should hardly be surprised that the National Security Adviser John Bolton, one of
America's most extreme pro-Israel zealots,
had personally given the green light to the arrest. Meanwhile, there are credible reports
that Trump himself remained entirely unaware of these plans, and Ms. Meng was seized on the
same day that he was personally meeting on trade issues with Chinese President Xi. Some have
even suggested that the incident was a deliberate slap in Trump's face.
But Bolton's apparent involvement underscores the central role of his longtime patron,
multi-billionaire casino-magnate Sheldon Adelson, whose enormous financial influence within
Republican political circles has been overwhelmingly focused on pro-Israel policy and
hostility towards Iran, Israel's regional rival.
Although it is far from clear whether the very elderly Adelson played any direct personal
role in Ms. Meng's arrest, he surely must be viewed as the central figure in fostering the
political climate that produced the current situation. Perhaps he should not be described as
the ultimate puppet-master behind our current clash with China, but any such political
puppet-masters who do exist are certainly operating at his immediate beck and call. In very
literal terms, I suspect that if Adelson placed a single phone call to the White House, the
Trump Administration would order Canada to release Ms. Meng that same day.
Adelson's fortune of $33 billion ranks him as the 15th
wealthiest man in America, and the bulk of his fortune is based on his ownership of extremely
lucrative gambling casinos in Macau, China . In effect, the Chinese government currently has
its hands around the financial windpipe of the man ultimately responsible for Ms. Meng's
arrest and whose pro-Israel minions largely control American foreign policy. I very much
doubt that they are fully aware of this enormous, untapped source of political leverage.
Over the years, Adelson's Chinese Macau casinos have been involved in all sorts of political
bribery scandals , and I suspect it would be very easy for the Chinese government to find
reasonable grounds for immediately shutting them down, at least on a temporary basis, with
such an action having almost no negative repercussions to Chinese society or the bulk of the
Chinese population. How could the international community possibly complain about the Chinese
government shutting down some of their own local gambling casinos with a long public record
of official bribery and other criminal activity? At worst, other gambling casino magnates
would become reluctant to invest future sums in establishing additional Chinese casinos,
hardly a desperate threat to President Xi's anti-corruption government.
I don't have a background in finance and I haven't bothered trying to guess the precise
impact of a temporary shutdown of Adelson's Chinese casinos, but it wouldn't surprise me if
the resulting drop in the stock price of Las Vegas Sands Corp would reduce
Adelson's personal net worth were by $5-10 billion within 24 hours, surely enough to get his
immediate personal attention. Meanwhile, threats of a permanent shutdown, perhaps extending
to Chinese-influenced Singapore, might lead to the near-total destruction of Adelson's
personal fortune, and similar measures could also be applied as well to the casinos of all
the other fanatically pro-Israel American billionaires, who dominate the remainder of
gambling in Chinese Macau.
The chain of political puppets responsible for Ms. Meng's sudden detention is certainly a
complex and murky one. But the Chinese government already possesses the absolute power of
financial life-or-death over Sheldon Adelson, the man located at the very top of that chain.
If the Chinese leadership recognizes that power and takes effective steps, Ms. Meng will
immediately be put on a plane back home, carrying the deepest sort of international political
apology. And future attacks against Huawei, ZTE, and other Chinese technology companies would
not be repeated.
China actually holds a Royal Flush in this international political poker game. The only
question is whether they will recognize the value of their hand. I hope they do for the sake
of America and the entire world.
"... Launching a tech war or a trade war against any country is not appropriate, nor is it the best way to defend national security, Macron said. ..."
"... Out of the total of 70 billion U.S. dollars Huawei spent on buying components in 2018, some 11 billion dollars went to U.S. companies, the Reuters reported Friday. ..."
"... The spirit of openness is what helped the United States develop. However, Washington's restrictions on Huawei, based on unfounded allegations and political speculations, fall foul of the golden rules it once embraced ..."
WASHINGTON, May 22 (Xinhua) --
Washington last week declared a national emergency over what it claimed are technological
threats, and announced restrictions on sale and transfer of American technologies to China's
Huawei.
The telecom company has long been accused by the United States of being able to use its
network equipment to spy on foreign nations for the Chinese government. However, "no
intelligence service has published clear evidence that Huawei inserted 'backdoors' for Chinese
authorities to access the data that passes through its networks," according to a December 2018
article by U.S. media Politico.
Given the lack of proof that Huawei threatens U.S. security, last week's twin moves by
Washington -- the use of state apparatus to oppress a company -- are a reflection of nothing
but bullying.
The smearing campaign against Huawei aside, the United States has also been trying to rally
Europe to abandon Huawei products, citing security threats. It was not welcome.
"Europe must not be dragged into the trade dispute between China and the United States,"
Germany's powerful BDI industrial lobby group was quoted by media reports as saying in a
statement on Thursday.
France too refused to take orders from the United States. "Our perspective is not to block
Huawei or any company," President Emmanuel Macron told the VivaTech conference in Paris on
Thursday.
Launching a tech war or a trade war against any country is not appropriate,
nor is it the best way to defend national security, Macron said.
The ban on the supply of U.S.-made chips to Huawei is a lose-lose in any sense, as it poses
a threat to Huawei's viability and U.S. companies also pay the price.
Out of the total
of 70 billion U.S. dollars Huawei spent on buying components in 2018, some 11 billion dollars
went to U.S. companies, the Reuters reported Friday.
"The ban will financially harm the thousands of Americans employed by the U.S. companies
that do business with Huawei," said Catherine Chen, a Director of the Board at Huawei, in a The
New York Times article on Friday. "A total ban on Huawei equipment could eliminate tens of
thousands of American jobs."
Although Huawei does not do much business in the United States, the company is the sole
provider of networking equipment to many rural American internet providers, according to a CNN
article on Tuesday.
"Those companies have said it will take time -- or may be impossible -- to replace their
Huawei technology with a rival's," it added.
As a move to ease the repercussion of the ban, the U.S. Department of Commerce on Monday
issued a 90-day temporary license loosening restrictions on business deals with Huawei.
Huawei doesn't intend to isolate itself from others, but wants to make as many friends as
possible, its founder Ren Zhengfei told Chinese media on Tuesday when asked why Huawei didn't
use substitutes before the United States took the latest aggressive measures.
"We don't want to do harm to friends," he said. "We want to help them achieve good balance
sheets. Even if we make adjustments, we still ought to render help."
The spirit of
openness is what helped the United States develop. However, Washington's restrictions on
Huawei, based on unfounded allegations and political speculations, fall foul of the golden
rules it once embraced
.
For Washington to win in an era of cooperation and inter-dependence, it would be better to
revive the spirit of openness.
"... In a company-wide memo, ARM told employees that their designs contain "US origin technology," which would be affected by the Trump administration's May 15 Executive Order to "protect our country against critical national security threats." ..."
"... Also cunning thing would be to change brand name a bit like change/remove 1 letter. ..."
"... Yet, they find out they are buying from another vendor that complies with China's demands and poof there goes another company ..."
"... Xi should have listen to Deng Xiaoping. Keep your head down, go about your business and shut the **** up. But Xi the chest pounding panda declared Made in China 2025 and spooked everyone. China should de-robe him then hang him high! ..."
"... There has been a suspiciously sudden rise in China hawkishness among American citizens (e.g., commentators on these boards) coincident with what to outside observers has been a very obvious post-Russia tsunami of political and MSM anti-China propaganda (it's often easier to see propaganda from the outside than from the inside). ..."
"... Yes, but not all of China is restricted from using ARM. Only Huawei. Other phone manufacturers will be unaffected. ..."
Japanese-owned chip designer
ARM Holdings
has notified its staff to halt "
all active contracts,
support entitlements, and any pending engagements
" with Huawei and its subsidiaries in order to comply with the
recent US clampdown, according to the
BBC
. Based in the
UK and owned by Japan's Softbank, ARM designs and licenses processors used in all types of electronic devices, including
smart phones, tablets, laptops, televisions, automotive systems and more.
"
ARM is the foundation of Huawei's smartphone chip designs, so this is an insurmountable obstacle for Huawei
,"
said Geoff Blaber of CCS Insight, adding: "That said, with an abundance of companies in Huawei's supply chain already
having taken action to comply with the US order,
Huawei's ability to operate was already severely affected
."
In a company-wide memo, ARM told employees that their designs contain "US origin technology," which
would be affected by the Trump administration's May 15
Executive Order
to "protect our country against critical national security threats."
The US has argued that the Chinese government could force companies such as Huawei to install backdoors on their devices
to allow for spying on US networks - an accusation Huawei has repeatedly denied.
Softbank - which is also one of Japan's largest mobile carriers - has joined with
Japan's largest carriers
DoCoMo and KDDI in announcing that they will stop taking orders for Huawei handsets.
Nope, cross licensing is strictly forbidden under the licensing
ARM uses. If uou want to use ARM based designs, you have two
choices. Buy the chips already made, or license a core and fab the
package yourself.
If you fab it yourself, you have to market the cores and chips
as being nased on theirs.
That's it. I learned this when looking to have some Asics made
up for compute decices and decided to review all of my options. I
decided two things looking into that.
1 I wouldn't have anything made until I could have them made
here in the US. Still waiting for a FAB with older equipment to
for such things to pop up. I simply don't trust China.
2 I would start from scratch using a RISC design with MIT
license to avoid the decades of no development by actually having
a real open licensing scheme. The GPL crap sucks.
Licenses to independent third parties do not matter yet.
"ARM Holdings
has notified its staff to halt "
all
active contracts, support entitlements, and any pending
engagements
" with Huawei and its subsidiaries"
KASHGAR, China -- A God's-eye view of Kashgar, an ancient city in
western China, flashed onto a wall-size screen, with colorful icons
marking police stations, checkpoints and the locations of recent
security incidents. At the click of a mouse, a technician explained,
the police can pull up live video from any surveillance camera or
take a closer look at anyone passing through one of the thousands of
checkpoints in the city...
There's no such things a national security. This is U.S. corporate
security protecting the corporate interests of the other telecom
corporations that license to operate through the U.S. corporation.
Comprendo?
The way this gloal fraud operates really is a laughable
pathetic joke with what's hidden because is criminal. That includes
everything globally that alleged to be classified or some level of so
called top secret but none of it is. The sedtion and treason of the
government saw to those eliminations along with the cancellation of
all NDA's, or other similar docments to attempt to use threat,
coercion, murder as a consequence.
When is there going to be a fully functional so called smart phone
that is not hackable, trackable, fully compliant with all unalienable
rights, usable globally, with a degree of voice and data encryption
to ensure no possibility of interception or monitoring? Oh and free
phone w/ $25 unlimited voice and data monthly.
Xi should have listen to Deng Xiaoping. Keep your head down, go about
your business and shut the **** up. But Xi the chest pounding panda
declared Made in China 2025 and spooked everyone. China should
de-robe him then hang him high!
Simple! Send the Chinese navy to Venezuela at the time when the
U.S. is sending its naval forces to Iran. That should rattle
Washington greatly. That should up the ante greatly too. Then see
who blinks first.
There has been a suspiciously sudden rise in China hawkishness among
American citizens (e.g., commentators on these boards) coincident
with what to outside observers has been a very obvious post-Russia
tsunami of political and MSM anti-China propaganda (it's often easier
to see propaganda from the outside than from the inside).
A good
discussion of the opposing point of view has just aired on RT, among
the host, an American living in Russia, Fred Teng, President of the
America China Public Affairs Institute, and James Bradley (American),
author of The China Mirage. You may think this is just propaganda
from the opposite direction, but if so you will at least have two
poles to position yourself between rather than just one side of the
story. If you have an open mind.........it is well worth watching.
https://m.youtube.com/watch?v=6C1kYnrm1cA
All you ignorant fuckers need to
take a one month vacation to China. Come back and lets talk then.
Your world outlook will have been greatly humbled and you would be
more willing to be of the cooperative model of world politics rather
than this senseless belligerence I see here.
I remember being photographed at every highway underpass. I
remember not being able to view You Tube or any video on Facebook
because it was blocked...
This is an major O'sh2t because all of China's cell phones use ARM!
China is now like African no internet village because they don't have
smart phones... LOL
"... And once trade talks had broken down, there was a 'scramble' to implement the measures against Huawei. ..."
"... this report effectively confirms that the administration wasn't being entirely truthful when it said there was 'no link' between Huawei and the trade talks. Trump said back in December that he would go so far as to intervene in efforts to extradite Meng Wanzhou if it would help with the trade talks. And although that would be extreme, we should rule it out just yet. ..."
If there was any lingering doubt that President Trump has treated Huawei like a 'bargaining
chip' during trade talks with the Chinese,
Bloomberg just put the issue to rest.
In a report sourced to administration insiders,
BBG reported that the Trump administration waited to blacklist Huawei until talks with the
Chinese had hit an impasse, because they were concerned that targeting Huawei would disrupt the
talks. Plans to punish Huawei - including possible economic sanctions - had been kicking around
for months. And prosecutors took their first tentative steps toward holding Huawei
'accountable' by convincing Canada to arrest Huawei CFO Meng Wanzhou.
And once trade talks had broken down, there was a 'scramble' to implement the measures
against Huawei.
Though BBG doesn't offer a definitive answer on this, it reports that some are suspicious
that Trump is pressuring Huawei to 'gain a negotiating edge' with Beijing (meanwhile, the
Chinese leadership are furious about the decision).
Timing of the U.S. action raised questions about whether President Donald Trump is
punishing the company in part to gain a negotiating edge with Beijing in a deepening clash
over trade. Talks between Beijing and Washington deadlocked this month as Trump accused China
of backing out of a deal that was taking shape with U.S. officials, saying China reneged on
an agreement to enshrine a wide range of reforms in law.
Another take on what happened suggested that the decision to hold back on Huawei actually
came from the bureaucracy, as administration officials were worried President Trump would just
scrap the measures as a favor to Xi, like he did last year with ZTE Corp. Those concerns
haven't entirely abated.
Washington has offered Huawei some wiggle room by suspending the new restrictions for 90
days. The company has been stockpiling chips, and reportedly already has enough to keep its
business running for three months.
But this report effectively confirms that the administration wasn't being entirely
truthful when it said there was 'no link' between Huawei and the trade talks. Trump said back
in December that he would go so far as to intervene in efforts to extradite Meng Wanzhou if it
would help with the trade talks. And although that would be extreme, we should rule it out just
yet.
EU and China struggle over key concerns ahead of summit😲
Yet the summit might not produce a joint statement - as previous Chinese pledges on
speeding-up talks on an investment agreement, plus opening up its markets more to European
companies, havefailed to materialise.
"We can certainly agree on a joint statement, the question is how substantive this will
be," a senior EU official said. The EU wants to see concrete steps from China.
Failing to agree on a joint statement, however, is a sign of the EU's unsuccessful bid
to commit China to give greater access of its markets to European companies, and engage
seriously in reforming global trade rules within the World Trade Organisation (WTO).
The EU hoped to make China address longstanding European complaints, and to commit to
concluding an investment agreement that aims to secure better market access and fair
treatment for European companies in China by 2020.
The EU also hopes to achieve an agreement on indications of geographical origins to
protect European brands in China by the end of the year.
An EU official said that the recent foreign investment law adopted in China, does not
address all the issues of concern for Europeans,for instance on prohibited sectors,
dual regime for foreign and domestic operations, and on forced technological
transfer.
"We agree there has been a lot of promises, it is time for action, not only words.
[…] We want to make sure we have a modern framework for investment protection in a
binding agreement with mechanism to solve disputes," the EU official added.
“While the [European] Commission is getting tougher on China, at least for
now it does not seem to be aiming for a confrontation with China,” he said.
But even if the EU doesn’t fully align itself with the increasingly
hawkish Trump administration , a shift in China-EU relations seems inevitable.
“The EU has no interest in cooling its China relationship, but if it does not act
now to protect its economy from unfair state-owned enterprise competition in the EU market,
then the citizens of Europe might ask for more protection,” Wuttke said.
“[There is] growing realism in Europe and the end of naivety when it comes to
China.”
Exclusive: In China, the Party’s push for influence inside foreign firms stirs
fears😲
BEIJING (Reuters) - Late last month, executives from more than a dozen top European
companies in China met in Beijing to discuss their concerns about the growing role of the
ruling Communist Party in the local operations of foreign firms, according to three people
with knowledge of the discussions.
China got fucked the minute they agreed to invest trillions into US debt securities in
exchange for being given unlimited access to sell into the US market. This terrible
arrangement set them up to be crushed economically if the US were to close its doors to
Chinese exports, and to lose much of what they made from their trade surplus with the US if
they ever tried to unload their holdings.
Their main stock market now is down over 30% since the tariffs went into force last June,
and they are closing factories so fast that the price of oil to heat and power those
factories has fallen by the same 30+% as the Chinese stock market. And now, were the Chinese
to start off loading their US Treasury holdings, they would drive the bond market down about
10-20%, which would be another several hundreds of billions of dollars lost. A clean sweep
mop up operation would be done by the Fed and Anointed Banks in a afternoon. Answer this, why
is a good soldier to the PLA, HSBC advertising like crazy for deposit's in $ when they have
unlimited access to the Yuan? BOOM !!!
China's future access to U.S. dollars via their exports is the sword hanging above their
Chicom heads.
The Chinese were advised for a long time that they were going to have to make changes in
their trade policies if they were to avoid their present troubles. They were told not to hold
the US Treasury securities they were forced to buy, and instead sell them off slowly and
re-invest the capital into domestic infrastructure projects that would expand the size of the
Chinese middle class. And they were told to diversify their export markets, so that they
would not be so dependent on the US consumer to buy Chinese products, The Chinese did little
on the first initiative, and little on the second as well, although the second is difficult
to accomplish since there are not many consumer markets that can buy anywhere near what the
US can buy.
Not a pretty picture. But many saw this day coming. Unfortunately for China, not nearly
enough of the decision makers in the Forbidden City did. Xi Jinping played the card to walk
away from agreed upon section of the trade deal, he played his hand. Confusis say, you made
your bed now sleep in it...............
China would go from having the largest overall trade surplus in the world to having a
trade surplus smaller than Ireland if you take away the U.S. Trade Surplus China
Steals……….
Xi Jinping has now lost Face and the Entire Globe now knows it.
Well that should end the extradition case of Ms Weng. Clearly politically motivated. Her
attorney's Steptoe in DC are top drawer. This also means that Huawei may sue Trump for
damages.
That's because Steptoe never loses to the DOJ. There are three top firms in DC that are
DOJ killers. Steptoe is one of them. Williams & Connolly another. The Ted Stevens Case
was the greatest legal slaughter of the DOJ in history. 6 Gov attorney's sanctioned and
threatened by the Judge for disbarment. That's the way to kick the Gov ***. All six counts
dropped!
Meng is still in Canada so that is a Canadian Jurisdiction but the Canadian law is express
that political motivation is insufficient grounds for extradition. This is evidence of
precisely that.
All this over a charge of fraud... LOL. It doesn't get any weaker than that!
China will never do that. They are about business and they are not going to harm a
customer over politics. Trump does this routinely. He puts sanctions on Venezuela to harm the
women and children to soften up the Gov. He has done it with Russia. It is always indirect
attacks to get something unrelated. The cowardly conduct of a bully. Hitler did the same sort
of things. The siege of Stalingrad for example.
The damage Trump is doing to Google is incomprehensible. Huawei is one of Google's largest
customers. Can you even imaging the implications?
If you were a manufacturer of smartphones and were licensing an OS from Google and Trump
then blocks the license.... How many makers of smartphone do you think will want to be
dependent on this kind of lunatic gov? No country should want to deal with the US for
anything. Look at Russia, they were buying jet engines for their MC 21 and Trump Gov cuts
them off. Now they are making their own engines not buying US made engines. How does that
help the US manufacturer? Russia will make their engines and compete with the US makers.
"... China will only redouble its efforts to produce advanced technologies domestically. ..."
"... As a negotiating strategy, the decision makes even less sense. U.S. officials claim it had nothing to do with stalled trade talks, but it certainly looks like Trump wants to use Huawei as leverage, just as he did last year with ZTE Corp ..."
"... Worse, the decision undermines the implicit point of any U.S.-China trade deal: not just to increase commerce but to stabilize relations between the world's two most powerful nations. ..."
"... targeting Huawei so nakedly will only further marginalize the few moderates in the Chinese leadership and embolden hawks who see conflict as unavoidable ..."
"... Crushing Huawei, by contrast, simply looks like a strategic miscalculation -- and one with potentially disastrous consequences. ..."
Banning one of China's most high-profile companies from US networks makes sense. Putting it out of business does
not.
In its struggle with China over trade and national security, the US has many legitimate grievances, and a
variety of weapons for seeking redress. That doesn't mean it should use all of them.
The nuclear missile the U.S. just launched at Huawei Technologies Co. Ltd. is a case in point. Last week, the
Commerce Department placed Huawei and nearly 70 of its affiliates on an "
Entity
List
," which means that U.S. suppliers may now need a license to do business with them. Both Huawei's mobile
phones and its network equipment rely on American components, including advanced semiconductors. If the ban is
applied stringently, it
could drive
one of China's most high-profile companies -- employing more than 180,000 people -- out of business.
That would be a serious mistake. The U.S. has long argued that Huawei poses a national-security threat. And
there certainly are legitimate
reasons to worry
that incorporating Huawei gear into America's networks will leave them vulnerable both to
spying and, in the event of a conflict, sabotage. But the U.S. is already taking other prudent steps to prevent
Huawei equipment from being used domestically. Seeking to put the company out of business as well is both
disproportionate and deeply unwise.
For one thing, it will impose collateral damage. Blameless companies around the world -- including Huawei's
American suppliers
-- could lose business, face disruptions and incur significant new costs. Allies that have
resisted
U.S. pressure to shun Huawei's equipment will resent being backed into a corner: Even if President
Donald Trump loosens the noose a bit, they can hardly take the chance that restrictions won't be re-imposed later.
China will only redouble its efforts to produce advanced technologies domestically.
As a negotiating strategy, the decision makes even less sense. U.S. officials claim it had nothing to do with
stalled trade talks, but it certainly looks like Trump wants to use Huawei as leverage,
just as he did last year
with ZTE Corp. Trump has already
invoked
national security far too often in pursuing his scattered trade battles. Doing so here would set
another terrible precedent while almost certainly backfiring: It will aggravate the current impasse and give
Beijing little incentive to abide by any eventual agreement.
Worse, the decision undermines the implicit point of any U.S.-China trade deal: not just to increase commerce
but to stabilize relations between the world's two most powerful nations. While tensions are inevitable, a healthy
trading relationship should in theory restore ballance, reminding both sides of the benefits of cooperation and
strengthening constituencies that have reason to prefer peace to war. By contrast, targeting Huawei so nakedly
will only further marginalize the
few moderates
in the Chinese leadership and embolden hawks who see conflict as unavoidable. For ordinary
Chinese, it will be hard to avoid the impression that the U.S. is simply trying to limit their economic
possibilities.
Even on its own terms, finally, this gambit is likely to fail. To be effective, an assault on Huawei would need
to be embedded in a larger strategy with a clearer endgame in mind. That's nowhere in evidence: Is the aim to
cripple China's tech industry? Teach the country its place? Give a boost to non-Chinese suppliers? Provoke a
conflict? End one? Without a more focused goal, Trump risks simply alienating U.S. allies, infuriating average
Chinese and raising the chances of confrontation, all to no obvious end.
What the U.S. needs is a larger plan that seeks a healthier coexistence with China. That means building up
America's defenses, leveraging its competitive strengths, working with allies to pressure China to conform to
global norms, and taking the lead in writing new rules that can constrain its more disruptive behavior. Crushing
Huawei, by contrast, simply looks like a strategic miscalculation -- and one with potentially disastrous
consequences.
With $105 billion in global sales last year, Huawei has a vast web of customers and suppliers on
nearly every continent. The company is the world's largest provider of equipment used in 5G telecom networks, and the
second largest seller of cellphones. Last week, Huawei said that it spends more than $1 out of every $7 of its annual
$70 billion procurement budget buying equipment from U.S. companies.
Google said it would restrict Huawei's access to future updates of its Android operating
software, which powers many of Huawei's phones. Other U.S. manufacturers also began suspending business dealings with
the Chinese firm.
The markets punished many of those suppliers Monday, including Intel, Broadcom and Qualcomm, as
well as Micron and semiconductor manufacturer Cypress. Chip makers Qualcomm and Broadcom fell 6 percent. Intel
declined nearly 3 percent, and Lumentum Holdings shares fell more than 4 percent after the company said it would stop
selling to Huawei.
The United States said last week it was adding Huawei to a
trade blacklist
because the company "is engaged in activities that are contrary to U.S. national security or
foreign policy interest." That punishment means U.S. firms aren't allowed to sell to Huawei unless they get special
approval from the government.
On Monday evening, the Commerce Department
slightly eased
the timing of the restrictions, saying it would allow some transactions to continue for 90 days,
to facilitate "certain activities necessary to the continued operations of existing networks and to support existing
mobile services." The temporary reprieve will allow Huawei to receive U.S. equipment to service existing Huawei
mobile phone users and rural broadband networks.
Kevin Wolf, a former senior Commerce Department and current partner at Akin Gump, called the
reprieve "very narrow." "It's not relief for exporters. It really is to prevent unintended operational problems with
existing networks," Wolf said.
The United States views Huawei as a security risk because it believes the company has close ties
to the Chinese government, which Huawei has denied. U.S. officials have said Huawei could potentially tap into and
monitor sensitive U.S. communications through its network technology.
Ren Zhengfei, the founder of Huawei, said that the U.S had underestimated his company as he
sought to dismiss the impact of the ban.
"The current practice of U.S. politicians underestimates our strength," Ren said in a group
interview with Chinese media Tuesday morning. Huawei had a stockpile of chips and "can't be isolated" from the world,
he said.
The 90-day extension "doesn't mean much" and Huawei is fully prepared for the American actions,
Ren said, even appearing to brag about luring workers away from U.S. companies.
"We are very grateful to the U.S. companies. They have made a lot of contributions to us," he
said in the comments, which were shared in real time by state media. "Many of our consultants are from American
companies like IBM."
Earlier, Huawei reacted to Google's decision to stop allowing updates by saying the Chinese
company had "made substantial contributions to the development and growth of Android around theworld."
"As one of Android's key global partners, we have worked closely with their open-source platform
to develop an ecosystem that has benefitted both users and the industry," said spokesman Joe Kelly, adding that
Huawei would continue to provide security updates and after-sales services to its existingsmartphone and tablet
products.
Google's announcement came at an awkward time for Huawei, which on Tuesday is expected to unveil
its Honor 20 series of smartphones in London, and security experts were divided on how quickly and severely the ban
could hurt Huawei.
Some said Huawei is bigger and better prepared for the blockade than its Chinese competitor ZTE
was last year when the Trump administration restricted ZTE from doing business with U.S. firms. The U.S.
later eased
ZTE's punishment.
Washington announced last week that it would impose new prohibitions on Huawei, including a
ban on US companies selling components or services to the telecoms giant. The seriousness of
these actions is difficult to understate, as Rosenblatt Securities analyst Ryan Koontz
explained. If Huawei is pushed to the brink of collapse, Beijing might label this 'an act of
war'.
"The extreme scenario of Huawei's telecom network unit failing would set China back many
years and might even be viewed as an act of war by China," Koontz wrote. "Such a failure
would have massive global telecom market implications."
But bringing a massive global Chinese firm to its knees is one way to demonstrate to
Beijing, and the rest of the world, which ignored Washington's warnings about Huawei, the true
reach of American economic power. And it's one way to put a timer on talks with Beijing,
ensuring that the trade skirmish won't drag on until the height of campaign season.
American firms weren't the only ones to act. In Europe, German chipmaker Infineon
Technologies said it would suspend deliveries to Huawei, at least until it has had a chance to
determine the significance of Washington's executive order (though company sources later denied
these reports and said shipments to Huawei would continue).
Since hostilities with the US began, Huawei has been stockpiling components. It now has
enough of a buffer supply to keep its business running without interruption for at least three
months.
Nikkei reported late last week that Huawei had reportedly asked suppliers to help it build
up enough stockpiles to last it a year, but it's unlikely that Huawei has accumulated enough
buffer stock to last it anywhere near as long.
If Washington refuses to back down, this three-month window might become the next critical
deadline for the trade talks.
If it wasn't clear before, we now know that President Trump wasn't kidding when he said late
last year that Huawei could become 'a bargaining chip' in the trade skirmish. Whether the
prosecution of Meng Wanzhou factors into it remains to be seen, but President Trump did tell
Fox News over the weekend that he wouldn't allow China to surpass the US on his watch.
Huawei's odds of finding replacement suppliers are slim, as Koontz explained. Huawei "is
heavily dependent on U.S. semiconductor products and would be seriously crippled without supply
of key U.S. components."
It's clear where Beijing stands on this. We wouldn't be surprised to see a 'consumer
movement' emerge in China where middle-class consumers ditch foreign phones and proudly
proclaim their support for Huawei.
On Sunday afternoon, President Trump threatened Iran with military intervention via tweet.
Yet, analysts blamed the growing pressure on Huawei for the risk-averse trading atmosphere.
US stocks were on track to open lower. Meanwhile, Huawei's dollar-denominated corporate
bonds tumbled again on Monday after one of their biggest declines in recent memory on Friday.
The selloff comes as fears of a Huawei bankruptcy are beginning to intensify.
Beijing has maintained its aggressive posture, with its Ministry of Foreign Affairs warning
in response to news of the Google ban that China would do what it needed to do to protect its
companies' "legitimate rights", and also hinted at legal actions it might take. Over the
weekend, Beijing compared the trade skirmish with its actions in the Korean War, about as clear
a sign as any that we're in for a protracted conflict.
Whatever happens, it looks like the showdown over Huawei has eclipsed the broader trade-war
narrative. So much for the Huawei crackdown being a 'separate issue' from the trade talks, like
Trump officials had previously insisted.
Bottom line: If we don't get a deal by the end of June, this trade war is going to really
heat up.
So, Huawei is dependent upon Western semiconductor manufacturers. But I thought the
Chinese were the leaders in innovation? That's all I hear on here and elsewhere. Seems to me
that they should have invented and created their own semiconductor industry back in the
1800's when Westerners began to mess with them. One would think that the great and powerful
and super duper intelligent Chinese would have discovered and invented it first in the first
place. Certainly the Chinese or their pals in the USSR could have done so sometime in the
'50s, '60s, '70s, '80s or '90s? No?
The US might win this battle but it has already lost the war. It is in a position similar
to Ukraine which was the richest and most developed Sovjet republic after the breakup - but
which is now one of the biggest shitholes in the entire Galaxy, feasted upon by a bunch of
Zionazi oligarchs. Think of the US as an Ukraine on steroids.
Trump and his diverse actions will hurt Huawei. Maybe even badly. Long term, maybe even
short term, the US won't gain anything from it. It is in a position where it can only lose.
Not because the potential of the US isn't "terrific" (actually it coud be the most promising
country) - but because the US is designed to fail as it is basically a failed state
already.
Im confused, how would not choosing to do business with Huawei possibly be considered an
act of war?
Especially when China largely keeps their markets closed to the west?
After speaking to some Chinese immigrrants... according to them, they'll never come to any
kind of fair agreement with the west. They're not interested in a level playing field at all.
All they care about is making sure the Chinese state gets all the benefits in order to
further Chinas power and influence.
Great news. Huawei already has completed development of its own OS, no doubt an Android
clone. This finally gives us a path off of the Goolag/ Android OS. In 19 months Rabbi Trump
will be gone, which is good, but his destroying the Android monopoly may be his biggest
achievement.
An android clone? No way that would be stealing again. No they will make their own special
sauce OS that will electrocute the citizen if they don't adhere to the state directives.
There are so many other better ways to run a phone interface , I wonder if these two
systems have been kept as monopolies so that the Spooks at the NSA and CIA are able to find
their way around easily
The take away quote
"
Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by
the United States.
"
Empire is having its hand slapped back in Venezuela, Iran, Syria, ???
Where are they going to get their war on?
I see empire as a war junkie and they are starting to twitch in withdrawals which is
dangerous but a necessary stage. Trumps latest tweets show that level of energy.
The
spinning plates of empire are not wowing the crowds like before.....what is plan Z?
"First published From Parameters, Summer 1997, pp. 4-14: US Army War College: "There will
be no peace. At any given moment for the rest of our lifetimes, there will be multiple
conflicts in mutating forms around the globe. Violent conflict will dominate the headlines,
but cultural and economic struggles will be steadier and ultimately more decisive. The de
facto role of the US armed forces will be to keep the world safe for our economy and open
to our cultural assault. To those ends, we will do a fair amount of killing."
"Excerpts From Pentagon's Plan: 'Prevent the Re-Emergence of a New Rival':
"Our first objective is to prevent the re-emergence of a new rival, either on the
territory of the former Soviet Union or elsewhere, that poses a threat on the order of that
posed formerly by the Soviet Union.
This is a dominant consideration underlying the new regional defense strategy and
requires that we endeavor to prevent any hostile power from dominating a region whose
resources would, under consolidated control, be sufficient to generate global power. These
regions include Western Europe, East Asia, the territory of the former Soviet Union, and
Southwest Asia.
There are three additional aspects to this objective: First, the U.S. must show the
leadership necessary to establish and protect a new order that holds the promise of
convincing potential competitors that they need not aspire to a greater role or pursue a
more aggressive posture to protect their legitimate interests.
Second, in the non-defense areas, we must account sufficiently for the interests of the
advanced industrial nations to discourage them from challenging our leadership or seeking
to overturn the established political and economic order. Finally, we must maintain the
mechanisms for deterring potential competitors from even aspiring to a larger regional or
global role. An effective reconstitution capability is important here, since it implies
that a potential rival could not hope to quickly or easily gain a predominant military
position in the world."
... access to vital raw materials, primarily Persian Gulf oil"
Indeed, the biggest cost may be imposed on investors, who for years have inflated the
economic potential of communist China's state-directed economy. Major public companies in the
United States, including Apple, Caterpillar, and Boeing, are among some of the leading
exporters to China. Yet exports to China accounted for just 7.2 percent of overall American
exports in 2018. According to the U.S. Trade
Representative , the top export categories that year were: aircraft ($18 billion),
machinery ($14 billion), electrical machinery ($13 billion), optical and medical instruments
($9.8 billion), and vehicles ($9.4 billion).
Hmmm. This sounds suspiciously like the arguments Brexiters have dragged out about the EU.
Remember the "German car manufacturers will help us get everything we want because we're such
a large market and they can't afford to lose us"?
People of a country can decide to put up with a heck of a lot of economic pain if they
decide they're defending their country.
Base issue seems clear. Two large economies with very different models of governing. One a
Totalitarian state run economy, and our economy based on greed and consumption, to support
GDP. The theory that the world need be interconnected by trade, has run its course. We really
don't even need a Nafta re done treaty. All 3 economies have exhausted what works for them,
and can simply abandon what doesn't. If a cuntry has something to sell and the buyer country
sees a price advantage the deal will go down.
Tariffs do not get passed along into higher consumer prices unless the product has a very
high inelasticity in demand.
Here's a thought experiment: suppose I sell an imported product for $10. The government
imposes a 25% tariff, so I decide to up the price to $12.50. Here's your issue: if I could
charge $12.50 for the product, why wouldn't I just have charged that in the first place?
Charity? No, I didn't charge that because every time I tried, sales collapsed.
And if you understand retail, especially imports, gross margins are enormous. Sales prices
can be 10 times cost of goods. So that $10 product probably just cost $1. And a 25% tariff on
$1 is only 25 cents. Top of the line iPhones cost about $180 to make but retail for close to
$1000.
Tariff expenses come out of some combination of negotiated lower prices with vendors, lost
jobs as importers seek to cut costs, and lower profits. Consumer prices are the last thing to
consider.
Please excuse my ignorance. We hear about a war on this and a war on that all the time. Now a
trade war which we are winning (or not). How will we know that we won? After victory do we
buy more stuff from China or less? Will their prices for stuff be higher or lower? I am a
financially comfortable retired person who has plenty of stuff that I have accumulated over
the years; a trade victory might have a different meaning to a young couple starting a life.
Who gets the spoils of victory, me or the youngsters?
China has been running much the same economic model as Japan in the 1970's and 1980's, an
export-led autarchy heavily dependent on debt financing. When Japan started to open its
financial markets in the later 1980's, things started grinding to halt and by the early
1990's stagnation started.
China is on much the same track, though Xi has been careful not to liberalize the
financial markets too much, and has otherwise done a good job of keep growth on track. But it
can't last, and if a trade war does not tip China into stagnation, something else will in the
not-too-distant future.
Any downturn will bring the legitimacy of the CCP into question, and the traditional
response of dictatorships in that situation is to find a foreign conflict to distract the
population. With mutual distrust, and even dislike, growing on both sides, things could get
very messy.
In the 2017/2018 trade year, the US exported $12 billion of soy to China. That's.
particularly important for two reasons:
* China accounts for the majority of US soy exports, so the trade war affects that sector
more that the others you mention.
* The people affected are one of the cores of Trump's base.
The latter point is particularly significant, because the success or failure of the war
will be determined by political stamina, not by economics directly. Who can hold out longer,
Xi or Trump, as his political position erodes. One of the "weaknesses" of a democracy is the
greater sensitivity to the broader political environment (ie, not just the Politburo). Are
you so sure that the US will win this war of attrition?
@Kent – Thank you! Finally someone with actual understanding about retail and the
ridiculous profit margins of imported goods, especially from Asia. As someone who worked
first-hand at a shoe factory in China, managing the account, I was aghast at how low U.S.
companies like Nike or even Wal-Mart drove down the production costs ($6-18 dollars landed),
while selling the shoes for $30 – $120 dollars.
Theoretically all that juiced-up profits from outsourcing should have been reinvested to
create new jobs for U.S. workers over the past 20 years. That's what economists and corporate
lobbyists will argue. Empirically, however, those profits were reinvested to the stock market
for fat quarterly bonuses.
The underlying issue with China is their long standing demand to disclose all development
info about any product doing trade in China. Take Apple, they butted heads with the FBI and
refused to unlock an Iphone that belonged to a killer. Then they enter China and the
government there demands all the tec info for phone development and Apple simply hands over
their deepest secrets. Its the same for Ford, Cat or any others wanting to do business in
China. I for one, can live without any China trade if these have to be the requirements.
There is a long list of other cheap labor countries that would welcome our trade without
being forced to provide trade secrets.
"So what happens in the next T-bill auction when China doesn't show up and instead sits on
the sidelines–does the Treasury end up paying higher interest rates to sell the
instruments necessary to finance our federal spending? And, if so, what does an increase in
those interest rates do to our economy?"
Interest rates for treasuries are always set by the Federal Reserve. The secret sauce is
the Primary Dealer banks. They are required, by law, to make the market for treasuries.
Meaning they have to buy any treasuries that aren't sold. And they do so at the interest rate
set by the Fed. And they always, always have all the money they need to do so. The Fed just
prints it and adds it to their balances.
It's the beauty of a fiat currency. The USA cannot be held hostage to foreign financial
agents.
This trade war is about regime in change in China, as Bannon has said on many occasions. The
Chinese are finally waking up to our true intentions. America can't allow a more successful
economic model to exist anymore than they allow socialism in Venezuela.
The only surprising outcome of the clash will be that American corporations will
experience massive collateral damage due to supply chain disruption and being shut out of the
largest consumer market in the world in China.
The U.S. Empire has decided if U.S. corporation can't run ruff shod over the Chinese
government like they do here and everywhere else, they cannot be allowed to submit to Chinese
government rule in exchange for the benefits of the Chinese market place.
It's probably the only time in recent history that the defense of market forces resulted
in a direct hit on the "free" market itself. Like all front line troops, U.S. corporations
will suffer many casualties in the battle ahead. They didn't volunteer for this trade war and
they had no idea that this would be a hill that many would die on.
The paradox of this situation is not lost on them and most are paralyzed by what lies
ahead.
You are conveniently forgetting that much of the Chinese goods subject to the increased
tariffs are goods manufactured by American corporations utilizing Chinese labour due to its
much reduced costs. Those American companies are going to lose market share and profits
because of these new tariffs. They will not be happy!
I wonder if they could by commodities? Buy surplus oil would be a logical choice. They could
sell their treasuries, use dollars for oil, thereby drive up the price of oil for everyone,
including the US.
Granted that could eventually help the US, but in the short term could be a pain.
Slugger , I don't think your question is ignorant at all. I think it's very wise. If
only we asked the "Why?" and "What does a win look like?" of all these literal and figurative
wars, we might get somewhere.
I do not, ultimately, believe Trump's trade war with China is going to make the US into a
manufacturing powerhouse again. Those days have come and gone. It will definitely increase
the cost of a lot of junk we buy from China.
The hope, however, is that it will force China into a position wherein we could demand
more fairness in terms of patents and technology theft.
The time when it was beneficial for China to trade real goods for numbers in a computer was
long since past. They keep doing it out of habit. Trump is doing both countries a big favor.
Historically, it has not been wise to discount China's capacity to overcome disruptions that
would vivisect virtually any other civilisational hegemon on this planet. China survived the
Mongols, the English, and the Japanese. And itself many many times over.
We're barely a blink in the eye of China's history. I would not be as sanguine about who
"needs" whom more over the long term.
(Just to be clear: I have more than my share of criticisms of American trade policy of the
past couple of generations, including our posture vis-a-vis China.)
"Slugger
May 17, 2019 at 9:58 am
Please excuse my ignorance. We hear about a war on this and a war on that all the time. Now a
trade war which we are winning (or not). How will we know that we won? After victory do we
buy more stuff from China or less? Will their prices for stuff be higher or lower? I am a
financially comfortable retired person who has plenty of stuff that I have accumulated over
the years; a trade victory might have a different meaning to a young couple starting a life.
Who gets the spoils of victory, me or the youngsters?"
You. Definately you.
Youngsters need to be able find a job that pays for their basic needs and a path to be
able to keep growing or stabilize that lifestyle.
This war bumps prices higher, but won't bring those jobs back. High skill jobs are already
in high demand with few takers so more of those won't help the majority. The rest will either
be automated, moved from China to other countries (which is already happening as China wants
to move from sweatshops to a consumer middle class economy and places like India and Vietnam
are taking up the slack), or abandoned due to a lack of profit margins.
I'm not saying we should or shouldn't do this with China. They haven't exactly been
treating us or our companies well after all. But this is NOT going to benefit the regular
American. Low skill, sustainable, reliable work is just Not going to be a thing.
What will help is encouraging the ability to gain high skills and mobility for those high
skill jobs that are in desperate need of workers, aiding low skill workers so that they can
afford the things they need and not be 100% exploited, and figure out what to do with the
many many middle age and up folks who were trained to be middle class to transition them into
one or the other and not hate life while doing so.
We can go fix or break our trading systems with other countries as we see fit, but we
really need to stop thinking it's going to fix things. Same goes for immigration for that
matter.
The author shows his ignorance. The Bank of China is a commercial bank. Foreign reserves are
held by the People's Bank of China. Different entities. I assume the rest of the article is
full of inaccuracies.
It is hard to know if China has already lost. Their published economic numbers are not very
accurate. A key point is that the standard economic models of International Trade are wrong.
"Free Trade" can have benefits, but does mandate optimal outcomes. For example, lower cost
players can transfer economic production to their soil. There are many equilibrium points
(vs. the one of standard economics) in international trade when productivity changes or there
are economies of scale. With many of these points it would be better a nation not Trade. The
US Trade with China fits this bill. This non-standrd was demonstrated by Baumol and See:
https://www.amazon.com/Conflicting to
-National-Interests-Robbins-Lectures/dp/0262072092/ref=sr_1_5?s=books&ie=UTF8&qid=1473299717&sr=1-5&keywords=Baumol+Trade
We need to follow the actual Terrain of economic results vs. the incorrect map of standard
economics.
Organizational and Technological stage drives over 80% of economic growth (see Solow). The
Chinese have latched on to US creativity to drive their economy (plus an investment rate of
45% vs. 20% for the US). In parallel the US went Crony Capitalist and its TFP went from 3% to
.4%/year. Can a Crony capitalist US recover its productivity growth and can a State
Capitalismt Chinese dictatorship be innovative without the West. The US under Trump is
attempting to displace its currrent ruling elites. This will not happen in China. My guess is
China has lost at trade and will lose at Economic productivity growth.
Sounds more like a pointless Pyrrhic victory. Tit-for-tat trade wars have many unintended
consequences, can easily expand into other sectors, and ultimately consumers and employees
will bear the burden.
Americans' fear and hatred of China is so great that we are yearning for China's lost
regardless of how it may harm Americans.
Take the latest "emergency order" to put Huawei in the "entity list" to ban it from
purchasing American products. If implemented, it will cost American companies $11 billions of
sales from Huawei, and lost of thousands of high tech and good quality jobs. If Huawei is
destroyed, the 5G market will probably be picked up by Swedish and Finland companies, and the
smart phones market by South Korean Samsung, not any US company. But who cares, as long as
Huawei is destroyed, right?
Take a look of all opinion pages in the media and comments in the Internet, if the supply
chain is moved from China to Vietnam, then it is a win for Americans, right? Who care whether
Vietnamese can produce it as efficiently as Chinese or not, or whether Vietnam is also a
communist country?
This *jihadic* style pursuit to destroy China is also blinding ordinary intelligent
Americans of common sense about the relative strengths and weaknesses of both sides. This
author, for example, ignores all the possible ways Chinese can hit back if they also decide
to go the self-destructive ways or even "nuclear" (figuratively or literally) options. And
yes, the options are not restricted to financial tool like US bonds only, e.g.
1. Stop selling rare earth to American companies – which means we can't even make
F-35 fighters. The last congressional study finds that it will take at least 10 years for US
to re-open our rare earth mine.
2. Start making the life of all American companies difficult in China – GM and Ford
are selling more cars in China than in US, Apple has its 2nd largest market in China. The
growth rate of China for these companies are higher than US.
3. Stop cooperating with US on geopolitical front, e.g. start helping North Korea to
perfect their ICBM, or buying lots of oil from Iran, etc.
These are just random thoughts I come out from 2 minutes of brainstorming. I am very sure
1.4 billions people can think of many things much more deeply and creative than me. Have the
author or any of the people in DC think through all the possibilities before shouting for
war? Good luck if you think they do.
And rest assured when the dusk settles, ordinary Americans will NOT be any penny richer or
our life any better.
This country has a long history of insecurity toward and racism against Asians. Sadly, the
current fight proves that this ugly chapter has not close.
Right now Trump administration clearly wants to slow down China development and Chinese
leadership understand that. The game is probably similar to the game the USA played with the USSR
-- create economic difficulties to the point when disintegration, or the social upheaval is possible.
China level of internal debt denominated in dollars probably dwarf their Treasury holdings (this also is true for Russia).
This situation is considered by many commenters a huge weak point and that might be
Trump team calculation: in their current situation Chinese's can't afford to lose such a large export market as the USA: many
enterprises will simply be bankrupt.
The US consumers might still feel the pinch, but ultimately Beijing needs the trade surplus more than the USA needs their
trade.
If this is wrong, Trump administration might make already bad situation worse, as if China
can switch goods flows and survive more of less intact that might undermine dollar as the
reserve currency. They also now will probably completely ignore sanctions against Iran, making
them non-essential: a kick in the chin to the Trump and neocons who surround him in WH.
Looks like we are on the wedge of creation of two hostile to each other neoliberal systems instead of one: one with the center in
Washington and the
second with the center in Peking.
It is bad strategy to attack several countries simultaneously (the war on two forints) and
that's what Trump is doing: Iran, Russia and China are three major battlefields now. There are
also some tensions with EU too.
The concept of face while somewhat interesting is probably exaggerated and is redundant here.
This comments really gats to the bottom of it: " It has always seemed to me that "Face" is the
distant inferior cousin of Honor and a much closer sibling to Pride or even Hubris. That is, the
Asian concept of Face has everything to do with how you are perceived and almost none with how
you "are". Honor, meanwhile, demands a rigorous adherence to a code of conduct and force of will
that places less emphasis on perception and more on "being". Westerners (myself included) tend to
get those two confused. "
Notable quotes:
"... 6: It goes a pretty long way to be aware of some more imaginative things that especially state aligned business can do if you are in China. Things like precision weighing any electronic equipment you take there before and after are just best practice. ..."
I
don't think the Washington decision makers, as opposed to perhaps career Sinologists in the
State Department, quite understand the dynamics of the Trump Administrations relationship with
China and the risks America appears to be running. The bit that seems to be missing is a
realistic appreciation of "Face".
A quick search of the internet reveals scholarly definitions of "Face" together with the
description of it in socio - cultural terms that in my opinion do not do it justice. Couple
that with Western insensitivity, NeoCon hubris and Trumps preference for believing everything
is a negotiable transaction and we are set up for a monumental falling out with China that has
lethal consequences for America.
I will give a few examples of Face, you can find plenty more on your own. Did you know it is
an insult to request a Chinese to sign a written contract? If he has agreed to the terms and
said as much in front of other Chinese then that is enough. "Face" does the rest. Did you know
that in certain circumstances "Face" requires you to lie to, or ignore, authorities in support
of family and friends? This last, in my opinion, is the reason for the current Chinese attempt
at omnipresent surveillance; "we tremble at the power of the Emperor in Peking, but the
mountains are high".
Col. Lang makes the point that the Japanese went to war to dispel the threatened perception
that "they weren't the men they thought they were". Well with "Face' in China its more than
that, you are your "Face". To damage someones "Face" is to create a lifelong mortal, implacable
enemy. There is no way, short of death, to recover once you have given offense. Against that
standard Trump, Bolton and Pompeo are playing with fire. "Just kidding" doesn't cut it.
It may surprise some of you to know that the West was trading with China right through the
cold war - in US dollars only. Nixon didn't discover China either. It also may surprise some
that China is perfectly capable of making very high quality reasonably priced sophisticated
goods, and always has been. The reason that Walmart sells cheap Chinese schlock is because
that's what they asked China to supply. As for "stealing intellectual property", don't make me
laugh. We all do it and China has plenty of very smart people that create first rate IP of
their own. I make the case that China is a sophisticated and capable economy, with its own
amour propre, not some third world hole populated by leaders that can be bought or
threatened, and Trump risks forgetting this at our peril.
To this end I note that the trade war is not going to Americas advantage, China has vast
holdings of American debt, China buys Iranian oil, judging by reports of Sochi discussions,
Russia AND China are likely to support Iran and both Korea and Taiwan are vulnerable. In my
opinion President Trump has a very small window left in which to fire Bolton and perhaps Pompeo
and embark on a more conciliatory line, before China becomes an irreversible, implacable
enemy.
So unless we economically surrender to them expect war?
See, that's the attitude Trump and the Trade Representative display. It is
impossible we could find a compromise that would be better for both sides. It is a purely
binary zero-sum game. If we do not "win," then we "lose," which means surrendering to an
implacable enemy who will destroy us. It's no wonder the majority of the world's people think
America is the greatest danger to world peace. This is why Bolton is able to find support
throughout the nomenklatura. Most Chinese still hold to Confucian concepts of honor,
something the American elites abandoned decades ago as unprofitable.
My son, Jason, is fluent in both Mandarin and Cantonese was headquarered in Hong Kong for
years but now works out of Tokyo but spends a great deal of time in China conducting
business. He would probably argue that, if anything, Walrus is understating the importance of
Face in China. There are numerous rituals associated with interacting with Chinese that must
be observed in order for communication and agreement to flow properly.
I think many in America, maybe even Trump, have an image of China as a backward country
full of uneducated dumb people. Nothing could be further from the truth as a large segment of
the population is not only eductated but intellectually the equal of Americans.
As far as handling the trade war between China and the U.S., I think in some ways China
has an advantage in it's government directed relationship with business. It allows China to
react quickly to adverse conditions, faster and with more cohesiveness than our capitalist
system. Watch for China to move it's manufactured products through numerous other countries
to avoid some of the impact of tariffs.
China is also not as responsive to consumer complaints as the U.S. democracy. As soon as
Trump's base starts complaining about the higher prices at Walmart etc. Congress and Trump's
re-election campaign officials will start to make China tariffs seem intolerable.
I would think the Chinese see Trump as something to be persevered for a few years regardless
of who he surrounds himself with at this point. I wonder if they have a term for "face
incapable" as a parallel concept to the Russian "agreement incapable"? As such they probably
see his administration as a no more sophisticated than a hornets nest, to be avoided if
possible and swatted if necessary.
It has always seemed to me that "Face" is the distant inferior cousin of Honor and a much
closer sibling to Pride or even Hubris. That is, the Asian concept of Face has everything to
do with how you are perceived and almost none with how you "are". Honor, meanwhile, demands a
rigorous adherence to a code of conduct and force of will that places less emphasis on
perception and more on "being". Westerners (myself included) tend to get those two
confused.
If the Chinese were bound by the authors concept of Face, China must be a paradise without
corruption. Instead of polluted water land and air, wizened elders concerned over their
stewardship and the lose of face from an environmental catastrophe, would provide a
harmonious balance between man and nature. Instead, its a paradise and a ghetto where
passerby's walk nonchalantly around the dieing. Where companies reluctantly provide netting
to slow the steady suicide of their workers. They do tend to plan for the long term, and they
can certainly hold a grudge I would agree. How far are you willing to bend-knee for someone
else's concept of pride though? Tariffs, which have been around since antiquity, seem like a
small infraction for all this talk of life-long mortal, implacable enemies. Yesterday I saw a
Chinese TV program that roughly translated said Donald Trump was literally in the White House
crying over soybean prices. POTUS literally crying over the Chinese governments response to
our rising tariffs after decades of unfair trade practices that benefited the Chinese (elites
anyway). So you shouldn't think that saving Face is a two way street or will result in a
mutually beneficial deal.
IMO, China has been "an irreversible, implacable enemy" for decades now. It just so
happens that our own fifth column in the Party of Davos have aided and abetted this
implacable enemy while making sure that we voluntarily disarmed and did not fight back a war
that they are fully engaged in. The consequence has been that we are paying for our own
destruction. China is more authoritarian & militaristic today than it was three decades
ago and there are several people who believe they currently pose an existential threat to the
US & the West in general.
While tariffs may not be the best strategy, we have to admire Trump's courage and
determination to finally fight back in the face of massive internal opposition from our fifth
column. When you look at the sheer scale at which the Chinese are buying think-tanks,
academics, media, K-Street lobbyists & political influence it is staggering and only the
Israeli influence operation is bigger in depth & breadth. Ever since Bill Clinton gave
China Most Favored Nation status and the Party of Davos furthering their own narrow
short-term financial interests, we have directly financed and transferred technology to China
and dismantled our industrial base. China joined the WTO but has thumbed their noses at every
adverse WTO ruling that showed they play not by the rules but are predatory.
You dismiss the scale of IP theft, forced technology transfer, product dumping, state
subsidies and industrial espionage as everyone does it. That's typical of the China
apologists in the West.
I think you over-estimate China's financial strength. There are several macro analysts
with excellent long-term analytical track records who believe that China is desperately short
USD. This theme that you note that China can crash the UST market is already proven to be
false. China in fact sold hundreds of billions of UST in 2014-2016 with no perturbation in
the UST market.
On the contrary the financial pressure on China is increasing as their debt-fueled
malinvestments grow. I'm willing to bet you that we'll see this pressure manifest in a
devaluation of the RMB.
Sure, they've kicked our ass these past couple decades. Now they've got cocky and think they
own us. Supply chains can re-orient.
As a red-blooded American I'd like my home team to seriously up their game and of course
beat the Chinese at their own mercantilist game. A good start would be to put the squeeze on
their massive USD short position. Eurodollar market is a perfect spot to begin. The Chinese
have US$1.3 trillion debt maturing in 12 months. They've either got to redeem or rollover.
Devalue & bleed reserves. Or else sell USD assets & lose collateral. Margin call
time! Wake-up call time for BRI - if Trump chooses to squeeze at this immediate
vulnerability. Trump can also take the next critical step - restrict their access to our
capital markets. The SEC can also come down hard on all their fraudulent listings.
Maybe Australia is losing its best & brightest moving to China. Not here. In fact it
is the opposite. Young Chinese techies whoever can get a visa are immigrating here. Wealthy
Chinese including top CCP officials are using every mechanism that they can avail to get
their capital out. Chinese capital controls are tightening. If they had an open capital
account their trillion dollar reserve would vanish overnight as capital flees. You must know
that China's domestic security budget is larger than their defense budget. The CCP fear their
own people more than anyone else. Why do you think they're amping up their domestic
surveillance expenditure?
I can also give you an anecdotal experience. Newly minted billionaire and founder of Zoom,
Eric Yuan spoke to our tech analyst team a year ago. I happened to be in that meeting. He was
categorical that if he had been in China and had half the success, CCP would effectively
control his company. He said every Chinese techie dreams of moving to America.
Jack Ma, was banded out here in the west as the new breed Chinese tech entrepreneur. A
billionaire on the Davos circuit. Did he really own Alibaba or was it the CCP? How come his
shareholding was suddenly zeroed out?
Do you think any smart Chinese really trusts the CCP? Why would they? You talk about
"face" & culture and the 3,000 year history of the Han people. What about the history
& culture of the Tibetans? Or the culture & traditions of the Uyghurs with over 2
million of them currently undergoing brutal "re-education" in concentration camps in
Xinjiang?
The authoritarian CCP have had a free ride on us for over two decades. It is time to suit
up and give them a little taste of their own medicine. I hope Trump retains his resolve.
I don't care one iota about their "Face". Not at the expense of deindustrializing large
sections of the American Heartland. Which has already happened. Our trade relationship with
China has been a disaster. The only people to benefit are large shareholders.
As for them holding our debt it's threat is non-existent. Let them sell all of the bonds.
China currently owns $1.13 trillion in Treasurys, a fraction of the total $22 trillion in
U.S. debt. The Federal Reserve if need be can buy them all up but even that won't be
necessary due to insatiable demand for the bonds even at these ridiculous low interest
rates.
In fact their obsession with "Face" indicates a psychopath. Defines as no sense of right
and wrong and is generally bolder, more manipulative, and more self-centered than a
sociopath. That sums up their dealings with us the last 25 years.
Only a fool continues to play this game of theirs. Stealing our technology at will, forced
50/50 partnerships, currency manipulation, dumping into our country to destroy industries,
etc. etc. etc.
Plus they are expanding geographically now due to us making them rich. They are 1.3
million homogeneous Han for the most part. Especially compared to our country. I have to say
their government has definitely improved the lives of their citizens as a whole and I respect
that. But enough of our weak kneed leaders giving away the store.
I personally am being hurt by the tariffs due to many LVP flooring products I sell are
sourced from China. I have no problem taking a hit for the greater good and have been working
on sourcing from different locations.
Thanks for pointing the finger at China -looking out for their own interests - the bloody
bas-ards.
I guess you believe that had China had remained insular, the US would not have
de-industrialized to a different country? As if NAFTA wasn't a great sucking sound. Hmm. Me
things the problem lies closer to home - but no finger pointing there.
Totally impressed with the TrumpTareef - Totally on top of everything.
Oh wait, the tax advantages that encourage de-industrialization remain. But I guess Trump
doesn't understand taxes and how wealthy corporations and people use them to move production
overseas and not pay taxes ....
Meanwhile, global de-dolarization accelerates. At some % the US loses its special status
and there will be a reckoning.
I see a lot of hot air - not new policy: Manufacturing did not come back, US
infrastructure is a joke and continues to crumble, workforce participation continues
dropping, and hourly median wage remain stagnant. Why? Because it requires actual policies
that lessen the profitability of some (very wealthy friends in the circle Trump wants to
run).
Here's my prediction - Trump will fold by summer or sooner.
Apologies for butting-in in an otherwise fascinating conversation... but....
There is considerable but misplaced talk of "capitalism" being thrown about in some
threads, whilst Harlan worries about the deindustrialization of the West, ostensibly, due to
China. China has little to do with deindustrialization. A centralized monetary system coupled
with electoral politics, can only be sustained through the use of perpetual fiscal
deficits.
In order for the political construct to be able to run perpetual fiscal deficits, national
debt must necessarily expand. As debt conforms to the law of diminishing marginal utility
however, this is a compounding strategy.
Thus, in order to compensate for the loss of purchasing power, government borrowing must
progressively increase till eventually it goes parabolic. Hence the reason debt in the USA
doubled between 2008 and 2016. This is the parabolic phase.
In order to sustain this strategy, fiscal revenue must ideally expand. In order to
increase fiscal revenue however, legislation must be brought to bear. As legislation and
fiscality become progressively more restrictive in one country, economic actors migrate to
countries where they can achieve an economic advantage.
As a corollary, as legislation and fiscality become progressively more restrictive,
barriers are raised in business and industry. As barriers rise, so does unemployment and/or
under employment whilst business dynamism is proportionally stifled.
In this context therefore, artificially lowering interest rates to ostensibly kick start
the economy, actually reinforces the offshoring dynamic to the detriment of SMEs and the
benefit of large corporations.
If China can be blamed for anything therefore, it can only be blamed to have opened the
doors wide open to Western corporations to allow them to shift their production technology
out of Europe and the USA.
All the while, the finance industry is laughing all the way to the bank.... their own
bank that is.. ..
Chas Freeman was president Richard Nixon's senior interpreter for Nixon's visit to China.
Here is an interesting description by Freeman of some of that trip--
Something to which not enough consideration is given is that China has a considerable
volume of foreign loans, those are increasing, they are denominated in dollars (particularly
since the yuan is not convertible), and must be serviced in dollars. That means that China
needs a lot of dollars which it obtains via selling goods to the United States.
Said another way, China cannot reduce the amount it sells to the U. S. or buy more from
the U. S. without a convertible currency or reducing its level of foreign debt.
Your commentary exudes the naivety that the Chinese have preyed on for the past 50 years.
Their meekish and subservient mannerisms hide a ruthless and immoral inner nature. They would
still be a backward country if not for our elite's insatiable greed. What have they produced
organically that wasn't ripped off from developed countries? What do they offer cultural
other than a social credit system with improved state surveillance techniques? They treat
their own people like dogs and they still have dog eating festivals. China offers a way of
life that is an antithesis of the West, so it is inevitable that there will be a clash. The
question isn't if but when. The longer we delude ourselves into thinking that economics will
change China, the more blood will be shed when the reckoning occurs.
Chinese chauvinism puts American exceptionalism to shame. They've been the Celestial Empire
thousands of years longer than the upstart Anglo-American Empire. In last 30 years the
Western Elite dumped "noblesse oblige" for "get it while you can". China's entry into the WTO
directly hallowed out manufacturing in the Mid-West ultimately resulting to Donald Trump's
trade war.
This was a result of CEOs and Wall Street Raiders moving manufacturing to low wage, no
environmental regulation, nations to make a quick buck. China was a willing partner in the
con in order to modernize.
China's retail sales are now greater than America's. Since the US declared an economic
war, GM will have to drop Buick and Cadillac brands and market their cars in China as
Chinese. But "Face" likely will make that ploy unsuccessful.
GM sold over 4 million vehicles in China last year, even more than it sold in the North
American market. The U.S. only exported 267,000 passenger vehicles to China. Apple sales
declined 30% in China. In an economic war Chinese will avoid buying American branded
products. They have alternatives. Americans don't have a choice at Walmart except to pay the
higher prices due to the tariffs.
Those GM vehicles were built in China by a JV with majority Chinese ownership. The product
line sold at Wal-Mart has plenty of things made in countries other than China. We have a
twenty trillion dollar economy with Chinese imports making up 500 billion. We've got plenty
of options.
China has been emboldened as the west moved their manufacturing base there and transferred
their technology. They've been taking the next steps directly influencing our politics.
Huawei while it claims it is an employee owned company is controlled by the CCP as many
"private" companies in China. The west would be foolish to not put an end to Chinese
subterfuge that undermines their economy and national security.
I don't buy it at all. As others have pointed out China requires access to American markets
to 1) make their dollar denominated loan payments and 2) keep foreign manufacturing located
in the country. The cost of tariffs to the United States is finding alternative sources in
supply chains and higher end cost to consumers. We're insanely rich, we can afford that
without issue. The cost of tariffs to China, in the ultimate analysis, is foreign companies
moving their manufacturing out of the country, which would utterly devastate them.
So far as I understand the Trump administration is demanding nothing more than China play
by the rules of the game as written. If they're not willing to do so, **** 'em.
A well written contract contains enforceable penalties for non-performance with the money
often held in escrow. That's the way I write them. Trump is using the balance of US/China
trade to penalize the Chinese for reneging on the verbal and draft agreements they made with
us.
True. I am not familiar with the agreements so can't discuss it intelligently.
Just saying it seems hardly anyone lives up to agreements any more regardless of in writing
or not.
And dealing with countries is dealing with the people who represent it ..I do believe you
catch more flies with honey than vinegar. You can always swat them later if honey doesn't do
the trick.
This is a traditional problem deeply embedded in Chinese culture. Westerners in the 1800s
concluded that it was impossible to write a binding contract in classical Chinese. There were
hopes for Mandarin, but... I was reading about this as a college student studying Chinese
in the 1970s and have never ceased running across complaints about it. Chinese contracts are
only as good as the will of the contractors and the influence you can bring to bear. When you
are dealing with government, a contract is good until the officials get replaced with new
faces. Even big players like McDonald's are not exempt.
"...what was meant as the flagship of McDonald's planned expansion into the People's
Republic of China (it already had outlets in Hong Kong and Taiwan) was destined for
controversy. In 1994 -- only two years after opening -- a legal battle pitted the
transnational corporation against Beijing's government in a land dispute symptomatic of
China's no holds barred modernization.
"In question was McDonald's 20-year lease on the strategically located property at
Wangfujing -- a busy central shopping district -- and the city's attempts to shutter the
restaurant to make way for a new super sized shopping mall. McDonald's balked at the eminent
domain order, which flattened the surrounding neighborhood. In the end the burger joint was
the lone building standing amid acres of rubble. The dispute raised serious concerns among
foreign investors over the efficacy of business contracts in China at a time when the
Communist state was seen as the future of global markets.
"But in late 1996 McDonald's China president Marvin Whaley announced a reconciliation. "In
a spirit of teamwork and partnership, we've developed a plan that will allow our strong
expansion in the city to continue."
Note that it took two years for the "spirit of teamwork and cooperation' to kick in for a
multi-billion dollar cooperation who could presumably have just been given another good spot
for a hamburger stand. If the officials involved had been willing. Your mileage may vary, but
you are unlikely to do better.
Chinese will respect a verbal contract - the difficulty is getting them to say the terms in
front of other Chinese. Lieing to you is permissible.
Our business solved the problem by using irrevocable letters of credit. That way we could
both blame the banks and not accuse each other of skulduggery. Hence Face was always kept
intact.
For the record and to preclude pointless ad hominem attacks, the Chinese are intelligent
hard working people for whom sophisticated business and finance was a way of life while we
were still living in mud huts. They revere education. They do not subscribe to Modern Judeo
Christian ethics but a much older Confucian creed. For that reason pleas for China to 'play
by the rules" just do not compute.
China is not some modern, fly by night, Westphalian creation. You are dealing with the
Middle Kingdom - 3000 years old and the Chinese, after centuries of oppression now demand
respect. The idea that once again the West can dictate to China is offensive to Chinese and,
considering their economy, downright delusional.
China has its problems. Face as a concept does not extend beyond family and immediate
friends, so the concept of higher loyalty to a Chinese nation (ie patriotism) is not strong.
Neither is respect for national law, nor respect for institutions or companies. This is the
source of all commercial crime (eg: fraud, adulterated products pollution).
The governments reaction to the tendencies of its population include draconian punishments
and now attempts at nationwide surveillance.
The problem Trump fails to recognise is that the CCP and its leaders have Face. Threaten
that and China will become an implacable and unbeatable enemy.
The underlaying philosophies are in some ways diametrically opposed. We in the West are
object and goal oriented, with an ideals based culture, while the East has more of a feedback
oriented view, ie. Yin and Yang.
Even the concept of time is different, as we think of ourselves as individuals, thus
moving through our context, the future is in front and the past behind, traveling the events
of our lives. While the Eastern view is the past is in front and the future behind, as they
see themselves as part of their context and necessarily witness events after they occur, then
the situation continues.
Both are valid in their own context. Though our presumption of moving toward some ideal is
flawed. When some is good, more is not always better. Consider efficiency, which is to do
more with less. Then the ideal of efficiency would be to do everything with nothing. Those
most committed to this view see Armageddon as the door to their ideal state.
What should be kept in mind about the East is that with Communism and the Party system,
then becoming China Inc, to global capitalism, they have adopted essentially Western ideas
and tried framing them through their own lens. The reason would be that such an ideals, goal
oriented paradigm is very effective in the short and medium term, but creates that much more
blowback, in the long term. While China might seem a threat to the current American status
quo, the real danger is our own social and economic breakdown. We have been living on the
equivalent of a national home loan since Reagan, if not Roosevelt and if the holders of that
debt try calling it due, say trading it for remaining public assets, we will be revisiting
feudalism.
The Russian and the Chinese, as well as the Iranians, etc. are really just boogie men,
being thrown up to distract us. This Iranian situation seems to have be a total disconnect
with reality. Something is brewing, whether planned, or just the wheels really coming off the
train.
Both we and the Chinese seem to be headed to our own versions of Brexit. The Russians went
through it with the fall of the Soviet Union.
"...the concept of higher loyalty..." Sounds like the Chinese exclusion act might have
been a good idea afterall. How many generations in the US will it take for a Chinese national
to actually assimiate and become "American"?
"...unbeatable enemy." The PRC is not the Middle Kingdom. President Xi is not the subject
of Master Po's "Everlasting Wrong" and he is well aware that China is certainly not
"unbeatable". These are trade negotiations and right now they need us one hell of a lot more
than we need them. Convincing his fellows in the CCP of that is probably going to be harder
for him than for Trump to do the same with Congress.
Walrus, I find the most illuminating thing about your informative post is the reaction you
elicited. Comment after comment, in my opinion, illustrates some degree of unwillingness or
inability to acknowledge and tolerate a culture clearly different from ours. I am reminded of
a South Park episode called "Toleration" in which the whole town wrongly assumes toleration
of the other requires wholehearted celebration of the other. Nothing could be further from
the truth. There's plenty many of us don't like about today's Chinese culture and society,
but it's their culture and society. They don't have to conform to our ways anymore than we
have to conform to theirs, but we should acknowledge the difference and deal with it.
In the name of tolerance of another culture are we going to surrender to their predatory
behavior? Are we going to allow the Chinese to continue to "beat us at our own game" as
Walrus alludes? Sure the Party of Davos have benefited from the current relationship but why
should the US in it's national interest continue to allow an authoritarian state to steal our
IP, subsidize their companies to dump products in our market and prevent our companies to
sell into their market unless they transfer technology, only to have it stolen?
That type of predatory behavior is not about cultural difference but taking advantage of a
situation that we allowed. Tariffs may not be the best strategy but at least Trump is saying
the current arrangement no longer works. It makes no sense to say in order to protect Chinese
"face" we should continue this arrangement where we have the short end of the deal. I hope
that Trump doesn't back down in the face of Chinese influence operations in the US and his
perception of what's best for his reelection. IMO, the Chinese threat is significantly larger
than any threat from Russia or Iran, and saying we should walk on eggshells to not offend
their cultural sensibilities is frankly ridiculous.
I believe Walrus over-estimates their strengths. There is a reason why their "best and
brightest" continue to immigrate to Silicon Valley in droves. I know some of them personally
as I have backed their entrepreneurial ventures. They will be the first to tell you that they
have given up a lot in terms of familial connection to immigrate to the US as they don't
share nor do they want their kid's futures to be subject to the capriciousness of Xi
Jinping's authoritarian vision.
Jack, why surrender to their predatory behavior? Just stop dealing with them. Stop allowing
American nationalists to buy Chinese made goods and stop selling China our goods. Why not
make the stuff ourselves or learn to do without? Why are those American farmers growing
soybeans for the Chinese. Let them grow stuff for Americans. Sure this approach is even more
extreme that the current tariff war, but it will make us immune to Chinese predatory
practices, won't it? The isolation of Sakoku as the purest form of American nationalism. As
an added benefit of implementing a policy of Sakoku, there would be no more American foreign
adventurism.
I say this tongue in cheek realizing it will never be implemented. But wouldn't this a
better implementation of American nationalism than demanding that all other countries simply
bend to our demands in all matters?
I wholeheartedly agree with you that we should end our overseas interventionism. I've
opposed it for a long time from Vietnam to Iraq & Syria. The costs in the trillions of
dollars, the destabilization of fragile societies to the unnecessary sacrifices of our
soldiers and their families have not provided any meaningful benefit to us.
As far as China is concerned I believe the situation is more complex. One thing I've
noticed in general and exemplified by the comments on this thread is the conflation of the
heritage and Confucian values of the Chinese people on the CCP. Let's not be under any
illusion. The CCP is unabashedly totalitarian. I've no quarrel with the Chinese people. On
the contrary they have my deepest sympathies for having to endure under the boot of the
CCP.
Of course any change in their form of government is for them to effect just as our
forefathers did here. The important point that I believe needs to be made is that we provided
the finance, the technology and the markets to enable the economic development of an
authoritarian regime. An argument can be made that those early decisions to bring in China
into the global economic framework was in the belief it would enable them to reform. I was
persuaded then by Sir James Goldsmith & Ross Perot and others that the GATT trade deal
driven by Wall St would be a disaster for our working class. Neither Bill Clinton nor the
Republicans asked the question then what if the CCP doesn't reform and instead intensifies
their authoritarianism?
Of course the big transfer of our industrial base was completely our own doing as our
political system is fully captured by the Party of Davos. In retrospect it should be clear
that the CCP never intended to relinquish their monopoly on power and would become even more
repressive to maintain it. The CCP is not our friend. They are an implacable enemy who are
now using their growing economic and military strength to directly interfere and subvert our
societies. The scale of their influence operations and the direct use of cash to purchase
influence and espionage is something much larger than at the depth of the Cold War with the
Soviet Union. It is high time we understand this threat and act. At least Trump in his own
limited way gets that something needs to change even if in his mind it is purely
transactional. I'd like to highlight a current example where the Trump administration is
moving to ban Huawei from our market. Opeds are being furiously written and published in our
national media in defense of Huawei, while the company hires the top cybersecurity official
in the Obama administration with top secret clearance as their lobbyist. There are no Opeds
here or in China that Google, Facebook, and other US companies are banned in China. Why is
that? IMO, it's because we accept the authoritarianism of the CCP. The neocons made a lot of
noise demonizing Sadam & Assad as brutal dictators, yet they're silent as Xi Jinping has
millions of Uighurs in concentration camps. If we don't act to check the CCP now our
grandchildren will regret it as they'll have to fight a war.
Quote -"The idea that once again the West can dictate to China is offensive to Chinese and,
considering their economy, downright delusional."
I believe this is the underlying driver to the individual Chinese acceptance of the cost to
any conflict, it also links directly to what they see as a Century of Humiliation where China
wasn't powerful. The very use of the word Humiliation in any translation directly links into
their concept of Face.
Quote- "China has its problems, Face as a concept does not extend beyond family and immediate
friends"
I believe to extend and change this cultural concept of what constitutes Face is behind
the national introduction of Social Credit scores for all citizens and available on line to
all citizens. It is in fact intended as a national reputation system whereby an unrelated
Chinese can lose Face when interacting with other citizens. China is the elephant in the room
in any Western political, defence and economic policy debate.
IMHO, the USA holds most of the cards in this negotiation:
1. The USA trade deficit with China is huge and China needs to sell to the USA, as it will
not find other countries to make up for the lost market.
2. It is not uncommon for supply chains to change. Goods that today are manufactured in
China will likely be made in other asian countries which have even lower wages if the trade
war really goes for a significant amount of time.
3. The inflationary and GDP contraction risk of a trade war is not that high, as the
imported chinese goods make up only 2,3% of the USA GDP.
4. The fact that China has lots of USA sovereign debt is not something that can not be
solved by the FED. A few economists have already pointed that in the past 5 or 10 years.
5. China already is an enemy of the USA. Worst case, it will be more active in the
hotspots in the World, instead of only spying and hacking the hell out of the USA.
So, do not panic. The ones that should be panicking are the chinese.
China gets our middle class and the west gets cheap socks in return.As our middle class
disappears overseas our cheap socks become unaffordable because there are no jobs for our
young workers.The only way to get our middle class back is to stop buying cheap socks.or to
put the price up on our middle class.any idiot can make cheap socks but middle class is
priceless.the backbone of a stable society.Secondly any society that lives beyond its means
through over population is doomed and under no circumstances must it be allowed to
expand.China's growing affluence will increase competition for resources as it's middle class
expands and this will lead to conflict.Cheap socks might end up causing WWIII
Just as a reminder - having run International businesses, I just want to clarify that U.S.
Businesses are not saints. There is a certain amount of cheating, browbeating and stealing as
long as we don't get caught and profits are increasing.
We might not like the Chinese using our methods but that is the way the cookie crumbles.
At this point about two-thirds of Prudential's profits come from overseas subsidiaries and
one of the reasons for that success is our ability to mimic what works in their domestic
companies and to do it somewhat better and cheaper.
Since the profits were repatriated to the U.S., I had to deal with a lot of government
flack about hurting their domestic companies and their employees.
1: Highly sophisticated Culture. They tend to react pretty well if one can show a more
then basic degree of understanding of their history.
2: They greatly prefer nuance. Simple answers imply simple minds.
3: I have not been in the position to actually have to get formal contracts with them. I
can certainly echo however that making a Chinese promise something in front of other Chinese
about whose perception he cares is usually sufficient to have a pretty honorable commitment
to something, it is often easier said then done.
4: I initially had some disdain for the Chinese way of not directly letting you know how
annoyed they are at any given point (Russians are fairly straightforward in this), but
essentially, their point of view is also that if you are incapable of assessing how annoyed
they are you are not a valid negotiation partner.
5: Also, keeping annoyance beneath the radar does not create scenes, and if a scene is
created reactions may have to be forced. Vengeance is a thing with the Chinese . My
impression is that they can be mollified though, and generally regard vengeance as an
expensive luxury item, I also got the impression that you need to go out of your way to
seriously become a target of vengeance, just professional disagreements are not a cause for
vengeance, especially not if you are a foreigner. They also have a pathway of not having to
take vengeance to save their faces by asserting that the offender is
insane/feebleminded/crazy and thus beneath vengeance. Its not a position you want to be in
though.
6: It goes a pretty long way to be aware of some more imaginative things that especially
state aligned business can do if you are in China. Things like precision weighing any
electronic equipment you take there before and after are just best practice.
Via ChasFreeman.net,
Remarks to the Freeman Spogli Institute for International Studies China Program
Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Senior Fellow, Watson Institute for International and Public Affairs, Brown University
Stanford, California, 3 May 2019
President Trump's trade war with China has quickly metastasized into every other domain
of Sino-American relations.
Washington is now trying to dismantle China's
interdependence with the American economy, curb its role in global governance, counter its foreign
investments, cripple its companies, block its technological advance, punish its many deviations
from liberal ideology, contest its borders, map its defenses, and sustain the ability to penetrate
those defenses at will.
The message of hostility to China these efforts send is consistent and apparently
comprehensive. Most Chinese believe it reflects an integrated U.S. view or strategy. It does not.
There is no longer an orderly policy process in Washington to coordinate, moderate, or
control policy formulation or implementation. Instead, a populist president has effectively
declared open season on China.
This permits everyone in his administration to go after
China as they wish. Every internationally engaged department and agency – the U.S. Special Trade
Representative, the Departments of State, Treasury, Justice, Commerce, Defense, and Homeland
Security – is doing its own thing about China. The president has unleashed an undisciplined
onslaught. Evidently, he calculates that this will increase pressure on China to capitulate to his
protectionist and mercantilist demands. That would give him something to boast about as he seeks
reelection in 2020.
Trump's presidency has been built on lower middle-class fears of displacement by immigrants and
outsourcing of jobs to foreigners. His campaign found a footing in the anger of ordinary Americans
– especially religious Americans – at the apparent contempt for them and indifference to their
welfare of the country's managerial and political elites. For many, the trade imbalance with China
and Chinese rip-offs of U.S. technology became the explanations of choice for increasingly unfair
income distribution, declining equality of opportunity, the deindustrialization of the job market,
and the erosion of optimism in the United States.
In their views of China, many Americans now appear subconsciously to have combined
images of the insidious Dr. Fu Manchu, Japan's unnerving 1980s challenge to U.S. industrial and
financial primacy, and a sense of existential threat analogous to the Sinophobia that inspired the
Anti-Coolie and Chinese Exclusion Acts.
Meanwhile, the ineptitude of the American elite revealed by the 2008 financial crisis, the
regular eruptions of racial violence and gun massacres in the United States, the persistence of
paralyzing political constipation in Washington, and the arrogant unilateralism of "America First"
have greatly diminished the appeal of America to the Chinese elite.
As a result, Sino-American interaction is now long on mutual indignation and very short
on empirically validated information to substantiate the passions it evokes.
On each
side, the other is presumed guilty of a litany of iniquities. There is no process by which either
side can achieve exoneration from the other's accusations. Guesstimates, conjectures,
a priori
reasoning
from dubious assumptions, and media-generated hallucinations are reiterated so often that they are
taken as facts. The demagoguery of contemporary American populism ensures that in this country
clamor about China needs no evidence at all to fuel it. Meanwhile, Chinese nationalism answers
American rhetorical kicks in the teeth by swallowing the figurative blood in its mouth and
refraining from responding in kind, while sullenly plotting revenge.
We are now entering not just a post-American but
post-Western
era.
In
many ways the contours of the emerging world order are unclear. But one aspect of them is certain:
China will play a larger and the U.S. a lesser role than before in global and regional governance.
The Trump administration's response to China's increasing wealth and power does not bode well for
this future. The pattern of mutual resentment and hostility the two countries are now establishing
may turn out to be indelible. If so, the consequences for both and for world prosperity and peace
could be deeply unsettling.
For now, America's relationship with China appears to have become a vector compounded of many
contradictory forces and factors, each with its own advocates and constituencies. The resentments
of some counter the enthusiasms of others. No one now in government seems to be assessing the
overall impact on American interests or wellbeing of an uncoordinated approach to relations with
the world's greatest rising power. And few in the United States seem to be considering the
possibility that antagonism to China's rise might end up harming the United States and its Asian
security partners more than it does China. Or that, in extreme circumstances, it could even lead
to a devastating trans-Pacific nuclear exchange.
Some of the complaints against China from the squirming mass of Sinophobes who have attached
themselves to President Trump are entirely justified. The Chinese have been slow to accept the
capitalist idea that knowledge is property that can be owned on an exclusive basis. This is, after
all, contrary to a millennial Chinese tradition that regards copying as flattery, not a violation
of genius. Chinese businessfolk have engaged in the theft of intellectual property rights not just
from each other but from foreigners. Others may have done the same in the past, but they were
nowhere near as big as China. China's mere size makes its offenses intolerable. Neither the
market economy in China nor China's international trade and investment relationships can realize
their potential until its disrespect for private property is corrected. The United States and the
European Union (EU) are right to insist that the Chinese government fix this problem.
Many Chinese agree. Not a few quietly welcome foreign pressure to strengthen the enforcement of
patents and trademarks, of which they are now large creators, in the Chinese domestic market. Even
more hope the trade war will force their government to reinvigorate "reform and opening." Fairer
treatment of foreign-invested Chinese companies is not just a reasonable demand but one that serves
the interests of the economically dominant but politically disadvantaged private sector in China.
Chinese protectionism is an unlatched door against which the United States and others should
continue to push.
But other complaints against China range from the partially warranted to the patently bogus.
Some recall Hermann Göring's cynical observation at Nuremberg that:
"The people can always be
brought to the bidding of the leaders. That is easy. All you have to do is tell them they are
being attacked and denounce the pacifists for lack of patriotism and exposing the country to
danger. It works the same way in any country."
There is a lot of this sort of manipulative
reasoning at play in the deteriorating U.S. security relationship with the Chinese. Social and
niche media, which make everything plausible and leave no truth unrefuted, facilitate this. In the
Internet miasma of conspiracy theories, false narratives, fabricated reports, fictive "facts," and
outright lies, baseless hypotheses about China rapidly become firm convictions and long-discredited
myths and rumors find easy resurrection.
Consider the speed with which a snappy phrase invented by an Indian polemicist –
"debt-trap diplomacy" – has become universally accepted as encapsulating an alleged Chinese policy
of international politico-economic predation. Yet the only instance of a so-called a "debt trap"
ever cited is the port of Hambantota, commissioned by the since-ousted autocratic president of Sri
Lanka to glorify his hometown.
His successor correctly judged that the port was a white
elephant and decided to offload it on the Chinese company that had built it by demanding that the
company exchange the debt to it for equity. To recover any portion of its investment, the Chinese
company now has to build some sort of economic hinterland for the port. Hambantota is less an
example of a "debt trap" than of a stranded asset.
Then too, China is now routinely accused of iniquities that better describe the present-day
United States than the People's Middle Kingdom. Among the most ironic of such accusations is the
charge that it is China, not a sociopathic "America First" assault on the international
status
quo
, that is undermining both U.S. global leadership and the multilateral order remarkably
wise American statesmen put in place some seven decades ago. But it is the United States, not
China, that is ignoring the U.N. Charter, withdrawing from treaties and agreements, attempting to
paralyze the World Trade Organization's dispute resolution mechanisms, and substituting bilateral
protectionist schemes for multilateral facilitation of international trade based on comparative
advantage.
The WTO was intended as an antidote to mercantilism, also known as "government-managed trade."
China has come strongly to support globalization and free trade. These are the primary sources of
its rise to prosperity. It is hardly surprising that China has become a strong defender of the
trade and investment regime Americans designed and put in place.
By contrast, the Trump administration is all about mercantilism – boosting national power by
minimizing imports and maximizing exports as part of a government effort to manage trade with
unilateral tariffs and quotas, while exempting the United States from the rules it insists that
others obey.
I will not go on except to note the absurdity of the thesis that "engagement" failed to
transform China's political system and should therefore be abandoned. Those who most vociferously
advance this canard are the very people who used to complain that changing China's political order
was
not
the objective of engagement but that it
should
be. They now condemn
engagement because it did not accomplish objectives that they
wanted
it to have but used to
know that it
didn't
. It is telling that American engagement with other illiberal societies
(like Egypt, the Israeli occupation in Palestine, or the Philippines under President Duterte) is
not condemned for having failed to change them.
That said, we should not slight the tremendous impact of America's forty-year opening to China
on its socioeconomic development.
American engagement with China helped it develop
policies that rapidly lifted at least 500 million people out of poverty.
It transformed
China from an angry, impoverished, and isolated power intent on overthrowing the capitalist world
order to an active, increasingly wealthy, and very successful participant in that order. It
midwifed the birth of a modernized economy that is now the largest single driver of the world's
economic growth and that, until the trade war intervened, was America's fastest growing overseas
market. American engagement with China helped reform its educational system to create a
scientific, technological, engineering, and mathematical ("STEM") workforce that already accounts
for one-fourth of such workers in the global economy. For a while, China was a drag on human
progress. It is now an engine accelerating it. That transformation owes a great deal to the
breadth and depth of American engagement with it.
Nor should we underestimate the potential impact of the economic decoupling, political
animosity, and military antagonism that U.S. policy is now institutionalizing.
Even if
the two sides conclude the current trade war, Washington now seems determined to do everything it
can to hold China down. It seems appropriate to ask: can the United States succeed in doing this?
What are the probable costs and consequences of attempting to do it? If America disengages from
China, what influence, if any, will the United States have on its future evolution? What is that
evolution likely to look like under conditions of hostile coexistence between the two countries?
Some likely answers, issue by issue.
First
: the consequences of
cutting back Sino-American economic
interdependence.
The supply chains now tying the two economies together were forged by market-regulated
comparative advantage. The U.S. attempt to impose government-dictated targets for Chinese
purchases of agricultural commodities, semiconductors, and the like represents a political
preemption of market forces. By simultaneously walking away from the Paris climate accords, TPP,
the Iran nuclear deal, and other treaties and agreements, Washington has shown that it can no
longer be trusted to respect the sanctity of contracts. The U.S. government has also demonstrated
that it can ignore the economic interests of its farmers and manufacturers and impose politically
motivated embargoes on them. The basic lesson Chinese have taken from recent U.S. diplomacy is
that no one should rely on either America's word or its industrial and agricultural exports.
For these reasons, the impending trade "deal" between China and the United States – if there is
one – will be at most a truce that invites further struggle. It will be a short-term expedient,
not a long-term reinvigoration of the Sino-American trade and investment relationship to American
advantage. No future Chinese government will allow China to become substantially dependent on
imports or supply chains involving a country as fickle and hostile as Trump's America has proven to
be. China will instead develop non-American sources of foodstuffs, natural resources, and
manufactures, while pursuing a greater degree of self-reliance. More limited access to the China
market for U.S. factories and farmers will depress U.S. growth rates. By trying to reduce U.S.
interdependence with China, the Trump administration has inadvertently made the United States the
supplier of last resort to what is fast becoming the world's largest consumer market.
The consequences for American manufacturers of "losing" the China market are worsened by the
issue of scale. China's non-service economy already dwarfs that of the United States. Size
matters. Chinese companies, based in a domestic market of unparalleled size, have economies of
scale that give them major advantages in international competition. American companies producing
goods – for example, construction equipment or digital switching gear – have just been put at a
serious tariff disadvantage in the China market as China retaliates against U.S. protectionism by
reciprocating it. One side effect of the new handicaps U.S. companies now face in the China market
is more effective competition from Chinese companies, not just in China but in third country
markets too.
Second
: the U.S. effort to
block an expanded Chinese role in global
governance
.
This is no more likely to succeed than the earlier American campaign to persuade allies and
trading partners to boycott the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB).
That has isolated the United States, not China. Carping at the Belt and Road initiative and
related programs from outside them does nothing to shape them to American advantage. It just
deprives American companies of the profits they might gain from participating in them.
The United States seems to be acting out of nostalgia for the simplicities of a bipolar world
order, in which countries could be pressured to stand with either the United States or its then
rival. But China is not hampered by a dysfunctional ideology and economic system, as America's
Soviet adversary was. What's more, today's China is an integral member of international society,
not a Soviet-style outcast. There is now, quite literally, no country willing to accept being
forced to make a choice between Beijing and Washington. Instead, all seek to extract whatever
benefits they can from relations with both and with other capitals as well, if they have something
to offer. The binary choices, diplomatic group-think, and trench warfare of the Cold War have been
succeeded by national identity politics and the opportunistic pursuit of political, economic, and
military interests wherever they can be served. Past allegiances do not anywhere determine current
behavior.
The sad reality is that the United States, which led the creation of the Bretton Woods
institutions that have been at the core of the post-World War II rule-bound international system,
now offers these institutions and their members neither funding nor reform. Both are necessary to
promote development as balances of supply, demand, wealth, and power shift. The new
organizations, like the AIIB and the New Development Bank, that China and others are creating are
not predatory intrusions into the domain of American-dominated international finance. They are
necessary responses to unmet financial and economic demand. Denouncing them does not alter that
reality.
Other countries do not see these organizations as supplanting pre-existing lending institutions
long led by the United States. The new institutions supplement the World Bank Group and regional
development banks. They operate under slightly improved versions of the lending rules pioneered by
the Bretton Woods legacy establishments. China is a major contributor to the new development
banks, but it does not exercise a veto in them as the U.S. does in the IMF and World Bank. The
AIIB's staff is multinational (and includes Americans in key positions). The New Development
Bank's first president is Indian and its principal lending activity to date has been in South
Africa.
Washington has chosen to boycott anything and everything sponsored by China. So far, the sad
but entirely predictable result of this attempt to ostracize and reduce Chinese influence has not
curbed China's international clout but magnified it. By absenting itself from the new
institutions, the United States is making itself increasingly irrelevant to the overall governance
of multilateral development finance.
Third
: the U.S. campaign to
block China's international investments,
cripple its technology companies, and impede its scientific and technological advance.
The actions of the Committee on Foreign Investment in the United States (CFIUS) to prevent
Chinese investment in American industry and agriculture are well publicized and are becoming ever
more frequent. So are official American denunciations of Chinese telecommunications companies like
Huawei and ZTE amidst intermittent efforts to shut them down. In an ominous echo of World War I's
anti-German, World War II's anti-Japanese, and the Cold War's anti-communist xenophobia, the FBI
has begun issuing loud warnings about the menace posed by the large Chinese student presence on
American campuses. Washington is adjusting visa policies to discourage such dangerous people from
matriculating here. It has also mounted a strident campaign to persuade other countries to reject
Chinese investments under the "Belt and Road" initiative.
In the aggregate, these policies represent a decision by the U.S. political elite to try to
hamstring China, rather than to invest in strengthening America's ability to compete with it.
There is no reason whatsoever to believe this approach can succeed. China's foreign direct
investments have more than doubled over the past three years. Third countries are openly declining
to go along with U.S. opposition to intensified economic relations with China. They want the
capital, technology, and market openings that Chinese investment provides. U.S. denunciations of
their interest in doing business with China are seldom accompanied by credible offers by American
companies to match what their Chinese competitors offer. You can't beat something with nothing.
It's also not clear which country is most likely to be hurt by U.S. government obstruction of
collaboration between Chinese and American STEM workers. There is a good chance the greatest
damage will be to the United States. A fair number of native-born Americans seem more interested
in religious myths, magic, and superheroes than in science. U.S. achievements in STEM owe much to
immigration and to the presence of Chinese and other foreign researchers in America's graduate
schools. The Trump administration is trying to curtail both.
China already possesses one-fourth of the world's STEM workforce. It is currently graduating
three times as many STEM students annually as the United States. (Ironically, a significant
percentage of STEM graduates in the United States are Chinese or other Asian nationals. Around
half of those studying computer sciences in the United States are such foreigners.) American loss
of contact with scientists in China and a reduced Chinese presence in U.S. research institutions
can only retard the further advance of science in the United States.
China is rapidly increasing its investments in education, basic science, research, and
development even as the United States reduces funding for these activities, which are the
foundation of technological advance. The pace of innovation in China is visibly accelerating.
Cutting Americans off from interaction with their Chinese counterparts while other countries
continue risks causing the United States to fall behind not just China but other foreign
competitors.
Finally
: the
U.S. military
is in China's face
.
The U.S. Navy and Air Force patrol China's coasts and test its defenses on a daily basis. U.S.
strategy in the event of war with China – for example, over Taiwan – depends on overcoming those
defenses so as to be able to strike deep into the Chinese homeland. The United States has just
withdrawn from the treaty on intermediate nuclear forces in part to be able to deploy nuclear
weapons to the Chinese periphery. In the short term, there is increasing danger of a war by
accident, triggered by a mishap in the South China Sea, the Senkaku Archipelago, or by efforts by
Taiwanese politicians to push the envelope of mainland tolerance of their island's unsettled
political
status quo
. These threats are driving growth in China's defense budget and its
development of capabilities to deny the United States continued military primacy in its adjacent
seas.
In the long term, U.S. efforts to dominate China's periphery invite a Chinese military response
on America's periphery like that formerly mounted by the Soviet Union. Moscow actively patrolled
both U.S. coasts, stationed missile-launching submarines just off them, supported anti-American
regimes in the Western Hemisphere, and relied on its ability to devastate the American homeland
with nuclear weapons to deter war with the United States. On what basis does Washington imagine
that Beijing cannot and will not eventually reciprocate the threat the U.S. forces surrounding
China appear to pose to it?
Throughout the forty-two years of the Cold War, Americans maintained substantive
military-to-military dialogue with their Soviet enemies. Both sides explicitly recognized the need
for strategic balance and developed mechanisms for crisis management that could limit the risk of a
war and a nuclear exchange between them. But no such dialogue, understandings, or mechanisms to
control escalation now exist between the U.S. armed forces and the PLA. In their absence Americans
attribute to the PLA all sorts of intentions and plans that are based on mirror-imaging rather than
evidence.
The possibility that mutual misunderstanding will intensify military confrontation and increase
the dangers it presents is growing. The chances of this are all the greater because the internal
security and counterintelligence apparatuses in China and the United States appear to be engaged in
a contest to see which can most thoroughly alienate the citizens of the other country. China is a
police state. For Chinese in America, the United States sometimes seems to be on the way to
becoming one.
It's hard to avoid the
conclusion
that, if Washington stays on its current
course, the United States will gain little, while ceding substantial ground to China and
significantly increasing risks to its wellbeing, global leadership, and security.
Economically
, China will become less welcoming to American exports. It will
pursue import substitution or alternative sourcing for goods and services it has previously sourced
in the United States. With impaired access to the world's largest middle class and consumer
economy, the United States will be pushed down the value chain. China's ties to other major
economies will grow faster than those with America, adversely affecting U.S. growth rates. Any
reductions in the U.S. trade deficit with China will be offset by increases in trade deficits with
the countries to which current production in China is relocated.
China's role in
global governance
will expand as it adds new institutions and
funds to the existing array of international organizations and takes a larger part in their
management. The Belt and Road initiative will expand China's economic reach to every corner of the
Eurasian landmass and adjacent areas. The U.S. role in global rule-making and implementation will
continue to recede. China will gradually displace the United States in setting global standards
for trade, investment, transport, and the regulation of new technologies.
Chinese
technological innovation
will accelerate, but it will no longer advance
in collaboration with American researchers and institutions. Instead it will do so indigenously
and in cooperation with scientists outside the United States. U.S. universities will no longer
attract the most brilliant students and researchers from China. The benefits of new technologies
developed without American inputs may be withheld rather than shared with America, even as the
leads the United States has long enjoyed in science and technology one-by-one erode and are
eclipsed. As cordiality and connections between China and the United States wither, reasons for
Chinese to respect the intellectual property of Americans will diminish rather than increase.
Given the forward deployment of U.S. forces, the Chinese
military
has the great
advantage of a defensive posture and short lines of communication. The PLA is currently focused on
countering U.S. power projection in the last tenth or so of the 6,000-mile span of the Pacific
Ocean. In time, however, it is likely to seek to match American pressure on its borders with its
own direct military pressure on the United States along the lines of what the Soviet armed forces
once did.
The adversarial relationship that now exists between the U.S. armed forces and the PLA already
fuels an arms race between them. This will likely expand and accelerate. The PLA is rapidly
shrinking the gap between its capabilities and those of the U.S. armed forces. It is developing a
nuclear triad to match that of the United States. The good news is that mutual deterrence seems
possible. The bad news is that politicians in Taiwan and their fellow travelers in Washington are
determinedly testing the policy frameworks and understandings that have, over the past forty years,
tempered military confrontation in the Taiwan Strait with dialogue and rapprochement. Some in
Taiwan seem to believe that they can count on the United States to intervene if they get themselves
in trouble with Chinese across the Strait. The Chinese civil war, suspended but not ended by U.S.
unilateral intervention in 1950, seems closer to a resumption than it has been for decades.
As a final note on politico-military aspects of Sino-American relations, in the United States,
security clearances are now routinely withheld from anyone who has spent time in China. This
guarantees that few intelligence analysts have the Fingerspitzengefühl – the feeling derived from
direct experience – necessary to really understand China or the Chinese. Not to worry. The
administration disbelieves the intelligence community. Policy is now made on the basis of
ignorance overlaid with media-manufactured fantasies. In these circumstances, some enterprising
Americans have taken to combing the dragon dung for nuggets of undigested Chinese malevolence, so
they can preen before those in power now eager for such stuff. There is a Chinese expression that
nicely describes such pretense: 屎壳螂戴花儿 -- 又臭又美 – "a dung beetle with flowers in its hair still
stinks."
All said, this does not add up to a fruitful approach to dealing with the multiple challenges
that arise from China's growing wealth and power. So,
what is to be done?
该怎么办？
Here are a few
suggestions
.
First
, accept the reality that China is both too big and too embedded in the
international system to be dealt with bilaterally. The international system needs to adjust to
and accommodate the seismic shifts in the regional and global balances of wealth and power that
China's rise is causing. To have any hope of success at adapting to the changes now underway,
the United States needs to be backed by a coalition of the reasonable and farsighted. This
can't happen if the United States continues to act in contempt of alliances and partnerships.
Washington needs to rediscover statecraft based on diplomacy and comity.
Second
, forget government-managed trade and other forms of mercantilism. No
one can hope to beat China at such a statist game. The world shouldn't try. Nor should it
empower the Chinese government to manage trade at the expense of market forces or China's
private sector. Governments can and – in my opinion – should set economic policy objectives,
but everyone is better off when markets, not politicians, allocate capital and labor to achieve
these.
Third
, instead of pretending that China can be excluded from significant
roles in regional and global governance, yield gracefully to its inclusion in both. Instead of
attempting to ostracize China, leverage its wealth and power in support of the rule-bound order
in which it rose to prosperity, including the WTO.
Fourth
, accept that the United States has as much or more to gain than to
lose by remaining open to science, technology, and educational exchanges with China. Be
vigilant but moderate. Err on the side of openness and transnational collaboration in
progress. Work on China to convince it that the costs of technology theft are ultimately too
high for it to be worthwhile.
Fifth
and finally, back away from provocative military actions on the China
coast. Trade frequent "freedom of navigation operations" to protest Chinese interpretations of
the U.N. Convention on the Law of the Sea for dialogue aimed at reaching common understandings
of relevant interests and principles. Ratify the Convention on the Law of the Sea and make use
of its dispute resolution mechanisms. As much as possible, call off military confrontation and
look for activities, like the protection of commercial shipping, that are common interests.
Seek common ground without prejudice to persisting differences.
In
conclusion
:
both China and the United States need a peaceful
international environment to be able to address long-neglected domestic problems.
Doing
more of what we're now doing threatens to preclude either of us from sustaining the levels of
peace, prosperity, and domestic tranquility that a more cooperative relationship would afford.
Hostile coexistence between two such great nations injures both and benefits neither. It
carries unacceptable risks. Americans and Chinese need to turn from the path we are now on.
We can – we must – find a route forward that is better for both of us.
The article presents itself as being forward thinking, yet no
mention of the robot revolution and how destabilizing it will be
for both sides. As it stands today, it seems the economic conflict
is between the US and China-perhaps. But when these robots come on
line the economic war is going to be between the laborer and the
employee world wide.
The demise of the US economy and
manufacturing base in the US is a direct result of cheap labor, so
one has a clear picture of what cheap labor will do. Outside of
stuff falling from the sky for free, there isn't anything that
will be more devastating to the world labor market than a robot
enhanced with AI. Sure, products may become cheaper due to
reduced labor cost, but if people do not have a job to raise
enough income, then how are they going to buy stuff? Clearly, the
whole capitalistic system will collapse and then what? What will
be our choices? Will we have to shun progress in order to save the
current system that has brought us all this wonderful labor saving
innovation? Will people choose the hard road over the easy road?
It seems to me that things always take the path of least
resistance.
The only advantage China has is cheap labor.The robot revolution
will upset the apple cart for both sides. It will be interesting,
to say the least, when both sides realize that innovation is both
a blessing and a curse.
This is a pretty good article, I agree with a lot of it. The part
I don't like is the author's extreme worship of property rights.
He ignores the commons, things held in common by the people,
things like science and culture. For example, Disney's copyright
on its films will never expire if Disney can help it. Even an
American's personal data is now someone else's private property,
probably including their genetic data since even genes can be
patented.
"... More broadly, Wilkerson pegs the ramping up of confrontation with China as "all about keeping the [military-industrial] complex alive" that Wilkerson explains "the military was scared to death would disappear as we began to pay the American people back" a peace dividend at the end of the cold war. US government efforts against terrorism, explains Wilkerson, have also been used to ensure the money keeps flowing. ..."
Former Army Colonel Lawrence Wilkerson, who was chief of staff for Secretary of State Colin Powell in the George W. Bush administration,
warns in a new The Real News interview with host Sharmini Peries that the United States government is driving down a "highway to
war" with China -- a war for which Wilkerson sees no sound justification.
The drive toward war is not undertaken in response to a real threat posed by China to the people of America. Instead, argues Wilkerson,
the US government is moving toward war for reasons related to money for both the military and the broader military-industrial complex,
as well to advance President Donald Trump's domestic political goals.
Wilkerson, who is a member of the Ron Paul Institute for Peace and Prosperity's Academic Board, elaborates on the US military's
money-seeking motivation to advance the new China scare, stating:
All of this right now, first and foremost, is a budget ploy. They want more money.
And that's largely because their personnel costs are just eating their lunch. And, second, it's an attempt to develop - and
this has something to do with money too of course - another threat, another cold war, another feeding system .
The military just hooks up like it is hooking up to an intravenous, you know, an IV system and the money just pours out-slush
fund money, appropriated money, everything else.
More broadly, Wilkerson pegs the ramping up of confrontation with China as "all about keeping the [military-industrial] complex
alive" that Wilkerson explains "the military was scared to death would disappear as we began to pay the American people back" a peace
dividend at the end of the cold war. US government efforts against terrorism, explains Wilkerson, have also been used to ensure the
money keeps flowing.
Google has reportedly suspended its licences and product-sharing agreements with Chinese
communications giant Huawei, as Washington accuses the company of spying for Beijing. The
Silicon Valley tech giant has cut its business deals with Huawei that involve the transfer of
hardware and software, Reuters and The Verge report. Following the move, Huawei will lose
access to Android operating system updates, and its forthcoming smartphones will be shut out of
some Google apps, including the Google Play Store and Gmail apps. The Chinese firm however will
still have access to the open source version of the Android operating system.
We have confirmed this is genuine.
Huawei will only be able to use the public version of Android, and won't get access to
proprietary apps and services from Google
Huawei will have to create their own update mechanism for security patches https://t.co/7eTi4JvWsE
Washington repeatedly accused Huawei of installing so-called 'backdoors' into its products
on behalf of the Chinese government. The heads of six US intelligence agencies warned
American citizens against using Huawei products last year, and the Chinese company's phones
were banned from US military bases shortly afterwards.
The US objective is to sustain US tech prominence by stifling Chinese plans to advance its
economy. Of course China will never agree to that.
from CFR..
The Chinese government has launched "Made in China 2025," a state-led industrial policy
that seeks to make China dominant in global high-tech manufacturing. The program aims to
use government subsidies, mobilize state-owned enterprises, and pursue intellectual
property acquisition to catch up with -- and then surpass -- Western technological prowess
in advanced industries.
For the United States and other major industrialized democracies, however, these tactics
not only undermine Beijing's stated adherence to international trade rules but also pose a
security risk. . . here
"... All last week, anti-American propaganda flourished across the country, with the slogan "Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on Chinese social media platforms. ..."
With the trade war between the US and China suddenly erupting after a 5-month ceasefire,
CCTV 6, the movie channel of China's leading state television broadcaster, aired three
anti-American movies last week,
reported What's On Weibo .
The three movies are Korean war films: Heroic Sons and Daughters (1964), Battle on
Shangganling Mountain (1954), and Surprise Attack (1960), which aired about one week after
President Trump raised an existing 10% tariff on $200 billion worth of Chinese goods to
25%.
All last week, anti-American propaganda flourished across the country, with the slogan
"Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on
Chinese social media platforms.
... ... ...
China's government broadcasting anti-American movies to hundreds of millions of its people
shows how officials are starting up the propaganda machines ahead of a potential armed conflict
with the US...
Chinese spokesperson Hu Xijin writes: "there's no equal negotiation without fighting." No
need for negotiation (or fighting). Assuming Trump imposes the rest of the tariffs, US trade
with China will recede to nothing. Inciting anti-American feelings in mainland China just
makes the break in relations easier. Goodbye China!
China has no intention of going to actual war over trade with the U.S. - they have plenty
of other potential markets, as is repeatedly alluded to here and elsewhere. This televised
propaganda is about manipulating the attitudes of their own disillusioned, controlled
populace.
So they're broadcasting regular American television? Those shows do a great job demeaning
and shitting on average American men while holding up minorities and freaks as capable
people. They didn't need to invent any propaganda; just use the same **** *** producers have
been feeding us dumb goyim for decades.
Isage master of the The famous paper tiger threat of turning something into glass, empty
fuckin threat from a country whose professional army has managed to lose every major conflict
in the last 50 years to poorly equipped sometimes barefoot soldiers armed with nothing more
that AK -47s.
please see Korean villagers, Vietnamese villagers, iraqi villagers, afghan villagers and
Syrian Villagers.
and the vaunted Israelis who who only win against ancient armies with ancient gear, but
faced with dedicated Hezbollah Lebanese villagers again .....lose.
Give it up, you are masters of snatching defeat from the jaws of victory... not much
else.
"... Negotiating with countries is different from the wheeling and dealing world of New York real estate. This should be especially clear with a nation-first politician like Donald Trump. ..."
"... Where making maximum demands on other parties might work in New York, it's much less likely if one is dealing with proud, independent nations - that should have been the lesson from the North Korea fiasco. ..."
"... Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. ..."
by: Shareholders Unite
Shareholders
Unite Small-cap, macro, value, momentum Shareholdersunite
(11,300 followers) Summary It is difficult to see the Chinese caving to the demands of the Trump government, which seem to involve
a wholesale change of China's economic model.
Either some middle ground is found or we risk a serious escalation with multiple risks to the state of the world economy, with
many known and unknown facilities.
The end state could be a wholesale decoupling of the American and Chinese economies, and while some would applaud such an outcome,
it's unlikely to be better than what we've got.
The Trump administration seems to have the illusion that if you raise the stakes high enough, other countries will cave to US
demands. There might also be an element of creating foreign adversary in order to unite the domestic front, we don't know.
Trade tensions have been taken way too far when the government slapped tariffs on Canadian steel exports because of national security
concerns, but in the case of China, there are some legitimate concerns. Mind you, these concerns don't involve:
China's mercantilism - its trade surplus has all but vanished (see below).
The bilateral trade deficit the US has with China that's way overstated (much of the value added comes from other countries,
most notably the US), meaningless and not amenable to change from deliberate policy measures (the US trade deficit is caused by
a lack of savings with respect to investments; in so far as policy manages to reduce the bilateral trade deficit with China, the
deficit will simply reappear elsewhere as long as the saving/investment balance isn't changed).
While China has "manipulated" its currency in the past in order to keep it low, in recent years they've done exactly the opposite,
trying to keep their currency from falling.
China isn't paying for the tariffs, US importers and consumers are.
Negotiating with countries is different from the wheeling and dealing world of New York real estate. This should be especially
clear with a nation-first politician like Donald Trump.
Where making maximum demands on other parties might work in New York, it's much less likely if one is dealing with proud,
independent nations - that should have been the lesson from the North Korea fiasco.
Just as there is one thing worse than a severe economic recession, which is caving to US pressure for the Iranian ayatollas, the
same holds for Chinese politicians in charge of policy.
It's true that the pain from the escalation in the trade war is probably significantly larger in China compared to the US, but
that doesn't make them more likely to be the first to cave, especially considering that what the US administration seems to demand
is a wholesale
change of China's economic model . That's never going to happen. Since there are no free elections, they can endure the pain
for longer, and much fewer people own stocks, so even while the sell-off in China might be worse, it's hitting much fewer people.
In fact, caving to US demands, or even being seen to be caving, might well be a one-way ticket to political oblivion. Which is
why China's leaders called President Trump's bluff. Contrast this with the situation in the US.
Trade experts like Krugman
argue that the short-term economic impact as such on the US economy is fairly moderate, and who are we to disagree? However,
a further escalation isn't likely to go by unnoticed, and there is this ephemeral concept called "confidence", of which the stock
market might be one of the best indicators:
The market is already reeling, and this could become uncomfortable pretty soon for a president who prides himself on the rally
in the markets.
The real danger
The risk is that this becomes a protracted conflict with each party digging in, egged on by heated domestic rhetoric. The longer
this lasts, the greater the following risks:
Sentiment spilling over in the real economy
A large yuan depreciation
Collateral damage
A wholesale decoupling of the Chinese and American economies
Sentiment is turning, and at a certain point, this can very well start to affect consumption, investment, and lending decisions
in the real world. We're not there yet, but look how the sell-off at the end of last year cowered the Fed into one of the more spectacular
retreats in policy. This wasn't because of the market sell-off itself but because of the increasing signs that sentiment could hit
the real economy, even if much of the more immediate risks were abroad.
Moreover, in a highly leveraged financial system, you never know what you're going to find when the investor flows recede. Things
can go very fast here. Look how Argentina was able to sell a 100-year bond in 2016, only to be hit by the receding flows pretty soon
after.
Another real risk is a substantial yuan depreciation . It's the most effective way the Chinese can absorb the direct tariff cost
on their competitiveness, but it runs the risk of becoming a self-fulfilling prophesy.
The markets have already twice succumbed to yuan depreciation scares, in 2015 and at the start of 2016, and the PBoC spent $1
trillion of its $4 trillion reserves plus draconian capital controls to stop the rot.
We're not talking hypotheticals here - guess when that gap-up happened? On the day of the Trump tweets announcing the 25% tariffs:
A substantial yuan depreciation will risk inserting a major deflationary blow to the world economy as it exports the effects of
the US tariffs on China to the rest of the world.
Given the shaky state of the eurozone, we're not relishing this prospect at all. We have long argued that the eurozone is one
downturn away from disintegration, with Italy as its focal point.
Italy is already in a recession and has a dysfunctional government consisting of a left-wing and right-wing populist party which
are constantly bickering. What's more, it has unsustainable debt dynamics and a potential banking doom loop, should the debt dynamics
trigger a market selloff, and has no lender of last resort.
With all the debt and leverage in the world economy, it's a bit like riding a bicycle - you have to keep cycling to stop falling
over.
Decoupling
While the direct monetary impact of the tariffs is fairly moderate (it's a modest, albeit highly regressive, tax increase), another
likely consequence is a further relocation of supply chains and decoupling of the US and Chinese economies.
We have already read numerous company CCs which described rerouting supplies from China, albeit not usually back to the US, and
we're not imagining stuff. From Monday's issue of DigiTimes:
If 10% tariffs can do that, 25% of tariffs will accelerate this and the next round, where the US levies tariffs on all Chinese
imports even more.
Some within the US administration seems to relish this, as it weakens China economically, but a hard Chinese landing won't pass
the US unnoticed, and the end result could very well be two competing economic blocks and a new sort of cold war.
One of the very first economic measures the Trump government took was to get the US out of the TPP, which not only gave up a lot
of leverage over China, but the mostly ASEAN countries who are part of the TPP (without the US) are now firmer in China's orbit as
a result, and they will have unenviable choices to make in terms of their future alignment.
It's also unfortunate that Trump has been waging trade wars on multiple fronts (see
here for an overview ), alienating many partners in the process.
Now might be as good a time as any to remind people of the unpopular thesis that trade isn't a zero-sum game and that both the
US and China have greatly benefited from their economic integration the past couple of decades.
The US got increased exports as well - not as spectacular as the Chinese exports to the US, but this is in part an optical illusion.
Much of China's exports to the US contain value added produced elsewhere, even from the US itself:
You see that less than half of the value added of Chinese electronics export to the US is actually produced in China itself. The
iPhone is a classic example:
In the case of the Apple iPhone, this means that China's
exports balance accounts for the full $500 iPhone value, when China adds only approximately $15 to $30 of the value to the phone.
Most of the iPhone value accretes to Samsung in Korea ($150) and to Apple - the brand owner and engineer. This highlights how
the normal accounting of trade flows is inherently distorted under the current trade-deficit estimates.
Yes, the US has lost manufacturing jobs as a result, but it failed to compensate those who lost from trade like other countries
have (via massive active labor market policies, for instance in the Nordic countries, where there is little in the way of an industrial
waste land as a result).
The US has also gained. It found willing buyers for its Treasuries, keeping interest rates low, cheap consumer goods, keeping
inflation low - which allowed the Fed to keep low interest rates, and which in turn increased economic growth and employment.
It's not perfect, and we're not blind to China's IP theft and the conditions it places on American companies operating in the
country. But China's rise has propelled half a billion people out of poverty and turned them into eager consumers of US agricultural,
cultural and high-tech products.
Conclusion
While a number of American grievances are right, the Trump administration seems to want a wholesale sellout of China, abandoning
its economic model. That's not going to happen, and even less so because they also antagonized potential allies, like ASEAN countries,
the EU and Canada.
There are two choices here: either some middle ground is found or this could spiral out of control, with major economic risks
involved and a wholesale decoupling of the Chinese and American economies. Economics 101 argues quite clearly that that world is
unlikely to be better than the one we have, despite all the imperfections of the latter.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72
hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from
Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
33 out 90 suppliers of Huawei are US companies. If Huawei do not buy from them who will buy
them? It's two way street.
Trump is breaking neoliberalism createing two camps of neoliberal countries hostile to each
other. Potential partners for China are Russia, Turkey, Syria, Iraq, Iran, Pakistan and North
Korea so this would be a weaker, but still formidable in economic and military capacity
block.
On Wednesday, U.S. President Donald Trump issued an executive order barring U.S. firms from
using telecom equipment made by companies accused of being a national security risk; this
includes Chinese tech giant Huawei. The U.S. Commerce Department questioned whether Huawei will
be able to continue purchasing components from its American suppliers. In response, the Chinese
Commerce Ministry said on Thursday
Huawei will survive with supply chain alternatives and reengineering designs, it will make
Huawei stronger with better products. American high tech products and parts suppliers can
wait until American companies come up with design to utilise their products, hopefully not
long enough to cripple all these high tech parts manufacturers.
"... US Tariffs Have Nothing to Do With Competition, These are Steps to Contain China ..."
"... Or do they want to cut off all opportunities for China's future development? In my opinion, the relevant measures that the Americans have been initiating since the very beginning of the trade war to the present day are most likely real steps to contain China rather than some form of sanctions. This is a desire to hinder China's development in various spheres, specifically in trade, economic development, industrial development, science and technology, in the financial sphere and even in the area of human resources in China. They want to hamper our development on all sides. ..."
"... You might know that we used to have the popular concept of the so-called "hybrid war" but I would not describe the behaviour of Americans using this term. They just want to cut off all of China's development opportunities. They want to limit our ability to thrive as much as possible. ..."
"... Today I heard you talking about Russia, about the principles of preserving your development and sovereignty, I agree with that. The geopolitical situation is different for everyone, the history is different. There may be differences in how countries approach dealing with issues. ..."
"... The advantage of the United States is its hegemony in the global financial system. The second advantage is the strong alliance system that was formed after the Second World War and the Cold War. And another one is a still high level of weapons development in the world. ..."
"... Over the past decades, Americans have repeatedly initiated hostilities, and acute social inequality has flared up inside the country. Today, hegemony in the ideological system is being lost; and some countries and regions' confidence in the USA is being lost. ..."
Dmitry Kiselyov, the general director of Rossiya Segodnya International Information Agency, discussed the recent
escalation in the Sino-American trade war with Kong Dan, the former chairman of CITIC Group; Zhang Weiwei, a Chinese
professor of international relations at Fudan University and a senior research fellow at the Chunqiu Institute; and Li Shimo,
an investor and billionaire, founder and managing director of Chengwei Capital, owner of many US Silicon Valley companies.
US Tariffs Have Nothing to Do With Competition, These are Steps to Contain China
Dmitry Kiselyov: What resources does China have?
Kong Dan: Without a trade war, our view of the United States would be superficial; now we
know the other side as well. I, as a representative of business circles, do not really
understand the subtleties of what the Americans want. Do they just think that Chinese
development is unacceptable for them?
Or do they want to cut off all opportunities for China's future development? In my opinion,
the relevant measures that the Americans have been initiating since
the very beginning of the trade war to the present day are most likely real steps to
contain China rather than some form of sanctions. This is a desire to hinder China's
development in various spheres, specifically in trade, economic development, industrial
development, science and technology, in the financial sphere and even in the area of human
resources in China. They want to hamper our development on all sides.
Dmitry Kiselyov: But is it hostile?
Kong Dan: I would call this approach competition. But competition can be different: hostile,
non-hostile
Dmitry Kiselyov: Competition without rules is animosity
Kong Dan: You might know that we used to have the popular concept of the so-called "hybrid
war" but I would not describe the behaviour of Americans using this term. They just want to cut
off all of China's development opportunities. They want to limit our ability to thrive as much
as possible.
China May
Regulate Energy Imports from US Amid Trade Row Competition has various forms or different
aspects. I also have a counter-question for you, how do Russians assess the nature of those
sanctions measures that the Americans have implemented against Russia?
The United States considers us its adversaries. They previously included Russia, China,
Iran, and North Korea on their blacklist, a list of terrorist forces. And China is first on the
list. Are we hostile to them?
Today I heard you talking about Russia, about the principles of preserving your development
and sovereignty, I agree with that. The geopolitical situation is different for everyone, the
history is different. There may be differences in how countries approach dealing with
issues.
I previously worked as the head of the largest state-owned company in China, so, of course,
I understand what kind of mission one carries on his/her shoulders. I am willing to make
efforts to stimulate the development of the Russian-Chinese partnership as a whole; I think
there is still a lot to do in this direction. The US underestimates the potential of President
Putin and Russia, China and President Xi Jinping. They will pay a heavy price for it.
I would like to name two advantages of the trade war for us.
First of all, we have an advantage in a unique, specific management system in the trade
fight with the United States. I believe that the Americans do not want to minimize the trade
deficit; they just want to eliminate our institutional advantage. Of course, we will not
retreat from such a line. If the Americans want to
cross the red line , then I am sure that President Xi and the Chinese government has a
definite response to win the trade war.
Secondly, we have our colossal domestic market, which has no competitors throughout the
world. Our consumer and innovation markets provide us with a large number of advantages and
room, giving China an opportunity to make a manoeuvre. Therefore, their blockage gives China
a chance to become even stronger. We must express our appreciation to our mentor, Trump, for
this, for this lesson and for forcing China to figure out how to withstand the threats on its
own.
Why China is Likely to Emerge Victorious in Trump-Driven Trade War
Dmitry Kiselyov: You said you have confidence that China will emerge victorious in this
trade war, what does this victory mean? When will it come?
Kong Dan: Trump has said many times that he can hit our stock market to destroy it. As for
us, we are doing everything well, we are successfully organising work, and we are looking for
ways for rapid development in recent years. Our goal of a 100-year-old rebirth of the nation
can be achieved -- and that is our victory Of course, we understand that the United States
wants to impede our development. If they want to destroy us then I think they will fail. Only
in their dreams!
Zhang Weiwei: I support Mr Kong's view that the Chinese consumer market is the largest in
the world! Especially, in the field of innovation. And if one leads the battle with such
colossal markets, then the
initiators will surely fail .
'If US Continues to Maintain Hegemony, It Will Suffer Heavy Losses'
Dmitry Kiselyov: What will then become of the defeated United States?
Kong Dan: It is very hard to explain all this only in military terms. China neither wants to
seize the United States nor does it want to take a dominant position like the United States. We
simply do not want the United States to cut off all the opportunities for our country's
development.
Li Shimo: I would like to note that in the course of a trade war, each of the parties has
its own strengths and weaknesses. Our advantage is that we have a strong political system. The
second one is social cohesion. The third one, as has already been stated, China has quite large
domestic markets. The fourth one, China is the world's largest trading country and also the
largest trading nation in the history of mankind.
The advantage of the United States is its hegemony in the global financial system. The
second advantage is the strong alliance system that was formed after the Second World War and
the Cold War. And another one is a still high level of weapons development in the world.
However, the United States and China have different development goals. China is simply
looking for suitable paths to future accelerated development. But the US has a dilemma.
Previously, there was a different situation, there was hegemony -- a very important driving
force, a very important pillar, the so-called "soft power", and particularly they had
ideological dominance. Over the past decades, Americans have repeatedly initiated hostilities,
and acute social inequality has flared up inside the country. Today, hegemony in the
ideological system is being lost; and some countries and regions' confidence in the USA is
being lost.
Therefore, if they now wish to continue to maintain hegemony,
they will suffer heavy losses. But if they back down from it -- for instance, Trump wants to
abandon ideological dominance -- it will turn into a power struggle in its purest form. This
will lead to a loss of ideological advantage in the international arena.
How to assess the outcome of the battle? I would suggest that you read the 19th National
Congress of the Communist Party of China report delivered by President Xi Jinping. In it, he
outlined two challenges: the first one -- 2035, the second one -- 2049. These two goals are
quite clear and realistic If we can complete these tasks, then the victory will be ours.
China's Three Future Milestones: 2021, 2035, 2049
Dmitry Kiselyov: What are these challenges?
Kong Dan: China has two development goals for the current century. The first is that by 2021
when the CPC will celebrate its 100th anniversary, it will fully and comprehensively build a
moderately prosperous society in China. Another goal by 2049, when it will be 100 years since
the founding of the PRC, China should reach the level of the most advanced developed countries.
Moreover, there is another intermediate task between these two goals of the current century --
by 2035 China has to move into the category of moderately developed countries.
Zhang Weiwei: China borrowed its methodology and planning practices from the USSR. However,
over the past decades, we have brought a lot of innovation into this process. Now it is no
longer the old decision-making but strategic and guiding planning. The Americans could see that
over the past 40 years China has been fulfilling all its five-year plans ahead of schedule, and
that frightened them. If we are talking about how the China-US trade war will end, then
personally I would like to quote Americans who say: "if you can't beat them, join them".
China Presents New Model of Development as Western & Soviet Models Failed
Dmitry Kiselyov: How many fingers are needed to describe the Chinese model, and what in fact
is that, if we are talking about the alternative?
Zhang Weiwei: The Chinese Model of Development has several features. First, the leading
ideology must be based on real facts. "Practice is the sole criterion of truth". As a result,
we found that a developing country, such as China, needs to carry out modernisation. Looking at
the rest of the world, it becomes clear that the Western model is not successful. The Soviet
model also did not prevail. Therefore, Deng Xiaoping said that we need to follow our own path.
We did not fall into the trap of "colour revolutions", we were looking for the path we needed
based on reality. That is the key thing.
I would like to add a
little bit. If we talk about reforms in socialist countries, we can name two basic models.
The first is the Gorbachev model, which is characterised by a radical nature. This is
political and economic shock therapy. The cost of such reforms was very high and they were not
quite successful.
The Cuban Castro model implies supportive conservative therapy. They did not build a market
economy; they were not included in the processes of globalisation but resorted only to spot
adjustment and correction.
Reforms according to the Chinese model are characterised by balance, prudence, and
sustainability. We have carried out bold economic reforms, built a market economy, and joined
the process of globalisation. However, we treat political reforms with caution and prudence;
everything should serve economic reforms, and, ultimately, improve people's living
standards.
The American model provides for the concept of political equality "One person, one vote", a
multiparty system for governing a country. Strictly speaking, it only started working in 1965.
The Chinese model began to take shape in 1978. Their starting points are more than ten years
apart. Of course, they can compete with each other but I consider the Chinese model to be more
successful and attractive; and I have already been talking about this for 20 years.
The views and opinions expressed by the speakers and the contributor do not necessarily
reflect those of Sputnik.
China's state media signaled a lack of interest in resuming trade talks with the U.S. under
the current threat of higher tariffs, while the government said stimulus will be stepped up to
buttress the domestic economy.
Without new moves that show the U.S. is sincere, it is meaningless for its officials to come
to China and have trade talks, according to a commentary by the blog Taoran Notes, which was
carried by state-run Xinhua News Agency and the People's Daily, the Communist Party's
mouthpiece. The Ministry of Commerce spokesman
said Thursday he had no information about any U.S. officials coming to Beijing for further
talks.
U.S. equities fell on concern that talks between the world's two largest economies have
stalled. The Shanghai Composite Index also declined. "If the U.S. doesn't make concessions in
key issues, there is little point for China to resume talks," said Zhou Xiaoming, a former
commerce ministry official and diplomat. "China's stance has become more hard-line and it's in
no rush for a deal" because the U.S. approach is extremely repellent and China has no illusions
about U.S. sincerity, he said. No Rush for a Deal
According to Zhou, the commerce ministry spokesman on Thursday effectively ruled out talks
in the near term. In comments to the media, ministry spokesman Gao Feng said that China's
three major concerns need to be addressed before any deal can be reached, adding that the
unilateral escalation of tensions in Washington recently had "seriously hurt" talks.
The U.S. has been talking about wanting to continue the negotiations, but in the meantime it
has been playing "little tricks to disrupt the atmosphere," according to the Taoran commentary
on Thursday night, citing Trump's steps this week to curb Chinese telecom giant Huawei
Technologies Co.
"We can't see the U.S. has any substantial sincerity in pushing forward the talks. Rather,
it is expanding extreme pressure," the blog wrote. "If the U.S. ignores the will of the Chinese
people, then it probably won't get an effective response from the Chinese side," it added.
The blog reiterated China's three main concerns for a deal are tariff removal, achievable
purchase plans and a balanced agreement text, as first revealed by Vice Premier Liu He. They
mark the official stance as much as the will of the Chinese public, it wrote.
"If anyone thinks the Chinese side is just bluffing, that will be the most significant
misjudgment" since the Korean War, it said.
Read: China Vows 'People's War' as Trade Fight Takes Nationalist Turn
In addition to putting the Taoran commentary on WeChat, the People's Daily newspaper had
three defiant articles on the trade war in the physical newspaper Friday.
A front page commentary from the Communist Party's propaganda department headlined 'No Power
Can Stop the Chinese People from Achieving Their Dream' said "the trade war will not cripple
China, it will only strengthen us as we endure it," citing the hardships China has overcome
from the Opium War to floods to the SARS epidemic in 2002-2003.
There were two editorials on page three, with one saying "China doesn't intend to change or
replace the U.S., and the U.S. can't dictate to China or hold back our development." The other
said claims from some officials in the U.S. that they have "rebuilt" China over the past 25
years are "outrageous" and shows their vanity, ignorance and distorted mentalities.
US President Donald Trump declared a national emergency over Huawei, which he has deemed a
national security threat. His new executive order makes it more difficult for US companies to
do business with the Chinese tech giant. RT America's Manila Chan chats with investigative
journalist Ben Swann, who says no evidence exists for the Trump administration's claim.
#RTAmerica#InQuestionRT#QuestionMore
U.S. cannot spy via Chinese made technology products. That is the problem. When did
competition against American technology get to be a national security threat? It is about
creating a monopoly of only certain products in America. I hope American companies fight
back. Prices in American stores have already started to rise. Monopolies mean high
prices.
In the age of technology...any country
who doesn't SPY on other countries or their own citizens is LYING thru their teeth! USA is NO
DIFFERENT than CHINA.....they both are rogue nations, competing for the same thing,
TECHNOLOGY LEADERSHIP! The problem is....HUAWEI just got the upper hand in 5G technology
before the US can compete...so as such, the US threatens other countries with scare tactics
until the US can develop and deploy 5G technology to compete with CHINA. It's all about MONEY
and BUSINESS.
USA has dishonestly gathered more data on it's own civilians than it can access or
understand in several lifetimes, they have the gaul to attack others without proof?
UNREAL
Boeing and Hollywood are two week stops that China can hit with impunity.
Notable quotes:
"... China has outspent the US on R&D since 2009 and now invests three times as much each year. ..."
"... The issue with these chips highlights just how ridiculous the American position is. The chips referred to are Intel processors they use in servers and qualcomm (arm core) processors in cell phones. Funny thing is, these processors are not even made in the US, and their replacement isn't that much of an issue, not for a company with the resources Huawei possesses. ..."
"... For government and other high security uses China has options like the MIPs based Loongson but that wouldn't work in the commercial environment so hopelessly devoted to x86 and windows. Probably the best solution would be to make an x86 analog like AMD markets, and it wouldn't take that long to do. ..."
"... The United States attacked China's largest telecom equipment maker Huawei. If China decides to retaliate, it could target chip giants like Qualcomm and Broadcom, which rely heavily on it for revenue, or tech giant Apple, which depends on them for iPhone manufacturing. ..."
"... Huawei's competitors Nokia and Ericsson would stand to win from the above ban as the United States and its allies would resort to them for 5G deployment. Nokia's and Ericsson's stocks rose more than 4% and 2% in early trading on May 16. . . here ..."
"... Chip fab is the only remaining significant technological lead that America retains anymore, but the raw engineering brainpower behind that industry in the US is mostly imported from China anyway. The Chinese have no shortage of brilliant engineers, they just have not really had the need to do without Intel and AMD before. Now they do. ..."
"... Within a year or so China will be producing chips as good as America's. Another year after that and America will be eclipsed in that industry. No longer will people be looking for "Intel Inside!" stickers on products but rather "Huawei Inside!" . ..."
"... What doesn't seem to be clear, or else ignored/excused here -- China is today just as globalist as the US and in fact the multinational corporations in control of both countries are inextricably linked, especially in the high tech sector currently under the intense MoA thread microscope. ..."
"... By our standards exploitation of workers in China is a grim picture , which compares with the grim blue collar conditions in the US, the equal and opposite result of the globalist equation wrt offshoring factory jobs endemic to capitalist production. ..."
"... MoA China "experts" should study the reality of globalization after removing the rose colored glasses if you wish to be considered analysts instead of merely wishful thinkers/cheerleaders of groupthink delusion. ..."
@William Gruff #75: China is already producing world-class ARM chips. HiSilicon 's latest Kirin
processors are on par with Qualcomm's Snapdragon and Samsung's Exynos processors. Apple's
A-series is ahead of them all, but what does it matter if Apple's rising prices and falling
quality are going to kill Apple anyway?
Per Reuters, Huawei spends $11b on US components, and its ability to withstand this hit will
vary by segment: "Huawei being unable to manufacture network servers, for example, because
they can't get key U.S. components would mean they also stop buying parts from other
countries altogether," said an executive at a Huawei chip supplier.
"They can relatively better manage component sourcing for mobile phones because they have
their own component businesses for smartphones. But server and network, it's a different
story," the executive said.
Are there any articles on how dependent Apple and Boeing are on Chinese components? This
strategy seems incredibly short-sighted.
Remember the "Asian pivot"? Did Huawei and other critical tech companies start making
independent chips back then? Or before? When were the tariffs planned? Speculation, anyone?
The issue with these chips highlights just how ridiculous the American position is. The chips
referred to are Intel processors they use in servers and qualcomm (arm core) processors in
cell phones. Funny thing is, these processors are not even made in the US, and their
replacement isn't that much of an issue, not for a company with the resources Huawei
possesses.
Huawei already has its own arm based soc's it uses in it's high end phones and they can
replace processors in it's low end phones with lesser versions of these.
The Intel processors will be tougher to do for the commercial market because of software
compatibility issues.
For government and other high security uses China has options like the MIPs based Loongson
but that wouldn't work in the commercial environment so hopelessly devoted to x86 and
windows. Probably the best solution would be to make an x86 analog like AMD markets, and it
wouldn't take that long to do.
The United States attacked China's largest telecom equipment maker Huawei. If China
decides to retaliate, it could target chip giants like Qualcomm and Broadcom, which rely
heavily on it for revenue, or tech giant Apple, which depends on them for iPhone
manufacturing.
Huawei uses Qualcomm's modems in its high-end smartphones and has been in settlement talks
with the chip supplier over a licensing dispute. Tensions between the United States and
Huawei could delay this licensing settlement, sending Qualcomm's stock down 4.4% on May
16.
Huawei's competitors Nokia and Ericsson would stand to win from the above ban as the
United States and its allies would resort to them for 5G deployment. Nokia's and Ericsson's
stocks rose more than 4% and 2% in early trading on May 16. . .
here
"Soon U.S. chip companies will have lost all their sales to the second largest
smartphone producer of the world. That loss will not be just temporarily, it will become
permanent." --b
This is a crucial and important development. So long as China is just developing their
domestic chip designs as an academic exercise they will forever trail behind the market
leaders by at least one technological iteration. Why try so hard with chip designs that will
only ever just be used in college degree theses papers and proof of concept models? Real
innovation comes from scratching an itch; from fulfilling an actual need. Chip fab is the
only remaining significant technological lead that America retains anymore, but the raw
engineering brainpower behind that industry in the US is mostly imported from China anyway.
The Chinese have no shortage of brilliant engineers, they just have not really had the need
to do without Intel and AMD before. Now they do.
In the short term the transition will be painful for China. The first few iterations of
their replacement chip designs will be buggy and not have the features of chips they could
have bought for cheaper from the US. They will also have problems ramping up capacity to meet
their needs. Typical growing pains, in other words. In the long term, though, this will be
seen as the point at which the end started for America's chip tech dominance. Within a
year or so China will be producing chips as good as America's. Another year after that and
America will be eclipsed in that industry. No longer will people be looking for "Intel
Inside!" stickers on products but rather "Huawei Inside!" .
Isnt it clear the US is globalist? Uhhm, well, yes, it's only been clear for the prior 75
years at least. In fact Lenin laid it all out during WWI so one could
say it's been clear for 100 years.
What doesn't seem to be clear, or else ignored/excused here -- China is today just as
globalist as the US and in fact the multinational corporations in control of both countries
are inextricably linked, especially in the high tech sector currently under the intense MoA
thread microscope.
Why aren't Huawei making making more smartphone chips in production? Because so many
Chinese component manufacturers are still heavily invested in churning out product for Apple.
These companies employ millions in "relatively high paying" factory jobs and account for a
large slice of Chinese export income and stock market capitalization. These corporate
oligarchs supported by the Chinese government retain a vested interest in the status quo.
This is not to minimize Huawei or Chinese growing ability to compete at the design and
innovation level as well as production, it is simply rightsizing the perspective to fit the
reality. Huawei production is growing worldwide but this doesn't mean Apple or Samsung will
evaporate or fall by the wayside and the Chinese need Apple and its markets too . In
fact, Huawei is now willing for the first time to sell microchips to third party cell phone
producers including Apple. Successful capitalist growth for China depends on increasing
production into new products, technologies and markets not replacing current platforms with
new. The product cycle will take care of itself in time anyway.
China is still in the industrial growth phase of its capitalist development, although
beginning to transition to the higher phase for sure. Of course.
MoA China "experts" should study the reality of globalization after removing the rose
colored glasses if you wish to be considered analysts instead of merely wishful
thinkers/cheerleaders of groupthink delusion.
Trump calculation is probably that neoliberalism in China already corrupted Communist Party enough for US being able to
destabilize the country buy depriving it of export revenue. And it is true that influence neoliberal Fifth column in china exists
and can compete with Communist Party for power. If Trump timing is correct China will be crushed. If this in incorrect the
USA might be crushed. This is a very high stake game as Trump burn bridges way too easily (being reckless and arrogant all his
life). Bulling as a negotiating tactics might be OK for New York real estate market is not that good in negotiating with
countries such as China.
Both countries are neoliberal countries but Chinese have more flexibility as remnants of Communist Party control remain in
place. But the same remnants are also a bog danger, as China might find itself in the position of the USSR when the US
crushed oil price and deprived it of much of its export revenue. In this case Communist Party will be blamed for social
disruptions and might lose power due tot he power of Chine Fifth column of
nouveau riche like happened in the USSR (opposition was supported by huge cash injections from the USA). I hope they study the
USSR experience very carefully and will not repeat Gorbachov mistakes (although it is difficult, as it is very difficult to find a
more stupid politician then Gorbachov, unless we assume that he was a traitor). Also the level of nationalism in China is
much higher and that might help. In any case this uncharted territory for both China and the USA.
The Trump administration seems to have the illusion that if you raise the stakes high enough, other countries will cave to US
demands. There might also be an element of creating foreign adversary in order to unite the domestic front. If Chinese will hold
their position tight despite the pain, Trump might lose the election in 2020 as he will be unable to protect the economy for
more then a year and the first signs of reception nullify his changes, as he will be blames for it.
Notable quotes:
"... This article titled 'Face' by Walrus over at SST is well worth a read alongside b's piece. https://turcopolier.typepad.com/sic_semper_tyrannis/2019/05/face-by-walrus.html ..."
"... Both these articles give a very clear picture of what the drunken louts 'Team Trump' are up against in their so called trade war. Very much like a drunken spectator climbing into the ring thinking he can take on a professional boxer. ..."
"... The US attack on China did not start with Trump. This is what Obama's military "Pivot to Asia" was about, as was the TPP, which explicitly was designed to develop an economic alliance that left China out. Capitalist trade wars are also not new, as are hot wars. They are part of capitalism. ..."
"... "Intellectual property" is a laughable assertion, an audacious attempt by the US to corner all human advances and claim them as the property of US capitalists, to be only used for their profits. As if! ..."
"... What an appalling ruling elite in the USA. Blamers and punishers. Never take any responsibility for their murderous acts ..."
"... The U.S. talks about pressuring China until they give in. China talks about a solution that respects the dignity of each party. ..."
"... I had the sudden realisation that US politics is essentially monarchist in its nature, for all the complicated legal and constitutional structures that have been built around it over the past 240+ years. US politics and culture are fixated on one individual with extreme powers; the superhero obsession in Hollywood is one symptom of that. ..."
"... In a way the US now resembles the Ottoman empire during that empire's Sultanate of Women period (late 1500s to mid-1700s) when sultans' power was dominated by their mothers, viziers and sometimes the janissaries who became a hereditary class during that period. ..."
"... Idolatry is universal. People always gravitate towards Alpha personalities. ..."
"... In looking into US culture and why it gives rise the type of leadership it has, I think it may be the belief in exceptionalism. Exceptionalism may also carry with it the belief that all other peoples want to be like them and all they (Americans) have to do is free those peoples from the nasty dictators ruling over them. ..."
"... Patrick Armstrong in one of his articles has said that in his dealings with US officials as Canadian ambassador or diplomat, is that American officials genuinely believed that all they had to do was overthrow the evil dictator and the people would welcome Americans or willingly join the US system. ..."
"... But, at the same time, on another level, Americans understand that the president is a puppet and must obey orders, or have his brains blown out in bright daylight, in the town square. ..."
"... We hold both these views simultaneously, hence, as Orwell called it, Doublethink. ..."
"... The British court said, no patent, no copyright and no monopoly can last longer than 7 years. that was 1787-89, and it explains the for a short time clause in the USA constitution. ..."
"... I don't think the US sees the world's nations as commanded by their senior politician. Far from it, but to keep the US public locked in a child's mentality, the govt and its MSM present every political event/action/reaction as between personalities. Can't have reason and logic breaking out among the minions can we? ..."
"... China's "competitive advantages" are too big for a confederation of micro-countries in the Pacific to overcome. ..."
"... b said;" the U.S. economic system is based on greed and not on the welfare of its citizens." Bingo! Jrabbit @ 52 said;"US foreign policy has been remarkably consistent for over 20 years." Maybe the last 100 yrs.? Demonize countries people and rulers, and take their stuff, but why not? We are, don't ya' know, the exceptional nation, doing gods work. Manifest Destiny, isn't it great? ..."
"... Smacking down China is a strategic priority for the Deep State. ..."
"... the neocons in the US believes it is now or never to defend the USA unique position as world power. They believe, that if they don't fight now, they will have lost. I say, they already have. ..."
"... Trust the UnitedSnake to blame the Chinese for reneging on an agreement ! Fact is, Trump's team Add in last minute conditions that are totally unacceptable to China. Chinese commentators are fuming at the audacity of the demands. 'WTF, Do they think we'r their gawd damned 51st state ?' ..."
"... Typical UnitedSnake's 'negotiation' tactics, designed to fail ! Thats how Clinton justity his bombing of ex Yugo, by blaming Belgrade for the breakdown of negotiation ,to justify its 78 days of aerial arsons against Yugo. ..."
Both these articles give a very clear picture of what the drunken louts 'Team Trump' are
up against in their so called trade war. Very much like a drunken spectator climbing into
the ring thinking he can take on a professional boxer.
@ Peter AU 1 | May 17, 2019 4:33:54 PM |
1 5 Trump
demanded concessions on trade
banned Huwei
made military [plans with Taiwan
saber rattled in the China Sea
Trump wants improved trade conditions for improved economic climate in the U.S.
But there are others in the admin who want something else.
But still: "backup chips it has independently developed"
That's a good one Mr Moon.
The US attack on China did not start with Trump. This is what Obama's military "Pivot to
Asia" was about, as was the TPP, which explicitly was designed to develop an economic
alliance that left China out.
Capitalist trade wars are also not new, as are hot wars.
They are part of capitalism.
"Intellectual property" is a laughable assertion, an audacious attempt by the US to corner
all human advances and claim them as the property of US capitalists, to be only used for
their profits.
As if!
What an appalling ruling elite in the USA. Blamers and punishers. Never take any
responsibility for their murderous acts.
Rise up people, these are dangerous, stupid leaders and elites.
B says: Whatever face is at the top is only representing the layers below.
Yes, this is the case when complex governmental systems are functioning properly. In
this case power is distributed throughout the system, based on the role each individual
within the system. People must have a collaborative culture for complex systems to function
properly.
People of an authoritarian nature hate complex systems and distributed power, as such
systems limit the freedom of action of the authoritarian leader. The corollary to this is
that systems must be kept simple to accommodate authoritarian leaders. And simple systems
are much less powerful and effective than complex systems.
My observation is that, in the U.S., authoritarianism is the dominant culture, as
opposed to a collaborative culture of the Chinese that is implied by B's comment.
Indeed we see many signs in these negotiations that the U.S. is operating based on a
culture of authoritarianism, whereas China is operating based on a culture of
collaboration. Among the signs:
The tendency that B. noted of Americans to assign all power to the leader.
(This is not the first time, and in fact it is a common mistake of the U.S. and one of the
reasons that their regime change efforts almost never achieve a result that is favorable
for the U.S.)
The U.S. talks about winning and losing. China talks equity.
The U.S. talks about pressuring China until they give in. China talks about a
solution that respects the dignity of each party.
The principle behind negotiations for people of a collaborative culture is 'Win-Win or
No-Deal'. For Authoritarians, Win-Win is a compromise, and compromise is the equivalent of a
loss. My conclusion is that there is only a very low probability that the U.S. and China will
successfully negotiate a trade deal. The cultures of the authoritarian Americans and the
collaborative Chinese are too divergent. China will only accept Win-Win and the U.S. cannot
accept Win-Win.
Classic US empire strategy.
Build up a supplier and when they start to be serious a competitor take them down.
Asian Tiger crisis,forcing occupied Japan into the Plaza Accord etc.
They left it too long with China, way too long.
China has not recycled its trade dollars surplus into USTs since 2014.
No replacement suppliers like Vietnam or Indonesia etc will do either, no more vendor
finance
for the US.
It will have to live within its means, no wonder the neocohens are going
insane.
We are watching the death of the $ as GRC first hand.
NO jared, Trump is in charge, fully responsible and yet totally irresponsible. He hires
and fires, he barks the orders, Trump is not captive. You may desperately wish to believe
that but NO, Trump wants it like this and NO dissent.
This is Henry Kissinger's plan implemented by Trump. A war criminal implementing a
sociopath war criminal's plan. Trump is a killer and an oligarchs stooge and he like the
rewards.
See the fabulous Aaron Mate discussion previously linked in the last thread.
I'd be curious to know what other MoA barflies think of the US tendency to personalize
other countries' governments and political systems and reduce them all to monarchies of one
sort or another, and what this says about the American psychology generally. So much of the
US slather and accusations against Russia and China and what those nations are supposedly
doing look like psychological projection of the US' own sins and malevolent behaviour.
I was in hospital nearly 20 years ago for a major operation and some of my recuperation
there was spent watching a few old "Star Trek: Next Generation" episodes. Watching those
shows, I was struck by how much "power" the Star Trek captain Jean-Luc Picard appeared to
wield. Every one of his subordinates deferred to his decisions and very few challenged
him.
I know this is an old TV show with scripts that emphasise individual action over
collective action and delineating a whole culture on board the Starship fleet (this is a
long time before "Game of Thrones") but I had the sudden realisation that US politics is
essentially monarchist in its nature, for all the complicated legal and constitutional
structures that have been built around it over the past 240+ years. US politics and culture
are fixated on one individual with extreme powers; the superhero obsession in Hollywood is
one symptom of that.
In a way the US now resembles the Ottoman empire during that empire's Sultanate of Women
period (late 1500s to mid-1700s) when sultans' power was dominated by their mothers,
viziers and sometimes the janissaries who became a hereditary class during that period.
@ dh-mtl 21
You provided an excellent analysis of two very different kinds of people, westerners and
Asians (Chinese). Americans who believe that Chinese are pretty much like them, and respond
to people, to pressures and and to situations in the same way, are badly mistaken.
I would add another: Westerners want instant results and quick profits whereas Chinese take
the long view. Heck, they've been around for five thousand years so why not.
I'm glad you raise the issue of increased prices for US consumers, b. I have been looking
in vain for a mention of this even in alternative media. Nobody appears to be talking about
it.
If I can go off track for a moment the events surrounding Boeing are highly significant
and a parallel to what is happening generally in the US. Here is a something I wrote for
naked capitalism but did not send - Yves is too fierce and I don't trust her. A bit like a
feminine Colonel what's his name Laing...
Because of the prestige of Boeing Wall Street left its dimantling until quite late -
1997. GE and Ford had already produced their versions of the 737 Max in the 1960s with the
Corvair and the Pinto respectively as finance people started to take over the running of US
companies. There is something very sad in watching a once magnificent company reduced by
bankers to a shadow of its former self.
There has been a trade imbalance for quite a while but it didn't seem to matter much. The
Chinese raised their standard of living, Americans got cheap stuff, surplus dollars went
into treasuries to fund the deficit.
It all worked pretty well until Trump and MAGA. Somehow he thinks he'll bring the jobs
back but no Americans are going to make sneakers and circuit boards for $2 an hour.
I have just replied to Karlof1 in I think the previous thread and I link into this. In
looking into US culture and why it gives rise the type of leadership it has, I think it may
be the belief in exceptionalism. Exceptionalism may also carry with it the belief that all
other peoples want to be like them and all they (Americans) have to do is free those
peoples from the nasty dictators ruling over them.
Patrick Armstrong in one of his articles has said that in his dealings with US officials as
Canadian ambassador or diplomat, is that American officials genuinely believed that all
they had to do was overthrow the evil dictator and the people would welcome Americans or
willingly join the US system.
All the economic momentum is in Eurasia, centering on China, India, and Russia.
China is spearheading this drive and re-assuming its historical status as the richest
land in the world. Instead of resisting, Washington should be working with projects like
the BRI that help enrich everyone. (Indeed, why doesn't Washington announce a BRI for North/South America, perhaps a Yellow
Brick Road? But that's an aside...)
And concerns about Chinese spying through their companies should be equaled with
internal reflection about the practice in the United States. Perhaps it would be wise for
both countries to develop and practice international standards that respect human rights in
an Everything's Connected world.
Given how the US and China frequently treat "different" people with disdain, that's a
lot to ask. But no country or people is spotless regarding abusing human rights and some
wisdom with power would be welcome from both governments.
You point out that our entertainment industry focuses its plots on strong leaders, and Good
Guys vs Bad Guys, and we definitely internalize that, especially when our overlords want to
demonize another country, and use our entertainment-induced perspective as a shortcut.
They tell us that the leader of the targeted country is a Bad Guy and we must kill the
people in order to save them. And Americans nod and comply. Except for the 5% that prefers
peace, and they argue that the leader is not a Bad Guy, so we shouldn't kill the people to
save them.
No American ever thinks to argue international law or basic morality, we just argue about
the plot lines.
But, at the same time, on another level, Americans understand that the president is a
puppet and must obey orders, or have his brains blown out in bright daylight, in the town
square.
We hold both these views simultaneously, hence, as Orwell called it, Doublethink.
China has succeeded because it does not honor copyright and patent monopolies. Western
civilization is failing because it imposes the feudal monopoly by rule of law system.. The
state will make sure a few fat cats are lords and the masses are their slaves.
---
It is almost asking the change of China's political system." <= no its not, the struggle
today is freedom, human rights and the right to self determination not socialism vs
capitalism.. it the struggle today is capitalism vs monopolism.. because monopolism aims to
make every single human being alive its slave to a very few monopoly powered corporate
giants.. China is a clear example of what can be if the masses are allowed to compete
without the shackles of copyrights, patents and other thin air monopolies.
Some aspects of China's trade behavior can and should be criticized.
Why? Because of that "intellectual property" stuff? Japan basically built itself from the
ground up in the post-war through allowed and unallowed intellectual property theft. Canon
and Nikon, for example, essentially fac-similed Leica during that period; after the
transition to digital, they erased their theft past, but it doesn't change the objective
truth both wouldn't exist without stealing technology from a defeated country (Germany). It
did the same with missile reentrance technology it stole from the USSR after the Cold
War.
< Technology is a product of the human mind.. copyright and patents are thefts of the
products of the human mind.. and human mind assets do not belong to anyone, to any
country.. Instead, copyright and patents (intellectual property) are and should be in the
public domain (but the scum that write the laws have created from thin air; rights which do
not exist, and given the rights they fabricated to their feudal lords and the corporations
owned by such lords. So the lawmaking scum have made it possible for a few (feudal lords)
to establish and maintain a monopoly in the good life, over the masses in the world. ..
Just as in the in England, France and Switzerland, where only the rich, corrupt
politicians, and criminal few hung out and traded copyright and patent monopolies in the
coffee houses, (much like stocks and bonds are traded today, monopoly trading was a game
between fat cats (today's the fat cats are wall street barons), ..monopolies allow rich and
wealth to support their royal life styles at the price of enslaving the masses to poverty.
Luckily a court in England, threaten by an angry crowd of the masses, denied the wealthy
their perpetual lifetime patents and copyright demands, no longer could the fat cats
squeeze ownership of an intellectual creation from its creator, convert it to intangible
property, and use the intellectual property to monopolize the world.
The British court
said, no patent, no copyright and no monopoly can last longer than 7 years. that was
1787-89, and it explains the for a short time clause in the USA constitution.
I don't think the US sees the world's nations as commanded by their senior politician. Far
from it, but to keep the US public locked in a child's mentality, the govt and its MSM
present every political event/action/reaction as between personalities. Can't have reason
and logic breaking out among the minions can we?
As for Trump being in charge, I rather doubt it, no US president has been "in charge" of
any thing except possibly what is for lunch since Washington.
Too many policies Trump began, such as negotiations with NK, have been trashed by his
"teams" who I believe are actually his minders put in place by the Deep State.
Is Trump a great guy? A NY developer by their very nature is not a great guy. But I do
think he wants to be seen as a great president. To do that he has to pull off some deals
that will be remembered which is why he wanted the deal with NK, that Pompeo blew up.
I also think that the govt is preparing for the time when the dollar is no longer the
reserve currency. And to do that you need to pull manufacturing back from abroad (from
China), seize critical assets (from Venezuela),break any and all treaties that require you
to spend money you won't have (making NATO (pay as you go).
All things the govt is doing, admittedly with the most horrific management team since
Taft's. But they are moving on all fronts to circle the wagons of US commerce.
They know what is coming, some of them may see war as the way to bilk a few more
trillions out of the treasury, but I don't think the military will let them. For they know
that if they go up against a nation that Russia and China support and botch it, that
R&C will go for the throat and that, more so than the currency crash would be the end
of the US.
These moves we see are very serious because the end game is for the continued existence
(or death)of the US. And many of these tactical moves are very high risk because they
hasten the end of the dollar. I give the dollar five years more, tops. Then it will be just
one in a basket of currencies until the yuan makes its way to the top.
And where that strange UN Agenda 21 fits in this I don't know, its plan for the US is
for drastically reduced population (70% loss, from what?)the remaining population in mega
cities and truly vast areas of no go set aside for the "environment." It reads like a
National Parks program on crack with a side of Hunger Games.
The next five years are going to be really critical and I personally think the US will
only make it by the skin of its teeth.
@ Jen. Another thought. The era in which the current state of America was conceived.
British colonies in a war of separation or independence against the British. Europe and
Britain at that time mostly ruled by hereditary monarchs nobles and lords ect.
Americans which I take it at that time would have been mostly British ancestry had done
away with hereditary monarchs and so forth. It would have been somewhat exceptional at the
time. In the targeting of the leader of a nation as the source of all evil, I wonder if
that relates back to doing away with hereditary leadership especially monarch.
President Trump has declared a national emergency due a threat to the US from "the ability
of foreign adversaries to create and exploit vulnerabilities in information and
communications technology or services, with potentially catastrophic effects, and thereby
constitutes an unusual and extraordinary threat to the national security, foreign policy,
and economy of the United States," so various actions and prohibitions have been stipulated
here .
I think war reporting rules are in place with China, and Trade war has started.
Every month that passes without a crisis is a success for China right now as it over takes
US in GDP, tech, and trade links.
Key issues are bringing Europe in - the Huawei ban extended to Europe is battlefield #1,
Northstream (gas link to Russia) is #2.
First get Europe on board, the US can up things a lot further.
If Trump gets this right, he can delay outright defeat by China under well beyond his 8
years are up. (Bush or Obama early on could have won, or could have found a peaceful
solution).
A president doesn't have to obey the orders of the powers that be just because they
threaten to kill him otherwise. A brave president would defy them to do their worst. If
they went ahead and killed him, he would still have accomplished something important. By
exposing the nature of the system, he would have robbed it of its legitimacy and brought a
revolution much closer.
You've all been trained very well to ignore the class warfare.
China's "peaceful rise" was convenient when it enriched the Western elite.
But when China makes a play for equal footing, the must be smacked down. In each case (rise, smack-down) ordinary people (like yourselves) get f*cked. Kissinger's NWO? It's for the children.... No, not YOUR children. Welcome to the rabbithole.
Best example of a country stealing foreign inventions and protecting its 'uneconomical'
industries with tariffs is the USA.
It was notorious that in the C19th American publishers pirated authors and musicians from
Europe, particularly of course from Britain where the intellectual properties of Dickens
and his contemporaries laid the basis for many an American publishing fortune.
Among the primary victims were American authors who couldn't compete against stolen
imports.
I am not so sure the conclusions of the article are correct. Tariffs on Chinese factories
will force production to other countries in the area like Vietnam where costs are not going
to be much higher than China.
Granted, the US may be pissed off that Huawei is placing back doors in their systems but
I suspect that they are only copying what the US has done for years with US companies like
Microsoft.
My daughter managed 5 factories located in China of a clothing manufacture based in the
US some years ago. She said there was constant chaos as the workers were continually on
strike. Bad air, dangerous machines, poor wages. few bathrooms, bad water, childcare is
chaining you child to a fence for the day, and the like. Her boss flew to China and asked
for the cheapest costs possible. They showed him a factory full of little children cranking
out production. He left crying his eyes out. He was a cold hearted bastard but even that
was too much for him to see.
I viewed first hand the destruction trade agreements like NAFTA caused to good union
wages and benefits in the US. Hell, that is what got Trump elected. It is tough to watch
your children go into the same profession and make 50% less in wages and fringes 30 years
later.
Intellectual property and patents? No so sure about that, the views here are new to me.
I always supported them but I guess I need to dig deeper on that one.
In the net I think China is the loser, fewer jobs, higher food costs, their markets are
down 30%, ours are peaking and are seen as a safe haven for money. Export numbers for China
are dropping as is the trade balance.
At this point it is not a trade war but a re balancing of markets IMHO. If it was a real
trade war things would be far worse. Middle supplier countries will be hurt, US farmers,
some markets win some lose. If it was business as usual then it would be business as usual.
Trump is stirring the pot and what the endgame is is anyone's guess. Did anyone really
believe China would just bend over and accept any demands from the US?
All that being said China can easily wait it out and hope Trump loses and the policy is
reversed which I am sure his policies will be reversed if anyone else gets elected.
Your link about Boeing is a good one. Today at Naked Capitalism was a
story about a possible 'payback' link between Huawei and Boeing. China has the option
of causing a great deal of pain to both the US and Boeing in retaliation.
They could declare the recertified 737-MAX to be unsafe, so much so they're cancelling
all orders and forbidding any landings in or overflights of China. If Canada hadn't screwed
up so badly, the local Bombardier airplane might have been substituted for the 737. But
Canada did goof in a major way.
There is no way that the US could subsidize the growth of a larger population base
forever.
China sends vast amounts of manufactured goods to the United States; the US pays for all
this with dollars it can effortlessly print. So who is subsidizing whom?
The National Basketball Association Inc. is hiring its first head of government and
public affairs in China as it seeks to protect its most important international market at
a time of high tension in the U.S.-China relationship.
What I don't like about Chas Freeman's article is his tone-deafness.
He has been around government enough to know better. Smacking down China is a strategic
priority for the Deep State. But Chas says:
There is no longer an orderly policy process in Washington to coordinate, moderate, or
control policy formulation or implementation. Instead, a populist president has
effectively declared open season on China.
It's a bit disturbing to see people here read Kissinger's 2014 Op-Ed (finally) but say
nothing about Chas Freeman's assertion that it's all made up by a "populist" President.
<> <> <> <> <> <> <>
If the above hurt your feeling please feel free to retreat to your happy place. We'd all
be better off.
Not happy, just learned to live with it. I think I get your point. The policy really
means little, the underlying issues will never change.
Been in the rabbit hole for a really long time. If more people jump in maybe things will
really start to change.
I am not so sure the conclusions of the article are correct. Tariffs on Chinese factories
will force production to other countries in the area like Vietnam where costs are not
going to be much higher than China.
First of all, this is not a new phenomenon: low wages, low technology industries are
already being transferred to India and SE-Asia. The Chinese know this and there are
innumerous articles on the internet you can find about it.
But even if this process accelerates, that won't solve the manufacturing problem of the
USA: it will continue to be abroad. Besides, China's "competitive advantages" are too big
for a confederation of micro-countries in the Pacific to overcome. It has a socialist
economy (centrally planified economy, under the hegemony of the working class); it has 1.5
billion people that will only peak in 2030; it is decades ahead in built infrastructure; it
has a huge scale economy advantage (e.g. infrastructure projects that are required to reach
a certain desired productive level, which are profitable in China, may not be profitable in
e.g. Malaysia simply because it is too small); its financial sector is not dominant over
production. But then, I repeat: even if the USA nukes China, manufacturing still won't go
back to American soil.
America's problem is a secular fall of its profit rates, not manufacturing capacity: it
can import whatever and how much products it needs simply because it can print world money
(Dollar system).
b said;" the U.S. economic system is based on greed and not on the welfare of its
citizens." Bingo! Jrabbit @ 52 said;"US foreign policy has been remarkably consistent for over 20
years." Maybe the last 100 yrs.? Demonize countries people and rulers, and take their stuff, but
why not? We are, don't ya' know, the exceptional nation, doing gods work. Manifest Destiny, isn't it great?
I know next to nothing about the "Huawei" business, so a new
article about it is something to grab at. Pretty cut and dried, huh? Hauwei is pure
evil, and no 'ifs' or 'buts' about it.
But who is this guy. A couple of quick searches turned up some more of his output.
'It's now or never': The untold story of the dramatic, Canadian-led rescue of Syria's
White Helmets
How Israel became a defender of the Syrian people
Just another neocon hack peddling BS, so I'm back to square one.
China will wait it out until Trump is out of office. The Chinese leadership is pretty
smart and had at least three years to prepare for the worst case scenario. Once Chinese
industries as a whole follow Huawei's footsteps (i.e. Plan B), there will be no turning
back. They'll set off Plan B once they see Trump winning 2020.
Are we to asume from "Some aspects of China's trade behavior can and should be criticized"
that the United States are shining example of trade (and all other) policies,all others to
follow?
For government and other high security uses China has options like the mips based
Loongson but that wouldn't work in the commercial environment so hopelessly devoted to
x86 and windows. Probably the best solution would be to make an x86 analog like amd
markets, and it wouldn't take that long to do.
Chinese-Taiwanese joint venture Zhaoxin has been making x86 processors since
2013, based on VIA Technologies' x86 license. These processors are manufactured by
Taiwanese TSMC, but may switch to Chinese SMIC
once it launches its 14nm process later this year.
"Whatever face is at the top is only representing the layers below." --b
The truth of this is also why so many in America hate Trump so much. He is too perfect a
reflection of what America truly stands for. Trump accurately represents America, from
America's bloated, over-inflated sense of self-importance and worth to America's
pussy-grabbing foreign policy. Trump-hate is really self-hate.
Delusional American Russiagater Trump Derangement Syndrome victims will protest, but
such people are incapable of taking a good hard look at themselves.
Hmm... "delusional" and "American" are redundant adjectives here. I should
be more careful with my writing style.
Mr. Gruff you have it almost correct, Americans and the USA are not one in the same and
they never have been.
I still don't think you guys get it.. The 7 article constitution of the USA apportions the
power to rule between two branches and separates the masses from their personal political
powers and their human rights. Its result is not a democracy, but a few people rule
republic. 100% of the authority to rule (operate and make decisions) is vested in one
person (Art. II, rule and decide: President w/VP backup), subject only to the powers
distributed to the two bodied legislative structure ( Art. I, pass law and raise money: 450
house+100 senate persons). Critical to understand => one person makes all decisions, and
directs the day to day government. Article III thru VII defines the judiciary and clarifies
various situations. (525 popularly elected + 2 electoral college appointed <=paid
governors) vs. 350,000,000 powerless governed persons entitled only to 3 votes/voter
[Senator(1), House members(2)] and allowed one vote/voter for each President(1) and VP(1)
<=but both Art. II persons are appointed by the electoral college).
The USA is about delivering to the ownership of a very few, all of the assets, all of
the power, and all of the services once possessed by the many. The demand for all of the
possessions of the many, to be delivered to the few, has expanded over time from 13 colony
America to earth and now space. No one but the few are entitled to anything and the USA and
other governments are there to be sure of it. But how is 'total possession vested in the
few' to be maintained? By rule of law!
But what law would transfer everyone's possessions into the ownership of a few? Ah, the
laws of monopoly.. so rule of law, from thin air , generates=> monopoly powers
and rights of ownership.. Examples of laws that bear monopoly powers and that transfer
ownership rights are copyright laws, patent laws, as they convert monopoly powers that once
the many shared (via governments) now belong to the few. The transfer is called
privatization. Oil is controlled for the benefit of the private few by ownership laws and
right to produce contracts. All in all the function of t he USA has been to make a few very
wealthy at the expense of the many.
The trade issues, sanctions, wars, tariffs, race wars, oil wars, religious wars etc. are
about which people are going to be the few. Until the form and function of governments are
determined by the masses from the bottom, instead of by the few from the top, nothing will
ever change. The masses will suffer or prosper according to which government is the
winner.
US factories moved to China because the US economy is based on greed?!! US government greed
for the company's money maybe. US factories moved to China because it was cheaper to
produce products there and then pay the expense to ship them all the way back. The US has
one of the highest federal tax rates on earth, and add in high state taxes for an
unacceptable situation. US fiat paper money is the base problem.
William Gruff @ 72 & snake 71
I was just about to say the very same thing !
Delusions of grandeur ! And now major self-harm systems !
But are these degenerates above the law ? They are after all genocidal mass murder's!
String um up I say or shall we fry um ?
Right now the brain dead American public are like something out of -- - -
'The invasion of the body snatchers ' film
@58, JackRabitt, Smacking down China is a strategic priority for the Deep State.
the first time I got some type of glimpse of the average American Mind on China, as it
filtered down from "the deep state" to the more fearfully ill-informed quarters of society
no doubt, was in the post 9/11 universe. The person or persons pushing the meme, may have been a bit confused by all the
conspiracy theories about 9/11 unfolding at the time.
Anyway, Chinese troops he/she/they asserted readers were close to the Mexican border
approaching, advancing swiftly.
In hindsight, maybe accidentally, although I doubt, Trump combines the elements of that
narrative perfectly. And it is not my intention to argue right or wrong here. But
apparently down at the border there is this "invasion" on the other hand there's also the
Yellow Peril.
DontBelieveEitherPropaganda , May 18, 2019 9:58:41 AM |
link
Well, the chinese system of power has always been the thoughest to understand for any
outsider. It has been this way, but in the last years it seems the so called age of
information has lead to erode the curtains of this complex mechanism. At least for those
who want to look behind those curtains, and not use them to project their propaganda.. ;)
And it is a good sign that while Xi tired to establish himself in such a unique position
of power like Mao, and openly tried to put himself into the historic succession of the old
emperors (like Mao did too), that the will of the people and party still tips the scale of
power.
It means the chinese confucian tradition and its consequences for a ruler even today still
matter. Even though they are anyway lost on someone who is not of Asian origin.
What to westerners look like a dictator, is of a different nature as one can even
imagine with western eyes. Every ruler has to strive for balance, for harmony, which in
turns makes hearing of the peoples popular will be a necessity.
Even though many Chinese say, they like any other people only strive for what they need
most ;) (like harmony and compromise). Though many also say, that the chinese will always
choose stability and security over freedom. And i guess that is what many from the western
world dont get about China, and also about the Putinists.
I say let them and every one else have their choice. Just like i say let the US do theirs,
and reap what they seeded.
For those able to read German check out the Books of Peter Scholl-Latour on China. The
most telling and authorative books from a journalist who has reported first had for over 60
years, and has always defended and honored his own perspective;
While the western so called reporters were trapt in their professional delusion of pro-NATO
propaganda, and while the SDS praised the culture revolution as a democratic means, when
whole china was terrorized and millions slaugtherd.
Hard to walk that middle ground, while being attacked from ideological drones from both
sides i guess..
Anyway, the neocons in the US believes it is now or never to defend the USA unique
position as world power. They believe, that if they don't fight now, they will have
lost.
I say, they already have.
Short of pulling a Hitler on China, meaning a total annihilation of the Chinese people,
there is nothing they can do. And even Bolton will have a hard time trying to push through
a clear cut genocide ;)
We will see China rise. Those who feared of this will see that china will not be half as
bad as thought, and those who gloirfy china and put them into a good (vs bad US) black-wide
scheme will learn of the faults of the Chinese power and its projection (Like its own
believe of supremacy, of racism (a reason why china in the cold war was pretty
unsuccessful in Africa, where most knew who deeply racist Chinese treated their fellows as
workers, guest students,..).
All in all, what we need is a true and functional global community of nations and
people, where goverments truely work together to balance out the stronger world powers. And
with the pressure of Chinas rise and its strugle with the US, we may finally have a better
chance for this to at least partially succed.
I hope.. ;) Or of course it nuclear winter time. We will see.
China now, Japan in the 1980s - it's "deja vu all over again!"
"AFTER ITS DEFEAT in World War II, Japan was content to take foreign inventions -- the
transistor, the laser, the videotape player -- and convert them into products that it could
market around the world. Japan acquired much of its base of Western technology, most of it
American, perfectly legally through licensing, careful study of scientific papers and
patents, and imitation. But when the U.S. wasn't willing to share, some Japanese companies
simply copied with little regard for patents and other intellectual property rights that
the courts have only recently begun to define in many areas of high technology.
The U.S.,
confident of its technical superiority, ''sold out to the Japanese,'' says G. Steven Burrill, head of the high-technology consulting group at Arthur Young, a Big Eight
accounting firm. ''We let them share our brain.''
Now, belatedly awake to the recognition
that Japan has been eating their breakfast, lunch, dinner, and bedtime snack, American
companies are stirring. IBM vs. Fujitsu over computer software, Honeywell vs. Minolta over
automatic focusing, Corning Glass vs. Sumitomo Electric over fiber optics -- these are only
the latest, best-publicized complaints that Japan has stolen American technology.
Even as
those legal battles are fought out, the copycat cliche is becoming obsolete. A series of
studies financed by the U.S. government since 1984 warn that Japan has caught up with the
U.S. or passed it in the development of integrated circuits, fiber optics, computer
hardware engineering, and advanced materials like polymers. It is pressing hard in some
areas of biotechnology, and lags primarily in computer software.
Already there are signs
that the Japanese, buoyed by their new prowess, have assumed the arrogance of the U.S.
along with its technology."
"A MEASURE of Japan's progress can be found in the number of patent filings in the U.S.,
Japan's most important export market. ..."
"THE FACT that Americans now worry about their access to Japanese technology is an
acknowledgment of Japan's new scientific competence. When the Japanese were known primarily
as copycats, the flow of technology was essentially in one direction. It was also cheap.
Aaron Gellman, president of a consulting firm, says that for years U.S. firms licensed
technology to the Japanese without asking for a grant-back, the right to use any
improvements they made. Says Gellman: ''This was very arrogant and implied that no one
could improve on our technology.''"
"U.S. scientists and companies have failed to take advantage of opportunities to tap
Japanese academic research. ''What's wrong here is pure laziness,'' says Martin Anderson,
an analyst with the MAC Group, a consulting firm in Cambridge, Massachusetts."
Trust the UnitedSnake to blame the Chinese for
reneging on an agreement ! Fact is, Trump's team Add in last minute conditions that are totally unacceptable to
China.
Chinese commentators are fuming at the audacity of
the demands.
'WTF, Do they think we'r their gawd damned 51st state ?'
Typical UnitedSnake's 'negotiation' tactics, designed to fail ! Thats how Clinton justity his bombing of ex Yugo,
by blaming Belgrade for the breakdown of negotiation ,to justify its 78 days of aerial
arsons against Yugo.
How the UnitedSnake destroyed Toshiba and took over its crown jewel chip tech,... Toshiba was severely punished for breaking fukus
sanction on USSR, by selling state of art milling
machine to the Soviets. the unitedsnake slapped a heavy fine, demanded
the resignation of Toshiba CEO, imposed a ten
years ban on Toshiba products, FORCED the Japs
to share their latest chip tech with Merikkans. Toshiba never recovered from that disaster.
An excellent summary of many aspects of a serious and deteriorating situation. In the end, China has a lot of brainpower to apply to situations like this.They are used to speaking and writing one of the world's most difficult languages. They are used to playing Go, one of the world's most difficult board games. And their national endowment of analytical skills immensely surpasses that of the United
States.
They are said to have eight times as many students in math and science and engineering
in their universities. Xi himself is very bright, having earned degrees in difficult subjects at demanding
universities, and he is calm and very forward-thinking. Just consider that magnificent
long-term Silk Road Project. When I think of Trump with his constant mock-heroic poses and foot-high signatures on
every silly memo and his gang of noisy, pompous thugs in top appointments, I can't help
thinking I know how this will turn out in the end.
China's
yuan slide risks trolling Trump It's good to remember that would not be the first time. After the first round of
tariffs, China devalued the Renminbi and it basically
wiped out the tariffs . In fact, it didn't even need to devalue that much: 1 Renminbi
is now US$ 0.14 -- just a little over the Government max upwards band of 1:7.
In 2013, the CEO of French hi tech co Alstom
was arrested by FBI, while changing flight at
New York.
His 'crime', breaking MERIKKAN anti corruption
law by bribing govn officials in INDONESIA ! Such is the LONG arm of merikkan extra territorial jurisdiction, rings a bell ...
Ms meng ?
Just like Toshiba, the French paid a very heavy price. The CEO went to jail, Allstom,
the crown
jewel of French industry, was FORCED to sell off its core business to its main rival, GE.
!
What did Ian Fleming's fundamental law of probability says....
ONCE IS HAPPENSTENCE, TWIC IS COINCIDENCE...
US MegaCos. outsourced and 'globalised' with the blessing, nay encouragement! of the Pol.
Class. Cheaper labor and lax environmental rules, in comparison with 'home' (US, W countries,
etc.) is a mantra. That is of course good enough, and one can track, say, sh*t-clothes
factories transiting from Bangladesh, to China, to Malaysia, to Mexico, etc.
Other motives, the first is lack of responsibility and involvement which allows
domineering and rapacious behavior. Foreign co. implant can just leave, relocate, if
whatever. A random /racist term/ exploited worker in the 3rd world is not voting in US
elections.
Deadly industrial pollution is outsourced, and energy use etc. at home while not
curtailed or significantly diminished is not as high as one might see under condition of
the industries returning home - a sort of 'greener' environment can be touted.
The PTB simply cannot grasp why some US citizens, who live high on the hog, house, 2
cars, 3 kids, endless dirt cheap consumer goods, etc. produced by 'slaves' abroad,
complain. If the 'stuff' was produced at home, it would cost much more, the pay would be
going to 'low-level' US labor -- in a more closed economic circuit there would be more
'equality' as things stand today in the US - *not* claiming it's a general rule.
Trump had some confused? thoughts about turning the present situation around, and
relocating industrial - some extractive - manufacturing - jobs back home, say 1960s, with
decent pay, to ppl who would then vote for him.
The stumbling block is that profits to shareholders, oligarchs, chief CEO's, asset
trippers, usurers, Mafia types, Banks and other Fin, and Politicians who in the US are
highly paid lackeys, etc. is set to diminish, as 'the pie' can no longer be grown much to
accomodate all these grifters. Due to energy constraints, disruption of climate change,
etc.
Brit and Dutch spooks now concur with Trump the charlatan's claim of Huawei security risk ! Trust the Brits to doublecross the Chinese, after they've been given the huawei source
codes to examine and declared it free of bugs. As for the Dutch , they seems to be the goto guys these days, whenever the 5liars need
some loyal poodles to corroborate their B.S., cue the M17 'investigation'.
This is a good overview of Huawai crisis, but the reason for it is deeper. Huaway is just a skirmish in a much larger war for
the supremacy in the neoliberal world. At the same time this is a crisis of neoliberlism as social system. Much like the crisis of
Bolshevism.
After 2008 the neoliberal elite lost legitimacy. Nasty jokes about Trump and Obama are just a tip of the iceberg, they just show
the level of distrust. In a way they are like anecdotes about Brezhnev during "Stagnation" ("Zastoy" in Russian ) period.
Simplifying, Trump is some variation on the theme of of Gorbachov. and a counterrevolution against Trump was similar to the
counterrevolution against Gorbachov ("putsch" with the main difference that putsch was instigated by Gorbachov himself and he lost
power as the result). While most probably the dirt will be swiped under the carpet, some minor figures might go to jail
in the USA as the result as this was clearly attempt of the palace coup by intelligence agencies with the support of Obama
administration and Clinton wing of republican partty.
The level of lies in MSM and level of lies of politicians on the Capital Hill is a clear sign that the social crisis is reached
the state "when the elite can't govern as usual, and prols can't live usual". People working in Wall-mart essentially live in
a third world country.
The most telling sign that this stage has come is that the neoliberal elite no longer is able to tell the truth to the
population. Russiagate was partially an attempt to cement the cracks in neoliberal facade (loss of the legitimacy of neoliberal
elite) by redirecting the anger of population to the external enemy. In this sense neoliberal elite badly long for a war, which
would solve their problems, but in the modern world this is too dangerous move. But new local wars (Iran, Venezuela ) are still a
possibility, especially because Israel fifth column ( Adelson, Hassid mafia -- Kushner and Co, etc) partially controls Trump
and were able to secure the appointments of Bolton and Pompeo.
BTW attitude to Jews here turned to be much worse (especially in NYC, there are a lot of Hassidic sects). Jews also are very
convenient scapegoats and always were.
The Trump attempt to bully China is based on the understanding that China is a neoliberal state too and as such it should fold
in the name of neoliberal globalization, as the USA is the dominant neoliberal power -- kind like the USSR was for Bolshevism.
It is funny that China defection to neoliberalism doomed Bolshevism :-)
As neoliberalism is a flavor of Trotskyism (Trotskyism for the rich :-) it can't be decoupled from the neoliberal
globalization ("Financial oligarchy of all countries unite") like Trotskyism can't be decoupled for the idea of the
World revolution. If you decouple those two you will get Stalinism.
The question now is about the control of globalization. Where is the center? In the USA or in China (China is pushing its own
version via Belt and Road Initiative -- a China-centered trading network)
As for China-USA trade war timing is everything. If it is too late the USA will come out of it with bloody nose with the
continuation of the Great Recession in the cards. The root case was only patched, but never fixed -- secular stagnation continued
past 2010: concentration of wealth at the top undermine consumption of the middle class (lower class does not matter much) and
external expansion is limited as there will be no the second USSR collapse and no new markets. As Marxist taught us -- all
imperialistic wars are the wars for the redistribution of the markets. I think this might be the case now. .
If timing for Trump attack is right, China will be crushed and pushed into economic depression.
I am incompetent in this area but it looks to me that Trump in his usually bulling style overdid it putting too much
pressure, and as a result China revolted. Neither China not the USA understand the full consequences of this move, but that does not
matter. Chinese reaction suggests that "the Rubicon was crossed" and the real trade war is in th cards. May be some
compromise reached, but if the neoliberal world is stilt into two camps: USA-dominated and China-dominated (much weaker, but
Russia and possibly India, Pakistan and Iran probably will gravitate to it). Replaying the Cold War on a new level and with
much weaker cards in the USA hands.
Looks like Trump recently understood that he committed a blunder and is trying to back off, but that might be too little too
late.
Notable quotes:
"... It's the clearest sign yet that the basic assumptions of globalization are collapsing. ..."
"... the story of the use of SWIFT against Iran, and increasingly it's the story of fights over tech/networks ..."
1. A thread on why Trump decision to put Huawei on the entity list is a very big deal indeed, as
@Dimi and others are arguing.
ft.com/content/c8d6ca . This is a far
bigger step than just excluding Huawei from the US market.
2. It requires any US company that wants to supply Huawei to first ask the US government for permission. This has obvious implications
for Google's Android operating system, Qualcomm chips and a myriad of other suppliers
4. The globalization of the 1990s massively transformed the world economy. National economic systems that had previously been
separate from each other became densely interpenetrated, and deeply dependent on financial, informational and trade networks that
spanned borders.
5. These networks are structurally embedded. Supply chains have been globalized, in the pursuit of economic efficiencies. It's
hard to imagine how the world economy could work without them. But the pursuit of efficiency created strategic vulnerabilities.
6. Some networks had hub structures meaning that states that could control the hub could control the network. Others relied on
crucial components that were single sourced or sourced within an individual country.
7. The last decade has seen states move increasingly to exploit these vulnerabilities against others or to shore their own vulnerabilities
up against outside attackers. That's the story of the use of SWIFT against Iran, and increasingly it's the story of fights over
tech/networks
9. The Huawei move displays both US fears about vulnerabilities, and US efforts to exploit them. The US is worried that 5G networks
could compromise US communications to surveillance.
10. US is not only moving to push Huawei out of existing markets - but to damage Huawei's core business by potentially preventing
it from using core US components (such as Qualcomm chips or Android OS (it remains to be seen exactly which technologies will be
listed). Chinese hawks are talking about retaliating through e.g. blocking sales of rare earths again.
11. This will also reinforce Chinese efforts to build "autonomous and controllable" technology and supply chains outside US control
to decrease their vulnerability to future attack.
12. The old model of globalization is in serious trouble. The networks that tie the world economy together are being exploited
for strategic gain. The US move is both a response to fears about its own vulnerabilities, and an effort to exploit China's vulnerabilities
in return.
13. The result will likely be escalation - but we don't know for sure. We still don't have anything that approaches a strategic
analysis of this new field of politics and how it works. Historical experience provides no good recent analogies.
14. During the Cold War, the US dominated parts of the global economy and Comecon were largely disconnected, with the exception
of raw commodities such as grain. Now, the economies of US, Europe, China and Russia are deeply intertwined.
15. If you want to be pessimistic, you can resort to scorpions-in-bottles analogies. If you want to be optimistic, you can point
to continued shared interests that states have in avoiding major economic disruptions. The willingness of the US to push this so
far and so hard
16. suggests the skeptics may find their fears justified - but we'll be finding out. Interesting times for international political
economy scholars, if frightening times for the international political economy. Finis.
Why not? Hollywood those days mostly produced utter junk. It's an easy and lucrative move
Notable quotes:
"... The most obvious is the simple fact that the U.S. is much less dependent on its services exports to China than South Korea is. While certain sectors might feel some pain, it's not likely to be strong enough to force the White House to back down. (Indeed, Trump might not mind if liberal Hollywood takes a hit.) ..."
"... Similarly, many Chinese industries rely fundamentally upon licensed American services. In 2018, foreign films accounted for 38% of China's box office; the most lucrative among them were American. That trend continues: Over the weekend, "Avengers: Endgame" became the third-highest grossing film in Chinese history. ..."
Trying to boycott U.S. entertainment and travel, as Beijing did
with South Korea, will only backfire on Chinese companies and consumers.
By Adam Minter , May 17,
2019 8:00 PM
Adam Minter is a Bloomberg Opinion columnist. He is the author of "Junkyard Planet: Travels in the Billion-Dollar
Trash Trade" and the forthcoming "Secondhand: Travels in the New Global Garage Sale.
China may want to stand tough against Donald Trump's trade threats. It's going to have a hard time retaliating, though, and
not only because it doesn't import enough goods to match the U.S. president tariff-for-tariff.
One obvious target would be the
$58.9 billion in
services the U.S. exports to China. These include everything from Hollywood blockbusters to tourism and education. In theory,
Beijing could easily enough cut off the flow of American entertainment into China and Chinese students and tourists out of the
mainland. Indeed, the nationalist editor-in-chief of the Global Times newspaper has already
suggested such a strategy.
China has some experience with this. After South Korea agreed to deploy a U.S. anti-missile system on its soil in 2016, Chinese
television stations were
informed that programs involving South Korean stars wouldn't be approved for broadcast, while Chinese venues began
canceling appearances by K-pop
bands and other South Korean celebrities. On top of restrictions on outbound tourism, the measures helped knock 0.4% off South
Korea's expected growth rate in 2017.
On the other hand, the unofficial boycott didn't persuade Seoul to reverse its decision. And there are many reasons to think
a similar strategy directed at the U.S. would be even less effective.
The most obvious is the simple fact that the U.S. is much less dependent on its services exports to China than South Korea
is. While certain sectors might feel some pain, it's not likely to be strong enough to force the White House to back down. (Indeed,
Trump might not mind if liberal Hollywood takes a hit.)
The second reason is more important. Chinese businesses are often as dependent upon U.S. services as American retailers are
on their mainland-based supply chains. Restricting Chinese tourism to the U.S., for instance, would damage China's airlines, many
of which have been handsomely subsidized in a battle for dominance over hyper-competitive trans-Pacific air routes.
Similarly, many Chinese industries rely fundamentally upon licensed American services. In 2018, foreign films accounted for
38% of China's box office; the most lucrative among them were American. That trend continues: Over the weekend, "Avengers: Endgame"
became the third-highest
grossing film in Chinese history.
Chinese regulators are already worried about
slowing box-office revenue
. In 2016, they even
temporarily lifted
quotas on foreign films to help cinema owners. It's unlikely they'd seek to add new burdens now to the struggling industry.
In recent years, the most high-profile buyers of U.S. entertainment content have been China's celebrated tech champions. In
2015, Tencent Holdings Ltd. agreed to pay the National Basketball Association
$500 million
(potentially rising to $700 million) for the rights to stream the league's games, highlights and other content in China. It
was a smart investment: The NBA is the
most popular professional sports league among Chinese viewers. During the 2017 finals, more than
170 million people in China streamed the games live.
And Tencent isn't the only Chinese tech company leaning upon the NBA to boost user counts. The league has signed more than
a dozen media partnerships in China, including a
March 2019 agreement with Alibaba Group Holding Ltd. under which the NBA agreed to create content for Alibaba users. (Alibaba
Vice Chairman Joseph Tsai owns 49 percent of the Brooklyn Nets NBA franchise.)
Ultimately, the biggest impediment to any Chinese boycott of U.S. services may be the Chinese public. Though there's no question
that Chinese popular opinion is behind Beijing, there's little evidence so far that the trade war has diminished consumer enthusiasm
for American movies and vacations. During the key Chinese New Year travel period, the U.S. was the
most popular long-haul travel destination for Chinese tourists. Los Angeles reported a
6.9% boost in Chinese visitors last
year.
While some Chinese might just switch to illegal streaming services and pirated downloads if cut off from their favorite American
TV shows and movies, trying to bar them from visiting the U.S., sending their kids to university there or seeking medical treatment
could quickly provoke a backlash among middle-class citizens. Especially at a time when growth is slowing at home, that's a constituency
the government can't afford to alienate.
Of course, none of this means the Trump Administration should think its services exports are entirely immune. As American culture
becomes more globalized, it becomes easier to emulate. China's film industry is getting more polished in spite of censorship.
Yao Ming is steadily
improving Chinese
basketball in spite of China's state meddling in sport. And low-cost airlines give Chinese access to a wide variety of destinations
just as compelling as Los Angeles. For now at least, though, China will have a hard time restricting what it can't replace.
Uh, no, Tom, she won't be collecting a lot of voters, well, at least not near enough. Biden
has already been "chosen" like Hillary was over Bernie last time. You should know by now Tom,
we don't select our candidates, they're chosen for us for our own good. 2 hours ago
This is going to take a long time. You just can't turn this ship around overnight.
US Political System:
United States is neither a Republic and even less Socialistic. US, in the technical
literature, is called a Polyarchy (state capitalism). Polyarchy (state capitalism) idea is old,
it goes back to James Madison and the foundation of the US Constitution. A Polyarchy is a
system in which power resides in the hands of those who Madison called the wealth of the
nation. The educated and responsible class of men. The rest of the population is to be
fragmented and distracted. They are allowed to participate every couple of years by voting.
That's it. The population have little choice among the educated and responsible men they are
voting for.
This is not an accident. America was founded on the principle, explained by the Founding
Father that the primary goal of government is to protect the minority of the opulent against
the majority. That is how the US Constitution was designed sort of ensuring that there will be
a lot of struggle. US is not as the same as it were two centuries ago but that remains the
elites ideal.
Polyarchy (state capitalism) it is a system where small group actually rules on behalf of
capital, and majority's decision making is confined to choosing among selective number of
elites within tightly controlled elective process. It is a form of consensual domination made
possible by the structural domination of the global capital which allowed concentration of
political powers.
A republic is SUBORDINATE to democracy. Polyarchy can't be subordinated to any form of
Democracy. 2 hours ago Is the author, to use an English term, daft? Tulsi Gabbard won't get out
of the primaries, much less defeat Sanders or Biden. Farage achieved his goal (Brexit), then
found out (SHOCK!) that the will of the people doesn't mean anything anymore.
If Luongo had wanted to talk about the people's uprising, he should've mentioned the Tea
Party. 3 hours ago Gabbard appears to have some moral fibre and half a backbone, at least for a
politician, regardless of their views, Farage is a slimy charlatan opportunistic populist shill
3 hours ago (Edited) I like Tulsi Gabbard on MIC stuff (and as a surfer in my youth - still
dream about that almost endless pipeline at Jeffreys Bay in August), but...
On everything else?
She votes along party lines no matter what bollocks legislation the Democrats put in front
of Congress. And anyone standing full-square behind Saunders on his socialist/marxist
agenda?
Do me a favour. 1 hour ago (Edited) Farage left because he saw what UKIP was becoming...a
zionazi party.
Also Gabbard is a CFR member. 3 hours ago Gold, Goats and Guns? Certainly not guns under
President Gabbard! Here's her idea of "common sense gun control:"
I'm totally against warmongering, but I have to ask - what good is it to stop foreign
warmongering, only to turn around and incite civil war here by further raping the 2nd
Amendment? The CFR ties are disturbing as hell, too. And to compare Gabbard to Ron Paul? No,
just...no! 3 hours ago Always been a fan of Bernie, but I hope Gabbard becomes president. The
world would breathe a huge sigh of relief (before the assassination). 4 hours ago By this time
in his 1st term, Obama had started the US Wars in Syria and Libya and has restarted the Iraq
War.
Thus far Trump has ended the War in Syria, pledged not to get us dragged into Libya's civil
wars and started a peace process with North Korea.
Venezuela and Iran look scary. We don't know what Gabbard would actually do when faced with
the same events. Obama talked peace too.
Plaza accord, Asian Tiger crisis, and now China trade war.
Notable quotes:
"... Submitted by Christopher Dembik of SaxoBank ..."
"... The tone is clearly different in China where the official media, such as CCTV and People's Daily, adopted a tougher stance. ..."
"... As of yesterday, all the articles and TV reports mention "trade war". This terminology change means a lot and confirms that the negotiations have entered a more dangerous phase. ..."
Yesterday evening, senior Trump administration officials tried to appease tensions. US
secretary of the Treasury Mnuchin confirmed, without giving much detail, that the US-China
trade talks are still ongoing. The tone is clearly different in China where the official
media, such as CCTV and People's Daily, adopted a tougher stance. It is interesting to
note that in the previous rounds of trade disputes that occurred since Autumn 2018, People's
Daily articles mostly used the term "trade friction" instead of "trade war" until now As of
yesterday, all the articles and TV reports mention "trade war". This terminology change means a
lot and confirms that the negotiations have entered a more dangerous phase.
In addition, China has tightened its "national security" review for foreign investments,
which can be considered as another step in the retaliation process.
... ... ...
Trump's approval rate is still high
On the US domestic front, President Trump is now seeking $15 billion to bail out farmers in
order to mitigate the negative impact of the trade war. Interestingly, more and more Republican
Congressmen that were interviewed yesterday on US TV were very vocal against the latest
measures decided by the Trump administration. It is, however, unlikely to have any influence on
the ongoing process or to push the administration to comprise with Beijing. Trump is looking at
polls and the message they send is bright and clear: as of yesterday, 42% of US voters
supported Trump's policy (FiveThirtyEight). His electoral base has remained stable, faithful
and very broad since he was elected.
What's next?
By May 18 -- Potential US tariffs on global auto sector.
June 1 -- China's move to raise the rate of additional tariffs to 25% on 2,493 US
products (representing $60 billion worth of US imports) will come into effect. In addition,
list 3 tariffs from 10% to 25% decided by the USA against China will truly be implemented for
all products. For the moment, an exemption applies to list 3 products exported before May 10
and arriving in the US before June 1. For these products, the duty rate is still at 10%.
June 17 -- The USTR will hold a public hearing on potential duty of up to 25% tariffs on
virtually all Chinese goods (list 4 tariffs) that are not currently covered by previous
tariffs hikes. It will be followed by at least a week of discussions.
June 28 -- Likely meeting between presidents Trump and Xi at the G20 meeting in Osaka to
reach a compromise on trade issues.
By three methods we may learn wisdom: First, by reflection, which is noblest; Second,
by imitation, which is easiest; and third by experience, which is the bitterest." --
Confucius
The US has been the biggest offender in trade wars for decades. The petrodollar conceived
by Kissinger and Nixon forced countries to buy oil in USD. How is that not warlike? China and
other countries are trying to unhitch themselves from the dollar and who can blame them? The
problem is that when they are successful, and they will be, all those dollars will come home
to mommy and inflation will run rampant.
The country that prints the money will always have the upperhand against the country that
works hard and dirty to acquire the said money.
China is one of the cheapest producers,but that doesnt mean that the US cannot either
import or manufacture its own product.
Case in point im a salesman from greece. I know for a fact that the chinese sell a t-shirt
for 2 euros a piece (wholesale) and greek producers for 4 euros a piece. All the t-shirts are
sold (retail) for 12-70 euros. So its not about costs but about profit.
If greece decides tomorow to take back its production from the sick ***** and impose
tariffs on them literaly nothing will change.
Despite all the rhetoric about buying from other places than China, the facts remain,
manufacturing is not returning to America. Nor are the jobs coming here to America, nor is
the wealth. Conditions in America doesn't favor it. Agriculture was always America's strong
suite. But, with the trade wars causing farmers to go bankrupt, you can be assured of losing
that too. The question is now, who will feed all you American fat asses, when all your
farmers go broke?
Consumer economies are the economies of third world countries, and that is what America
has got. China, with its manufacturing economy, will go on to make investments in other
countries, and leave America in the dust.
You have had tariffs for over a year and not one company has returned from Overseas or
left China. In fact more US companies have moved manufacturing to China.
In the USA you have unions, the epa, osha, IRS... and the most litigious tort system and
most unreliable employees in the world. You have the most disability claims, the most
lawsuits against employers etc. Most absenteeism. Most employee theft. Gender issues,
bathroom issues, diversity issues. Your gov continue to pack on the minimum wages eliminating
any potential to make products to compete with the world.
In short the US is dying on the vine. Trump has caused so much bad blood with Asia, that
US global businesses will have difficulty penetrating Asian markets which are the only thing
that matters for the next 100 years. You Trumptard RACISTS are losers.
500,000 manufacturing jobs added in Us in last two years.
Where’d they come from.
US companies leaving China accelerating - relocating elsewhere in Asia, and bringing back
workers to US. Increasing location in US of foreign owned manufacturing plants to avoid trade
issues and tariffs.
The US is not only not dying on the vine, growth ACCELERATED in last several quarters.
Can’t hire skilled workers — no one available to take them. My daughter was
approached by 3 recruiters to lure her away from her job - she moved for a big pay increase -
they upped their offer 20% - and goit the job of her dreams, with all benefits at a major
company - and she is an ARTIST!! The huge increase in content production has created a golden
age even for liberal arts professions.
The US ONLY issue is its debt, which it can start to solve by simply retiring debt held by
the Fed, and continuing open market purchases and retirements. Monetize while inflation is
low and dollar strong. This will likely come with next rate drop (if we get one).
Chiona living on a MASSIVE consumer/mortgage debt bubble like the US faced in 2007. The
tide will wash over their financial industry, as it has begun, and the central government
will burn its reserves bailing them out. What goes up...
China hitting the wall of wage growth where it has become more expensive than its
competitors in SE Asia and India.
The next decade will be a lot more difficult for China. It’s totalitarian state will
need to become even more militant and oppressive to survive.
Every auto made in the world, every mower, every computer, every modem, every LED TV,
every telco switch, every smart phone, virtually any product you can think of has Chinese
Components or is manufactured in China. China is the largest semiconductor maker in the
world. LED lights... CHINA.
As we view the global economy we should consider that much of the "free trade" movement is
driven by mega companies desire for larger markets and greed. The desire of companies to both
develop and control future rules has caused them to lobby individual governments into giving
up control and becoming subservient to corporate “efficiency.”
This is probably not in the best interest of the average citizen as we can see by surging
inequality. Those concerned that a trade agreement with low wage nations will not be a great
job creator for America have history on their side. The piece below argues that fair trade
trumps free trade!
anybody pointing the finger at China because of IP theft and not doing the same to the
USSA is either brainwashed beyond repair, stupid like a piece of wood, a paid troll or any
combination of these.
"accuse the enemy of doing what you secretly do"
- plenty of people in powerful positions all across history
Most aren't paying attention to what Trump says.... he said a year ago that China was
wanting to make a deal. Trump said, "BUT,they're not ready yet" , meaning that they wanted a
small change to the imbalance like Canada and Mexico received.
China's trade imbalance is seriously astronomical compared to any other country we do
business.
Canada's trade imbalance is $20,000,000,000 per year with US.
China's trade imbalance is $420,000,000,000 per year with US.
We have almost the same trade with each $660 B with China and $620 B with Canada.
Canada is ripping us off. China is not ripping us off, they're ******* us.
Worst case is we STOP trading with China. Best case they reduce the trade imbalance
90%.
the other side of the coin is a chinese boycott of usa brands means a dollar devaluation
in the form of a tanked market. the chinese market means not much. the usa equity/bond market
is everything. a falling dollar takes a lot powder out of usa guns.
If winning elections at the expense of the electorate is the main concern of politicians,
might that suggest gross immorality amongst the political class?
On the other hand, if supporting politicians because they mouth soothing platitudes, while
yet their policies and actions, defenestrate the quality of life of the electorate, suggests
indoctrination, might that not be cause for serious concern?
Now, it's doubtless that leaders will be required to take unpopular stances sometimes, but
ought not those stances be based on cogent analysis of reality, and the elimination or
reduction of self contributory inputs?
All in all, leadership is about courage - to do what's right, and necessary, even if it
requires declaring mea culpa. Humility, is often the true indicator of leadership
abilities.
Which reminds us of Alexander, the Great that is, who had to turn back from his expedition
in India, when his troops balked at going further. He could have razzmatazzed them no doubt,
but he realized they were telling him that exhaustion was prevalent, pushing forward offered
no additional gains, and better to return home to sex their wives, teach their sons
horsemanship, give their daughters away in marriage, till their farms, chill out, smell the
roses, party, and reminisce to their children and grandkids about their adventures..
Alexander, Great that he is, listened, and with a heavy heart, due to his adventurous
nature, signaled the retreat, and homewards it was. That is why they called him Great, not
because of his martial prowess which was indeed formidable, but because of his discerning
prowess..
On the other hand, there was Marcus Crassus, who was so avaricious, he went East to war,
and got as much gold as his heart desired..molten, and poured down his throat. He died rich,
literally filled with gold, cheers...
Its real simple, if you don't like the cost of doing business in China along with being
required by the twisted communist government to turn over your intellectual property as a
requirement for doing your manufacturing there, then bring it home to America.
Not very long ago int he early 1990s I can still recall watching on the cable news
programs Chinese rockets launching and blowing up just prior to achieving orbit. The Clintons
then were at it full bore trading access to top secret rocket technologies from Loral Space
and Technology (Bernie Schwartz) CEO for campaign cash. Clintons transferred Top Secret
technologies from State Department to Commerce Department allowing them the access to Sell
out America to the Communists. It is why they had to arrange for the liquidation of Commerce
Secretary Ron Brown. Remember the video of Bill Clinton laughing and cajoling at the Ron
Brown funeral, then when he sees the camera on him, he immediately turns on the bitter tears.
These people are the phoniest crooks to ever come to power in America.
Was at Wal Mart yesterday. Surprisingly there isn't any products made in China that I
needed to buy. All the food, cleaning supplies, and toiletries are still made in the United
States. The clothing section had made in Malaysia, Singapore, India, Mexico. So in reality,
other countries can take market share from China. Some of the production will return to
United States as well.
"... The REAL REASON behind the TRADE WAR: Israhell: "I want Iran embargoed and starved to death." China: "I will buy Iran's oil." BAM! Trade War! ..."
The 'play of the day' above comes against a backdrop of markets trying to accentuate the
positive in the latest US-China trade war deterioration. Indeed, Moody's has declared a trade
deal will still be done and a Bloomberg survey of US economists shows around two thirds think a
deal will be signed by year-end, a fifth by 2020, and only 13% don't see a deal for at least
five years. Field Marshall, please take these men and women out and have them shot, there's a
good chap.
The rhetoric from China has turned starkly, aggressively nationalist. The Global Times is
calling for a "People's War", a 1930's Mao reference to repelling Japanese imperialism; "trade
war" now fills Chinese media, having been largely absent for months; and Tuesday's People's
Daily mouthpiece posted an image of the Chinese flag with "Talk -- fine! Fight -- we'll be
there! Bully us -- delusion!" superimposed on it. US President Trump is also not backing down
in a further set of trade-related tweets, again stating tariff revenues will support 'patriot'
farmers and adding: "China will be pumping money into their system and probably reducing
interest rates, as always, in order to make up for the business they are, and will be, losing.
If the Federal Reserve ever did a "match," it would be game over, we win! In any event, China
wants a deal!"
A huge fiscal deficit; trade tariffs; a rapid increase in military expenditure; 'Patriot'
farmers; and a political call for lower interest rates for a national struggle. It all sounds
very Chinese, doesn't it? But that shouldn't be a surprise. Last year's ' The Rise and Fall and
Rise of the Great Powers (and Great Currencies)' argued the historical lessons of the economics
of past power struggles are that one must have low borrowing costs, spend a lot on a large
military, and be mercantilist if your enemy is. True, one also needs to be economically
vibrant, and that isn't assured with mercantilism, militarism and large fiscal deficits. Yet
real free trade, pacifism, and austerity is *ruinous* for Great Power . Which is why the EU is
not a Great Power but a Great Whinger.
Some in the markets are starting to get this.
Regular Bloomberg commentator Noah Smith yesterday published an article --'The Grim Logic
Behind Trump's Trade War With China'-- that admits he was wrong to expect a trade deal, that
Trump is doubling down, and concludes "There may be a grim sort of logic to this approach If
Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do
it. If the harm to the US is modest and the costs for China are severe and lasting, Trump might
conclude that the former are acceptable losses. Geopolitical primacy, not maximum prosperity
for Americans, might be the president's true objective . if weakening China really is the goal,
then this could be just the opening rounds of a long and grinding trade war." That's' what I
argued back in November 2017's 'On Your Marx' special reports, which stressed a New Cold War
was likely ahead.
However, many in markets are still acting like a Treasury clerk telling Churchill that
Badolf Hissler can offer him a great deal on cut-price bullets, ships, and planes .
On a related front, we see reports of an alleged Iranian drone attack on Saudi oil
pipelines(!); also hear Iran's leader say there will be no war with the US; and Trump has
stated reports of 120,000 US troops moving to the region are fake news -- because if he were to
send troops it would " a hell of a lot more ." Mixed messages to put it mildly.
for 40 years, western liberals and capitalists have had a nebulous idea of China
developing, opening and "liberalizing." It hasn't usually occurred in the ways they wanted,
but China certainly has become a big market and has moved towards a more open economy and
somewhat, more open society overall, while still maintaining a "fascist" structure.
But we can all agree - that process is done. China's economy, society and politics are
what they are. The country is "grown-up." Do not ever expect the communist party to change
the tight, top-down structure it has. Do not expect changes to politics, do not expect anyone
in China to give up control, and certainly don't expect foreigners to have any say or
influence within China. China will always do exactly what benefits China and the CCP.
Trump is merely being a realist. So accept that, and trade/invest/exchange
accordingly.
Is it any surprise that a "Noah Smith" of Bloomberg would attribute all the wrong
motives and strategy behind President Trump's and America's trade dispute with China's
totalitarian regime?
That he sees the Chinese Communist Party as honest, good faith partners in this
scenario?
There is nothing Trump could ever do to please the internationalist media.
I seriously doubt if "weakening" China is Trump's primacy here. Perhaps a by-product but
let's finally admit one thing: The US-China trade arrangement is egregious at best. What no one is willing to discuss yet is the fact that this "philosophy" of evening out
trade with China will soon take on a life of its own: With the US consumer. We need to bring back a lot of jobs back to the US economy and that's not rocket science.
It won't happen overnight but it will indeed happen.
What is the point of this piece? To demonstrate the author’s wit and historical
knowledge (was that entire little playlet not invented)?
To maximize American prosperity long term, should the US simply allow China to cheat,
manipulate and intimidate its way to the top? China has proven that, unlike the US, its
growth is a zero sum game. It adds nothing to the equation of global growth except cheap
labor, which subtracts wealth from other nations by taking away their well-paid manufacturing
jobs. It contributes almost no raw materials, imports its food and energy, and has stolen
most of its technology at enormous cost to Western innovators.
The US has always provided net inputs to the system of global growth. Natural resources,
renewable materials (crops, renewable energy), and the relentless innovation and productivity
increases of its workforce. China is an extractor. Thus it needs to expand its borders
through exploitative economic imperialist initiatives under their One Belt One Road scam, and
their militaristic imperialism in the South China Sea. The US is a machine that puts out far
more than it takes in. China is the opposite. If the US directs its economic output away from
China’s vast and relentless maw, China’s machine will slow and sputter.
The real point of the trade war is to end the vacuum of Western and Asian prosperity by
China’s greedy and imperialist machine of economic destruction. China knows and
implements that its economic growth by definition comes at the cost of others’
prosperity. That the US took 20 years to wake the **** up is astonishing.
The key factor here is that the USA is a neoliberal state which means profits before people
and outsourcing to area with lower labor cost. Like leopard can't change its spots, neoliberalism
can't change it "free movement of goods and labor" principles, or it stop being
neoliberalism.
No jobs will come back to the USA as financial oligarchy is transnational body that uses the
USA military as an enforcer for their gang. It does not care one bit about the common people in
the USA.
Pause on the sound and fury for necessary precision. Even if the Trump administration slaps
25% tariffs on all Chinese exports to the US, the IMF has projected that would trim just a
meager slither – 0.55% – off China's GDP. And America is unlikely to profit,
because the extra tariffs won't bring back manufacturing jobs to the US – something that
Steve Jobs told Barack Obama eons ago.
What happens is that global supply chains will be redirected to economies that offer
comparative advantages in relation to China, such as Vietnam, Indonesia, Bangladesh, Cambodia
and Laos. And this redirection is already happening anyway – including by Chinese
companies.
BRI represents a massive geopolitical and financial investment by China, as well as its
partners; over 130 states and territories have signed on. Beijing is using its immense pool of
capital to make its own transition towards a consumer-based economy while advancing the
necessary pan-Eurasian infrastructure development – with all those ports, high-speed
rail, fiber optics, electrical grids expanding to most Global South latitudes.
The end result, up to 2049 – BRI's time span – will be the advent of an
integrated market of no less than 4.5 billion people, by that time with access to a Chinese
supply chain of high-tech exports as well as more prosaic consumer goods.
Anyone who has followed the nuts and bolts of the Chinese miracle launched by Little
Helmsman Deng Xiaoping in 1978 knows that Beijing is essentially exporting the mechanism that
led China's own 800 million citizens to, in a flash, become members of a global middle
class.
As much as the Trump administration may bet on "maximum pressure" to restrict or even block
Chinese access to whole sectors of the US market, what really matters is BRI's advance will be
able to generate multiple, extra US markets over the next two decades.
We don't do
'win-win'
There are no illusions in the Zhongnanhai, as there are no illusions in Tehran or in the
Kremlin. These three top actors of Eurasian integration have exhaustively studied how
Washington, in the 1990s, devastated Russia's post-USSR economy (until Putin engineered a
recovery) and how Washington has been trying to utterly destroy Iran for four decades.
Beijing, as well as Moscow and Tehran, know everything there is to know about Hybrid War,
which is an American intel concept. They know the ultimate strategic target of Hybrid War,
whatever the tactics, is social chaos and regime change.
The case of Brazil – a BRICS member like China and Russia – was even more
sophisticated: a Hybrid War initially crafted by NSA spying evolved into lawfare and regime
change via the ballot box. But it ended with mission accomplished – Brazil has been
reduced to the lowly status of an American neo-colony.
Let's remember an ancient mariner, the legendary Chinese Muslim Admiral Zheng He, who for
three decades, from 1405 to 1433, led seven expeditions across the seas all the way to Arabia
and Eastern Africa, reaching Champa, Borneo, Java, Malacca, Sumatra, Ceylon, Calicut, Hormuz,
Aden, Jeddah, Mogadiscio, Mombasa, bringing tons of goods to trade (silk, porcelain, silver,
cotton, iron tools, leather utensils).
That was the original Maritime Silk Road, progressing in parallel to Emperor Yong Le
establishing a Pax Sinica in Asia – with no need for colonies and religious proselytism.
But then the Ming dynasty retreated – and China was back to its agricultural vocation of
looking at itself.
They won't make the same mistake again. Even knowing that the current hegemon does not do
"win-win". Get ready for the real hardcore yet to come.
The Swine fever is sweeping china hog farms and since the start of 2019 200+ millions hogs
have been culled. Chinese hog production is down from 2016 high of 700 million to below 420
million by the end of the year. The fever is not under control.
Soybeans from Ukraine are unloaded at the port in Nantong, in eastern China. Imports of
soy used to come from the US, but have slumped since the trade war began. Should point out
that the Ukraine soy production matures at a different time of the year than the US soybean.
The USA planting season starts in Late april, may and june. Because of the harvest time
differences worldwide the USA supplies 80% of the late maturing soybeans needed by
October/Nov and December.
Perhaps this is one of the "casualties" ( https://www.rt.com/news/459355-us-austria-embassy-mcdonalds/
) of economic war given the significance of China and just how important it is to the U.S. in
it's purchases of $USD to maintain the illusion of it's reserve currency status and
"vigor"...
Surprised this didn't happen first at the U.S. Embassies in Russia and China?... Obviously
Ronald McDonald has turned into a charity of sorts helping out Uncle $am in his ailing
"health" these dayz!...
SUPER SIZE ME!... Cause I'm not lovin it anymore!... I'm needin it!!!!
I've never understood this "jobs aren't coming back" argument. Do you really think that it
will stop tariffs? They're happening. Better start preparing.
Oh, right, tariffs WILL bring back American jobs! Then why didn't the Administration
impose them fully in 2017? Why negotiate at all; just impose all the tariffs!?! lol
Pepe is correct as usual. Even if America tariffs the world the jobs aren't coming back as
corporations will be unable to turn profits in such a highly taxed country like America would
be. What could happen however is America can form an internal free market again going
isolationist with new home grown manufacturing.
You VERY obviously have ZERO knowledge of Chinas history and its discoveries/inventions
etc USED BY THE WEST.
I suggest that you keep your eyes open for "History Erased-China" on Y Tube. The series
shows what would happen in todays world if countries and their contributions to the world did
not happen.
It has become a cliché to quote William Butler Yeats’s poem “The
Second Coming,” written almost 100 years ago in the aftermath of World War I. But no one has said it better: “Things fall
apart; the centre cannot hold; / Mere anarchy is loosed upon the world . . . And what rough beast, its hour come round at last, /
Slouches toward Bethlehem to be born?”
Donald Trump's decision to raise duties on Chinese goods from ten to 25 percent of additional $200 billion of China exports
came into force. It is unclear how this will work and how much the US consumers will pay. Probably half of this raise
so from 5% to 10% which might be not very noticeable outside such items as shoes and clothing. The cost of Chinese's shoes already
is quite high -- plastic regular $60-30 with discounts on holiday. Leather -- $100-$50 and almost no discounts.
Trump uses his favorite "bully in the schoolyard" style, a typical the American foreign policy tactic to direct, lawless
pressure. First, they accuse partners of violations, to introduce restrictions on this basis (and at the same time to plunge world
markets into panic), and then to agree on the resumption of negotiations. But the previous decisions about tariffs were left, of
course, in force.
His gambit to conclude a deal with North Korea collapsed in failure in Hanoi in February, and
it is a huge blow to his self-styled image of a master dealmaker. Trump also faces a flurry
of congressional subpoenas at home from Democrats who now control the House of
Representatives. Hence with mounting legal and political troubles, Trump is cornered and
desperately needs a conclusion to the prolonged trade war with China, which has netted zero
benefits for him.
The prospect of a trade deal with China remains as elusive as ever, despite Trump's
increased tariffs to pressure China to come to the negotiating table with the list of
concession that he wants. It is highly unlikely that China will grant Trump the concessions
he wants. China remembers clearly the deal that Tokyo concluded with Washington in the 1990s
that caused Japan to slip into economic stagnation for many years. That period has now been
dubbed Japan's "lost decade."
China is not dumb and it will not concede to Trump.
Worse still, the move to increase tariffs took place while Chinese Vice-Premier Liu He was
in Washington to negotiate with the Trump administration.
It is a blunder by Trump and will be perceived by the Chinese as a cheap shot against
President Xi Jinping. The tariffs hike came despite Xi's
"beautiful letter" to Trump, and it is a massive loss of face for the Chinese leader to
see his group of officials return home from Washington with no deal to conclude the trade
war.
Xi could not afford to look weak in front of his people and he knows that millions of
Chinese netizens access information about the outside world by using virtual private networks
(VPNs) to circumvent the Great Firewall. Many ordinary Chinese know about the trade war's
latest developments and should any deal with Trump infringe on China's core interests, it
will be political suicide for Xi.
One of the main reasons the US-China trade talks broke down was that Washington's demands
were unpalatable to China. Some of the demands from the US, such as an end to government
support for state companies in specific industries and a streamlined approval process for
genetically engineered US crops, are a direct challenge to the Communist Party of China's
control of the economy.
Since Xi took office, he has extended the party's reach into every corner of Chinese
society, and every businessman in China who aspires to reach the top of the hierarchy knows
that they must receive the blessing of the party. It is not surprising that even Jack Ma, who
is one of China's most internationally recognizable figures, has been revealed to be a member
of the CPC after years of denial.
Hence in the face of renewed pressure from Trump, Xi and the Chinese government have
reached the conclusion that it is better to bear the consequences of increased tariffs than
to concede to US demands.
Xi is in for the long haul and can well afford to ride out the storm. And based on Trump's
past negotiations such as his failed bid to pressure House Democrats to fund his wall on the
Mexican border, which led to the longest government shutdown in US history, Xi knows that the
chances are good that Trump will blink first.
Trump uses his regular bulling style, but for him there are no mechanism out or this deadlock. China can't retaliate dollar to dollar but they
can encourage boycott of US goods that are replaceable with Chinese models such as Apple phones
In any cases there will additional unemployment in China and an additional stress on Chinese economy, which probably two
factors the Trump is counted on.
Notable quotes:
"... China should ban Boeing products for its compromise on aviation safety. Hit where it hurts with consumer power. ..."
"... When the 25 percent hits 345 billion dollars of additional untaxed imports Americans will just buy less. After this next round of taxes we will be on the road to bankrupting China and Iran. Europe's turn comes next. ..."
"the Chinese won't do us
the courtesy of saying hey this is because of your detention of madam Meng" actually this is
poorly understood by this professor. it's not a discourtesy, it is the opposite. it is a
courtesy to give Canada an opportunity to save face. that is, Canada frees madam Meng and can
claim they did so for OTHER reasons than bowing to Chinese pressure. It is a face-saving
measure for Canada's benefit. Come on, more cultural understanding is needed.
Western fools have learned one lesson : the CHINESE are NOT SOFT or like the JAPANESE in
the 80's.
The CHINESE have their mightiest WILL to stand against the demonic tyranny of the
US - the whole world know US is descending as US itself is struggling like one mad dog for
its prestigious status of world domination - refusing to acknowledge the country the nation
"in the last days of Rome".
When the 25 percent hits 345 billion dollars of additional untaxed imports Americans will
just buy less. After this next round of taxes we will be on the road to bankrupting China and
Iran. Europe's turn comes next.
"... "The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests," the nationalist, state-owned Global Times tabloid wrote . ..."
"... The Global Times also accused the Trump administration of misleading Americans about the victims of US tariffs. It singled out Larry Kudlow's interview on "Fox News Sunday" in which Trump's top economic advisor said that US consumers would also suffer from the trade war, contradicting Trump's claim that China would foot the bill. ..."
"... More than just a retaliation to "unprovoked" US aggression, China now sees its response as a crusade against the western style of life. During a prime time broadcast on Monday, CNN reported that the state broadcaster CCTV also aired a statement saying that China would " fight for a new world." ..."
"... The editorial also hinted that more retaliations are coming, saying that "China has plenty of countermeasures" and telling its readers that "the US tariff moves are very much like spraying bullets. They will cause a lot of self-inflicted harm and are hard to sustain in the long term. China, on the other hand, is going to aim with precision, trying to avoid hurting itself." ..."
"... The conclusion: "the Chinese side is obviously more realistic while the US is falsifying. This will, to a large extent, influence how the two countries digest the trade war impacts." ..."
China Calls For "People's War" Against The US, Vows To "Fight For A New World"
by
Tyler Durden
Tue, 05/14/2019 - 15:50
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While market mood has shifted diametrically from yesterday, with stocks sharply higher on Tuesday following what has
widely been interpreted as conciliatory comments from both president Trump and various members of China's ruling elite,
one would be hard pressed to find any de-escalation amid the Chinese press commentaries written in the aftermath of the
latest escalation in trade war between the US and China.
In a series of editorials and op-ed articles published Monday
and Tuesday, Chinese state media slammed what it labeled the Trump administration's "
greed and arrogance
",
called for a "
people's war
" targeting the US "
with precision
" as China begins a "
fight
for a new world
."
"The most important thing is that in the China-US trade war, the US side fights for greed and arrogance ... and
morale will break at any point. The Chinese side is fighting back to protect its legitimate interests," the nationalist,
state-owned Global Times
tabloid wrote
.
Urging indirect boycott of US goods and services, the editorial slammed Trump and suggested a nation-wide uprising
against the US aggression: "The trade war in the US is the creation of one person and one administration, but it affects
that country's entire population.
In China, the entire country and all its people are being threatened. For us,
this is a real 'people's war.'"
Whether this means a renewed collapse in Chinese iPhone sales remains to be
seen - for confirmation, watch for a new guidance cut from Apple in the coming days.
The
Global Times
also accused the Trump administration
of misleading Americans about the victims of US tariffs. It singled out Larry Kudlow's interview on "Fox News Sunday" in
which Trump's top economic advisor said that US consumers would also suffer from the trade war, contradicting Trump's
claim that China would foot the bill.
More than just a retaliation to "unprovoked" US aggression, China now sees its response as a crusade against the
western style of life. During a prime time broadcast on Monday, CNN reported that the state broadcaster CCTV also aired
a statement saying that China would "
fight for a new world."
"As President Xi Jinping pointed out, the Chinese economy is a sea, not a small pond," anchor Kang Hui said on his 7
p.m. news show. "A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is
still there." Hui concluded echoing a popular refrain, that "China doesn't want to fight, but it is not afraid to
fight."
The Global Times also mocked Trump's suggestion that the tariff hike would "force companies to leave China", stating
that "the consumption capabilities and market consumption potential driven by demand are what foreign companies value
most when they come to China." As a result,
"the White House might as well try to call on American companies such as General Motors, Ford,
Apple, McDonald's and Coca-Cola to leave China. Will any of them follow?
"
The editorial also hinted that more retaliations are coming, saying that "China has plenty of countermeasures" and
telling its readers that "the US tariff moves are very much like spraying bullets. They will cause a lot of
self-inflicted harm and are hard to sustain in the long term. China, on the other hand, is going to aim with precision,
trying to avoid hurting itself."
In an amusing twist, China then accused Trump of spinning and "seeking to beautify the trade war", while
Beijing has been "blunt about the difficulties and losses that the trade war will bring to the Chinese economy."
The conclusion: "the Chinese side is obviously more realistic while the US is falsifying. This will, to a large
extent, influence how the two countries digest the trade war impacts."
Whatever side of the ideological divide one finds themselves, this is hardly the rhetorica that will allow China to
reach a quick and painless compromise.
Right or wrong, the Chinese will fight as one for China. As well,
they have allies and resources, but the main thing is they are
homogenous and patriotic.
America is controlled from Jerusalem,
who will exit at the first sign of the gravy-train slowing, not to
mention *****-hat American snowflakes, a treacherous media and
politics. Etc.
Beware, Americans, about what you are getting into. You have
turned trade negotiations into a war and you will not win this
long-term. Just like all the others.
The Giant has awoken. Good job Trump. I guess it was all fake
news when you were telling us gullible Americans we were
winning. Any other wars you would like to start? Oh yea, Iran
and perhaps Venezuela first. Must stick with the
Israel
First
agenda.
The real issue is intellectual property. If the Chinese can't
steal our IP, they got nothing and they know it. Also we should
send home all their undergrad and graduate students. Let them
learn all this sh## on their own.
China is calling for a war, they've been engaged in for decades
via their technology, patent, forced technology transfers, and
copyright theft. And we should probably include their
subsidies of politically connected firms exporting products,
but at least in that case, the Chinese taxpayers are paying for
the subsidies.
If China wants a 'new world', they need to put on their big boy
pants and DEDOLLARIZE. You can't beat an opponent when you play by
the opponent's rigged rules!
The USA can't abolish neoliberalism. And the logic of neoliberalism is to use low cost labor oversees. Which means china.
Notable quotes:
"... If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the U.S. is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical primacy, not maximum prosperity for Americans, might be the president's true objective. ..."
Trump is doubling down. He's
raising
tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, and imposing new tariffs on almost all of the
remaining $325 billion or so. China today said it would retaliate and starting next month would impose tariffs on $60 billion of
U.S. goods. This is the biggest trade war in modern American history.
... ... ...
If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the U.S.
is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical
primacy, not maximum prosperity for Americans, might be the president's true objective.
Unusually shallow take from Noah. The real reason for the trade war is China's subsidizing SOEs. They subsidize them until
the SOEs outcompete all other manufacturers so much that competition dies, and then take over the market. See Moly Corp and rare
earths as an example.
Such dumping is pretty easy to catch, and pretty easy to stop. Perhaps a more focused but more severe tariff structure on things
like steel, tires etc would make more sense as an enforcement mechanism.
Note that the Chinese are willing to give lip service to things that they supposedly agree to, but cannot actually put the
mechanisms in place without "losing face". Gimme a break. If Xi hadn't crowed about China's intent for dominance by means of mercantilism,
we would still be bending over. Now the only face being lost is his.
The Chinese will never give up their use of administrative barriers to impede trade internally. But at least they could have
said they would. But they couldn't even do that. So again, tariffs are about the only thing they will listen to.
The flaw there is that the SOEs may generate a lot of employment in China, but they don't actually generate as much economic
growth. And the govt knows this. The support for the SOEs isn't about giving them market share, but to keep them from collapsing
precipitously, with all the resulting unemployment. It's China's version of the auto bailout, just on an extended basis. They
make up only 25% of China's economy today, down from 50% in 2000.
If Trump wants to slow China's ascent as a superpower, a trade war might be an effective way to do it. If the harm to the
U.S. is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical
primacy, not maximum prosperity for Americans, might be the president's true objective.
Are we living on the same planet? Coherent, long-term strategic thinking and geopolitical calculus are about as foreign to
Trump as marital fidelity.
Except the Chinese have fewer cards to play. They are in the mother of all bubbles that they desperately want to deflate with
a soft landing. And they were well on their way to doing it. Until Xi crowed about it, and basically rubbed the world's nose in
his ass with the SCS and OBOR, on top of the trade issues.
That soft landing is now in serious jeopardy. And we all will pay, so I take no satisfaction from China's troubles, now and
imminent. But don't blame trump for it happening. It was all those thousand vauted people whose hubris you worship.
Whatever China's economic problems are, and why wouldn't a country with such enviable rapid growth into the (soon to be) world's
largest economy with the worlds' most internet connected population, have some problems, but they at least seem to study and plan
for their future in an intelligent and rational way.
I don't blame Trump for being a pathological liar and a narcissist, but the spineless Republican Party and "conservatives"
who have done nothing to thwart his idiotic behavior. The Chinese have a word for those without a backbone, it translates as "folding
chair". My sources tell me a different story about Public Opinion in China.. fwit.. No, they've seen this Trump in action long
enough to know he's unreliable as a trading pardner and unbelievable as a leader... He'll fold and the OBOR will proceed more
or less as envisioned... Too bad America (trump) has "poisoned" many allies in Asia.
The sky is falling and it's all Donald Trumps fault!
The problem is not tariffs or Donald Trump (specifically with China)
The problems are state sanctioned intellectual property theft and cheating on international trade agreements by the Chinese dictatorship.
Producers can shift their supply chains away from China to countries that do not view/treat the USA as an adversary and those
products will not have tariffs on them. Problem solved. A few years of extra prices from supply-chain resourcing is a very small
price to pay to address a dictatorship that seeks to undermine democratic values and human rights.
If you are looking for cheap labor, the labor you find will be unskilled and without technical resources. It means they must
be brought up to today's standards, technically, with your IP. It is the US CEO's that gave away the farm, looking for cheap labor.
Apple taught them how to make iPhones, guess what happened? Regardless where they go, US CEO's must give up IP for technical competence.
This time the United States has all the cards. We buy $500 billion per year from them. They only buy $100 billion a year from
us. We have 5x leverage. All we have to do is play the hand according to economic game theory.
If our long run goal is to have a larger economy (and with it all the benefits of being the largest economy, including military
security by being able to afford capital ships and planes), we must stop paying China $400 billion extra more than they take from
us.
If China wants to trade, its trade -- $500 billion for $500 billion. If they simply want to use our consumers to build more
factory capital we should not allow it. And because of the asymmetry in the balance of trade, we hold all the cards.
This is Trump's hand to lose by caving in. The optimal move in this game is to raise tariffs and hold until China increases
its purchases.
(And -- tariffs might actually raise S&P 500 earnings long run as additional manufacturing is diverted to old and new U.S.
factories -- no one knows and the prognosticator "economists" here have as much empirical evidence as the Austrian School, i.e.
they really have no idea other than how they think tariffs ought to cause a recession.)
There were much better ways to do this. Trump only knows his unilateral tariff way. But it is an improvement over "lead from
behind" Obama, who did nothing.
The West normalizing relations with China is apt to go down as the biggest blunder in all of human history. China needs to
be isolated and cut off at the knees.
Chinese trade policies have always been predatory to the US across Republican and Democrat administrations since Reagan was
President. The cost of labor in China is cheap at about $4/hour. Add to that there are few environmental or OSHA-like standards
and the pollution is so obvious that at the 2008 Beijing Olympics industry was shut down so that the smog might clear. No US manufacturer
without tariff protection can compete with that for unskilled labor. That is a fact. If the US wants to keep some semblance of
manufacturing in this country, then tariffs are necessary. And that goes for the countries in the New Nafta and the proposed TPP.
The hypocrisy on tariffs is maddening because California's agricultural and Maine and Massachusetts' shoe industry for just a
few examples survive only because of the tariffs. Getting tough with China is long overdue, and the political outrage over trying
to protect US interests is just Trump Derangement from educated people who should know better.
Buying "made in China" was far too easy, although quality usually suffered (and sometimes dangerously so). Tariffs will force
our purchasing agents to look around for better deals...Not a bad idea.
We need to stop allowing Chinese Nationals into our STEM programs!
Look at any graduate program at a top US University's comp sci program, physics, math or any engineering department and you
will see that it is heavily filled -- if not dominated -- by Chinese Nationals.
China has a well organized program to send students to IS STEM programs and US jobs at tech firms and steal the technology.
I mean...same plan forever?
That plan is to soak the middle class to make life better for the working class. The theory is mfg will return to the US, because
we'll have 9-billion percent tariffs on all imports.
The net middle-class life goes downhill, the net working-class life goes up.
then next software and robots will be outlawed.
Washington & Wall Street want to stay top dog as long as possible. If that means most Americans are poorer than they might
be, their attitude is, too bad for them. The power base only looks out for itself. That isn't too surprising, since most people
are selfish.
The rise of China would be no big deal if it wasn't a totalitarian state. That makes it extremely dangerous, depending on the
wishes of the man at the top. Fortunately, the US is protected from invasion by large oceans, and democratic neighbors with close
trade and cultural ties. And then there are all the nukes. No sane person would risk using them first.
Mr. Smith writes about the 'why' of trumpy's trade war:
"It's also possible, of course, that the trade war is a purely populist endeavor, and that maintaining tariffs is simply
a way for Trump to look tough. "
Reality TV show for trumpy... that will hurt millions of Americans... and trumpy and his cronies will never feel it. Just like
his business partners that he cheated.
You hit the nail right on the head! Good report. Pres Trump main goal is to cripple and contain the rise of China. The trade
war is his strategy. As to whether it will succeed or not, only time will tell....The rest of the reasons are just "red herrings"
and surprisingly, most Americans felled for it hook line and sinker. But the rest of the world knows all along because US is a
hegemonic nation and there are abundant examples of countries that were destroyed by the US for challenging her dominance all
over the world. That's why US keep changing the "goal post" from trade deficits to stealing of intellectual property and force
technology transfers and now state subsidies. Just as China agrees to US demands, the latter now up the ante and is now insisting
that China has to change her laws so that the US can enforce them. Very soon it will be regime change. It will be interesting
to see what happen next because to me war is never easy to win. Both sides will suffer and so will the rest of the world. To even
think that the US economy is immune to it because it is strong and the numbers are good and it will be able withstand the perfect
storm is hubris. Maybe Pres Trump and his neocons can prove history and the Smoot Haley Tariff Act wrong...?
If you know anything about Narcissists, this is most likely Trumps way of getting you to focus on something other than his
deplorable Mueller report, his son DonJr, his huge losses as a business man and his impending Tax returns exposed.
After vowing over the weekend to "never surrender to external pressure",
Beijing has defied President Trump's demands that it not resort to retaliatory tariffs and announced plans to slap new levies
on $60 billion in US goods.
CHINA SAYS TO RAISE TARIFFS ON SOME U.S. GOODS FROM JUNE 1
CHINA SAYS TO RAISE TARIFFS ON $60B OF U.S. GOODS
CHINA SAYS TO RAISE TARIFFS ON 2493 U.S. GOODS TO 25%
CHINA MAY STOP PURCHASING US AGRICULTURAL PRODUCTS:GLOBAL TIMES
CHINA MAY REDUCE BOEING ORDERS: GLOBAL TIMES
CHINA ADDITIONAL TARIFFS DO NOT INCLUDE U.S. CRUDE OIL
CHINA RAISES TARIFF ON U.S. LNG TO 25% EFFECTIVE JUNE 1
CHINA TO RAISE TARIFFS ON IMPORTS OF U.S. RARE EARTHS TO 25%
China's announcement comes after the White House raised tariffs on some $200 billion in Chinese goods to 25% from 10% on Friday
(however, the new rates will only apply to goods leaving Chinese ports on or after the date where the new tariffs took effect).
Here's a breakdown of how China will impose tariffs on 2,493 US goods. The new rates will take effect at the beginning of next
month.
2,493 items to be subjected to 25% tariffs.
1,078 items to be subject to 20% of tariffs
974 items subject to 10% of tariffs
595 items continue to be levied at 5% tariffs
In further bad news for American farmers, China might stop purchasing agricultural products from the US, reduce its orders for
Boeing planes and restrict service trade.
There has also been talk that the PBOC could start dumping Treasurys (which would, in addition to pushing US rates higher, could
also have the effect of strengthening the yuan). Though if China is going to dump Treasuries, will they also be dumping US stocks
and real estate?
China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China.
Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.
"It's not China that pays tariffs. It's the American importers, the American companies that pay what in effect is a tax increase
and oftentimes passes it on to U.S. consumers," Wallace said.
As we
noted earlier , on Saturday, President Donald Trump said in tweets that it would be wise for China to "act now" to finish a trade
deal with the U.S., warning that "far worse" terms would be offered after what he predicted would be his certain re-election in 2020.
* * *
And so, as attention turns to China's "countermeasures", Bloomberg notes that while the Communist Party hasn't yet announced what
steps it would take, "the commentaries are probably the first part of its response, since state media in China is tightly controlled
and the government dictates what can be covered."
"If they weren't being seriously provoked, the Chinese people would not favor any trade war. However, once the country is strategically
coerced, nothing is unbearable for China in order to safeguard its sovereignty and dignity," the Global Times said in the editorial.
If the U.S. is to play a roller-coaster-style thriller game, it will bear the consequences."
In an earlier editorial, the Global Times said the U.S. has made a fundamental misjudgment, that is, believing China is unilaterally
benefiting from China-U.S. economic and trade relations."
"The U.S. has misunderstood the interests of both sides, and seriously underestimated China's endurance," the Global Times warned.
So to summarize the current state of the talks that on Friday were described as "constructive" helping send the Dow soaring by
over 500 points intraday, here is a
quick recap courtesy
of Mish Shedlock :
Trump demands China put commitments into law.
China replied that "no one should expect China to swallow bitter fruit that harms its core interests".
Trump ordered Lighthizer to begin the process of imposing tariffs on all remaining imports from China This would impact an
additional $300 billion worth of goods.
China said it would retaliate.
On Saturday, Trump warned China not to retaliate or it would face worse terms. Trump Tweeted "Love collecting BIG TARIFFS!"
Kudlow said on Sunday he expected retaliatory tariffs to kick in but that it had not happened yet.
China warned Trump on Sunday not to underestimate China's endurance and that China is not afraid to fight.
China posted its own set of demands for further talks including the removal of all extra tariffs.
As Mish concludes, "This dialog is what's known as "constructive". It's so constructive that further talks between Trump and have
been pushed back until the end of June, subject to change of course."
Meanwhile, as the market's hope for quick resolution fades, keep an eye on Apple and other Chinese consumer-reliant companies,
for the market's snap reaction - if Beijing plans to engage in "soft retaliation", it is those corporations that derive much of their
revenue from China that will be hit first and hardest. And if there is indeed a shift in sentiment, it will first appear in US equity
futures and Chinese stocks, both of which open for trading in just a few hours.
The idea behind imposing tariffs is to discourage buying, but 10-25% doesn't really make an impact on that front. It only proves
that the gubbermint wants to squeeze more out of the little people. Unfortunately, it will backfire (if not already) as shortsighted
policies (especially ones that are carried out over Twitter) usually do.
The verdict is not in on that yet. A corporation like Cummins can pay the tariff and deduct it as a business expense same with
a importer that is a corporation. LCC now have been destroyed by RINOTAX so they must pass that on to consumers or change to corporations.
Bottom line the consumer and or Taxpayer will eat the Tariffs.
Large multinationals are livid at Trump for this. The GOP is comatose, It has the feeling of a George Bush Subprime moment.
The GOP is going to take a big hit for this. Trump is mentally ill and out of control. Congress will have to rescind the section
232 delegation and remove that power from Trump.
The us trades with 102 nations and China has factories and banks in virtually all Asian countries. So there is a logistical
fix for this too. And as I have said before HONG KONG has its own treaty with the USA so it is immune to Trump Tariffs. All tariffs
are based on shipping origins and destinations so that's a pretty easy fix. Attacking 1 country out of 102, just makes the other
101 countries nervous about the arbitrary and capricious conduct of Trump.
China as you yourself stated is a heavyweight not some small outfit that can be pushed around by Trump. China is the largest
manufacturer in the world. 1000 metric tons of steel etc. Trump is harming US multinationals in China so Trump's days are numbered.
Corporations will be hamming republicans tomorrow. Trump is not smart, he's mentally ill and very sick. He had a breakdown when
he closed the gov and this is similar in that his mental illness responses are the same paranoia. The threats are similar etc.
Same disease different circumstance. And China knows this. They put the hammer down with their three demands. They will not budge.
China gets a bad rap because they were once very poor. But Gen MacArthur said that if the Chinese Army had not held off the
Japanese and fought to the death, the US Marines could not have taken the Japanese islands.
One other point. Part of the Asian culture is restraint. If China wanted to bust TRUMP hard they would cancel all Boeing Aircraft
orders. Mao would have done that. China is now very focused on business and trade and will only retaliate in small measured ways.
America's character went to **** in Vietnam. Then Bush family war criminals got into power. The only thing good about Obama
was he distanced America from the Jooz. But along came Trump and his joo daughter and son of a crook in law Kushner and then Trump
was antagonizing Iran, Jerusalem with the US embassy and put a US military base in Israel. So Trump is Bibi's houseboy. Then to
enforce this Trump appoints bolton, pompeo and Abrams, arms Saudi and signs on for year 17 in Afghanistan. Yet all this is just
fine with the TRUMPTARDS as long as they can chant built the wall. Absolutely astonishing how this Orange Tyrant is never held
accountable by his Trumptards.
Trump sounds terrified. His 60 tweets a day are indicative of someone suffering from fear. I have seen this in battle and thats
why everyone else gets clear of the yapper. His number is up.
I wonder if the Chinese media will show all the factories owned by the communist party cadres chugging along with free money
from the government, while millions of workers in privately owned factories are losing their jobs. All Trump wanted was for these
government run industries to go private, but the communist party needs to give jobs to friends and relatives. Because if you're
not a friend or relative of the communist party, you don't really matter in China.
what about the factories of Lockheed martin, Boeing, rayteon, churning along along with free money from the US government,
while millions of workers in privately owned companeis such as SEARs, Toys R US are losing their jobs?
Correction, Trump wants China to open up their markets to western exploitation which is not happening. If you understand history
about China it is mired in exploitation from European powers in the region. I don't blame China for its protectionism and their
ambitions to become an independent country.
The Orange Swine cut taxes for big corporations and multi millionaires and now lets middle class consumers pay the trade war
with China. And then orders the Fed to cut rates by 1% to destroy the Dollar. What's next? Value added tax anyone?
North American includes the USA and Canada. China exports 438 Billion and imports 180 billion from North America.
So if you look at it intelligently, US Tariffs have very little leverage but do harm the US supply chain enormously. When China
applies retaliatory tariffs to the US and Canada, they can hurt you badly. The US farmer is the prime example.
But the most important thing to look at is not your silly protectionism but the size of the ASIAN markets. China has been consolidating
all of Asia. They have companies and banks in all of those countries and their Asia Trade alone is over 2 trillion annually. Trump
screams about applying tariffs to 380 Billion in goods with no comprehension of how much he loses in access to Asia.
So as Bill O'Neil said, the only thing that matters for the next 100 years is the Asian Consumer. Nothing else matters. Asian
growth is exploding.
The chief export of the USA is aircraft 130 Billion a year. That will change drastically with Boeing. China is building its
own narrow body aircraft. Russia is also getting into the narrowbody aircraft space. The US doesn't want to be cultivating enemies
in Asia.
Many go directly to Washington coffers. But maney will be taken mostly from the US consumers
of Chinese goods. Also it is unclear what sanctions China will introduce in return, if any.
Notable quotes:
"... But the prolonged trade war — and Friday’s tariff hike — serves as ammunition for hawks on both sides, who see a more confrontational struggle for global dominance unfolding. ..."
"... In China, there is a growing belief that the U.S. motive in the talks is not to balance trade relations, but to undermine China, slow its rise and hamper its ability to best America in strategic high-tech fields. ..."
"... Hu Xijin , editor of the Communist Party-owned Global Times , has tweeted in English that China was “fully prepared for an escalated trade war.” He argued there is increased popular support in Beijing for a confrontational approach to the U.S. ..."
"... “The real intention of the U.S. is to squeeze China’s space in new technologies,” the editorial said. ..."
"... “Things will continue to slide downward into deeper competitive tensions,” Gill predicted, “including on the economic front because trade is not the problem. The deeper problem … is the question of economic and technological competition. ..."
"... Chinese President “Xi Jinping is not a forgiving man, so I think we can see that Xi Jinping will take a more robust stance against the U.S. if and when he feels that the Chinese government is able to do so successfully,” Tsang said. ..."
"... The United States faces a possibility that in decades, China could overtake it as the world’s largest economy. China’s economy is already ranked No. 1 in terms of purchasing parity power, a measure that adjusts GDP to account for price differences in countries. ..."
Even if the two sides can break through the stalemate and strike a deal on trade, the larger
message of the week is that U.S.-China relations have changed fundamentally, and there is
probably no going back.
Although their business relations are deeply entwined, the White House and China view
themselves as aggressive rivals jostling for global influence and geopolitical power.
The trade war launched by Trump is just one manifestation of this. Military friction in the
South China Sea, a string of espionage scandals, China’s rising military strength and the
Trump administration’s battle against Chinese tech giant Huawei are all signs of an
ominous chill in relations.
Although a trade deal seemed at hand in recent weeks, Trump administration officials have
accused China of reneging on agreements that had been made over months of negotiations. To
pressure Beijing to return to its previous commitments, Washington ratcheted up tariffs on $200
billion in products from China from 10% to 25%. China announced immediately that it would
retaliate.
Some experts said last-minute revisions from China are typical of its negotiating strategy,
as with Trump’s mercurial bargaining style.
If trade negotiators do not reach a deal in coming weeks, the U.S., Chinese and global
economies will be hurt, say analysts, who assume both sides will find a way to end the
impasse.
“My baseline scenario is that both leaders still need a deal for political reasons,
so we are likely to get one in the next few weeks, but it won't be this week,” said
Arthur Kroeber of Gavekal Dragonomics , a
financial research firm headquartered in Hong Kong. “The maneuvering right now is
mainly end-of-negotiation stuff. But both sides are playing brinkmanship pretty hard so there
is material risk (say 20 to 25%) that we don’t get a deal.”
But the prolonged trade war — and Friday’s tariff hike — serves as
ammunition for hawks on both sides, who see a more confrontational struggle for global
dominance unfolding.
In China, there is a growing belief that the U.S. motive in the talks is not to balance
trade relations, but to undermine China, slow its rise and hamper its ability to best America
in strategic high-tech fields.
Tariffs already have prompted some U.S. firms in China to shift their supply chains
elsewhere. China hawks in the Trump administration believe that applying heavy taxes on imports
can be one way to “decouple” from China.
U.S. legal charges against Huawei executive Meng Wanzhou, and Secretary of State Michael R.
Pompeo’s blunt efforts to dissuade European nations from using Huawei in 5G telecom
networks by threatening not to share intelligence, have hardened suspicions in China, as have
harsh criticisms and rhetoric from other senior officials in the Trump administration.
“None of the news of the past year or two has been very positive in terms of the
geopolitical direction of this relationship. It’s gone from tense to worse, and while the
trade relationship seems to get a lot of the headlines, a lot more problematic, even dangerous
elements are unfolding in other areas of the relationship particularly around security and
military affairs,” said Bates
Gill, China expert and professor at Macquarie University in Sydney, Australia.
“A so-called resolution of the current trade war is not going to remove or resolve the
fundamental structural problems in the economic relationship,” he said.
U.S. business has long favored engagement with China, arguing that external pressure from
the United States and others has pushed China to open its economy. More recently, however, that
assumption has been called into question by many in the West, giving Trump more political space
to go after China on trade and other areas.
Still, Jacob Parker , vice
president of China Operations at the U.S.-China Business Council , warned that if the Trump
administration confronts China too aggressively, it could backfire. He said that instead of
persuading China to open up more to American companies and ending its insistence that they
share their technology in return for market access, aggressive new tariffs could have the
opposite effect.
Parker also warned that Friday’s tariff hike on $200 billion of Chinese imports
— and Trump’s threats to slap tariffs on an additional $325 billion in Chinese
goods in the near future — has undermined economic reformers in the Chinese system and
strengthened the voices of hard-liners.
“That hardens those voices domestically and reinforces the perspective that the U.S.
is trying to contain China,” he said. “If we push the Chinese too far, I think
there’s a concern in the business community that we may go beyond what China can accept
and that things could start to fall apart. If that happens, I think we can at the least expect
that the Chinese economic reform process would come to an end.”
And in Washington, the lack of a deal would result in “increased tensions between the
national security wing of the U.S. administration, who will be happy with this result, and the
business-tech community, who are anxious to expand their participation in China and will be
pretty mad,” said Kroeber, of the Hong Kong financial research firm.
Stephen K. Bannon , former
chief strategist to Trump, is among a group of hawks who formed the Committee on the Present
Danger: China, an organization that sees its role as warning
Americans and political and business leaders of the “existential threats” to
America posed by China.
Meanwhile, Hu Xijin ,
editor of the Communist Party-owned Global
Times , has tweeted in English that China was “fully prepared for an escalated trade
war.” He argued there is increased popular support in Beijing for a confrontational
approach to the U.S.
“More and more Chinese now tend to believe the current US government is obsessed
with comprehensively containing China,” he tweeted Thursday.
A Global Times editorial Thursday said trade was “only a sideshow” in the
confrontation between the U.S. and China and the real issue was the U.S. fear that China would
catch up to it in high-tech fields.
“The real intention of the U.S. is to squeeze China’s space in new
technologies,” the editorial said.
Many analysts, including Australian professor Gill, share the view that relations are in
long-term decline.
“Things will continue to slide downward into deeper competitive tensions,”
Gill predicted, “including on the economic front because trade is not the problem. The
deeper problem … is the question of economic and technological competition.
“Ultimately at the bottom of all of this, the problem abides that the two countries
don’t trust each other and see each other as long-term strategic competitors.”
Steve Tsang ,
director of the SOAS China Institute
at the University of London, said regardless of who is president, the U.S. and China will
become increasingly competitive in the next two decades.
Chinese President “Xi Jinping is not a forgiving man, so I think we can see that
Xi Jinping will take a more robust stance against the U.S. if and when he feels that the
Chinese government is able to do so successfully,” Tsang said.
As relations decline, both Washington and Beijing are likely to compete to draw countries
into their orbit, he predicted.
He said European countries and the U.K. would drift toward the U.S. “because
ultimately this is what we believe in more. You will have a whole bunch of other countries that
will drift towards the Chinese because they remain fundamentally authoritarian
states.”
China’s global Belt and Road Initiative — in which it projects its international
power through soft loans for infrastructure — would also draw some nations to China, he
added.
Underscoring frictions are U.S. fears that China may overtake it in a range of high-tech
fields including space exploration, artificial intelligence, surveillance technology,
driverless cars and even military hardware.
Huawei’s emergence as the global leader in 5G technology — with no American
rival — was a shock to U.S. policymakers.
Parker, of the U.S.-China Business Council, said that although the U.S. and China face a
challenging security relationship, it is important to ensure that trade is not affected.
“I think there’s definitely a competitive dynamic between the U.S. and China,
and that will continue into the future. The twist is to ensure that the national security
issues don’t get entwined with the businesses’ side.”
The United States faces a possibility that in decades, China could overtake it as the
world’s largest economy. China’s economy is already ranked No. 1 in terms of
purchasing parity power, a measure that adjusts GDP to account for price differences in
countries.
“It would be a major milestone. It would send a lot of shock waves and shivers
certainly in the United States and much of the rest of the world and I think would be seen as a
major turning point, not unlike the United States overtaking the United Kingdom as the
world’s largest economy back in the late 19th century,” Gill said. “It would
certainly be the end of an era and the beginning of a new one.”
Trump's misguided tariff/trade war policies are straight out of the 19th century. They are
tearing apart relations with our allies and playing straight into Putin's hands. They will
cost U.S. consumers and businesses billions in tariff fees and higher prices on goods. They
are squeezing American farmers to the breaking point. Nobody wins a trade war.
Trump bravado is probably unwarranted. Here the train already left the station: the USA can do a damage to Chine economy only
by talking considerable damage to the empire and probably to the status of the dollar as well.
Notable quotes:
"... Commenting on this list, the Editor in Chief of the Global Times, Hu Xijin, who has become a real-time translator for Chinese unspoken intentions on twitter, explained that "from perspective of China's politics, there is little room for compromises. They will insist. This political logic won't be changed no matter how much additional tariffs the US will impose." ..."
"... Trump responded immediately on Twitter when he made it clear on Saturday that the US would not relent, stating that the Chinese may have felt they were "being beaten so badly" in the recent talks that it was better to drag their feet in hopes he would lose the 2020 election and get a better deal from the Democrats. Trump then said that "the only problem is that they know I am going to win (best economy & employment numbers in U.S. history, & much more), and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!" ..."
Following some soothing words from both the US and Chinese sides on Friday that while talks
to avert a tariff hikes had failed, they were "constructive" and there was grounds for
"cautious optimism" for the future, the standoff between the U.S. and China abruptly escalated
over the weekend when China's vice premier Liu He said that China is planning how to retaliate
and listed three core concerns that must be addressed, and on which it wouldn't make
concessions, ahead of any deal including:
i) the complete removal of all trade-war related tariffs,
ii) set targets for Chinese purchases of goods in line with real demand and
iii) ensure that the text of the deal is "balanced" to ensure the "dignity" of both
nations.
Commenting on this list, the Editor in Chief of the Global Times, Hu Xijin, who has become a
real-time translator for Chinese unspoken intentions on twitter, explained that "from
perspective of China's politics, there is little room for compromises. They will insist. This
political logic won't be changed no matter how much additional tariffs the US will impose."
Trump responded immediately on Twitter when he made it clear on Saturday that the US would not relent, stating that the
Chinese may have felt they were "being beaten so badly" in the recent talks that it was better to drag their feet in hopes he
would lose the 2020 election and get a better deal from the Democrats. Trump then said that "the only problem is that they know
I am going to win (best economy & employment numbers in U.S. history, & much more), and the deal will become far worse for them
if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!"
Trade, however, doesn't represent the only U.S.-China economic activity whose profile has
lowered recently. For example, since 2016, two-way foreign direct investment (purchases of
so-called hard assets, like factories and real estate, as opposed to financial assets, like
government bonds) has cratered by fully 70 percent. Most of the drop is due to an 80 percent
decrease in Chinese investment in the United States, and the bulk of that decline came in 2018.
But American direct investment in China peaked back in 2008, as the recession struck, hasn't
come close to recovering since, and is also down slightly since 2012.
U.S.-China economic flows are still so great that they won't dry up completely. Nor should
anyone expect the current unwinding to continue at its current pace. After all, China still
boasts advantages in many manufacturing industries (which dominate bilateral trade) sure to
sustain sales to American households and businesses. Chief among them are the scale of existing
production complexes in China and the efficiencies that result, along with the wide range of
cost-reducing subsidies these sectors receive from Beijing. Further, China can't expect to find
foreign markets capable of replacing its sales to the United States, and therefore supporting
its own ability to grow and maintain the employment levels vital for political stability. Nor
will American businesses be able to totally blow off the enormous Chinese market and its own
still-impressive growth.
.... ... ...
Nonetheless, the days are over when the United States -- or at least its
political and business leaders -- saw mushrooming commerce with China as an expressway to
greater national prosperity and higher profits, not to mention a powerful contributor to global
well-being, security, and stability, and a means of democratizing China itself. With all these
hopes dashed, Washington and the American business community will find ample reasons to keep
looking for exits.
Alan Tonelson is the founder of RealityChek, a public policy blog focusing on
economics and national security, and the author of The Race to the Bottom.
I do not necessarily support his course of action...but I feel that sometimes, doing
the unexpected and unconventional thing can lead to new doors and new possibilities.
China's internal debt situation is so precarious that it can ill-afford a trade war
with US. China has a trade surplus of $325 billion with the US. This kind of skewed
number is totally unacceptable. By reneging on the provisional agreements over IP and
other hurdles, China is playing with fire.
I am not a Trump supporter but I think his policy on China is right on the money. No
other US president had the courage to address this issue.
Even if the two sides can break through
the stalemate and strike a deal on trade, the larger message of the week is that U.S.-China
relations have changed fundamentally, and there is probably no going back. Although their
business relations are deeply entwined, the White House and China view themselves as aggressive
rivals jostling for global influence and geopolitical power. The trade war launched by Trump is
just one manifestation of this. Military friction in the South China Sea, a string of espionage
scandals, China's rising military strength and the Trump administration's battle against
Chinese tech giant Huawei are all signs of an ominous chill in relations. Although a trade deal
seemed at hand in recent weeks, Trump administration officials have accused China of reneging
on agreements that had been made over months of negotiations. To pressure Beijing to return to
its previous commitments, Washington ratcheted up tariffs on $200 billion in products from
China from 10% to 25%. China announced immediately that it would retaliate. Some experts said
last-minute revisions from China are typical of its negotiating strategy, as with Trump's
mercurial bargaining style. If trade negotiators do not reach a deal in coming weeks, the U.S.,
Chinese and global economies will be hurt, say analysts, who assume both sides will find a way
to end the impasse. "My baseline scenario is that both leaders still need a deal for political
reasons, so we are likely to get one in the next few weeks, but it won't be this week," said
Arthur Kroeber of Gavekal Dragonomics , a
financial research firm headquartered in Hong Kong. "The maneuvering right now is mainly
end-of-negotiation stuff. But both sides are playing brinkmanship pretty hard so there is
material risk (say 20 to 25%) that we don't get a deal." But the prolonged trade war -- and
Friday's tariff hike -- serves as ammunition for hawks on both sides, who see a more
confrontational struggle for global dominance unfolding. In China, there is a growing belief
that the U.S. motive in the talks is not to balance trade relations, but to undermine China,
slow its rise and hamper its ability to best America in strategic high-tech fields. Tariffs
already have prompted some U.S. firms in China to shift their supply chains elsewhere. China
hawks in the Trump administration believe that applying heavy taxes on imports can be one way
to "decouple" from China. U.S. legal charges against Huawei executive Meng Wanzhou, and
Secretary of State Michael R. Pompeo's blunt efforts to dissuade European nations from using
Huawei in 5G telecom networks by threatening not to share intelligence, have hardened
suspicions in China, as have harsh criticisms and rhetoric from other senior officials in the
Trump administration. "None of the news of the past year or two has been very positive in terms
of the geopolitical direction of this relationship. It's gone from tense to worse, and while
the trade relationship seems to get a lot of the headlines, a lot more problematic, even
dangerous elements are unfolding in other areas of the relationship particularly around
security and military affairs," said Bates Gill, China expert and professor at Macquarie
University in Sydney, Australia. Advertisement "A so-called resolution of the current trade war
is not going to remove or resolve the fundamental structural problems in the economic
relationship," he said. U.S. business has long favored engagement with China, arguing that
external pressure from the United States and others has pushed China to open its economy. More
recently, however, that assumption has been called into question by many in the West, giving
Trump more political space to go after China on trade and other areas. Still, Jacob Parker , vice president of China
Operations at the U.S.-China Business
Council , warned that if the Trump administration confronts China too aggressively, it
could backfire. He said that instead of persuading China to open up more to American companies
and ending its insistence that they share their technology in return for market access,
aggressive new tariffs could have the opposite effect. Parker also warned that Friday's tariff
hike on $200 billion of Chinese imports -- and Trump's threats to slap tariffs on an additional
$325 billion in Chinese goods in the near future -- has undermined economic reformers in the
Chinese system and strengthened the voices of hard-liners. "That hardens those voices
domestically and reinforces the perspective that the U.S. is trying to contain China," he said.
"If we push the Chinese too far, I think there's a concern in the business community that we
may go beyond what China can accept and that things could start to fall apart. If that happens,
I think we can at the least expect that the Chinese economic reform process would come to an
end." And in Washington, the lack of a deal would result in "increased tensions between the
national security wing of the U.S. administration, who will be happy with this result, and the
business-tech community, who are anxious to expand their participation in China and will be
pretty mad," said Kroeber, of the Hong Kong financial research firm. Advertisement
Stephen K. Bannon , former
chief strategist to Trump, is among a group of hawks who formed the Committee on the Present
Danger: China, an organization that sees its role as warning
Americans and political and business leaders of the "existential threats" to America posed by
China. Meanwhile, Hu Xijin ,
editor of the Communist Party-owned Global
Times , has tweeted in English that China was "fully prepared for an escalated trade war."
He argued there is increased popular support in Beijing for a confrontational approach to the
U.S. "More and more Chinese now tend to believe the current US government is obsessed with
comprehensively containing China," he tweeted Thursday. A Global
Times editorial Thursday said trade was "only a sideshow" in the confrontation between the U.S.
and China and the real issue was the U.S. fear that China would catch up to it in high-tech
fields. "The real intention of the U.S. is to squeeze China's space in new technologies," the
editorial said. Many analysts, including Australian professor Gill, share the view that
relations are in long-term decline. "Things will continue to slide downward into deeper
competitive tensions," Gill predicted, "including on the economic front because trade is not
the problem. The deeper problem is the question of economic and technological competition.
"Ultimately at the bottom of all of this, the problem abides that the two countries don't trust
each other and see each other as long-term strategic competitors." Steve Tsang , director of the SOAS China Institute at the University of
London, said regardless of who is president, the U.S. and China will become increasingly
competitive in the next two decades. Chinese President "Xi Jinping is not a forgiving man, so I
think we can see that Xi Jinping will take a more robust stance against the U.S. if and when he
feels that the Chinese government is able to do so successfully," Tsang said. As relations
decline, both Washington and Beijing are likely to compete to draw countries into their orbit,
he predicted. He said European countries and the U.K. would drift toward the U.S. "because
ultimately this is what we believe in more. You will have a whole bunch of other countries that
will drift towards the Chinese because they remain fundamentally authoritarian states." China's
global Belt and Road Initiative -- in which it projects its international power through soft
loans for infrastructure -- would also draw some nations to China, he added. Underscoring
frictions are U.S. fears that China may overtake it in a range of high-tech fields including
space exploration, artificial intelligence, surveillance technology, driverless cars and even
military hardware. Huawei's emergence as the global leader in 5G technology -- with no American
rival -- was a shock to U.S. policymakers. Parker, of the U.S.-China Business Council, said
that although the U.S. and China face a challenging security relationship, it is important to
ensure that trade is not affected. "I think there's definitely a competitive dynamic between
the U.S. and China, and that will continue into the future. The twist is to ensure that the
national security issues don't get entwined with the businesses' side." The United States faces
a possibility that in decades, China could overtake it as the world's largest economy. China's
economy is already ranked No. 1 in terms of purchasing parity power, a measure that adjusts GDP
to account for price differences in countries. "It would be a major milestone. It would send a
lot of shock waves and shivers certainly in the United States and much of the rest of the world
and I think would be seen as a major turning point, not unlike the United States overtaking the
United Kingdom as the world's largest economy back in the late 19th century," Gill said. "It
would certainly be the end of an era and the beginning of a new one." Trump's
tariff hike on Chinese goods takes effect as the two sides keep talking "
"... And if we don't protect manufacturing jobs in the US the whole damned car will be made in China and there won't be decent paying jobs here manufacturing them. ..."
"... I have worked with Chinese auto parts suppliers. They run from OK to horrible. ..."
"... In reality, the tariffs are 'cash in the bank' for the U.S. Treasury. If nothing else, tariffs will allow our politicians to spend more each year - perhaps we might even get to the point that our nation avoids 'deficit spending' for at least one year. ..."
John Murphy of Bank of America joins CNBC's "Closing Bell" to discuss the impact of new tariffs on the auto industry.
William 23 hours ago
And if we don't protect manufacturing jobs in the US the whole damned car will be made in China and there won't be decent paying
jobs here manufacturing them.
c craig f 21 hours ago
Cars that do not use Chinese parts will sell better and the world it will keep turning
P Park Slope 23 hours ago
Great. I'll keep my old one. Thanks for the savings.
BobBob, yesterday
I have worked with Chinese auto parts suppliers. They run from OK to horrible. I'd never buy from them - maybe as a LAST option
to avoid going belly up. The problem then becomes losing repeat customers due to quality and reliability problems....
GeorgeGeorge, 10 hours ago
Do not understand how the anti-Trump politicians and the media can be against these tariffs. In reality, the tariffs are
'cash in the bank' for the U.S. Treasury. If nothing else, tariffs will allow our politicians to spend more each year -
perhaps we might even get to the point that our nation avoids 'deficit spending' for at least one year.
In an unusual move, the Chinese delegation has come clean to the domestic press about
Beijing's remaining trade-deal related demands, exposing steep divides that could make it a
final deal impossible for Trump, who has repeatedly said he will only accept a "great"
deal.
Unsurprisingly, Liu He, the leading Chinese trade negotiator, confirmed what Beijing has
intimated time and time again :
That without the complete removal of all trade-war related tariffs, Beijing will not
remorse a deal.
The other two demands were related to American commitments to buy Chinese goods , something
that could also pose a problem.
In a wide-ranging interview with Chinese media after talks in Washington ended Friday,
Vice Premier Liu He said that in order to reach an agreement the U.S. must remove all extra
tariffs, set targets for Chinese purchases of goods in line with real demand and ensure that
the text of the deal is "balanced" to ensure the "dignity" of both nations.
China for the first time made clear what it wants to see from the U.S. in talks to end their trade war, laying
bare the deep differences that still exist between the two sides.
In a wide-ranging
interview
with Chinese media after talks in Washington ended Friday, Vice Premier Liu He said that in order to
reach an agreement the U.S. must remove all extra tariffs, set targets for Chinese purchases of goods in line with
real demand and ensure that the text of the deal is "balanced" to ensure the "dignity" of both nations.
Liu's three conditions underscore the work still to be done if an accord is to be reached between the world's
two largest economies. President Donald Trump's own negotiators told China it has a month to seal a deal or face
tariffs on all its exports to the U.S.
That threat was made during talks Friday in Washington, hours after Trump upped the ante by imposing a second
round of punitive duties on $200 billion in Chinese goods. China vowed retaliation, but hadn't announced any
details as of Saturday evening in Beijing.
U.S. Trade Representative Robert Lighthizer said the administration would on Monday release details of its
plans for tariffs on an additional $300 billion in imports from China, setting the process in motion for Trump to
deliver on the threat to hammer all Chinese trade.
U.S. officials insist they have been working on a deal that would bring an end to what they portray as China's
rampant theft of American intellectual property and rein in the industrial subsidies that have fueled the rapid
ascent of Chinese corporate giants.
Trump's move to raise tariffs on Friday came after China backed away from prior commitments to enshrine changes
promised at the negotiating table in Chinese law, according to U.S. officials. During his meetings in Washington
this week Liu said China was ready to commit to pushing reforms via State Council directives but again balked at
changing any laws, according to one person familiar with the discussions.
In his interview Liu said both sides agreed to keep talking despite what he called "some temporary resistance
and distractions,'' and to hold future meetings in Beijing. He dismissed the idea that talks had broken down.
"It's normal to have hiccups during the negotiations. It's inevitable."
Liu also struck a note of defiance. "For the interest of the people of China, the people of U.S. and the the
people of the whole world, we will deal with this rationally," the vice premier said. "But China is not afraid,
nor are the Chinese people," adding that "China needs a
cooperative agreement
with equality and dignity."
'Candid and Constructive'
In a series of tweets that cheered markets, Trump declared Friday that the talks with China had been candid and
constructive. "The relationship between President Xi and myself remains a very strong one, and conversations into
the future will continue," he said. Further talks are possible, but there's no immediate plan for the next round,
according to a person familiar with the negotiations.
Liu's comments, however, revealed yet another new fault line: a U.S. push for bigger Chinese purchases to level
the trade imbalance than had originally been agreed.
To Be Tariffed...Maybe
Top 10 U.S. imports from China which haven't been tariffed in current dispute
According to Liu, Trump and Chinese President Xi Jinping agreed "on a number" when they met in Argentina last
December to hammer out the truce that set off months of negotiations. That "is a very serious issue and can't be
changed easily."
The amount of purchases by China should be "in line with reality," according to a commentary by state news
agency Xinhua on Saturday. China also sees the removal of all the extra tariffs that have been imposed since last
year as a precondition to a deal, whereas U.S. negotiators see retention of some duties as a key mechanism to
enforce a deal.
The lack of progress left major question-marks hanging over the search for a deal on trade -- just one source
of tensions in a
growing geopolitical rivalry
that's already shifting supply chains and testing established economic and
security alliances.
Trump, who is seeking re-election on the back of a booming U.S. economy, on Friday sought to justify his
decision to hike tariffs as well as to convince businesses and financial markets that he wasn't walking away from
a deal.
No Rush
"There is absolutely no need to rush," the U.S. president said. In another tweet, Trump
proposed a vast new plan
to use income from tariffs to buy up the crops of American farmers who've watched
their exports to China collapse, and send them to poor countries as aid.
The presidential good humor hid what people familiar with the discussions say has been an increasingly gloomy
mood around the negotiations in recent days.
Before a rebound late Friday, U.S. equity markets had posted their worst week of the year, as the trade truce
that had been in place for months was shattered by the new U.S. tariffs. The S&P 500 recovered from earlier losses
Friday, ending the day 0.4% higher.
Election Year
This week's tariff move is likely to have
significant
short-term consequences for retailers and other U.S. businesses reliant on imports from China. But
extending it to all trade would increase the economic and political stakes even further for Trump and American
businesses.
Such a step would see price increases on smartphones, laptops and other consumer goods -- the kind that Trump's
advisers have been eager to avoid, out of concern for the domestic fallout. It would
likely provoke further retaliation
, and some economists are predicting it could even tip the U.S. economy into
recession just as Trump faces re-election in 2020.
'Gets Harder'
This week's talks have also amplified the differences that remain between the two governments as they navigate
their own domestic politics as well as a growing international rivalry.
Liu's interview underlined the need for any agreement not to be seen as undermining Chinese sovereignty -- as
the U.S. demand to change domestic laws surely would be.
The text "must be balanced" for the dignity of a country, Liu said, repeating China and the U.S. are "trying to
meet halfway" despite different views on some crucial issues.
Securing a trade deal is likely to get harder from here unless outside factors, such as
an economic downturn
, force a compromise, according to Ely Ratner, a China expert who served in the
administration of President Barack Obama and is now director of studies at the Center for a New American Security
think-tank.
"The question is can the Chinese come back and offer enough such that Trump can sell it?'' he said. "It is
going to be hard for them to do that in the face of Trump escalating. I think it gets harder as this thing goes
on, and it gets harder politically for Trump.''
-- With assistance by Jennifer Jacobs, Ye Xie, Andrew Mayeda, Jim Jia, Natalie Lung, Saleha Mohsin, and Jenny
Leonard
Stephen K. Bannon served as chief strategist for President Trump from January 2017 to
August 2017.
Getting tough with China to bring manufacturing jobs back to the United States was the
linchpin of President Trump's electoral march through the Rust Belt during his 2016 victory.
Today, the goal of the radical cadre running China -- the Chinese Communist Party (CCP) -- is
to be the global hegemonic power. The president's threatened
tariffs on Sunday demonstrate the severity of this threat. But as Washington and Beijing
wrap up months of negotiations on a trade deal this month, whatever emerges won't be a trade
deal. It will be a temporary truce in a years-long economic and strategic war with China.
These are six "understandings" that highlight why it is futile to compromise with this
regime.
The first understanding : The CCP has been waging economic war against industrial
democracies ever since China joined the World Trade Organization (WTO) in 2001, and now China
has emerged as the greatest economic and national security threat the United States has ever
faced.
As a framework for the current trade talks, China must agree to end forced technology
transfers; intellectual property theft; cyberintrusions into business networks; currency
manipulation; high tariff and nontariff barriers; and unfair subsidies to state-owned
enterprises. However, if the CCP agrees to the United States' demands in an enforceable manner,
it would amount to a legal and regulatory dismantling of Chinese state capitalism.
The second understanding : The trade deal under negotiation this month is not a deal between
two similar systems seeking closer ties, as its cheerleaders on Wall Street and in the media
and academia argue. Rather, this is a fundamental clash between two radically different
economic models.
The best U.S. result is a detailed document in which China renounces its predatory,
confiscatory and mercantilist practices while providing ample means to monitor and promptly
enforce the agreement.
The best CCP result is to get the tariffs lifted by filing reams of paper with false,
unenforceable promises that will allow it to run out the clock on the Trump administration and
hope for a less antagonistic Democratic alternative.
The third understanding : Chinese state capitalism is highly profitable for its owners --
the members of the CCP. Stagnant state-owned enterprises gain a competitive edge through
massive government subsidies and the cost savings won by stealing the intellectual property,
technology and innovations of foreigners.
If China halted such grand theft, its enterprises would be rapidly outcompeted by the
Germans, South Koreans, Japanese and especially the United States.
This fact explains much about internal Chinese politics today. President Xi Jinping faces a
palace sharply divided between reformers led by chief trade negotiator Liu He and a swarm of
hawks who have profited and gained power from the status quo. Within China itself, it is both
gallows humor and even money as to whether Liu He will be celebrated as the next Deng Xiaoping
or end up in a Chinese gulag.
The fourth understanding : Trump advisers inside and outside the White House are playing on
the president's well-earned pride in a rising stock market and a fear he might lose the Farm
Belt to try to box him into a weak deal. But it is a decidedly false narrative that any failure
to reach a deal will lead to a market meltdown and economic implosion.
In fact, there is no better argument for Trump keeping his bold tariffs on China than the
latest report that the U.S. economy grew at an annualized rate of 3.2 percent
in the first quarter .
Anything less than a great deal will subject the president to relentless criticism from the
Charles E. Schumer and Bernie Sanders wings of the Democratic Party. In addition, Sens. Marco
Rubio (R-Fla.) and Ted Cruz (R-Tex.) might use it to get to the right of Trump on China --
potentially setting up a later primary challenge. For these reasons, the president's best
political option is not to surrender, but rather, to double down on the tariffs -- they have
been highly effective in pressuring the Chinese without harming the U.S. economy.
The fifth understanding : Even the toughest agreement needs effective monitoring, which is
difficult even with accommodating partners and perhaps impossible with China. The danger is for
the president to sign what appears to be a reasonable deal and find out several years later
that the United States was hoodwinked.
The United States failed to adequately monitor China's entry into the WTO in 2001. Instead
of access to a billion Chinese consumers, the United States lost more than 5 million
manufacturing jobs since 2000.
The sixth understanding : The world now bears witness to a rapidly militarizing totalitarian
state imprisoning
millions in work camps; persecuting Uighurs, Christians and Buddhists; and spying on, and
enslaving, its own population.
This is history in real time; and the world is a house divided -- half slave, half free.
Trump and Xi are facing off to tip the scales in one direction or the other. One way leads to
the benefits of freedom, democracy and free-market capitalism. The other leads to a
totalitarian and mercantilist power run on state capitalism with Chinese characteristics.
The United States' fight is not with the Chinese people but with the CCP. The Chinese people
are the first and continuous victims of this barbarous regime.
The central issues that must be faced are China's intentions on the world stage and what
those ambitions mean for U.S. prosperity. With our country at a crossroads, it is more
important than ever that Trump follow his instincts and not soften his stance against the
greatest existential threat ever faced by the United States.
1. China must agree to end forced technology transfers; intellectual property theft;
cyberintrusions into business networks; currency manipulation; high tariff and nontariff
barriers; and unfair subsidies to state-owned enterprises.
In the good 'ol USA, we refer to this as "corporate welfare", direct federal subsidies (eg
farm subsidies), MIC and government 'no-bid defense' contract, oil depletion allowance, tax
credits and other tax incentives such as accelerated depreciation, dividend tax, Advanced
Technology Program, federal land giveways, local & state land & tax "incentive"
giveways, carried interest, welfare and food stamp costs paid to employees of companies like
Walmart and McDonalds (because employee wages for full time employment fall below poverty
level), the clunker auto subsidy program to bail out US auto companies, the mortgage interest
deduction, and more. The cherry on top is, of course, the trillions of dollars in TARP and QE
given to giant banks to bail out Wall Street.
For all the hot air, it appears that reciprocity is not really what Steve has in mind.
2. The best U.S. result is a detailed document in which China renounces its predatory,
confiscatory and mercantilist practices while providing ample means to monitor and promptly
enforce the agreement.
Steve? Steve?? Are you aware that the U.S. is currently trying to economically strangle
countries all over the world with economic sanctions? Venezuela. Cuba. Syria. Iran.
Russia.North Korea. Lebanon. Yemen. And if economic sanctions don't work, we bomb them. Iraq.
Afghanistan. Libya. Syria.
3. by stealing the intellectual property, technology and innovations of
foreigners.
Libya's gold "disappeared". As did much of Iraq's gold. And the Bank of England, citing
U.S. sanctions as its legal fig leaf, confiscated $1.2 billion of Venezuelan gold. As to
stealing technology, no one does it better than Uncle Same: Vault 7 and Stuxnet are prime
examples of US spying on foreign technology companies.
4. But it is a decidedly false narrative that any failure to reach a deal will lead to
a market meltdown and economic implosion.
I dunno. I'm hearing a lot of very unhappy muttering in the rural Midwest, where I live. I
think we're facing the very real possibility of a large-scale Trumpian economic disaster, due
to his trade war, negative trending macoeconomic indicators, the unbelievable Trumpian debt
(the biggest debt in the history of the galaxy, putting Obama and Bush Jr., and even WWII
debt to shame), and the looming loss of the dollar's world reserve currency status. Toss in a
global recession, to boot. This feels like "implosion" to me.
5. Instead of access to a billion Chinese consumers, the United States lost more than 5
million manufacturing jobs since 2000.
Typical capitalist hypocrisy. We demand free markets for other people. Never for
ourselves. Many American companies have been doing fine selling to "a billion Chinese
consumers". The problem is, Americans participating in the free market often choose Chinese
goods.
Not only are you full of hot air, Steve-- you and Bolton and the rest of Trump's
Israel-first neocon apologists are effectively destroying our economy and our country. When
the very likely "implosion" does occur, watch the rats (hate to use that metaphor, since the
lowest mangy flea-bitten rat is better than any neocon) scurry for the exits, blaming
everyone but themselves.
Who is Steve Bannon going to blame? Ocasio-Cortez, who else?
Understanding the core nature of China is important to comprehend the lack of flexibility
ingrained in their system. This comes in the ideology that directs its actions. China is
still very much a communist country, and the Chinese Communist Party (CCP) controls
everything. While it may appear both State-owned and private firms operate within China's
economic system. This is mostly an illusion following economic reforms in the 1980s.
In reality, the communist system does not allow for true private ownership and views all
"tech innovation" as essential to its national interests. Thus, private and state-owned
Chinese firms act in the interest of the Chinese regime when it comes to foreign investments
in the high-tech sectors. Below is the second part of a part-two series which explores why
China is on a one-track path and blind to other options going forward. This is a recipe for
conflict.
What pisses me off is the fact that pretty much every western company has decided to
manufacture in China.
My Mrs bought me a coat today. A nice snazzy Italian brand. Then looking at the label it
says made in China. So it's not an Italian coat at all. It's a Chinese coat with Italian
branding.
Burberry do the same thing. They can basically charge whatever they want for coats, and as
a consumer you buy into that British heritage . Low and behold their stuff is made in
China.
Perhaps we should slap the tariffs (I'm not a fan of tariffs BTW,) on the western
companies that continue to outsource to China .
The ceding of national interests, without the wilful, knowing consent of both political
parties, and citizens believing they could simply vote their way out of this or that brand of
swamp, could never have been accomplished ..
The story of the scorpion, and the frog, crossing the river ..
After much pleading by the scorpion, the frog did give the scorpion a lift to safely cross
the river, and after being bitten during the crossing, frog crys out "but you promised you
would not bite me!!"
Scorpion replys, " you knew what i was when you picked me up .. "
The story of the American body politic, on steroids the last 40 -50 years ..
That is exactly what happened. The murican and other corporations moved to the larger
consumer markets for their products, Asia. China has moar than 3 times the population of
murica. Labour is plenty, wages are low, no benefits or overtime. 12 hour days or moar is the
norm there. It's not China that people should be blaming for the transition to manufacture
there. The corporations are all about profits. They care less about you and yoar family or
jobs for you. The corporations are making money like never before. GM sells 3 times as many
cars in China than in murica. It costs money to ship over seas, cheaper to move manufacturing
to where the demand is.
China also has a growing middle class that will be big consumers of goods, whereas murica
has a decling middle class and retiring baby boomers. Murica is in decay. Neglected
infrastructure, dying cities, NY, Baltimore, Seattle, Detroit, Chicago, SanFran, farms are
over producing and need social welfare from tax payers, high consumer debts, low consumption
of goods. Car manufacturers will be back at the Fed window for free tax payers money to avert
total bankruptcy. We've seen this play before and here we are again.
Murica is bankrupt. This is why the banks around the world are buying gold reserves. All
currencies eventually become worthless paper for fire starting or heating in winter. There is
no currency that ever exceeded 100 yrs. as money. Gold has been money for thousands of
years.
Economies work best when currencies are stable in value. Once we know what the goal is, we
then look for a way to achieve it and the best way has always been to base a currency on
gold. Nobody has found a better way, even in the form of a proposal and nobody has ever
needed to find a better way, because gold has always worked very well.
The fight is actually with America's own politicians and corporations. They sold out
America long ago. The Chinese trade differently. They don't have to bomb. It's really too bad
what American democracy stands for today around the world. Nobody wants anything to do with
it and gradually they're dumping it.
British and Roman empires were not much different towards the end of their rein. They
become complacent and arrogant towards other countries. Eventually they run out of friends,
then start woars to rape and pillage gold, silver and resources. An attempt to sustain the
costs of maintaining their exuberant life style and military around the globe. Rome at first
started debasing their gold and silver money. Once trading partners realized their coins were
not pure, they called the empire a fraud and didn't want to trade with the crooks. Woar
ensued.
what a dumbass. bannon represents the wacko christian wing of the zionazi party.
usa oligarchy greed did this to the american people. the chinese happily cooperated likely
wondering how they were being screwed because the usa policy was so stupid. the usa made the
mistake of thinking the chinese would roll over like the japanese and koreans did, once the
spice started flowing.
the chinese don't have to give anything because the usa screwed itself so badly they need
china to keep producing crap for the usa because there is no competitive alternative either
by other countries to fill the gap and certainly not with a built from scratch usa
manufacturing sector. the usa is so stupid it has foreign countries make critical military
tech parts to maximize profit for mic.
does bannon really think the chinese people won't riot if they are unhappy with .gov? does
he remember tianemen square? it's american people who won't do anything about .gov and the
oligarchs screwing them.
according to bannon it is okay for the usa to kill millions of muslims and christians in
the mid east for jewland and the zionazis but wrong for china to control their influence in
china?
bannon's calling is a homeless alchy. he fits the part with lunatic rants and his
appearance.
The problem here isn't the WTO, it's the WTC. Bannon says China entered the WTO in 2001
and have been criminals ever since. Also in 2001 the Neocons started their insane wars after
blowing up the WTC and have been criminals ever since. Eighteen years of pissing away cash
and not minding the store - and these lunatics are back in the White House. Anybody hoping
for a happy ending with China is just as nuts.
You fat ******* zio-slob/slut troll. It may have been a good idea if it were just about
trade and you are willing to actually seek a mutually beneficial compromise, but when you are
also poking them militarily it changes the dynamics of the successful negotiations and
cooperation. Who wants to do a deal with someone who continually sends warships up and down
your coastline in engaging in provactive actions
Bannon has got some screws loose in the head. Getting tough with China isn't going to
bring manufacturing jobs back to the United States for ten reasons:
1. Those jobs have nowhere in the U.S. to come home to. Most of the factories have been
shut down and demolished years ago.
2. American workers have been out of the loop for so long, that they are basically
unskilled and untrained at this point...... all 95.5 million of them!
3. The fight isn't against China, as it is against corporate America. Corporate America
doesn't want to pay the higher wages or benefits here. That is why they went hunting for the
cheap labor in China in the first place. It's not China's fault!
4. America's entire tax system stinks and its predatory. There is nothing that is going to
make those businesses in China go to America , particularly when China is offering those same
companies tax incentives to stay.
5. China's transportation infrastructure is far better than America's. America's road
system is now a full 40 years behind China's, and America's rail system is 75 years behind
China's. Air transportation is about the same as the U.S., but China has the better airports
for handling large number of passengers and freight. Maritime shipping is first rate all the
way, the U.S. can't hardly touch them in moving freight overseas.
6. The United States routinely blocks the World Trade Organization's appointments of
judges who could rule on tariffs, because the U.S. wants to load the dice in their favor at
the WTO. Companies are often used as captive hostages by the U.S.,. Not the case with
China.
7. The U.S. has a notoriety for not honoring any treaty it signs. The WTO has cited the
U.S. as undisciplined, and the decision of whether to comply with international legal
obligations varies depending on which domestic political actors are engaged in the policy
process. Some American institutions are more likely to supply compliance than others. Why
would any company want to come to America without any assurances in governing trade rules or
a hostile political environment that turns on a dime?
8. China is the ideal place for emerging markets. It has access to lots of different
manufacturing for emerging businesses, something the U.S. lacks these days.
9. China has economic free zones, like Shanghai, Hong Kong, Macau, etc.,. The U.S. has
nothing to compare.
10. China's main priority has been shifted from expansion to stability. By stability, what
is implied is demand that is internal, rather than external, and that requires a focus on the
consumer. This could represent an opportunity for businesses that invest in the opportunity
to sell goods in the country. As it stands now, there is really no reason for a company in
China to come to the U.S., because every American is maxed out on credit and doesn't have the
money to buy anything. Why set up a business in the U.S. when the U.S. economy is in imminent
danger of collapsing over night, and becoming a casualty???
This is another false (fraudulent non-existent choice) being presented by the global so
called but no longer existent elite. U.S. vs China. It doesn't make any difference whether it
is the corporations presenting the false choice or the so called deep state. Either way it
has no truth and therefore no value.
As I've provided extensive facts and evidence as details on both sides all governments are
full of traitors. Traitors both foreign, domestic and international. Any future global
attempt at government will never consist of any of these two places or any other since all
others continue to fail in their own right to take the appropriate actions in their own
governments or against those that are attempting to implement wholly criminal operations
internationally.
Very little of the Chinese technology was stolen by them. It was freely given by US
universities getting big bucks to fill seats and US corporations looking to boost executives
pay and perks, plus offloading the headaches they were getting paid big bucks to solve, by
offshoring to China. As evidenced by the recent tax cut for corporations and the funds they
brought back from overseas bringing back or creating jobs in the US is a pipe dream. Your
CEO's thought it was more important to feather their nests, and in many cases putting their
company into hock, to buy back their stock. Raises or funds for R&D? Fuggeddaboutit. With
China in the cross hairs the captains of industry are sailing to other shitholes for their
stuff rather than the US. Don't blame the Chinese for the "best and brightest" selling the US
down the drain to enrich themselves. One of the many reasons the US is circling drain due to
self inflicted hurt is the whole country from top to bottom wants **** and they want it now
no matter what it takes whether it be power, riches, or both.
Trump continued tweeting on the trade situation Monday. "The United States has been losing,
for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion
Dollars. Sorry, we're not going to be doing that anymore!" he wrote.
"Risks of a full blown trade war are escalating," Chua Hak Bin, a senior economist at
Maybank Kim Eng Research Pte. in Singapore, said before the ministry's announcement. "Trump's
threat may backfire as China will not want to negotiate with a gun pointing at their
heads."
... ... ...
China was considering delaying a U.S. trip this week by a trade delegation led by Vice
Premier Liu He after Trump's tariff threat, according to people familiar with the matter. Liu
and about 100 other officials had been scheduled to arrive Wednesday for what was shaping up to
be the final round of negotiations.
The two sides have been locked in intense negotiations since last year for an agreement to
address U.S. concerns over China's trade surplus, alleged theft of intellectual property and
forced technology transfers. Trump and Xi agreed to a tariff truce on Dec. 1 to allow senior
officials time to negotiate.
... ... ...
White House economic adviser Larry Kudlow said on Fox News that the president was "issuing a
warning." While "great progress" has been made in the talks, structural and enforcement issues
remained, he said.
... ... ...
Trump imposed duties of 25 percent on an initial $50 billion of Chinese goods last year and
then 10 percent on an additional $200 billion in products in September. Those duties were set
to rise to 25 percent on Jan. 1 and then again on March 1, but Trump delayed that as talks
continued. China has imposed tariffs on $110 billion of U.S. exports in retaliation and
repeatedly warned it would counter tariffs with actions of its own.
That means there's a risk China would counter any extension of U.S. levies, though the
smaller size of its imports may constrain its ability to do so.
"China isn't likely to make concessions that the U.S. want with a big stick hanging over its
head," said Zhou Xiaoming, a former Ministry of Commerce official and diplomat. "If the tariffs
that Trump threatens are implemented on Friday, China has to respond."
So much for months and months of constant leaks, headlines, tweets, and press reports that
US-China trade talks are going great, and are imminent amid an ocean of "optimism" (meant
solely to sucker in amateurs into the most obvious bull headfake since 1987).
Just after noon on Sunday, President Trump tweeted that 10% tariffs paid by China on $200
billion in goods will rise to 25% on Friday, and that - contrary to what he himself and his
chief economist, Larry Kudlow has said for months, talks on a trade deal have been going too
slowly.
And, just to underscore his point, Trump also threatened to impose 25% tariffs on an
additional $325 billion of Chinese goods "shortly."
With the tariff rate on numerous goods originally set at 10% and set to more than double in
2019, Trump postponed that decision after China and the US agreed to sit down for trade talks;
following Trump's tweet it is now confirmed that trade talks have hit an impasse and that
escalation will be needed to break the stalemate.
It was as recently as Friday that Vice President Mike Pence told CNBC that Trump remained
hopeful that he could strike a deal with China (at the same time as he was urging for a rate
cut from the Fed).
Curiously, on Wednesday, the White House - clearly hoping to sucker in even more naive bulls
to buy stocks at all time highs - said the latest round of talks had moved Beijing and
Washington closer to an agreement. Press secretary Sarah Sanders said, "Discussions remain
focused toward making substantial progress on important structural issues and re-balancing the
US-China trade relationship."
In recent weeks there were multiple reports that China and U.S. were close to a trade deal,
and an agreement could come as soon as Friday. Major sticking points the U.S. and China have
been intellectual property theft and forced technology transfers. There has also been
disagreement as to whether tariffs be removed or remain in place as an enforcement
mechanism.
While it was not clear why Trump has decided to escalate his tariff policy, the most obvious
explanation is that for a White House, which has been obsessed with pushing the S&P to
record levels, this was the last lever it had at its disposal. And now that the S&P is back
at all time highs, the lies can end, if only for the time being.
Meanwhile, crickets about the border/invasion situation, even here on ZH articles. From an
off-duty, decompressing senior border patrol guy I happened to meet - El Paso alone has had
over half a million "migrants" come thru seeking "asylum". They are releasing about 2000 a
week into the US, leasing buildings, including a Las Cruces high school for the weekend to
stage them. he said unusual number of Cubans, maybe from VZ. Lots of sickness/disease, he
personally saw flesh-eating infections, dying AIDS patients, children accompanied by unknown
males. Already 90% who had court hearings were no-shows. They've found cutoff ankle monitors
at airports.Their hands are tied by archaic laws and a (((congress))) unwilling to do ****
about it. The **** governor of NM, Lujan-Grisham ****-blocking any effort to stem the tide.
But articles about giant meteors, James Woods, Russia-gate, China, etc, etc ad nauseum.
Sorry for the hi-jack. The globalists have mobilized their armies. Chinese **** I can live
without, except SKS in a pinch. Might need it when the in country migrant hordes are given
the sign and LE and mil stand down.
BTW< he said two more caravans are forming, one of about 30000.
Interesting to see how the stock market futures will react. If they dive, we can just
blame someone else. If it does good, we can give all the credit to Trump. And if we don't,
Trump will surely give himself credit for it and gloat.
When the U.S. taxes another country's goods, it puts downward pressure on that country's
currency. When China's yuan falls against the U.S. dollar, it makes Chinese goods cheaper,
canceling out some of the effect of the tariff. The yuan was at about 16 cents to the dollar
earlier this year, but as Trump imposed tariffs on Chinese goods and ramped up his trade-war
rhetoric, it fell to roughly 14 cents -- a decline of more than 12 percent:
This
basic fact pattern has been revealed to be worse than it first appeared by virtue of Boeing not
having been explicit that the angle of attack sensor alerts had been disabled on the 737 Max.
Why should Boeing have cleared its throat and said something? Recall that the sales pitch for
the 737 Max was that it was so much like existing 737s that it didn't require FAA
recertification or pilot simulator training. But the angle of attack sensor alert had been a
standard feature in all previous 737s, meaning buyers would assume it was part of the plane
unless they were told otherwise. And on top of that, the non-upgraded 737 Max did have lights
in the pilots' controls for this alert. But they didn't work unless the buyer had purchased the
package of safety extras.
And the proof that Boeing was playing way too cute with its pointed silence about its
deactivation of what had been a standard feature? The biggest customer for the 737 Max,
Southwest Airlines, had inaccurate information in its pilots' manual because the airline had
mistakenly assumed the angle of attack sensor alerts worked as they had on earlier 737s.
From the Wall Street Journal:
Boeing Co. didn't tell Southwest Airlines Co. and other carriers when they began flying
its 737 MAX jets that a safety feature found on earlier models that warns pilots about
malfunctioning sensors had been deactivated, according to government and industry
officials.
Federal Aviation Administration safety inspectors and supervisors responsible for
monitoring Southwest, the largest 737 MAX customer, also were unaware of the change, the
officials said.
The alerts inform pilots whether a sensor known as an "angle-of-attack vane" is
transmitting errant data about the pitch of a plane's nose .
Southwest's management and cockpit crews didn't know about the lack of the warning system
for more than a year after the planes went into service in 2017, industry and government
officials said. They and most other airlines operating the MAX learned about it only after
the Lion Air crash in October led to scrutiny of the plane's revised design.
"Southwest's own manuals were wrong" about the availability of the alerts, said the
Southwest pilots union president, Jon Weaks.
Boeing reduced the production rate on the 737 line in mid-April from 52/mo to 42/mo in
response to the grounding of the airplane by regulators worldwide.
The company and others said they didn't know how long the airplane would be
grounded.
But Boeing told suppliers to keep producing parts, components and the fuselage at rate
52.
Boeing already had a ramp-up plan in place;
According to the information LNA learned at the, this is the schedule for ramping back
up:
• Rate 42/mo, April and May;
• Rate 47, June;
• Rate 51.5, July and August; and
• Rate 57, September.
Boeing originally planned to go to 57/mo in June or July.
Good luck with that. The upside is that this corporate controlled flight into terrain
will someday make a great B-school case study.
Edit: If you Captcha-train an autonomous vehicle not to run into bicycles, and it gets
into an accident,
are you legally liable? Asking for a friend.
Oh man, this is bad. Really bad. This story just gets worse and worse over time. It's like
one of those Russian Matryoshka dolls – just when you think that you have a handle on
what happened, you find that there is a whole new layer of ugliness underneath. When the hell
did safety become an optional extra on Boeing aircraft? After reading this, I think that it
was a minor miracle that there were no 737 MAX crashes in the continental United States. By
the sounds of this article, it would have likely been a Southwest airliner if it had
happened. I am wondering what else will come out of this saga that we don't know about
yet.
I would say that Boeing easily falls into the 'Too big to fail.' category.
So no matter what happened they will be either made whole (more defense contracts,
taxpayer bailout if necessary, whatever is needed) or protected in some way tbd. They are a
100 billion a year company with 150,000+ employees and untold numbers of other contractors
and jobs depending on their existence. Going away is just not going to happen.
Okay, Boeing screwed the pooch again, and they should have been more clear in their
communications to the airlines. However, let me add some perspective as a 737 operator.
Given the AOA malfunction in either the Lion Air or Ethiopian accidents, an "AOA Disagree"
warning annunciation would have possibly been helpful, but not really crucial to the safe
recovery of the aircraft. There were plenty of other indications that the AOA's were
disagreeing – namely that only one of the stick shakers was activated. Once you get
over the initial surprise, it shouldn't have been that hard to determine this fact. The lack
of the AOA display and disagree annunciator is not what doomed these crews.
I've never had a flight emergency as a pilot, but had a few as a diver. I suspect that for
both of those, when they hit, you need to resolve things quickly and efficiently, with panic
being the worst enemy.
Panic in my experience stems from a number of things here, but two crucial ones are:
– input overload
– not knowing what to do, or learned actions not having any effect
Both of them can be, to a very large extent, overcome with training, training, and more
training (of actually practising the emergency situation, not just reading about it and
filling questionairres).
So, if the crews were expecting to see AoA disagree but it wasn't there, they could have
easily be misled and confused. The crews weren't (from what I've seen) hugely experienced. So
any confusion would have made a bad situation even worse. How big an impact it made is hard
to judge w/o any other materials.
Well it is rarely just one thing that causes an "accident". There are multiple
contributors here. But the one basic overarching cause was Boeing's insistence that
there-will-not-be-any-additional-training.
Without that management decree, the Max could be flown without the hack of MCAS, just that
the pilots be trained on the new pitchup characteristics.
And releasing MCAS into the wild without even alerting pilots to its existence, well, that
is manslaughter, if not outright murder.
My takeaway from the IEEE article was that the AOA sensor is almost a red herring. The dog
that didn't bark was a pitch sensor, and the cardinal sin (from a software perspective) was
that the MCAS algo did not consider pitch sensor values when deciding whether or not to angle
the plane towards ground.
I suggest reading some of the other pieces on the 737 debacle on NC. There's been
extensive discussion of the details, and yes the pilots may be partially to blame, but are
the least culpable out of all parties involved.
Given that story states that Boeing was more or less silent on the disabling of the sensor
alerts, it's is reasonable to posit that any 737 pilot stepping into a 737 MAX would expect
the sensor to be active.
I can understand the position that a pilot still needs to be skilled enough to not be 100%
reliant on sensors, warning lights etc. to fly the plane. However, if I already assume that a
sensor is active and it's not providing a signal that I would be potentially anticipating,
it's going to seed doubt in my mind in a scenario where you don't have much time at all to
think things through.
On the other hand: a safety light that is deactivated without telling the airlines and
pilots gives false negatives to pilots at a critical juncture. They assume it's active, check
it, and see a false negative they don't realize is false.
Imagine having a 'check engine' or 'oil' light on your car's dashboard that's been
deactivated. They never come on. But they're still there. The driver assumes they'll light if
there's engine trouble that needs attention.
Boeing's actions don't pass the 'reasonable man' test.
Yeah, normally if a mechanical gauge "knows" that it isn't working there will be a little
flag that pops up across the display. Leaving the light there but inoperative instead of
either removing the light or covering it up with an "inoperative" cover is a really bad idea.
It is EVEN WORSE than making safety features optional, and that is bad enough.
Let's see
First, they didn't know MCAS existed, so had no idea or training in what to do when it was
erroneously engaged by system.
Then, they think both Aos sensors are working properly.
And, Boeing tells everybody plane is just like previous versions, no need for
simulations.
I'm glad I'm not one of the dead pilots you're blaming.
By the way, it's apparently just chance that the bad sensors affected foreign and not
domestic flights, no public reports that superior domestic pilots had no problem when it hit
the fan on their watch although some domestic airlines were told (warned) that bad sensor
light was optional extra so possibly a domestic plane cancelled flight on account of bad
sensor.
But imagine a really experienced pilot would have saved the day so Boeing should say only
really experienced pilots should fly the plane? Maybe simulators help you get really
experienced, especially with unexpected emergencies?
Personally, I'll avoid the plane for a few years if simulators aren't required hate to have a
pilot not experienced with what we now know is not such a rare event.
We seem to be forgetting that, in the Lion Air case, a really experienced pilot did
save the day the previous day on the same aircraft . The issue was reported, the
airline neglected to repair the issue and nobody seems to have told the new aircrew about the
issue. This seems to support 737 Pilot's position. It is also another egregious failure, this
time on the part of the airline.
That pilot was a third set of eyes. Since he didn't have to fly the plane, he was free to
observe and fortunately his attention eventually focused on the repeating trim wheel
movements. A standard two-person crew doesn't have this luxury. Worth keeping in mind.
That lion crew also seems to have written up the problem incompletely. They didn't
mention, for example, that they had the stick shaker going for the entire flight.
Your point is legitimate but without the benefit of a CVR recording I think you may be
affording too much credit to the jumpseating pilot who is rumored to have provided the flight
crew with the excellent advice of disabling the electric stabilizer trim motor. Even if the
story is entirely true it's not like turning off the Stab trim motor was esoteric knowledge,
maybe 737 pilot can correct me on this but I thought that procedure was a memory item for
trim runaway emergencies, meaning the pilots were supposed to have that bit of knowledge
firmly committed to memory and they were supposed to execute that procedure without any
checklists or undue delay as soon as the condition was recognized. If not a memory item it
was in the 737 QRC or QRH emergency procedures guide that is always present for immediate
reference on the flight deck. The most important thing the crew of Lion Air 43(?) did (the
flight previous to 610 that managed not to crash) was to simply not let themselves become so
frazzled they forgot to pull the thrust levers out of the take-off detent after they reached
a safe altitude, and not overspeeding an out of trim airplane making a bad situation worse.
Maybe the jumpseating pilot had to scream at the crew to reduce thrust and maybe he had to
slap the Captain and reduce the thrust levers himself, but absent a CVR recording to verify
this slightly far-fetched scenario I would say the previous crew deserves the Lion's share
(sorry couldn't resist) of the credit for landing safely.
You are absolutely 100% correct when you point out the non-crashing Captain was far from
exemplary. He laid an absolutely vicious trap for the ill-fated crew of flight 610 by failing
to mention a great number of things he experienced, especially the uncommanded and unwanted
nose down trimming that necessitated turning off the stab trim motor which he also failed to
communicate. Not a shining moment for Lion Air pilots, mechanics or Boeing. Despite the
obvious and multiple shortcomings and blunders of the Captain/crew of Lion Air 43, I believe
that flight proves what the airline pilot commenters here have been saying all along, which
is the 737 Max flaws were serious but survivable with a competent crew. That's not the same
thing as calling the airplane safe or airworthy and it's certainly not excusing Boeing. They
delivered a death trap. Perhaps a bad analogy, but a professional body guard should be able
to easily disarm a five year with a knife, but that doesn't mean a murderous five year with a
knife isn't dangerous or isn't capable of killing you. Airplanes are machines which
inevitably fail and mechanics are humans who make mistakes which is why pilots need to know
how to hand fly airplanes absent automation. Reducing thrust during an emergency to avoid
overspeeding your airplane really isn't a tall ask for a professional pilot. Pilots get this,
non-pilots don't, and it's a point I've grown quite weary of making.
There's been interesting points made back and forth on NC – what do you make of this
from Karl Denninger: basically, "You can't fix the problems the 737Max has with software
alone"? https://market-ticker.org/akcs-www?post=235578
I made the exact same argument here a couple of days ago, but I will say IF the system was
engineered in a way it could have given the Ethiopians a warning prior to eighty knots or V1
(depending on training and pilot judgement) on takeoff, maybe they could have aborted and
kept the plane on the ground avoiding the disaster. Having that disagree light or indication
immediately after rotation on climbout could have soothed the nerves of the pilots and made
them feel more confident trusting the perfectly normal instrumentation on the FO's side of
the airplane. But if the high speed clacker, the airspeed tape and the thrust settings aren't
enough information to convince a overwhelmed, elevator control fixated pilot that he/she has
more than adequate speed to avoid stalling, and they should slow down, then it stands to
reason a secondary warning indication would also not break through the mental logjam of two
very overwhelmed pilots bombarded by warnings and data. In the case of Lion Air 610 the
malfunctioning AOA vane had already caused multiple instrument malfunctions and improper nose
down MCAS trimming on three other flights, so it seems like those guys were hellbent on
flying that plane no matter what. Even if Lion Air would have had the optional warning system
onboard the mechanics most likely would have deferred the warning system as broken. "Ops
checks good". They probably would have removed the bulb or stuck a placard on top of it.
And before anyone feels the need to point it out, yes, I'm engaging in speculation, but so
is everyone claiming this optional safety system would have made a difference in the two
aforementioned tragedies. I'm engaging in speculation as a guy who has reviewed thousands of
logbooks and had hundreds, possibly thousands of interactions with airline maintenance
technicians. Some of those interactions include contentious debates over what is safe to
defer or what can actually legally be deferred so I do have a bit of experience in this
department.
Boeing screwed up. They were hasty, they were greedy, they were cavalier, the MCAS trim
system with a single point of failure was a terrible design that was most likely criminal.
I'm just weighing in on 737 pilot's contention. With a system as poorly designed as the MCAS
stall protection trimming, every safety feature available should have come standard from
Boeing, but sadly additional fault indications don't always matter in emergency situations.
Proper fault diagnosis is only part of any successful emergency outcome. Pilots still have to
possess the knowledge and skill required to follow procedures and fly the airplane.
The only planes I ever flew you'd fly w/o pretty much any instrumentation (WW2 trainers,
hoping to fly a Spitfire or Mustang one day.. ).
But in a modern plane, I'd think that _any_ instrument that is doubled or more (which
implies some sort of criticality) should have an automatic "inputs disagree" indicator, which
would not be possible to turn off.
Not that you'll have to buy it as a special feature.
I have been thinking about the modern 737. My completely uninformed guess is that the
original model, while less "safe" was more informative in a real way than the current
one.
In modern cars, especially something like a hybrid, there is not much "feel" to it. In an
older old fashion gasoline engine car, there is. I could use the Volkswagen as an example,
because it only had some colored lights and the speedometer, and none of the safety features
of a modern car. However, I could sense, smell, see just about everything, often
subconsciously, even before something went kablowie because there was nothing isolating me
from the vehicle and the road. Today, I have to depend on my car's sensors because it has
been designed to be quiet and isolating as possible.
The downward slide of corrupt predatory capitalism is not a pretty picture. These cases
will continue as long as the responsible executives know they have nothing to lose.
Just more proof that self regulation works, just look to our favorite sporting events!
There's no need to have refs on the field because everyone involved is a professional and
would never cheat, disrespect the sport or do something against the rules because the fans
would punish them!
If our sports don't need refs, then surely our markets don't need regulators! Checkmate, big
government stooges!
I suppose I am naive, but I am shocked that the behavior of Boeing's management and the
FAA are not being treated as a criminal matter. What happened was not a business mistake, it
was a crime in which a number of persons deliberately and knowingly decided to risk other
people's lives in order to increase profits, as a result of which hundreds of people were
killed. I believe the term is 'negligent homicide', upon conviction of which lesser beings
than high management and bureaucrats go to jail. In some countries their next of kin would
already have received a bill for bullets and services rendered.
The term used to be criminally negligent homicide, but this no longer applies to those
wearing white collars.
Otherwise we would see charges against bankers, opioid pushers, and others.
But Boeing, as part of a duopoly, recognizes that its customers have nowhere to go .at
least for the next few years, which might as well be eternity as far as MBAs are
concerned.
Even if it meant drastically reducing flights why would any airline buy airplanes that are
not guaranteed to be safe? Losing money through fewer paying customers because you are
choosing to have fewer flights is better than being boycotted or bankrupted by lawsuits, or
arrested and criminally charged.
It is inexplicable that Boeing shut off an indicator system for the Max that had been
standard on earlier versions of the 737, when that AoA sensor disagreement indicator was even
more important for safe flight.
Turning it on in the Max version was possible but was made part of an extra-cost safety
package. How would a purchaser know to buy it when Boeing downplayed its importance so as not
to suggest how different the Max was from supposedly similar earlier versions of the 737?
The more that comes out about the conduct of Boeing and its senior management's decisions,
the more they look criminally reckless.
The FAA is mostly responsible for this fiasco because they have a misguided mission.
Safety should be their only concern, but over the years that's eroded into a "sort of safety"
attitude but mostly being a cheerleader for the aviation industry.
And you can't trust bastards like Boeing to "self-certify" anything, apparently!
"..It took months before Boeing CEO Dennis Muilenburg issued a video in which, among other
things, he said, "We own it." He was referring to safety of the MAX.
This was widely interpreted as Boeing stepping up and taking responsibility for at least
some of the causes of the Lion Air and Ethiopian Airlines crashes.
Last Wednesday, he took it all back.
On the first quarter earnings call, Muilenburg denied there was any "technical slip or
gap" in designing the now famous MCAS system. He said "actions not taken" contributed to the
crash, a thinly veiled reference once again to pilot error.."
Boeing and FAA are criminally negligent especially for the Ethiopian Airline crash. The
recovered horizontal stabilizer screw jack from the Lion Air crash was found in the full nose
down position that forced the plane to dive into the sea. It should have never be in this is
flight critical position. Grounding the fleet should have been immediate until the cause and
fix were found. On top of all this, it is simply criminal for Boeing to charge Southwest
Airlines for additional safety features and then turn them off not telling the airline.
It is tragic that it appears that Americans will have to rely on China to force Boeing to
actually fix MCAS and along with Canada to shame the FAA into requiring pilot training on
Flight Simulators before flying passengers on the Max.
A Boeing C-Suite executive has to go to jail. If not, there is no chance for the United
States of America to survive. With government run by and for profiteers, long term planning
is dead. Profit over people. A plague, an economic crash, a world war, a middle-class revolt,
flooded coasts, or an autocratic Caesar become inevitable.
[Nader's] niece, 24-year-old Samya Stumo, was among the 157 victims of an Ethiopian
Airlines flight crash last month, less than six months after a flight on the same aircraft,
the Boeing 737 Max 8, crashed in Indonesia.
"She was compassionate from the get-go. She'd be 8 years old and she'd get a pail of hot
water and go to her great-grandmother and soak her feet and rub her feet and dry them. She
was always that way."
Clifford Law has brought suit on behalf of the Stumo family in the United States District
Court for the Northern District of Illinois. From the
complaint :
Blinded by its greed, BOEING haphazardly rushed the 737 MAX 8 to market, with the
knowledge and tacit approval of the United States Federal Aviation Administration ("FAA"),
while BOEING actively concealed the nature of the automated system defects. Numerous
decisions by BOEING's leadership substantially contributed to the subject crash and
demonstrate BOEING's conscious disregard for the lives of others, including but not limited
to BOEING's role in: designing an aircraft with a powerful automated flight control system
[the MCAS] susceptible to catastrophic failure in the event a single defective sensor;
failing to properly inform pilots of the existence of the new flight control system and
educate and train them in all aspects of its operation; failing to properly address the new
system in the aircraft's flight manual; refusing to include key safety features as standard
in the aircraft rather than optional upgrades; delivering 737 MAX aircraft with a version of
the flight control system that was materially different from the version presented to the FAA
during certification; and failing to take appropriate action after BOEING learned that the
737 MAX aircraft was not performing as intended or safety, as was made tragically clear with
the crash of Lion Air Flight JT 610.
BOEING's decision to put profits over safety is further evident in BOEING's repeated
claims that the 737 MAX 8 is so similar to its earlier models that it does not require
significant retraining for those pilots familiar with the older generation of 737s.
All pretty much conventional wisdom at this point! The suit also calls for exemplary (punitive)
damages ; I've embedded the complaint at the end of the post, in case any readers care to
dig into it. I'm not going to examine the case in this post; rather, I'm going to focus on
three items from Naders letter that I think advance the story: His framing for 737 MAX
airworthiness; his highlighting of Boeing's stock buybacks; and his call for Boeing CEO
Muilenburg's defenestration.
(Stalling, in Nader's telling, being the condition the defective MCAS system was meant to
correct.) Because aircraft that are aerodynamicallly unstable, llke fighter jets, have ejection
seats! Now, a pedant would point out that Nader means commercial aircraft , but as
readers know, I eschew pedantry in all contexts. That said, Nader manages to encapsulate the
problem in a single sentence (using antithesis , isocolon , andanaphora ). Now, we have pilots in
the commentariat who will surely say whether Nader's formulation is correct, but to this
layperson it seems to be. From 737 MAX, a fan/geek site, on the business and technical logic of the MCAS system :
The LEAP engine nacelles are larger and had to be mounted slightly higher and further
forward from the previous NG CFM56-7 engines to give the necessary ground clearance. This new
location and larger size of nacelle cause the vortex flow off the nacelle body to produce
lift at high AoA [Angle of Attack]. As the nacelle is ahead of the C of G, this lift causes a
slight pitch-up effect (ie a reducing stick force) which could lead the pilot to
inadvertently pull the yoke further aft than intended bringing the aircraft closer towards
the stall. This abnormal nose-up pitching is not allowable under 14CFR §25.203(a) "Stall
characteristics". Several aerodynamic solutions were introduced such as revising the leading
edge stall strip and modifying the leading edge vortilons but they were insufficient to pass
regulation. MCAS was therefore introduced to give an automatic nose down stabilizer input
during elevated AoA when flaps are up.
Nader on Stock Buybacks
From Nader's
letter , where he is addressing Muilenberg ("you") directly:
Boeing management's behavior must be seen in the context of Boeing's use of its earned
capital. Did you use the $30 billion surplus from 2009 to 2017 to reinvest in
R&D, in new narrow-body passenger aircraft? Or did you, instead, essentially burn this
surplus with self-serving stock buybacks of $30 billion in that period? Boeing is one of the
companies that MarketWatch labelled as "Five companies that spent lavishly on stock buybacks
while pension funding lagged."
Incredibly, your buybacks of $9.24 billion in 2017 comprised 109% of annual
earnings . As you well know, stock buybacks do not create any jobs. They improve the
metrics for the executive compensation packages of top Boeing bosses [ka-ching]. Undeterred,
in 2018, buybacks of $9 billion constituted 86% of annual earnings .
To make your management recklessly worse, in December 2018, you arranged for your
rubberstamp Board of Directors to approve $20 billion more in buybacks. Apparently, you
had amortized the cost of the Indonesian Lion Air crash victims as not providing any
significant impact on your future guidance to the investor world.
Holy moley, that's real money! Nader's detail on the stock buybacks (see NC here
,
here , and here )
interested me, because it bears on Boeing's 2011 decision not to build a new narrow-body
aircraft in 2011. I
summarized the decision-making back in March:
(2) Choice of Airframe : The
Air Current describes the competitive environment that led Boeing to upgrade the 737 to
the 737 MAX, instead of building a new plane:
Boeing wanted to replace the 737. The plan had even earned the endorsement of its
now-retired chief executive. "We're gonna do a new airplane," Jim McNerney
said in February of that same year. "We're not done evaluating this whole situation
yet, but our current bias is to not re-engine, is to move to an all-new airplane at the end
of the decade." History went in a different direction. Airbus, riding its
same decades-long incremental strategy and chipping away at Boeing's market supremacy,
had made no secret of its plans to put new engines on the A320. But its own re-engined jet
somehow managed to take Boeing by surprise. Airbus and American forced Boeing's hand.
It had to put new engines on the 737 to stay even with its rival .
Why? The earlier butchered launch of the 787:
Boeing justified the decision thusly: There were huge and excruciatingly painful
near-term obstacles on its way to a new single-aisle airplane. In the summer of 2011, the
787 Dreamliner wasn't yet done after billions invested and years of delays. More than 800
airplanes later here in 2019, each 787 costs less to build than sell, but it's still
running a $23 billion production cost deficit. . The 737 Max was Boeing's ticket to
holding the line on its position -- both market and financial -- in the near term.
Abandoning the 737 would've meant walking away from its golden goose that helped finance
the astronomical costs of the 787 and the development of the 777X.
So, we might think of Boeing as a runner who's tripped and fallen: The initial stumble,
followed by loss of balance, was the 787; with the 737 MAX, Boeing hit the surface of the
track.
So, Dennis. How's that workin' out for ya? How does the decision not to build a new
plane look in retrospect? Ygeslias writes in
Vox, in April:
Looking back, Boeing probably wishes it had just stuck with the "build a new plane" plan
and toughed out a few years of rough sales, rather than ending up in the current situation.
Right now the company is, in effect, trying to patch things up piecemeal -- a software update
here, a new warning light there, etc. -- in hopes of persuading global regulatory agencies to
let its planes fly again.
What Nader's focus on stock buybacks shows, is that Boeing had the capital to invest in
developing a new plane .
From Bloomberg in 2019 :
For Boeing and Airbus, committing to an all-new aircraft is a once-in-a-decade event.
Costs are prohibitive, delays are the norm and payoff can take years to materialize. Boeing
could easily spend more than $15 billion on the NMA, according to Ken Herbert,
analyst with Canaccord Genuity, and Airbus may be forced into a clean-sheet design if sales
take off.
The sales force has been fine-tuning the design with airlines for at least five years,
creating a "will it or won't it?" drama around the decision on whether to make the plane,
known internally at Boeing as the NMA, for new, middle-of-market airplane.
Now, it is true that the "huge and excruciatingly painful near-term obstacles" referred to
by the Air Current are sales losses that Boeing would incur from putting a bullet into it's
cash cow, the 737, before it turned into a dog (like now?). Nevertheless, Beoing was clearly
capable, as Yglesias points put, of "tough[ing]out a few years of rough sales." So what
else was "excruciatingly painful"? Losing the stock buybacks (and that sweet, sweet
executive compensation). Readers, I wasn't cynical enough. I should have given consideration to
the possibility that Muilenburg and his merry men were looting the company!
Consider, in addition, the statement of two Harvard scholars -- Leonard J. Marcus and Eric
J. McNulty, authors of the forthcoming book, You're It: Crisis, Change, and How to Lead When
it Matters Most. These gentlemen did not achieve their positions by using strong language.
That is why, the concluding statement in their CNN article on March 27, 2019, merits your
closer attention:
"Of course, if Boeing did not act in good faith in deploying the 737 Max and the Justice
Department's investigation discovers Boeing cut corners or attempted to avoid proper
regulatory reviews of the modifications to the aircraft, Muilenburg and any other executives
involved should resign immediately. Too many families, indeed communities, depend on the
continued viability of Boeing."
These preconditions have already been disclosed and are evidentially based. Your
mismanagement is replete with documentation, including your obsession with shareholder value
and executive compensation. There is no need to wait for some long-drawn out, redundant
inquiry. Management was criminally negligent, 346 lives of passengers and crew were lost. You
and your team should forfeit your compensation and should resign forthwith.
All concerned with aviation safety should have your public response.
I can't find anything to disagree with here. However, I'll quote from commenter Guido at
Leeham News,
March 29, 2019 :
What I don't understand: Muilenburg was the CEO when the MCAS code was implemented.
Muilenburg was the CEO when Boeing "tweaked" the certification of the B737Max. It was the
Boeing management that decided, that the B737Max must under no circumstances trigger
simulator training for pilots.
Muilenburg has for sure not written the code for MCAS by himself, but as the CEO he is
responsible for the mess. He is responsible, that the first version of MCAS was cheap and
fast to implement, but not safe. It was basically Muilenburg, who allowed a strategy, that
was basically: Profits and Quickness before safety. Muilenburg has the responsibility for 346
dead people. You can't kill 346 people with your new product and still be the highly paid CEO
of the company. There have to be consequences.
Why are there no calls, that Muilenburg must step down?
However, a search of court documents and news reports shows the company is facing at least
34 claims from victims' families and one claim seeking class certification on behalf of
shareholders. The claims allege Boeing is responsible for losses after installing an unsafe
anti-stall system, called "MCAS" (Maneuvering Characteristics Augmentation System), on its
737 Max 8 planes, suspected to have played a role in both crashes. Boeing CEO Dennis
Muilenburg said it was "apparent" the system had been activated in both crashes.
Added to the uncertainty of potential expenses for Boeing are pending regulator
probes. The U.S. Justice Department initiated a criminal investigation into Boeing's Federal
Aviation Administration certification, as well as how it marketed its 737 Max 8 planes. The
U.S. Department of Transportation's Office of Inspector General is also conducting an
inquiry.
On April 9, the lawsuit seeking class certification was brought on behalf of shareholders who purchased Boeing stock
between January 8, 2019 and March 21, 2019. The proposed class period covers a time frame
beginning after the Lion Air crash, and extending beyond the Ethiopian Airlines crash, when
Boeing's stock experienced a steep decline.
But then again, Muilenberg may know -- or think -- that Boeing, as a national champion, is
too big to fail. So, if Boeing gracefully exits from the commercial aviation business, it may
find the warm embrace of government contracting more comfortable. Perhaps that's why propaganda
like this suddenly started showing up in my Twitter feed:
I suppose it's too much to ask that the CEO of a too-big-to-fail company be asked to resign,
even if he did kill a lot of people. But if Nader can do with the 737 MAX, at the end of his
career, what he did with
the Corvair ("a one-car accident") , when he was coming up, everybody except for a cabal of
looters and liars in Boeing's Chicago C-suite will be a lot better off. So we can hope.
I keep going back to the DC-10 fiasco in the 1970s.
In 1974, in one of the most horrific air disasters of all time, a THY (Turkish Airlines)
DC-10 crashed after takeoff from Orly Airport outside Paris, killing 346 people. The accident
was traced to a faulty cargo door design. (The same door had nearly caused the crash of an
American Airlines DC-10 two years earlier.) McDonnell Douglas had hurriedly designed a plane
with a door that it knew was defective, then, in the aftermath of Paris, tried to cover the
whole thing up. It was reckless, even criminal. Then, in 1979, American flight 191, also a
DC-10, went down at Chicago-O'Hare, killing 273 -- to this day the deadliest air crash ever
on U.S. soil -- after an engine detached on takeoff. Investigators blamed improper
maintenance procedures (including use of a forklift to raise the engine and its pylon), and
then found pylon cracks in at least six other DC-10s, causing the entire fleet to be grounded
for 37 days. The NTSB cited "deficiencies in the surveillance and reporting procedures of the
FAA," as well as production and quality control problems at McDonnell Douglas.
That's two of history's ten deadliest air crashes, complete with design defects, a
cover-up, and 619 dead people. And don't forget the 737 itself has a checkered past, going
back to the rudder problems that caused the crash of USAir flight 427 in 1994 (and likely the
crash of United flight 585 in 1991). Yet the DC-10, the 737, and America's aviation prestige
along with them, have persevered. If we survived the those scandals we can probably manage
this. I have a feeling that a year from now this saga will be mostly forgotten. Boeing and
its stock price will recover, the MAX will be up and flying again, and on and on we go.
This is how it happens.
Maybe. But in 1974, the United States was commercial aviation. Airbus had launched
its first plane, the A300 , only in 1972. We were also an
imperial hegemon in a way we are not now. For myself, I can't help noticing that it was
Boeing's takeover of a wretched, corrupt McDonnell Douglas -- the
famous reverse takeover -- that ultimately turned Boeing from an engineering company into a
company driven by finance. With resulits that we see.
The fact that the CEO and the Board have not resigned just shows everyone that they lack
all the essential characteristics of human beings.
Stock buybacks should be illegal. Profits should only be distributed via dividends or
reinvested. The fact that companies can do this shows how corrupted our governments are.
The rest of the world may forget this one. I won't and there are millions like me who will
never step aboard a boeing plane again.
The only thing that will save this company now is the US govt, which is likely.
Boeing's management is not going to jail and likely will keep their jobs. The deaths of
over three hundred people means nothing. They are not even American and probably only middle
class so they don't have connections to use. The "American" company Boeing has both money and
connections.
Money gives you rights and if you don't have it, you are not even a human being.
Just look at 2008. The Vampiric Octopus called Wall Street was saved by the Feds with
almost no one going to jail, or even criminally prosecuted. The exceptions of an innocent
small community bank in NYC and some low level employees of a very few loan companies. The
entire planetary economy came to with in hours of freezing and then collapsing. Millions of
Americans lost homes, often through questionably legal foreclosures, with many millions more
losing their jobs.
Nothing going to change and I wish I could believe otherwise.
So I should just fire up my own money press then as should everyone else Money was
invented as a limiter by the ancient church then adopted by governments.. Money isnt
necessary to live and it will b thrown overboard soon enough.
I think money as a concept arose in Sumer about 6-7 thousand years ago with the clay
receipts given by the temple of the local city's patron god for livestock and grain stored
there.
But my knowledge of money's history is limited. If anyone wants to correct or clarify,
please do.
Might be wrong but think (if my memory of Gerber serves) you refer to credit/debt. Actual
money (coin) I think arose along side the use of large scale Armies (armies are both highly
mobile & inherently amorphous -- ie people come & go, die, are wounded, loot must be
traded etc, all of which is difficult in the absence of currency)
Stock buybacks were once illegal because they are a type of stock market manipulation. But
then Reagan got in and wanted to do his banker buddies a favour-
To think that Boeing has Ralph Nader of all people on their case. With apologies to Liam
Neeson, Nader might be saying to Muilenberg right now: "If you are looking for (forgiveness),
I can tell you I don't have (forgiveness). But what I do have are a very particular set of
skills, skills I have acquired over a very long career. Skills that make me a nightmare for
people like you. If you go now, that'll be the end of it."
That sounds like good advice that.
Re-outlawing the "Stock Buyback" would be one useful reNew The Deal reform. Outlawing
compensation in stocks, options, or etc. of any kind except money would be another useful
Newer Deal reform. Both together would force-multiply each other's effect.
I hope the four Old Real Democrats have people reading these threads and taking any
possibly-good ideas back to headquarters. I hope the New Catfood Democrats and their people
aren't spying or eavesdropping on these threads.
I love how Nader brings stock buy-backs into his letter and basically connects the dots
from a recklessly designed aircraft system full circle to an indictment of our current
shareholder value system of capitalism and its perverse incentive structure which includes
safety shortcuts and runaway executive compensation. Such a perfect case study for this
site!
I think Nader really should beat the drum heavily on the perverse incentive structure at
Boeing and how executives shortchanged safety to grab more money for themselves because
that's an easy story for a jury to understand. I see where Nader is going with the inherently
"stall prone" aerodynamic design stuff, and he's not wrong, but I think he may be treading on
dangerous ground. Automatic stabilizer trimming systems designed to overcome the negative
aerodynamic attributes of the new 737 Max wing/engine design is a confusing rabbit hole for
the lay person. Boeing attorneys and expert witnesses may be able to twist the jury's head
into a pretzel on this issue. The debate and discussion here concerning process, decision
making, design philosophy etc at Boeing has generally been of very high quality, but has a
tendency to go off the rails when the discussion dives too deeply into the subject matter of
aerodynamics and aircraft systems. I could see the same dynamic playing out in the courtroom.
Nader is the master class-action consumer advocacy attorney not me, but I think he should go
heavy buybacks and whistle blower warnings while avoiding unforced errors arguing over the
not-so-important point of whether or not the 737 Max crashed because it was stall prone or
because it was too stall adverse. Two brand new Boeings crashed, people died, Boeing was
greedy, Boeing was hasty, the MCAS trim system was garbage and probably criminal. He's got a
slam dunk case arguing the MCAS trim system with a single point of failure was poorly
designed and recklessly conceived, I think he should just stick to that and the greed angle
and avoid the stall prone vs. stall adverse debate. I wish him luck.
They screwed up the plane design then thought an extra layer of software would ameliorate
the problem enough. It sucks but it's probably just good enough. Seems pretty simple.
As JerryDenim touched on, a good defense lawyer would probably be able to defeat this
argument in front of a jury. There are too many examples of successful and safe commercial
aircraft with aerodynamic compromises (the hardware, as you call it) that use software fixes
to overcome these limitations. The focus in this case would need to be on the implementation
of that software and how criminal neglect occurred there.
Boeing's attorneys are going to try and make any lawsuits a question of why the airplanes
ultimately crashed. I hate to spoil it for anyone, but I can tell you Boeing's attorneys are
going to blame it all on the pilots. Airlines and airplane manufactures always do. Nothing
new. Dead pilots can't defend themselves, their families don't have millions in the bank and
they aren't going to be placing any billion dollar aircraft orders in the future. If anyone
has read my frequently maligned comments, you already know the line of attack. Not following
the runaway trim procedures and overspeeding the aircraft with takeoff thrust set. That's why
Nader or anyone else pursuing Boeing would do well to sidestep the "why did two Boeing 737
Max Jets crash" question and stick to the details surrounding the horribly flawed MCAS trim
system and the Boeing corporate greed story. Steer clear of the pilots' actions and the
potentially confusing aerodynamics of modern jetliners, keep the focus squarely on the MCAS
trim system design process and executive greed.
Anyone prosecuting Boeing will have to deal with Boeing's defence, which as noted, will
play up the commoness of such technical compromises. I do wonder whether Boeing will go after
the pilots, though.
Any pilots argument naturally raises Boeing's negligence re : training, flight manuals &
communication. The prosecution case will naturally play up the greed aspect as
cause/motivation/
context for the crashes & Boeing's direct responsibility /negligence.
The defense would likely also pull in the airlines and FAA as targets for liability, as
both have some responsibility for these matters. Attacking the FAA would be fodder for the
de-regulators (Privatize it! Government is incompetent!). The airlines would complain that
competition forces them to cut costs, and that they meet all of the (gutted) legal
requirements.
I agree with focusing on the greed aspect. Nader's letter has some technical errors such
as stating the engines were tilted (they were moved horizontally and vertically, not rotated)
that show he hasn't fully understood the details. It doesn't help that many of the changes
made to the 737 MAX from previous generations are actually quite subtle, and can't really be
discussed individually for this context. It is the sum of these changes that made it an
extremely deadly aircraft.
The other failure/business feature is the concept of modularity. The software designed to
fix the aerodynamic complexities is broken down into modular components, and then sold off as
"options". Once again greed sabotages the system. Modularity is a great way to gouge
customers and lock in higher profits. The level of technical competence needed to properly
evaluate what modules are essential complicates the outcome. But then again, this can be
rationalized as a feature not a bug. Blame for failure can be passed around- the customer
should have purchased the entire package.
The runaway externalities emanating from the current form of capitalism as practiced in
the US must be reigned in. Voluntary compliance to some sort of moral code is useless- worse
than useless in that corrupt operators can hide behind lame excuses for failure.
The bigger problem is that Government regulations could solve these problems quickly, as
in throwing people in jail and confiscating their property. A strong argument can be made for
ill-gotten gains. I surely would vote for that if given the chance. Deal drugs and you can
loose your home. What about conscious business decisions
leading to harm?
You need a strong force external to these business concerns for this to happen. The
separation of government and business. Business should operate at the will of the government.
When the government is run with the wellbeing of the people foremost, then issues like
crashing planes can be rectified.
When the interests of business and government merge, then what you have is fascism.
American fascism will have a happy face. These unfortunate problems of crashing planes and
polluted environments will trundle along into the future. Billionaires will continue to
accumulate their billions while the rest of us will trundle along.
But one day, trundling along won't be an option. Maybe only outsiders to the US system can
see this clearly.
You ask: "So when the original 737 was designed, did the engineers have the option of
using these larger engines? Did they decline to do so because it was a flawed design?"
The larger engines currently in use on the 737 Max 8 were not designed until recently.
They did not decline because the current engine wasn't even invented.
I guess what I am wondering is if the original designers of the 737 had the option of
designing a more powerful engine similar to that used in the 737 MAX but declined to do so.
No doubt engine technology has advanced during the 50 years since the first 737's were built.
Could the engineers 50 years ago have designed engines like those on the 737 MAX? If so, what
were there reasons for not doing so?
I also have a second question. I have been told that stalling can be prevented by placing
small wings at the front of an airplane. Would such a design have resolved the problems with
the 737 MAX?
Fifty years of technological improvement, yes. The new engines aren't more powerful,
they're more fuel efficient. Airbus had put more fuel efficient engines on its planes, so
Boeing rushed new engines of its own into service to compete.
But they're really too large to
be mounted on the 737; they mess up the center of gravity. MCAS was a janky software fix to
solve a fundamental hardware problem, because Boeing didn't want to design a new plane.
And
it didn't want to lose money by requiring airlines to retrain pilots, it sold the plane with
the new engines as being exactly the same as the old, a painless upgrade.
Canards, as the small wings at the front of aircraft are sometimes called, would likely
not have been a fix in this case. There are some light aircraft that use these for stall
prevention by utilizing the aerodynamic properties of the wing. Since a stall (absence of
lift) is often caused by the nose of aircraft being too high, you can design the canard so
that it stalls before the main wing. Thus it's difficult for the whole plane to stall, since
the nose will sink when the canard loses lift first and returns the plane to a more
appropriate attitude. An example here:
In high performance aircraft canards are used to increase maneuverability by providing
another control surface.
We generally don't see them in commercial aircraft for a few reasons:
-Aircraft layout would not be conducive to carrying passengers – jetways would be
awkward, doors would be less accessible, visibility out of the cockpit might be
compromised.
-Control surfaces at the tail of the aircraft are more effective, as the lever distance
they act over is often longer. Tail surfaces are easier to place out of the airflow of the
main wing than to place main wing out of the airflow of canards.
-Added complexity for not much added benefit (if we were to add canards to a plane with
tail surfaces as well).
These are of course all very coarse generalizations – engineering is all about
making technical and economic trade-offs.
A radical example of what can be accomplished by a combination of aerodynamics and
software is the B-2 bomber – only one main wing, no tail or canards. I know, it has
ejection seats but I sincerely doubt any aeronautical engineer has ever sat down and thought,
"Hm, well, that's a sketchy design, but screw it, they can just eject if I messed up".
So would Boeing have to design a new plane to use canards? It would probably require the
737 MAX pilots to have new training. Boeing also seemed to want to hide the instability
problem and the canards would be visual evidence for the problem.
The 737 Was designed in the '60. High bypass turbo fan engines had yet to be developed
then. Upgrading the 737 is like adding a plug in hybrid engine to a Ford F100.
The original 737 was designed to be quite low to the ground, to allow for easier boarding
in an era before widespread jetway use (models have even been offered with integrated pull
out boarding stairs), and to allow for more accessible servicing.
This worked well with the
engines of the time, which were often low bypass turbofans, and thus smaller in diameter.
This combination of height and engines made sense for the market it was designed.
Most modern commercial engines are high bypass turbofans, and therefore larger in
diameter. The move to larger fan diameters has been enabled by advances in materials,
manufacturing technology, and simulation software, with the goal of increasing engine power
and efficiency.
Another factor influencing the engine size that can be used without extensive redesign is
the landing gear operation. Because it folds towards the centerline of the plane, and into
pockets in the bottom of the fuselage, there is a limit on how long it can be before it
becomes too long and each side would collide with the other. And one would need to redesign
the wing box structure to accommodate the moved wheels.
Exactly. This is a textbook case of the looting of America.
The $30 billion dollars made
by cutting costs including quality inspection, using an existing airframe, tax cuts and
ignoring safety went directly to stock buybacks that benefited stockholders and C-suite
compensation.
Just like 2008 Boeing is "too big to fail and jailing the executives would
cause it to collapse". Unless Americans demand an end to the corruption and the restoration
of the rule of law; the plundering will continue until there is nothing left to live on.
Boeing could have designed two brand new safe airliners with that cash that would have
provided jobs and efficient transportation into the future but instead the money went into
the pockets of the connected rich and killed 346 people.
What really gets me is that ultimately that would have given the fools more money because
the orders would have kept on coming and probably increase, which would mean more profit and
more compensation for everyone. Of course that would have taken a few years instead of
immediately. So now the compensation is going to crash. Oh wait! They will just sell again to
themselves, strip the company, and sell the nameplate still affixed to some ruin.
I am starting to understand why the Goths had no resistance when in Italy and during the
sack the city of Rome. Centuries earlier the Republic and then the Empire routinely raised
multiple armies and dealt with catastrophes both natural and man made. At the end, not only
could they not readily create an another army, they could not repair the aqueducts. Like we
are becoming, Rome became a hollow shell.
And probably the only stockholders who even benefited would be the individual or
family-dynasty rich stockholders who own many thousands to millions of shares of a particular
stock at a time. It takes ownership of that many shares for a tiny benefit-per-share to add
up to thousands or millions of tiny little benefits-per-share.
People with pensions or 401ks or whatever may well involuntarily "own" 2 or 3 or maybe 10
shares "apiece" of Boeing. But they derived no benefit from the tiny little benefit per share
this maneuver gained for the shares.
Re: appendix 3, over-steer is counter-intuitive as hell. Once it's underway you have to
steer left during a right turn and vice versa. I have watched race drivers do it (very
skillfully) at the track, but there is no way I would want to be in a car that did that in a
pressure or potential accident situation without a lot of training beforehand.
"your obsession with shareholder value": shareholder value is not being attended to if the
company is driven into the ground by virtue of its planes being driven into the ground.
Clearly the definition of "shareholder value" that these bozos use is as defective as
their engineering decision-making.
Hang a few of them pour encourager les autres . And hang a few of the regulators
who thought it would be a dandy idea to let the firm regulate itself.
And hang a few of the lawmakers and lawbuyers who legislatively de-budgeted and
money-starved FAA into this " turn it over to the plane-makers" corner as well.
There is another case of air disaster often referred to in what is known as *Human
Factors* training a L-1011 which *descended* into the glades; while the crew tried to sort
out a problem with a light bulb. I suggest familiarizing with it for perspective. (not to
exonerate Boeing; just to encourage keeping an open mind)
Ahhh, the infamous Captain Buddy. Immortal tyrant of early CRM training fame
Lambert's mention of the DC-10 and it's fatally flawed, explosive decompressing cargo door
sent me down a hole of DC-10 disasters and accident reports. Some of those DC-10 incidents
like America Airlines flight 96 could have been major tragedies but were saved by level heads
and airmanship that by today's standards would be considered exceptional. The AA 96 crew
landed safely with no fatalities after an explosive decompression, a partially collapsed
floor and severely compromised flight controls. The crew had to work together and use
non-standard asymmetrical thrust and control inputs to overcome the effects of a stuck, fully
deflected rudder and a crippled elevator. The pilots of the ill fated United flight 232,
another DC-10, are celebrated exemplars of the early CRM case studies, both crew members and
a United DC-10 instructor pilot who happened to be occupying the jumpseat all worked together
to heroically crash land their horribly stricken craft in Sioux City Iowa with only partial
aileron control and assymetrical thrust to control the airplane. No elevator, no rudder
control. A good number of passengers perished but most lived. Those pilots in the two
instances I mentioned were exceptional, and they had to resort to exceptional means to
control their aircraft, but in light of airmanship of that caliber from just a few decades
ago, it blows my mind that in 2019 the mere suggestion that professional airline pilots
should probably still be capable of moving the thrust levers during a trim emergency is
somehow controversial enough to expose oneself to charges of racism and bias?! Different
times indeed.
Boeing 737 Max aside, airplanes seem to be a lot safer these days than they were in the
1970's and 80's. Widespread acceptance and adoption of CRM/TEM has made personalities like
Captain Buddy and many bad cockpit automation practices relics from the past, but automation
itself still looks to be increasingly guilty of deskilling professional pilot ranks. In light
of that trend, it's a really good thing passenger jets in 2019 are more reliable than the
DC-10 and easier to land than the MD-11.
Deteriorating pilot skills. Yep. Now you're getting it. Problem is, more automation equals
more pilot skill degradation. Everything is just peachy with highly automated "idiot proof"
airplanes until something breaks, then who is supposed to fly the plane if the pilots can't?
The flight attendants? Whoever is sitting in 1A? Airbus airplanes malfunction too, as
documented in a number of well publicized disasters and not-so-well publicized near
disasters, so while this may be an effective marketing pitch to an airline executive not able
or not willing to pay for highly skilled, experienced pilots, it's not a solution to a pilot
skill crisis. Long term, it makes the situation worse.
Personally I believe in training the hell out of pilots because if I get into a plane, I
want a pilot at the controls and not an airplane-driver. I would bet that even I could be
trained to fly an aircraft where most of the functions are automated but when things go
south, that is when you want a pilot in control. Training is expensive but having an
ill-trained pilot in the cockpit is even more expensive.
A thought . A completely fresh plane design is not necessarily safer. There is aways a
trade off between innovation and proven reliability. It is surprisingly rare for an entirely
new aircraft family to be introduced without at least one problem that threatens (but does
not always take) lives.
787 and 737 MAX are not the only problems Boeing have had.
The 737 NG (Next Generation) airplane using composite materials for the aircraft body, was
also outsourced, The idea was that the Body parts would be built to exacting specifications,
so they could be connected at the stage of final assembly. However, the sub-contractor
couldn't live up to the specifications, so Boeing had to manually re-drill holes to connect
the fuselage parts.
Not long after we had a series of crashes, where the fuselage broke up into its parts,
something almost never seen before in airplanes.
There are other Human Factors at play; regarding pilot ability Measuring ability by simply
looking at *hours flown* (often referred to as *experience*) is misleading. Relevant details
might include just what types of experience. It is possible to get airline positions *ab
initio*, or in-house, if you will (with 500 hours, (IIRC) OR:
Prospective pilots from private sector, or military, may be more likely to have diverse
backgrounds; including Flight Instructor background, Upset Recovery training; Aerobatic
flying; and Glider or sailplane background. These are not necessarily prerequisites for
airline hires. Do they make a difference? in emergencies???
The change in Part 135 minimums for non ab-initio applicants has done little or nothing to
improve safety. It did financially squeeze some very competent and capable career minded
pilots out of the pipeline to the left front seat. (thanks chuck.)(f.u.) His feel-good
legislation:*We're doing something about it!*
It isn't just Boeing that is using share buybacks to goose CEO pay. Shareholders of
American Express have an opportunity to vote to Deduct Impact of BuyBacks on Pay. See
American
Express 2019 Proxy Vote Recommendations
But, but Nader made Al Gore lose in 2000. Good to see him out of the shadows (he has a
podcst BTW).
While Boeing deserves every form of condemnation and Muilenberg should resign I do think
the facts that were all laid out in that should-be-Pulitzer-winning Seattle Times series are
being stretched a bit. The problem seems to be, not that the plane is prone to fall out of
the sky, but that its handling characteristics differ from the earlier, ubiquitous, 737
models. MCAS is the defective part, and Boeing will pay plenty
Florida's presidential election in 2000 was expected to be close and likely to be decisive
in the electoral college vote. Nader was a fairly popular third-party candidate for president
in that election. Many supporters of Gore over Bush pleaded for Nader to exit that race and
ask his supporters to vote for Gore. He did neither. In the end the margin of Bush's win in
Florida was tiny, if it existed at all, so there was reason to be angry at Nader, as I was at
the time, since if he had quit the race in that state, Gore would very likely have become
president instead of Bush.
If you're into counterfactual teleology then you might say Nader's stubborn vanity
therefore led to the Iraq and Afghan wars. I don't but it's worth being aware that some
people do.
I can't find the link right now; but, it stated that after close study, most of the voters
who voted for Nadar would not have voted for Gore and would have just sat out the election
resulting in an even more pronounced victory for Bush. Gore's defeat came from his inability
to win his home state of TN.
The claim ignores other factors. Gore's lackadaisical campaign, for one, and its poor
response to the BushCheney campaign's misuse of the legal system to stop the Florida
recount.
It's not Gore's fault the Supreme Court's conservative majority chose to not let the FL
supreme court determine what FL law means, and chose to decide the election itself. But his
response to the Florida debacle was weak, like his campaign. That might be one reason so many
people voted for Nader. That's on Al and on BushCheney.
Some additional information and clarification about the Corvair.
The Corvair had a rear mounted engine and rear wheel drive. This is a poor design from a
handling perspective as the rear weight bias produces a pendulum effect making the Corvair
prone to oversteer. This tendency was exacerbated by the Corvair's swing axle independent
rear suspension with its inherent camber changes as the wheel moved up and down. These
characteristics of the Corvair were deadly in that while cornering if you let off the
accelerator, the engine brakes the rear wheels creating a condition called "throttle lift
oversteer". Under this situation the counterintutive reaction should be to put your foot on
the accelerator and not the brakes. Some of you may recall that comedian Ernie Kovacs was
killed when his Corvair spun off the road in wet weather and hit a utility pole.
A paradox here is that the Porsche 911 has a design very similar to the Corvair, rear
wheel drive, rear mounted engine and rear weight bias and is praised for its handling. The
Corvair was sometimes referred to as a poor man's 911. It too was prone to severe and violent
oversteer if the throttle was lifted while cornering but in the case of the 911 it was
expected that the driver know that while cornering your foot stayed on the accelerator. As
the horsepower of 911s increased over the years the tendency to oversteer was tamed by
fitting larger tires on the rear wheels. With the advent of technologies like antilock
braking systems ,traction control and advanced computers employing torque vectoring to
control vehicle stablity, cars today do have their versions of MCAS and the Porsche can be
referred to as a triumph of engineering over design.
The 911 had pivots at both ends of the stub axles. It would lift throttle oversteer (boy
would it lift throttle oversteer -lots of fun if you knew what you were doing), but it would
not do the jacking rear-end lift that the corvair (pivots only at the differential end of the
half shaft) would do.
Oddly, the VW bug had the exact same layout but Ralph never went after it.
Nader is right to point out the design flaws, which seem to have the potential to cascade
into failure.
The new engine nacelles create unusual lift. Being placed forward of the center of lift,
that causes the nose of the aircraft to rotate vertically upward. If uncorrected, that would
cause the aircraft inappropriately to rise in altitude and/or to approach a stall.
The nacelle-induced lift increases with an increase in engine thrust. That increases speed
and/or reduces the time the pilot has to react and to correct an inappropriate nose-up
attitude.
Boeing seemed unable to correct that design problem through changes in the aircraft's
shape or control surfaces. It corrected it, instead, by having the computer step in to fly
the aircraft back into the appropriate attitude. Works when it works.
But Boeing seems to have forgotten a CompSci 101 problem: shit in, shit out. If the
sensors feeding the computer report bad data, the computer will generate a bad solution.
Boeing also seems to have designed the s/w to reset after manual attitude correction by the
pilot, forcing a correction loop the pilots would not always win.
Boeing elected not to inform aircraft purchasers or their flight crews of their automated
fix to their new aircraft's inherent instability problem. Murphy's Law being what it is
– if something can go wrong, it will – the pilots should have been made aware of
the recommended fix so that when something went wrong it, they would have a chance of fixing
it with a routine response.
Boeing elected not to do that. In the short run, it avoided the need for expensive
additional pilot training. In the long run, Boeing would have hoped to increase sales. When
hoping for the best, it is normal practice to plan for the worst. Boeing seems not to have
done that either.
All this talk of CEO and top managment resignation . honestly they probably don't care.
They have made millions, if not tens of millions of dollars on bonuses; they can retire once
they walk out the door. To change the behaviour of the C-suite you must affect the C-suite
directly, charge convict them with at least criminal negligence or worse.. A drunk driver who
causes the accident will most likley go to jail if someone dies in the accident, how come a
CEO and his mgmt team, can wilfully go against decades of engineering and aviation best
practices that are codified, and still only have to resign??
In a few days we may be witnessing a massive game of "chicken" between the world's two
largest economies:
"If China does not cut Iran oil purchases to zero, the Trump administration may have to
make a decision on blocking Chinese banks from the U.S. financial system. That could have
unintended consequences for finance and business between the world's two biggest economies,
already in negotiations over trade disagreements.
The unnamed "senior official" consulted for this article is remarkably confident the
Chinese will blink on this matter, based on a what seems a limited understanding of what
constitutes their base interest. In previous times, foreign policy initiatives always
featured internal deliberation with advocates from all sides of an issue, so a complete range
of option and consequence could be anticipated. Such process seems to have been
abandoned.
"... The article also discusses how some frontline FAA safety inspectors wanted to ground the MAXes until the "AoA Disagree" indicators were re-enabled, but were overridden by higher-ups who insisted that it was not a primary safety feature. ..."
Yes, the very last country to pull the 737-MAX out of use is going to be the first to
put it back. There is some serious money being lost by Boeing and the Airlines, and they
want to put a stop to it. This is all about millions and millions of Benjamins, for "they"
are taking a shortct to save even more money.
Simulators are EXPENSIVE, so the plan is to give the pilots a joystick and a computer,
and maybe throw in some lectures and videos of other pilots using a real flight simulator.
Are you ready to rush to reserve a flight?
This isn't a bad deal just for the flight crews and passengers, but the pure stench of
it is contaminating other arenas. A Denier site I'm not going to link has managed to
leverage the lack of regulator oversight by the FAA to lots of other places.
Planes, Automobiles, Bicycles, Homes, Hospitals, Schools, and Sidewalks Can All Be Made
Unsafe by Mad Science, Rush to Market, and Corrupt Regulators
They don't include "vaccines" in that list because their readers understand perfectly
well that if the FAA is a crap agency, why not the FDA as well? Much as I hate to admit it,
the Deniers didn't have to break a sweat to score these perfectly valid points.
Does anyone imagine Volkswagen could have gotten away with all those years of cheating
on their emissions if the regulators had been doing their jobs?
How did China get away with shipping that cancer-causing blood pressure medicine to the
US for so many years? It's safe to assume some bored "regulator" was just waving the stuff
on past without doing a single test.
This is going to cost us. I'm out of links, but here is a headline to consider.
Russia's Irkut aircraft manufacturer has posted the first video of a direct flight by
its MS-21-300 airliner from Irkutsk to Ulyanovsk-Vostochny Airfield.
The brand-new Russian passenger craft is designed to transport up to 211 people over
a distance of 6,400 kilometres.
There are competitors out there, and they can't be fended off by "sanctions" forever.
Allowing unwatched & unregulated companies to run amok is going to hurt us all in the
long term.
Boeing management's behavior must be seen in the context of Boeing's use of its earned
capital. Did you use the $30 billion surplus from 2009 to 2017 to reinvest in R&D, in
new narrow-body passenger aircraft? Or did you, instead, essentially burn this surplus
with self-serving stock buybacks of $30 billion in that period? Boeing is one of the
companies that MarketWatch labelled as "Five companies that spent lavishly on stock
buybacks while pension funding lagged. "
Feathering the Corporate Nest while stiffing the workers. Just what Wall Street loves.
"Ugly" at Boeing isn't a 'skin deep' issue - it's that way clear to the bone!
The article also discusses how some frontline FAA safety inspectors wanted to ground the
MAXes until the "AoA Disagree" indicators were re-enabled, but were overridden by
higher-ups who insisted that it was not a primary safety feature.
A pilot with 30 years of flying
experience and 40 years of design experience rips decisions made by Boeing and the FAA.
Gregory Travis, a software developer and pilot for 30 years wrote a scathing report on the
limitations of the 737, and the arrogance of software developers unfit to write airplane code.
Travis provides easy to understand explanations including a test you can do by sticking your
hand out the window of a car to demonstrate stall speed.
Design shortcuts meant to make a new plane seem like an old, familiar one are to blame.
This was all about saving money. Boeing and the FAA pretend the 737-Max is the same aircraft as
the original 737 that flew in 1967, over 50 years ago.
Travis was 3 years old at the time. Back then, the 737 was a smallish aircraft with smallish
engines and relatively simple systems. The new 737 is large and complicated.
Boeing cut corners to save money. Cutting corners works until it fails spectacularly.
The original 737 had (by today's standards) tiny little engines, which easily cleared the
ground beneath the wings. As the 737 grew and was fitted with bigger engines, the clearance
between the engines and the ground started to get a little um, tight.
With the 737 Max, the situation became critical. The engines on the original 737 had a fan
diameter (that of the intake blades on the engine) of just 100 centimeters (40 inches); those
planned for the 737 Max have 176 cm. That's a centerline difference of well over 30 cm (a foot),
and you couldn't "ovalize" the intake enough to hang the new engines beneath the wing without
scraping the ground.
The solution was to extend the engine up and well in front of the wing. However, doing so
also meant that the centerline of the engine's thrust changed. Now, when the pilots applied
power to the engine, the aircraft would have a significant propensity to "pitch up," or raise
its nose. This propensity to pitch up with power application thereby increased the risk that the
airplane could stall when the pilots "punched it"
Worse still, because the engine nacelles were so far in front of the wing and so large, a
power increase will cause them to actually produce lift, particularly at high angles of attack.
So the nacelles make a bad problem worse.
I'll say it again: In the 737 Max, the engine nacelles themselves can, at high angles of
attack, work as a wing and produce lift. And the lift they produce is well ahead of the wing's
center of lift, meaning the nacelles will cause the 737 Max at a high angle of attack to go to a
higher angle of attack. This is
aerodynamic malpractice
of the worst kind.
It violated that most ancient of aviation canons and probably violated the certification
criteria of the U.S. Federal Aviation Administration. But instead of going back to the drawing
board and getting the airframe hardware right, Boeing relied on something called the
"Maneuvering Characteristics Augmentation System," or MCAS.
It all comes down to money
, and in this case, MCAS was the way for both Boeing and
its customers to keep the money flowing in the right direction. The necessity to insist that the
737 Max was no different in flying characteristics, no different in systems, from any other 737
was the key to the 737 Max's fleet fungibility. That's probably also the reason why the
documentation about the MCAS system was kept on the down-low.
Put in a change with too much visibility, particularly a change to the aircraft's operating
handbook or to pilot training, and someone -- probably a pilot -- would have piped up and said, "Hey.
This doesn't look like a 737 anymore." And then the money would flow the wrong way.
When the flight computer trims the airplane to descend, because the MCAS system thinks it's
about to stall, a set of motors and jacks push the pilot's control columns forward. It turns out
that
the Elevator Feel Computer can put a lot of force into that column -- indeed, so much
force that a human pilot can quickly become exhausted trying to pull the column back, trying to
tell the computer that this really, really should not be happening
.
MCAS is implemented in the flight management computer, even at times when the autopilot is
turned off, when the pilots think they are flying the plane. I
n a fight between the flight
management computer and human pilots over who is in charge, the computer will bite humans until
they give up and (literally) die
. Finally, there's the need to keep the very existence of
the MCAS system on the hush-hush lest someone say, "Hey, this isn't your father's 737," and bank
accounts start to suffer.
Those lines of code were no doubt created by people at the direction of managers.
In a pinch, a human pilot could just look out the windshield to confirm visually and directly
that, no, the aircraft is not pitched up dangerously. That's the ultimate check and should go
directly to the pilot's ultimate sovereignty. Unfortunately, the current implementation of MCAS
denies that sovereignty. It denies the pilots the ability to respond to what's before their own
eyes.
In the MCAS system, the flight management computer is blind to any other evidence that it is
wrong, including what the pilot sees with his own eyes and what he does when he desperately
tries to pull back on the robotic control columns that are biting him, and his passengers, to
death.
The people who wrote the code for the original MCAS system were obviously terribly far
out of their league and did not know it. How can they can implement a software fix, much less
give us any comfort that the rest of the flight management software is reliable?
So Boeing produced a dynamically unstable airframe, the 737 Max. That is big strike No.
1. Boeing then tried to mask the 737's dynamic instability with a software system. Big strike
No. 2. Finally, the software relied on systems known for their propensity to fail
(angle-of-attack indicators) and did not appear to include even rudimentary provisions to
cross-check the outputs of the angle-of-attack sensor against other sensors, or even the other
angle-of-attack sensor. Big strike No. 3.
None of the above should have passed muster. It is likely that MCAS, originally added in
the spirit of increasing safety, has now killed more people than it could have ever saved. It
doesn't need to be "fixed" with more complexity, more software. It needs to be removed
altogether
.
Numerous Bad Decisions at Every Stage
Ultimately 346 people are dead because of really bad decisions, software engineer arrogance, and
Boeing's pretense that the 737 Max is the same aircraft as 50 years ago.
It is incredible that the plane has two sensors but the system only uses one. A look out the
window was enough to confirm the sensor was wrong.
Boeing also offered "cheap" versions of the aircraft without some controls. The two crashed
flights were with the cheaper aircraft.
An experienced pilot with adequate training could have disengaged MACS but in one of the crashed
flights, the pilot was desperately reading a manual trying to figure out how to do that.
Flight Stall Test
If you stick you hand out the window of a car and your hand is level to the ground. You have a
low angle of attack. There is no lift. Tilt your hand a bit and you have lift. Your arm will rise.
When the angle of attack on the wing of an aircraft is too great the aircraft enters aerodynamic
stall. The same thing happens with your hand out a car window.
At a steep enough angle your arm wants to flop down on the car door.
The MACS software overrides what a pilot can see by looking out the window.
Useless Manuals
If you need a manual to stop a plane from crashing mid-flight, the manual is useless.
It's already too late.
The pilot had seconds in which to react. Yet, instead of requiring
additional training, and alerting pilots of the dangers, Boeing put this stuff in a manual.
This was necessary as part of the pretense that a 737 is a 737 is a 737.
In my day Pilot's were repeatedly cautioned not to fly the
aircraft to the scene of an accident since nobody survives a high
speed crash or a stall. Non-pilots can vote me down but the
proper action at the second the pilot lost control of his aircraft
that close to the ground should have been to pull power, drop
flaps, and make a soft field landing that some passengers would
have survived.
Sure it's a flying turd, but it will be back in the air soon. The
CEO can spew buzzwords at the speed of sound. The FAA will approve
any fix Boeing pukes forth cause nobody has the moral courage to
stand in the way of making the big money.
I saw that article in Spectrum and while it makes some points
about software development he mixes it up with generic claims way
beyond his expertise. Editors at Spectrum should be fired.
Cirrus Jet got grounded due to this MACS problem.. This CODE is
all over the place and probably in AIRBUS also [(.. I'm
betting that it was stolen from AIRBUS] Computer controlled fly
by wire is death-in-a-box as it can always be hacked.
Boeing thinks it will fix the problem with its "MCAS" software.
While it may do so on paper, there remains the problem of the
weight distribution of engines, cargo and fuel which is placing
the center of gravity behind the center of pressure for this
modified aircraft during flight near the stall point. That problem
is faulty aerodynamics. Any aircraft that is inherently
aerodynamically unstable should never be flown in a commercial
setting. Ground them all. Fire the stupid fools who allowed this
beast to fly, including those at the FAA. And finally, sell your
Boeing stock.
The granting of a "permanent normal trading relationship" (PNTR) and then the subsequent
accession to the World Trade Organization (WTO) in 2001 have been a boon for China, but the
persistence of ongoing American trade deficits have led many,
including the current president, to judge the United States a loser in ongoing trade
negotiations with Beijing. It's not a totally irrational judgment: China's WTO accession
hasn't been
great for U.S. manufacturers .
Part of the problem stems from the extraordinary fact that Washington has seldom deployed a
negotiator who is actually well-versed in trade issues. Since the days of the Clinton
administration, it has been the U.S. Treasury Secretary, as opposed to the country's chief
trade representative, who has consistently directed trade negotiations, with the resultant (and
eminently predictable) impact that financial interests have superseded those of any other
economic sector. That pattern was briefly disrupted when President George W. Bush appointed
Alcoa's CEO, Paul O'Neill, to head the Treasury, and then CSX president John W. Snow, but
ultimately the " Wall Street uber alles " mentality again prevailed with the appointment
of Hank Paulson (to be followed by Tim Geithner, Jack Lew, and now Steve Mnuchin -- all of whom
have finance-centric backgrounds).
For all of the supposed financial sophistication of America's Wall Street-based Treasury
Secretaries, it is indeed ironic that China has consistently been able to play them for fools
with the implied threat of its so-called "nuclear option," a highly flawed
narrative that alleges that as a final resort, Beijing would dump its huge stockpile of
U.S. Treasuries, thereby driving up U.S. rates, and creating a catastrophic depression for the
U.S. economy. That so-called threat to the bond market is the traditional reason why successive
Treasury Secretaries have been hesitant to resort to the blunt trauma force of trade sanctions
or tariffs when it came to negotiating with Beijing. They were also comforted by the idea that
as it modernized, China would increasingly abide by traditional norms of free trade doctrine
against all
available evidence that shows that it has not played by the same rules.
Let's leave aside the internal incoherence of the nuclear option: China exiting
dollar-denominated assets could well create downward pressure on the external value of the
free-floating currency. But that would enhance U.S. export competitiveness, assuming, of
course, that America has anything left to export, an unfortunate legacy of the Treasury's
malign neglect of U.S. manufacturing. It's also operationally wrong (see here
for further detail), and mistakenly assumes (against all historical evidence to the contrary)
that Beijing would pursue an economic policy that is the functional equivalent of cutting its
own nose to spite its face, as Paul Krugman, among others, notes.
Even if Paulson, Geithner, Lew, Mnuchin, etc., didn't truly believe in the "nuclear option,"
they have been happy to tamp down the possibility of a trade war in order to keep the capital
markets stable. Each trade "deal" has therefore largely sustained the status quo, the price for
which sees Beijing usually offering up a few well-timed purchases of soybeans or Boeing
aircraft (although the latter will be more problematic in light of the 737 fiasco). But China's
policy makers have never been forced to deal with the economic consequences of their country's
mercantilism, which has resulted in the steady erosion of America's Rust Belt, as the U.S.
economy gave back the considerable employment gains it achieved during the 1990s, via
a
historic contraction in manufacturing employment .
Things have changed markedly since Trump seized the "China trade" portfolio from the
Treasury's Steve Mnuchin, and placed it under the control of Robert Lighthizer, the current
trade representative. Unusually for a member of the Trump administration, Lighthizer actually
knows his brief. He has had literally decades of experience in trade issues, dating from his
days as a deputy U.S. trade representative in 1983 (when Japan was widely perceived as the main
trade threat), to his current role as America's chief trade negotiator. As Trump's U.S. Trade
Representative (USTR), he has provided policy flesh and bones to the president's robustly
unilateral approach in trade.
If anything, Lighthizer's trade hawkishness has become even more pronounced over the years,
as he has shifted his attention away from Japan to China. In his 2010 congressional
testimony , he argued that U.S. policy makers gravely underestimated the threat posed to
American manufacturing by virtue of China's entry into the WTO, marshaling an array of evidence
to cast doubt on the idea that its entry had brought any significant economic benefits to U.S.
workers and businesses. He also highlighted the mercantilist nature of Beijing's state
capitalism and noted that the country's administrative complexity likely precluded it embracing
WTO rules, even if wanted to do so (which he doubted):
"As part of China's system, specific large companies receive government patronage in the
form of credit, contracts, and subsidies. The Chinese government, in turn, sees these
'national champions' as a means of competing with foreign rivals and encourages their
dominant role in the domestic economy and in export markets
{[S]cholars have questioned whether -- given its lack of institutional capacity and the
complexity of its constitutional, administrative, and legal system -- China is even capable
of complying with its WTO obligations.
No doubt in thrall to the prevailing free-trade ideology, Washington's "policy passivity"
made it loath to use available tools such as the WTO's "421" special safeguards to counter
the resultant trade shock. In that same testimony, Lighthizer also signaled that he was
uninterested in the niceties of WTO style multilateralism, more inclined to the use of "
aggressive unilateralism "
via executive orders, diplomatic pressure, and most importantly,
the use of Section 232 of the 1962 Trade Expansion Act to levy tariffs on various
products, premised on the notion that the targeted country (in today's case, China)
represented a national security threat.
Most significant from the Lighthizer perspective is an explicit rejection of the idea that
China needs to do more than just buy more U.S. goods before the two countries strike a
permanent trade deal, which in any case is highly problematic if the end objective is to bring
the bilateral trade balance between the two countries to zero.
"The scope for explosive growth in soybeans is actually fairly limited, as the pre-tariff
base for soybeans [the number one or two largest U.S. export to China] was quite high -- the
United States was supplying $12 billion of China's almost $40 billion in oil seed imports. A
huge tilt away from Brazil might cause U.S. beans exports to double, but getting much more
than that would be difficult (there is a natural seasonality to soybean trade that favors
alternating supply from the Southern and Northern Hemispheres).
"The real growth would need to come in sectors where China doesn't buy much now. Corn. Rice.
Perhaps pork and beef Getting really big numbers there though would risk pushing up U.S.
prices, and getting China to abandon its goal of self-sufficiency in basic grains."
So U.S. farm prices would be pushed up, which would hurt U.S. domestic consumers, even as it
cosmetically dresses up America's trade position vis a vis China.
"China has signaled it is willing to let foreign firms take majority stakes in a few more
sectors, and has reiterated its belief that technology transfer isn't a legal requirement for
entry into the Chinese market. There are likely to be settlements on some long-standing
disputes as well -- the rating agencies have gotten approval to enter the Chinese market; Visa,
American Express and Mastercard likely will
finally get approval too (
Mastercard through a joint venture not everything changes); and some tariffs introduced as
retaliation in the past may get dropped."
But how does the entry into China of consumer credit card companies or the ratings agencies
help Americans? Ironically, this looks precisely like the kind of sop to finance that Trump
said he would eschew. However, because of corporate/Wall Street pressure, the Trump agenda
pivoted a few months ago from selective decoupling and protection of American strategic
industries to opening up China for U.S. investment and pushing China to treat American
companies doing business in China more equally. That is why leading U.S. companies have become
friendlier and increasingly less critical of the president's trade policy, even as the economic
commentariat has continued to blast him.
Trump himself needs to understand that a third to a half of 'trade' is really transnational
production with inputs from suppliers coordinated by mostly third-party manufacturers in Asia
(notably in semiconductors). The purpose of modern mercantilism (particularly as it is
practiced in China today) is not just to sell more finished goods but to try to monopolize the
high value added rungs of supply chains. It is unclear that targeting China's bilateral trade
surplus with the United States will ultimately disrupt these entrenched supply chains. It
almost certainly won't bring semiconductor manufacturing back to America's shores.
In the end, therefore, pushing China's leadership to make structural changes to open up
China to American companies is probably an illusion. Beijing is unlikely to rip up the model
that has seen it create national champions that can now compete successfully with America's
biggest corporations. It may make token promises to curtail cybertheft, or the subsidies that
the administration complains create an uneven playing field for American companies. But, as
noted above, even Lighthizer himself has cast doubt that Beijing could enforce those promises,
given the administrative complexity of its system of governance. In his eagerness to claim a
win, therefore, Trump ironically might end up settling for the usual Faustian bargain: more
large Chinese purchases, selective decoupling of supply chains (as American companies
rethink
their reliance on China ), and increased domestic protection for certain sectors (such as
5G) on national security grounds, Lighthizer's considerable efforts notwithstanding. We may
have reached the peak as far as this particular tariff war goes, but the longer-term trade
tensions will almost certainly persist well beyond this hollow 'victory,' which Mr. "Art of the
Deal" will no doubt claim for himself when the negotiations do officially end.
Excellent assessment of the situation here. I suppose another factor for Trump is the fact
that as the US 2020 elections drew ever nearer, he will want some sort of win – any
sort of win – to take to the American people to show that he was tough on China and got
a better deal. His opponents will disagree with the deal. Hell, probably most economists will
disagree but Trump will only care what his supporters think as they are the ones that will
re-elect him.
But of course the interests of people like Robert Lighthizer may come into play here as he
may not care what Trump wants. He is the sort of person that might just blow up negotiations
in order to be tough on China to get it to buckle. I have seen this movie before. Let me
quote from a Salon article here-
"In the summer of 1941, before leaving for Placentia Bay, U.S. President Franklin D.
Roosevelt had ordered a freeze on Japanese assets. That measure required the Japanese to seek
and obtain licenses to export and pay for each shipment of goods from the United States,
including oil. This move was most distressing to the Japanese because they were dependent on
the United States for most of their crude oil and refined petroleum products. However,
Roosevelt did not want to trigger a war with Japan. His intention was to keep the oil flowing
by continuing to grant licenses. Roosevelt had a noose around Japan's neck, but he chose not
to tighten it. He was not ready to cut off its oil lifeline for fear that such a move would
be regarded as tantamount to an act of war.
That summer, while Roosevelt, his trusted adviser Harry Hopkins and U.S. Undersecretary of
State Sumner Welles were attending the shipboard conference off Newfoundland and Secretary of
State Cordell Hull was on vacation at the Greenbrier in West Virginia, the authority to grant
licenses to export and pay for oil and other goods was in the hands of a three-person
interagency committee. It was dominated by Assistant Secretary of State Dean Acheson, whom
one historian described as the "quintessential opportunist of U.S. foreign policy in
1941."
Acheson favored a "bullet-proof freeze" on oil shipments to Japan, claiming it would not
provoke war because "no rational Japanese could believe that an attack on us could result in
anything but disaster for his country." With breathtaking confidence in his own judgment, and
ignoring the objections of others in the State Department, Acheson refused to grant licenses
to Japan to pay for goods in dollars. That effectively ended Japan's ability to ship oil and
all other goods from the United States.
Acheson's actions cut off all American trade with Japan. When Roosevelt returned, he decided
not to overturn the "state of affairs" initiated by Acheson, apparently because he feared he
would otherwise be regarded as an appeaser. Once Roosevelt perpetuated Acheson's trade
embargo, the planners in Japan's imperial military headquarters knew that oil to fuel their
fleet, as well as rubber, rice and other vital reserves, would soon run out."
And we all know what happened next. So I would not be surprised if Robert Lighthizer could
very well be the re-encarnation of Dean Acheson and given half a chance, would seek to put
China under the gun if he thought that he would get away with it.
Rev Kev
I hope you are right. LIghthizer is actually one of the few beacons of hope in the Trump
Administration. But I fear he'll drink the Trump Kool-Aid and basically settle for less than
half a loaf. That's a fascinating historical precedent you have cited. Thank you for bringing
it to my attention.
Very interesting article. In the mean time Japans aim was land conquest. They raped,
murdered, and pillaged their neighbors so WWII USA/Japan was not avoidable to say the least.
They worshipped an emperor and thought they were superior ideologically and militarily. One
could argue that they should have addressed the Japan issue years earlier.
Trump has taken on 20+ years of terrible trade deals and is now stepping up to change it. He
should be applauded! Instead, everyone in the peanut gallery (news media) takes pot shots at
him. We are dealing with a "COMMUNIST" country here which says it all. We now have a business
man running the USA thank God. To make changes will take time!
Darn. When I read the headline, I hoped the article would explain what a victory in U.S.
trade policy with China would look like -- that is, what kind of trade relationship would
"rectify lingering structural problems that have devastated U.S. manufacturing (with genuine
enforcement provisions)." That's a tough question to answer! But all this article describes
is why Trump's policy won't achieve that result. Every policy tried so far has not achieved
that result, so it's not really surprising that this one won't either. In fact, the article
seems to suggest that China cannot play by reasonable trade rules. So what is victory?
Seriously, we need an answer to that one.
How can State Capitalism have caused that 'quantum leap' for China when everyone told us
Central Planning does not work?
If it does work, maybe the US should try it in a way other than the PPT, Fed bailouts, ag
subsidies, military industrial complex, mortgage subsidies, sanctions on rivals, military
action on rivals, etc they already do.
As I understand it, US manufacturing left the US for other countries because of the lower
cost of labour and the lower cost of doing business in foreign countries. What would bring
manufacturing back from foreign countries? Maybe when the cost of doing business in the US
(i.e., wages and salaries of the working class) are lower than those in foreign countries.
Maybe a labour contigent made up entirely of robots would bring back manufacturing to the
US.
While lower wage costs helped drive it, now they the ever rising cost of shipping their
wares. Course they have seen the Chinese boycotts work so well, they may think they will have
a US version to deal with, as so many dislike ok, hate globalization, that any that smacks of
it has a PR problem. Course its likely we will see a repeat of NKoroea too
different budget line probably, so can still be presented as cost-saving also factor in
the use of consultants before/during/after off-shoring – but again different budget
line!
I'm not sure at all what others think a "victory' would look like, but to me it would be
anything that finally raises the profile our (Western Nations) reliance (addiction?) on
supply chains emanating from CHina that impact, negatively, our National Security. If we
could even BEGIN to discuss this dilema I'd be satisfied. And it appears we are beginning to
question the dependence.
China has been at war with the United States for decades. It is an all domain,
unrestricted war. The Chinese do not play by any rules but their own. They have used the
West's strengths of an open political and market system against North American and European
industrialized democracies.
A win against China means re-industrializing the United States across all manufacturing
industries. Tariffs and regulations are the most efficient means to effect this result.
Negotiating is a fool's errand. China will not live up to its obligations under the
agreement anyway.
Perhaps, readers should ask themselves if China is beginning to resemble the Third Reich.
Dictatorship, concentration camps, military buildup, territorial expansion, religious
persecution, military aggression, economic warfare, racist ideology If so, then we should
determine what steps the West and its allies in the East should take to ensure its survival
and prosperity.
Probably we need tariffs to protect against the wage race to the bottom. Not at all clear
trumps 25% threat is high enough.
But spending big on overdue infra would employ lots of blue collars, some at union wages not
in competition w foreign labor, and focusing on higher unemployment regions first avoids
inflation.
Regarding changes in Chinese gov us has been warmonger for decades, assassinates foreign
leaders etc China so far not nearly as aggressive.
Our corporations which benefit from unlimited credit via our very own Military Industrial
Capitalism are no different from China's SOEs. China is protecting essential industries, so
are we. We have tried to force austerity on the rest of our economy – but China does
not. Why is that? And because we have succeeded in establishing the world's most unequal
society, we should be proud of our success. Mindless and shameful as it has been. China
doesn't think it would be politically beneficial to do that to 1.5 billion Chinese. They will
find their own way. Why should they now shoot themselves in the foot just because we did? For
them to bend to our demand that they stop being so mercantilist means they would have to
impose austerity on their people to some degree. It's an appropriate point for a showdown.
And I can't imagine we will win unless we are willing to continue our own ridiculous social
"structure" which is undemocratic and tyrannical. We're looking at a political revolution
because everyone is fed up. China is not. Who's right? We can only brag that we have the
"liberal" high ground because we haven't faced facts yet.
The latest Iran sanctions salvo, the claim that "waivers" for China and others will be
eliminated, is another complication. It will be perceived, with good reason, as deliberately
interfering with world trade under false pretenses. An aggressive follow-up and this could be
an effective way for team Trump to get out of whatever agreements they made in negotiations
so far. More drama
I would not say advantage US; for example China needs US semiconductors. To me if feels
like the US and China are two pilots locked in a kamikaze plane together; both nations are
floating on a sea of debt and IMO prone to massive downside risk during a recession (eg, US
corporate balance sheets are in very poor shape due to debt used to fund stock buybacks). The
US has the reserve currency, but China has sane leadership and doesn't have to carry around
other countries. Interesting times.
@ William Gruff
"Planned economies cannot have overproduction problems like market economies do" I don't
agree with that; look at China's empty cities (overproduction of everything in that city).
The recent book China's Great Wall of Debt went through China's massive overproduction of
certain items (do they really need that much cement?). The book's thesis is that China builds
what it knows how to build, whether it needs it or not.
Data Tells: China's BRI promotes global trade
By Zhang Xinyuan
As a development strategy proposed by China that focuses on connectivity and cooperation
on a trans‐continental scale, the Belt and Road Initiative (BRI) has significantly
boosted global trade and investment in recent years.
With a wave of trade protectionism sweeping across the world in recent years, causing
global economic turmoil, China still adheres to economic openness, actively pushing toward
economic globalization, and striving to build a more convenient and liberal environment for
international trade and investment.
BRI is one of the most important tools for China to achieve that goal. About 125 countries
and 29 international organizations have signed cooperation agreements with China on jointly
building the Belt and Road, according to data published in March on China's official Belt and
Road website.
The total trade volume of goods between China and countries along the Belt and Road
exceeded six trillion U.S. dollars from 2013 to 2018, according to a Ministry of Commerce
(MOFCOM) statement on Thursday.
The average annual growth rate of trade between China and countries along the Belt and
Road hit four percent during the 2013-2018 period, higher than the growth rate of China's
foreign trade during the same period, accounting for 27.4 percent of China's total trade in
goods, according to MOFCOM.
According to the Belt and Road Big Data Annual Report of 2018 from the State Information
Center, BRI in 2017 connected 71 countries around the world, spanning across Asia, Europe,
and Eastern Africa, and in total the BRI countries' foreign trade reached 9.3 trillion U.S.
dollars in 2017, 27.8 percent of the total world trade volume.
Among the BRI countries, South Korea ranks first in terms of foreign trade volume,
reaching over one trillion U.S. dollars in 2017, Singapore and India follows with 697 billion
U.S. dollars and 617 billion U.S. dollars, respectively, the report showed.
In terms of trade commodities, the top import and export commodities among BRI economies
fall in the same categories, including electronic machinery, sound recorder and reproducers,
and televisions, followed by nuclear reactors, boilers, and other heavy machinery, based on
the report.
Private enterprises in China have played a major role in trade with BRI economies. In
2017, China's private enterprises trade with BRI countries reached 619 billion U.S. dollars,
representing 43 percent of the total trade volume between China and BRI countries. Foreign
companies grabbed 36.6 percent of the trade pie, while state-owned enterprises got 19.4
percent of the market share.
BRI has greatly prompted the development of private economies in China and further opened
its market to foreign companies.
As Jimmy Carter observed....the US spread death and destruction investing in war and spending
on war to the tune of trillions, China is investing in the future.
Carter to Trump: While China has some 18k miles of high-speed rail, the US has wasted $3
trillion on military spending. "It's more than you can imagine. China has not wasted a single
penny on war, and that's why they're ahead of us. In almost every way."
China set a defense budget growth target of 7.5 percent in 2019, slower than last year but
still enough to fulfill President Xi Jinping's plans to build a world-class military.
Authorities made the announcement on Tuesday in a statement released ahead of the National
People's Congress, the annual gathering of China's legislature in Beijing. In 2018, before
the trade war started to affect China's economy, officials predicted an increase of 8.1
percent to 1.11 trillion yuan ($164 billion). ...
When the US economy was a larger share of the world economy, then access to the US market
meant more. For example, World Bank statistics say that the US economy was 40% of the entire
world economy in 1960, but is now about 24%. The main source of growth in the world economy
for the foreseeable future will be in emerging markets.
For a sense of the shift, consider this figure from the most recent World Economic Outlook
report, published by the IMF (April 2019). The lines in the figure show the trade flows
between countries that are at least 1% of total world GDP. The size of the dots for each
country is proportionate to the country's GDP.
In 1995, you can see international trade revolving around the United States, with another
hub of trade happening in Europe and a third hub focused around Japan. Trade between the US
and China shows up on the figure, but China did not have trade flows greater than 1% of world
GDP with any country other than the US.
The picture is rather different in 2015. The US remains an international hub for trade.
Germany remains a hub as well, although fewer of its trade flows now exceed 1% of world GDP.
And China has clearly become a hub of central importance in Asia.
[Graph]
The patterns of trade have also shifted toward greater use of global value chains--that
is, intermediate products that are shipped across national borders at least once, and often
multiple times, before they become final products. Here's the overall pattern since 1995 of
falling tariffs and rising participation in global value chains for the world economy as a
whole.
[Graph]
Several decades ago, emerging markets around the world worried about having access to
selling in US and European markets, and this market access could be used by the US and
European nations as a bargaining chip in economic treaties and more broadly in international
relations. Looking ahead, US production is now more tied into global value chains, and the
long-term growth of US manufacturing is going to rely more heavily on sales to markets
outside the United States.
For example, if one is concerned about the future of the US car industry, the US now
produces about 7% of the world's cars in 2015, and about 22% of the world's trucks. The
future growth of car consumption is going to be primarily outside the US economy. For the
health and long-term growth of the US car business, the possibility of unfair imports into
the US economy matters a lot less than the access of US car producers to selling in the rest
of the world economy.
The interconnectedness of global value chains means that General Motors already produces
more cars in China than it does in the United States. In fact, sales of US multinationals now
producing in China are already twice as high as exports from the US to China. Again, the
long-term health of many US manufacturers is going to be based on their ability to
participate in international value chains and in overseas production.
Although what caught my eye in this World Economic Outlook report was the shifting
patterns of world trade, the main emphases of the chapter are on other themes that will come
as no surprise to faithful readers of this blog. One main theme is that shifts in bilateral
and overall trade deficits are the result of macroeconomic factors, not the outcome of trade
negotiations, a theme I've harped on here.
The IMF report also offers calculations that higher tariffs between the US and China will
cause economic losses for both sides. From the IMF report:
"The starting point is a collapse in US–China trade, which falls by 25–30
percent in the short term and somewhere between 30 percent and 70 percent over the long term,
depending on the model and the direction of trade. The decrease in external demand leads to a
decline in total exports and in GDP in both countries. Annual real GDP losses range from
–0.3 percent to –0.6 percent for the United States and from –0.5 percent to
–1.5 percent for China ... Finally, although the US–China bilateral trade deficit
is reduced, there is no economically significant change in each country's multilateral trade
balance."
Some advocates of higher tariffs take comfort in noting that the estimated losses to
China's economy are bigger than the losses to the US economy. Yes, but it's losses all
around! As the 21st century economy evolves, the most important issues for US producers are
going to involve their ability to compete in unfettered ways in the increasingly important
markets outside the US.
"... "One of the problems we have with the system is, why put a system like that on an airplane in the first place?" said Slack, who doesn't represent any survivors of either the Lion Air or Ethiopia Airlines crashes. "I think what we're going to find is that because of changes from the (Boeing 737) 800 series to the MAX series, there are dramatic changes in which they put in controls without native pitch stability. It goes to the basic DNA of the airplane. It may not be fixable." ..."
"... But it's also important that the pilots get physical feedback about what is going on. In the old days, when cables connected the pilot's controls to the flying surfaces, you had to pull up, hard, if the airplane was trimmed to descend. You had to push, hard, if the airplane was trimmed to ascend. With computer oversight there is a loss of natural sense in the controls. There is only an artificial feel, a feeling that the computer wants the pilots to feel. And sometimes, it doesn't feel so great. ..."
"... An airplane approaching an aerodynamic stall cannot, under any circumstances, have a tendency to go further into the stall. This is called "dynamic instability," and the only airplanes that exhibit that characteristic -- fighter jets -- are also fitted with ejection seats. ..."
"... The airframe, the hardware, should get it right the first time and not need a lot of added bells and whistles to fly predictably. This has been an aviation canon from the day the Wright brothers first flew at Kitty Hawk. ..."
"... When the flight computer trims the airplane to descend, because the MCAS system thinks it's about to stall, a set of motors and jacks push the pilot's control columns forward. It turns out that the flight management computer can put a lot of force into that column -- indeed, so much force that a human pilot can quickly become exhausted trying to pull the column back, trying to tell the computer that this really, really should not be happening. ..."
"... MCAS is implemented in the flight management computer, even at times when the autopilot is turned off, when the pilots think they are flying the plane. In a fight between the flight management computer and human pilots over who is in charge, the computer will bite humans until they give up and (literally) die ..."
"... Like someone with narcissistic personality disorder, MCAS gaslights the pilots. And it turns out badly for everyone. "Raise the nose, HAL." "I'm sorry, Dave, I'm afraid I can't do that." ..."
"... Travis also describes the bad business incentives that led Boeing to conceptualize and present the 737 Max as just a tweak of an existing design, as opposed to being so areodynamically different as to be a new plane .and require time-consuming and costly recertification. To succeed in that obfuscation, Boeing had to underplay the existence and role of the MCAS system: ..."
"... Travis also explains why the FAA allows for what amounts to self-certification. This practice didn't result from the usual deregulation pressures, but from the FAA being unable to keep technical experts from being bid away by private sector players. Moreover, the industry has such a strong safety culture (airplanes falling out of the sky are bad for business) that the accommodation didn't seem risky. ..."
"... The 737 Max saga teaches us not only about the limits of technology and the risks of complexity, it teaches us about our real priorities. Today, safety doesn't come first -- money comes first, and safety's only utility in that regard is in helping to keep the money coming. The problem is getting worse because our devices are increasingly dominated by something that's all too easy to manipulate: software ..."
Even though Boeing is scrambling to fix the software meant to counter the 737 Max's increased propensity to stall as a result
of the placement of larger, more fuel=efficient engines in a way that reduced the stability of the plane in flight, it's not clear
that this will be adequate in terms of flight safety or the public perception of the plane. And even though the FAA is almost certain
to sign off on Boeing's patch, foreign regulators may not be so forgiving. The divergence we've seen between the FAA and other national
authorities is likely to intensify. Recall that China grounded the 737 Max before the FAA. In another vote of no confidence, even
as Boeing was touting that its changes to its now infamous MCAS software, designed to compensate for safety risks introduced by the
placement of the engines on the 737 Max, the Canadian air regulator said he wanted 737 Max pilots to have flight simulator training,
contrary to the manufacturer's assertion that it isn't necessary. Last week, the Wall Street Journal reported that
American Airlines is developing 737 Max flight simulator training .
But a fundamental question remains: can improved software compensate for hardware shortcomings? Some experts harbor doubts. For
instance, from the Spokane
Spokesman-Review
:
"One of the problems we have with the system is, why put a system like that on an airplane in the first place?" said Slack,
who doesn't represent any survivors of either the Lion Air or Ethiopia Airlines crashes. "I think what we're going to find is
that because of changes from the (Boeing 737) 800 series to the MAX series, there are dramatic changes in which they put in controls
without native pitch stability. It goes to the basic DNA of the airplane. It may not be fixable."
"It is within the realm of possibility that, if much of the basic pitch stability performance of the plane cannot be addressed
by a software fix, a redesign may be required and the MAX might not ever fly," [aviation attorney and former NASA aerospace engineer
Mike] Slack said.
An even more damming take comes in
How the Boeing 737 Max Disaster Looks to a Software Developer in IEEE Spectrum (hat tip Marshall Auerback). Author Greg Travis
has been a software developer for 40 years and a pilot. He does a terrific job of explaining the engineering and business considerations
that drove the 737 Max design. He describes why the plane's design is unsound and why the software patch in the form of MCAS was
inadequate, and an improved version is unlikely to be able to compensate for the plane's deficiencies.
Even for those who have been following the 737 Max story, this article has background that is likely to be new. For instance,
to a large degree, pilots do not fly commercial aircraft. Pilots send instructions to computer systems that fly these planes. Travis
explains early on that the As Travis explains:
In the 737 Max, like most modern airliners and most modern cars, everything is monitored by computer, if not directly controlled
by computer. In many cases, there are no actual mechanical connections (cables, push tubes, hydraulic lines) between the pilot's
controls and the things on the wings, rudder, and so forth that actually make the plane move ..
But it's also important that the pilots get physical feedback about what is going on. In the old days, when cables connected
the pilot's controls to the flying surfaces, you had to pull up, hard, if the airplane was trimmed to descend. You had to push,
hard, if the airplane was trimmed to ascend. With computer oversight there is a loss of natural sense in the controls. There is
only an artificial feel, a feeling that the computer wants the pilots to feel. And sometimes, it doesn't feel so great.
Travis also explains why the 737 Max's engine location made the plane dangerously unstable:
Pitch changes with power changes are common in aircraft. Even my little Cessna pitches up a bit when power is applied. Pilots
train for this problem and are used to it. Nevertheless, there are limits to what safety regulators will allow and to what pilots
will put up with.
Pitch changes with increasing angle of attack, however, are quite another thing. An airplane approaching an aerodynamic stall
cannot, under any circumstances, have a tendency to go further into the stall. This is called "dynamic instability," and the only
airplanes that exhibit that characteristic -- fighter jets -- are also fitted with ejection seats.
Everyone in the aviation community wants an airplane that flies as simply and as naturally as possible. That means that conditions
should not change markedly, there should be no significant roll, no significant pitch change, no nothing when the pilot is adding
power, lowering the flaps, or extending the landing gear.
The airframe, the hardware, should get it right the first time and not need a lot of added bells and whistles to fly predictably.
This has been an aviation canon from the day the Wright brothers first flew at Kitty Hawk.
Travis explains in detail why the MCAS approach to monitoring the angle of attack was greatly inferior to older methods .including
having the pilots look out the window. And here's what happens when MCAS goes wrong:
When the flight computer trims the airplane to descend, because the MCAS system thinks it's about to stall, a set of motors
and jacks push the pilot's control columns forward. It turns out that the flight management computer can put a lot of force into
that column -- indeed, so much force that a human pilot can quickly become exhausted trying to pull the column back, trying to
tell the computer that this really, really should not be happening.
Indeed, not letting the pilot regain control by pulling back on the column was an explicit design decision. Because if the
pilots could pull up the nose when MCAS said it should go down, why have MCAS at all?
MCAS is implemented in the flight management computer, even at times when the autopilot is turned off, when the pilots think
they are flying the plane. In a fight between the flight management computer and human pilots over who is in charge, the computer
will bite humans until they give up and (literally) die
Like someone with narcissistic personality disorder, MCAS gaslights the pilots. And it turns out badly for everyone. "Raise
the nose, HAL." "I'm sorry, Dave, I'm afraid I can't do that."
Travis also describes the bad business incentives that led Boeing to conceptualize and present the 737 Max as just a tweak of
an existing design, as opposed to being so areodynamically different as to be a new plane .and require time-consuming and costly
recertification. To succeed in that obfuscation, Boeing had to underplay the existence and role of the MCAS system:
The necessity to insist that the 737 Max was no different in flying characteristics, no different in systems, from any other
737 was the key to the 737 Max's fleet fungibility. That's probably also the reason why the documentation about the MCAS system
was kept on the down-low.
Put in a change with too much visibility, particularly a change to the aircraft's operating handbook or to pilot training,
and someone -- probably a pilot -- would have piped up and said, "Hey. This doesn't look like a 737 anymore."
To drive the point home, Travis contrasts the documentation related to MCAS with documentation Cessna provided with an upgrade
to its digital autopilot, particularly warnings. The difference is dramatic and it shouldn't be. He concludes:
In my Cessna, humans still win a battle of the wills every time. That used to be a design philosophy of every Boeing aircraft,
as well, and one they used against their archrival Airbus, which had a different philosophy. But it seems that with the 737 Max,
Boeing has changed philosophies about human/machine interaction as quietly as they've changed their aircraft operating manuals.
Travis also explains why the FAA allows for what amounts to self-certification. This practice didn't result from the usual deregulation
pressures, but from the FAA being unable to keep technical experts from being bid away by private sector players. Moreover, the industry
has such a strong safety culture (airplanes falling out of the sky are bad for business) that the accommodation didn't seem risky.
But it is now:
So Boeing produced a dynamically unstable airframe, the 737 Max. That is big strike No. 1. Boeing then tried to mask the 737's
dynamic instability with a software system. Big strike No. 2. Finally, the software relied on systems known for their propensity
to fail (angle-of-attack indicators) and did not appear to include even rudimentary provisions to cross-check the outputs of the
angle-of-attack sensor against other sensors, or even the other angle-of-attack sensor. Big strike No. 3.
None of the above should have passed muster. None of the above should have passed the "OK" pencil of the most junior engineering
staff, much less a DER [FAA Designated Engineering Representative].
That's not a big strike. That's a political, social, economic, and technical sin .
The 737 Max saga teaches us not only about the limits of technology and the risks of complexity, it teaches us about our real
priorities. Today, safety doesn't come first -- money comes first, and safety's only utility in that regard is in helping to keep
the money coming. The problem is getting worse because our devices are increasingly dominated by something that's all too easy
to manipulate: software
I believe the relative ease -- not to mention the lack of tangible cost -- of software updates has created a cultural laziness
within the software engineering community. Moreover, because more and more of the hardware that we create is monitored and controlled
by software, that cultural laziness is now creeping into hardware engineering -- like building airliners. Less thought is now
given to getting a design correct and simple up front because it's so easy to fix what you didn't get right later .
It is likely that MCAS, originally added in the spirit of increasing safety, has now killed more people than it could have
ever saved. It doesn't need to be "fixed" with more complexity, more software. It needs to be removed altogether.
There's a lot more in
this meaty piece . Be sure to read it in full.
And if crapification by software has undermined the once-vanuted airline safety culture, why should we hold out hope for any better
with self-driving cars?
Automation is not the issue. Boeing cutting corners and putting only one or two angle of attack sensors is. Just like a man
with two clocks can't tell the time, if one of the sensors malfunctions, the computer has no way of knowing which one is wrong.
That's why Airbus puts three sensors in its aircraft, and why Boeing's Dreamliner has three computers with CPUs from three different
manufacturers to get the necessary triple redundancy.
Thus this is really about Boeing's shocking negligence in putting profits above safety, and the FAA's total capture to the
point Boeing employees did most of the certification work. I would add the corrosion of Boeing's ethical standards was completely
predictable once it acquired McDonnell-Douglas and became a major defense contractor.
I beg to differ since it looks like you didn't read the article in full, as a strongly recommended. The article has a section on the cost of fixing hardware problems versus software problems. Hardware problems are enormously
costly to fix.
The plane has a hardware problem resulting from Boeing not being willing to risk having to recertify a fuel efficient 737.
So rather than making the plane higher off the ground (new landing gear, which other articles indicate was a non-starter since
it would lead to enough other changes so as to necessitate recertification) and trying to fix a hardware problem with software.
That has two knock-on problems: it's not clear this will ever be adequate (not just Travis' opinion) and second, it's risky given
the software industry's propensity to ship and patch later. Boeing created an additional problem, as Travis stresses, by greatly
underplaying the existence of MCAS (it was mentioned after page 700 in the documentation!) and maintaining the fiction that pilots
didn't need simulator training, which some regulators expect will be the case even after the patch.
You also miss the point the article makes: the author argues (unlike in banking), the FAA coming to rely on the airlines for
certification wasn't a decision they made, but an adaptation to the fact that they could no longer hire and retain the engineers
they needed to do the work at the FAA on government pay scales. By contrast, at (say) the SEC, you see a revolving door of lawyers
from plenty fancy firms. You have plenty of "talent" willing to work at the SEC, but with bad incentives.
Thank you for reviewing this. 700+ pages! I thought it was paywalled bec. so slow to download. The resistance to achieving
fuel efficiency is front and center these days. One thing I relate it to is the Macron attitude of punishing the fuel consumer
to change the market. Cart before horse. When the FAA sent down fuel efficiency requirements it might have been similarly preemptive,
now in hindsight. There should have been legislation and regulation which adjusted the profitability of the airline industry via
better tax breaks or regulations against aggressive competition. The safety of airlines would have been upheld if the viability
of the company were protected. So even domestic protectionism when it comes to safety. And in so doing, the FAA/congress could
also have controlled and limited airline use which tries to make up in volume for all the new costs it incurs. It's a serious
problem when you are so carefree as a legislator that you let the free market do it. What a mess. Quality is the first thing to
go.
reminds me of what was said about risk departments inside banks -- deliberately lowly paid, so that anyone with skills would
move on or easily be hired away. Was it you? Bill Black? Luyendijk? I don't remember. Either way..
I did read the article completely and I was an aircraft commander of a C-141A during the Viet Nam war and I am a degreed electrical
engineer.
Having flown the C-141A for several thousand hours I am very familiar with the aircraft pitching up almost uncontrollably.
A favorite trick that C -141 flight instructors pulled on pilots new to aircraft was to tell the student pilot to "go around"
(for the first time during his training) on an approach. The student pilot followed the flight manual procedure and started to
raise the nose while advancing the throttles to full power. However, what wasn't covered in the flight manual was the fact that
a HUGE trim change occurred when the engines went from near idle to full power. To regain control, it took both hands (arms) to
move the yoke away from your chest while running nose down trim. While you were doing this the airplane was trying to stand on
its tail. On the other hand none of us ever forgot the lesson.
The C-141 was not fly by wire; however all control surfaces were equipped with hydraulic assist and "feel springs" to mimic
control feel without the hydraulics. The feel springs for the elevators must have been selected using a human subject like Arnold
Schwarzenegger because (in my opinion) they were much stronger than necessary. The intent was to prevent the pilots from getting
into excessive angles of pitch, which absolutely would occur if you weren't prepared for it on a "go around".
What Fazal & V have said is basically correct. The max has four angle of attack vanes. The MAIN problem was that Boeing decided
to go cheap and only connect one of the vanes to the MCAS. If they had connected two, the MCAS would be able to determine that
one of them was wrong and disconnect itself. That would have eliminated the pitch down problem that caused the two crashes.
Connecting that second AOA vane would not have created any certification issues and would have made Boeing's claim about the
"Max" being the "same" as previous versions much closer to the truth. Had they done that we wouldn't be talking about this.
Another solution would have been to disable the MCAS if there was significant counter force on the yoke applied by the pilot.
This has been used on autopilot systems since the 1960's. But not consistently. The proper programming protocol for the MCAS exists
and should have been used.
I agree that using only one AOA vane and the programming weren't the only really stupid things that Boeing did in this matter.
Insufficient information and training given to the pilots was another.
Yes. second, it's risky given the software industry's propensity to ship and patch later.
-this is one of the main themes in the Dilbert cartoon strip.
the author argues (unlike in banking), the FAA coming to rely on the airlines for certification wasn't a decision they made,
but an adaptation to the fact that they could no longer hire and retain the engineers they needed to do the work at the FAA on
government pay scales.
-That's what happens when you make 'government small enough to drown in a bathtub' , i.e. starve of the funds necessary to
do a good job.
My 2¢ . Boeing's decision to cut manufacturing corners AND give the autopilot MCAS system absolute control might have been
done (just a guess here, based on the all current the 'self-driving' fantasies in technology ) to push more AI 'self-drivingness'
into the airplane. (The 'We don't need expensive pilots, we can use inexpensive pilots, and one day we won't need pilots at all'
fantasy.) Imo, this makes the MCAS system, along with the auto AI self-driving systems now on the road no better than beta
test platforms And early beta test platforms, at that.
It's one thing when MS or Apple push out a not quite ready for prime time OS "upgrade", then wait for all the user feedback
to know where it the OS needs more patches. No one dies in those situations (hopefully). But putting not-ready for prime time
airplanes and cars on the road in beta test condition to get feedback? yikes . my opinion.
It is interesting that a software bug that appears in the field costs very roughly ten times as much as one caught in QA before
being released, yet most managements continue to slight QA in favor of glitzy features. I suppose that preference follows supposed
customer demand.
Boeing, the FAA, and the airlines seriously screwed up the introduction of this aircraft so badly it cost lives. The article
by Travis is however written by someone out of his depth, even though he has more familiarity with aircraft and software than
the average person. There are numerous factual errors and misrepresentations, which many commenters (with more detailed knowledge
of the subjects) on the article point out. One of the principles of aviation safety is to identify and fix failures without finger
pointing, in order to encourage a culture of openness and cooperation. The tone of the article takes the opposite approach while
trying to argue from (undeserved) authority. I agree with his critique that these incidents are a result capitalism run amok –
that should, in my opinion, be separate from a discussion of the technical problems and how to fix them.
If Boeing had adhered to that cardinal principle of openness, there might be no failure to fix via "a culture of openness and
cooperation". These catastrophic failures were a result of Boeing not being open with its customers about the safety implications
of its redesign of the 737 Max and instead choosing the path of obfuscation to sell the idea of seamless fleet fungibility to
airlines.
Looking through the comments the complaints about the article seemed to be in one of three areas-
– Questioning the author's credentials (you're just a Cessna pilot!)
– Parroting the Boeing line that this was all really pilot error
– Focusing on some narrow technical element to discredit the article
The majority of comments were in agreement with the general tenor of the piece, and the author engaged politely and constructively
with some of the points that were brought up. I thought the article was very insightful, and sometimes it does take an outsider
to point out that the emperor has no clothes.
I'd like to see a reference for your assertion that the "principles of aviation safety" preclude finger pointing. Unless I'm
very much mistaken the whole purpose of an FAA accident investigation is to determine the root cause, identify the responsible
party, and, yes, point fingers if necessary.
The general point I was trying to make, perhaps poorly worded, is that the only goal is to identify the problem and fix it,
and not to focus primarily on assigning blame as vigorously as possible. Mistakes occur for many reasons – some of them nefarious,
some not. Excessive finger pointing, especially before a full picture of what went wrong has been developed, fosters a tendency
to coverups and fear, in my opinion.
Regarding your other points, the technical details are vital to understand clearly in almost any aviation incident, as there
is never one cause, and the chain of events is always incredibly complex. Travis' analysis makes the answers too easy.
From what I understand the light touch approach was more about getting people to honestly divulge information during the investigation
period, of which, assisted in determining cause.
This "light touch" approach is used throughout the aviation industry, all the way from initial design to aircraft maintenance,
as the purpose is to make sure that anyone, no matter the rank or experience, can bring up safety concerns before incidents occur
without fear of repercussions for challenging authority. It's likely that this cornerstone of aviation culture was ignored at
too many points along the way here.
I am not defending Boeing, the FAA, or the airlines. Serious, likely criminal, mistakes were made by all.
I however take issue with Travis' approach of assigning blame this early and vigorously while making errors in explaining what
happened. He especially attacks the the development process at Boeing, since software is his speciality, although he makes no
claims as to having worked with real time or avionics software, aside from using products incorporating it. These are quite different
types of software from normal code running a website or a bank. He does not, and can not, know what occurred when the code was
written, yet makes significant declarations as to the incompetence of the engineers and coders involved.
If he were leading the investigation, I believe the most likely outcome would be pushback and coverup by those involved.
It's likely that this cornerstone of aviation culture was ignored at too many points along the way here.
I am not defending Boeing, the FAA, or the airlines. Serious, likely criminal, mistakes were made by all.
I however take issue with Travis' approach of assigning blame this early
I don't disagree with your description of how it used to be. However, since the FAA has reduced its regulatory role, and by
extension given aircraft manufactures more leash to run with ideas that shouldn't be followed, we're left with the situation that
large, potentially crippling tort lawsuits are one of the only checks left on manufacturer stupidity or malfeasance. Think of
the Ford Pinto bolt-too-long-causing-gas-tank-explosions case. If the FCC won't make manufacturers think twice when internal engineers
say 'this isn't a good idea, isn't a good design', maybe the potential of a massive lawsuit will make them think twice.
And this is where we get into pointing the finger, assigning blame, etc. I'm assuming there are good engineers at Boeing who
warned against these multiple design failure and were ignored, the FCC was see-no-evil here-no-evil, and the MCAS went forward.
Now come the law suits. It's the only thing left to 'get Boeing's attention'. I don't know if Travis' is too early. It's likely
there's been plenty of chatter among the Boeing and industry engineers already. imo.
Training a pilot is building a very complicated automation system : what kind of thought process do you expect within the short
timeframe (few minutes) of a crisis in a cockpit ? Kant's critique of pure reason ?Somehow people seem more comfortable from death
coming from human error (I.e. a bad human automation system) that death coming from a design fault, but a death is a death
The problem is not automation vs no automation, it is bad corner-cutting automation vs good systematic and expensive automation.
It is also bad integration between pilot brain based automation and system automation, which also boils out to corner cutting,
because sharing too much information about the real behaviour of the system (if only it is known accurately ) increases the complexity
and the cost of pilot training.
Real safety comes from proven design (as in mathematical proof). It is only achievable on simple systems because proofing is
conceptually very hard. A human is inevitably a very complex system that is impossible to proof, therefore, beyond a certain standard
of reliability, getting the human factor out of the equation is the only way to improve things further. we are probably close
to that threshold with civil aviation.
Similarly, regarding cars, the considerable improvement in death per km travelled in the last 30 years cannot be attributed
only to better drivers, a large part comes from ESP and ABS becoming standard (see
https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/811182
). If this is not automation, what is ?
It looks as if you didn't read the piece. The problem, which the author makes explicit, is the "ship now, patch later" philosophy
that is endemic in software design.
And it would be better to look at flight safety stats within markets. You have great swathes of the emerging world starting
to fly on airplanes during this period. I'm not saying the general trend isn't correct, but I would anticipate it's to a significant
degree attributable to the maturation of emerging economy air systems. For instance, I flew on Indonesia's Garuda in the early
1990s and was told I was taking a safety risk; I'm now informed that it's a good airline. Similarly, in the early 1980s I was
doing business in Mexico, and the McKinsey partner I was traveling with (who as a hobby read black box transcripts from plane
crashes) was very edgy on the legs of our travels when we had to use AeroMexico (as in he'd natter on in a way that was very out
of character for a typical older WASP-y guy, he was close to white knuckle nervous).
Garuda's transition from "safety risk" to "good airline" was an actual occurrence. At one point Garuda and all other Indonesian
air lines were prohibited from flying in the EU because of numerous crashes that were the result of management issues, that forced
the airline(s) to change their ways.
ABS is an enhancement. MCAS is a kludge to patch up massive weaknesses introduced into the hardware by a chain of bad decisions
going back almost 20 years.
Boeing should have started designing a new narrow-body when they cancelled the 757 in 2004. Instead, they chose to keep relying
on the 737. The end result is MCAS and 300+ deaths.
"There are numerous factual errors and misrepresentations, which many commenters (with more detailed knowledge of the subjects)
on the article point out."
Not sure why anyone would mis-characterise comments. The first comment points out a deficiency, and explains it. There was only
one other commenter, who alleged errors – but without explaining what those could be. He was later identified by another person
as a troll. Almost all other comments were complimentary of the article. So why make the above assertion?
We have a noteworthy number of newbie comments making poorly-substantiated digs at the Spectrum IEEE piece. We've also seen
this sort of non-organic-looking response when we've put up pro-union pieces when political fights were in play, like Wisconsin's
Scott Walker going after unions.
Travis does indeed play fast and loose with a number of things. For example, his 0-360 engine does *not* have pistons the size
of dinner plates (at a 130mm bore it isn't even the diameter of a particularly large saucer). MCAS is a stability augmentation
system not stall prevention system and the 737 MAX wasn't "unstable" it was insufficiently stable. The 737 trim system acts on
the stabilizer not the elevator (which is a completely different control surface). etc.
For the most part, it doesn't affect the thrust of his arguments which are at a higher level. However it does get distracting.
Thank you – I was beginning to wonder what the difference was between unstable and insufficiently stable. Not that this is
a subject to make jokes about.
Yeah, but sometimes the choice is to laugh or cry, and after constantly going WTF!?! every time I read about this horror, even
mordantly grim humor is nice.
Investigators pipe up, but my understanding of a proper investigation is: a. find out what happened; b. find out why the incident
occurred; c. what can be done to prevent.
The public opinion has already sailed I think, against the company. If negligent, adverse-safety decisions were made, the head
people should be prosecuted accordingly.
Yet, I feel this isn't going to happen despite the reality that billions of humans never want to fly a boeing jet again. Why
would you risk it? Toast and deservedly imho
"Agile" "use-case driven" software development: very dangerous, takes the disruptive, crappification approach (under some hands)
of trying to identify the minimum investment to hit the minimal requirements, particularly focusing on an 80/20 Pareto rule distribution
of efforts.
Which may be good enough for video delivery or cell-phone function, but not for life-critical or scientifically-critical equipment
Many people here are assuming Boeing uses modern software-development methodology in spite of flaws that make such an approach
iffy in this field. Why assume that?
When I worked, many years ago now, as a Boeing software engineer, their software-development practices were 15 years behind
the rest of the world. Part of that was sheer caution and conservatism re new things, precisely because of the safety culture,
and part of it was because they did not have many of the best software people. They could rarely hire the best in part because
cautious, super-conservative code is boring. Their management approach was optimized to get solid systems out of ordinary engineers
with a near incomprehensible number of review and testing steps.
Anyone in this audience worked there in software recently? If not, fewer words about how they develop code might be called
for. Yes, the MCAS system was seriously flawed. But we do not have the information to actually know why.
> Anyone in this audience worked there in software recently? If not, fewer words about how they develop code might be called
for.
4/16 Links included a lengthy spiel from Reddit via Hacker News by a
software engineer who worked at Boeing 10 years ago (far more recently than you) which detailed the horrors of Boeing's dysfunctional
corporate culture at length. This is in addition to many other posts covering the story from multiple angles.
NC has covered this topic extensively. Maybe try familiarizing yourself with their content before telling others to shut up.
Excuse me? Are ad hominem attacks fine now? I didn't tell anyone to "shut up" or contradict the great amount of good reporting
on Boeing's management dysfunction.
I just pointed out that at one time, yes way back there, there was a logic to it and that the current criticism here of its
software-development culture in particular seems founded on a combination of speculation and general disgust with the software
industry.
Whatever else I am or however wrong I may sometimes be, I am an engineer, and real engineers look for evidence.
Moving the engines in itself didn't introduce safety risks, this tendency to nose up was always there. The primary problem
is Boeing wanted to pretend MAX is the same plane as NG (the previous version) for certification and pilot training purposes.
Which is why the MCAS is black box deeply hardwired into the control systems and they didn't tell pilots about it. It was supposed
to be invisible, just sort of translating layer between the new airframe and pilots commanding it as the old one.
And this yearning for pre-automation age, for directly controlling the surfaces by cables and all, is misguided. People didn't
evolve for flying, it's all learned the hard way, there is no natural way to feel the plane. In fact in school they will drill
into you to trust the instruments and not your pedestrian instincts. Instruments and computers may fail, but your instincts will
fail far more often.
After all 737 actually is old design, not fly by wire. And one theory of what happened in the Ethiopian case is that when they
disengaged the automatic thing, they were not able to physically overcome the aerodynamic forces pushing on the plane. So there
you have your cables & strings operated machine.
I don't see basis for your assertion about safety risks given the counter-evidence in the form of the very existence of the
MCAS software. Every article written on it points out it was to prevent the possibility of the plane stalling out when "punching
up". And as the article describes, there were two design factors, the placement of the engines and the nacelles, which led to
it generating too much lift in certain scenarios.
And your argument regarding what happened when the pilot turned off the autopilot is yet another indictment of Boeing's design.
This is not "Oh bad pilots," this is "OMG, evidence of another Boeing fuckup." This is what occurred when the pilots disabled
MCAS per instructions.
Have you not heard of purely mechanical systems that allow for the multiplication of force? It's another Boeing design defect
that the pilots couldn't operate the flight stabilizer when the plane was under takeoff stresses. That's a typical use case!
And it was what Boeing told pilots to do and it didn't work!
From Reuters (apparently
written before the black box detail revealed that the pilots could not control the stabilizers):
Boeing pointed to long-established procedures that pilots could have used to handle a malfunction of the anti-stall system,
regardless of whether the pilots knew MCAS existed.
That checklist tells pilots to switch off the two stabilizer trim cutout switches on the central console, and then to adjust
the aircraft's stabilizers manually using trim wheels.
And that's one of they should worry about most, since that's one of highest risk times for flight, and the plane should have
been engineered with that scenario in mind. This raises the possibility that the inability of the pilots to handle the plane manually
in takeoff also somehow resulted from the changes to the aerodynamics resulting from the placement of the bigger engines.
This is his argument about how the reliance on software has led to undue relaxation of good hardware design principles:
The original FAA Eisenhower-era certification requirement was a testament to simplicity: Planes should not exhibit significant
pitch changes with changes in engine power. That requirement was written when there was a direct connection between the controls
in the pilot's hands and the flying surfaces on the airplane. Because of that, the requirement -- when written -- rightly imposed
a discipline of simplicity on the design of the airframe itself. Now software stands between man and machine, and no one seems
to know exactly what is going on. Things have become too complex to understand.
Pitch changes with power changes are common in aircraft. Even my little Cessna pitches up a bit when power is applied. Pilots
train for this problem and are used to it.
Again, the plane already had the habit of picthing up and the changes didn't add that. The question isn't if, but how much
and what to do about it. Nowhere did I read MAX exceeds some safety limits in this regard. If Boeing made the plane to physically
break regulations and tried to fix it with software then indeed that would be bad. However, I'm not aware of that.
As for the Ethiopian scenario, I was talking about
this article . It says when they tried manual, it very well could be beyond their physical ability to turn the wheels and
so they were forced to switch electrical motors back on, but that also turned up MCAS again. In fact it also says this seizing
up thing was present in the old 737 design and pilots were trained to deal with it, but somehow the plane become more reliable
and training for this failure mode was dropped. This to me doesn't look like good old days of aviation design ruined by computers.
You should read the Ethiopian Government's crash preliminary crash report. Very short and easy to read. Contains a wealth of
information. Regarding the pilot's attempt to use the manual trim wheel, according to the crash report, the aircraft was already
traveling at 340 knots indicated airspeed, well past Vmo or the aircraft's certified airspeed when they first attempted to manually
trim the nose up. It didn't work because of the excessive control forces generated by high airspeeds well beyond the aircraft's
certification. I'm not excusing Boeing, the automated MCAS nose down trim system was an engineering abomination, but the pilots
could have made their lives much easier by setting a more normal thrust setting for straight and level flight, slowing their aircraft
to a speed within the normal operating envelope, then working their runaway nose-down pitch emergency.
I didn't like the IEEE Spectrum piece very much since the author seemed to miss or exaggerate some issues, and also seemed
to confuse flying a Cessna with being expert about large airliners or aerospace engineering. The title says "software engineer"
but at the end he says "software executive". Executive doesn't always mean non-engineer but it does mean someone who is full of
themselves, and that shows through the whole article. The stuff I'm seeing from actual engineers (mostly on Hacker News) is a
little more careful. I'm still getting the sense that the 737 MAX is fundamentally a reasonable plane though Boeing fucked up
badly presenting it as a no-retraining-needed tweak to the older 737's.
There's some conventional wisdom that Boeing's crapification stems from the McDonnell merger in 1997. Boeing, then successful,
took over the failing and badly managed McDonnell. The crappy McDonnell managers then spent the next years pushing out the Boeing
managers, and subsequently have been running Boeing into the ground. I don't know how accurate that is, but it's a narrative that
rings true.
You are misrepresenting the Hacker News criticisms, and IMHO they misrepresent the piece. They don't question his software
chops. And if you really knew the software biz, "software executive" often = developer who built a company (and that includes
smallish ones). The guy OWNS a Cessna, which means he's spent as much on a plane as a lot of people spend on a house. If he was
a senior manager as you posit, that means at large company, and no large company would let an employee write something like this.
He's either between gigs or one of the top guys in a smallish private company where mouthing off like this won't hurt the business.
Notice also his contempt for managers in the article).
He's also done flight simulator time on a 757, and one commentor pointed out that depending on the simulator, it could be tantamount
to serious training, as in count towards qualifying hours to be certified to fly a 757.
They do argue, straw manning his piece, that he claims the big failure is with the software. That in fact is not what the article
says. It says that the design changes in the 737 Max made it dynamically unstable, which is an unacceptable characteristic in
any plane, no matter what size. He also describes at length the problem of relying on only one sensor as an input to the MCAS
and how that undermined having the pilots be able to act as a backup .by looking at each other's instrumentation results.
The idea that he's generalizing from a Cessna is absurd. He describes how Cessnas have the pilot having greater mechanical
control than jets like the 737. He describes how the pilots read the instrument results from each side of the plane, something
which cannot occur in a Cessna, a single pilot plane. He refers to the Cessna documentation to make the point that the norm is
to over-inform pilots as to how changes in the software affect how they operate the plane, not radically under-inform them as
Boeing did with the 737 Max.
As to the reasonableness of Travis' concerns, did you miss that a former NASA engineer has the same reservations? Are you trying
to say he doesn't understand how aircraft hardware works?
He owns a 1978 Cessna 172 , goes for about $70K,
so not quite house prices, more like a nice Tesla, whose drive by wire systems he seems to trust far more for some reason.
In regard to "dynamic instability" being unacceptable, this is a red herring. Most modern airliners rely on flight characteristic
augmentation systems in normal operation, trim systems being the most common. Additionally, there are aircraft designed
to be unstable (fighters) but rely on computers to fly them stably, to greatly increase manoeuvrability.
In regard to Cessnas being single pilot planes, the presence of flight controls on both sides of the cockpit would somewhat
bring into question this assertion .? Most 172s do however have only one set of instrumentation. When operating with two pilots
(as with let's say a student pilot and instructor) you would still have the issue of two pilots trying to agree on possibly faulty
readings from one set of non-redundant instruments.
No, it's a 1979 Cessna, and you don't know when he bought it and how much use it had, since price is significantly dependent
on flight hours. The listings I show it costs over $100K. A quick Google search says a plane with a new feel is closer to $300K.
Even $100K in equity is more than most people put down when buying a house
He also glides, and gliders often own or co-own their gliders.
The author acknowledges your point re fighters. Did you miss that he also says they are the only planes where pilots can eject
themselves from the aircraft? Arguing from what is acceptable for a fighter, where you compromise a lot on other factors to get
maneuverability, to a commercial jet is dodgy.
Regarding fighters and instability, I'm not the one that stated it's "an unacceptable characteristic in any plane, no matter
the size".
I am completely on Travis' side when it comes to the issues with culture and business that brought on these incidents. Seeing
however that these affected and overrode good engineering, I believe it's vitally important that the engineering is discussed
as accurately as possible. Hence my criticism of the piece.
Had you looked at prices as you claimed to, Cessnsa 172s specify the year in the headline description. 1977 v. 1978 v 1979
on a page I got Googling for 1979.
You are now well into the terrain of continuing to argue for argument sake.
I agree with you that the article is good and the criticisms I've read seem largely unmerited (quite a few of those btl on
that article are clearly bad faith arguments), but just to clarify:
That in fact is not what the article says. It says that the design changes in the 737 Max made it dynamically unstable,
which is an unacceptable characteristic in any plane, no matter what size.
My understanding (non-engineer, but long time aviation nerd) is that many aircraft, including all Airbus's are dynamically
unstable and use software to maintain stability. The key point I think that the article makes is that there is a fundamental difference
between designing hardware and software in synchronicity to make a safe aircraft (i.e Airbus), and using software as a fudge to
avoid making hard decisions when the hardware engineers find they can't overcome a problem without spending a fortune in redesigns.
Hard engineering 'fudges' are actually really common in aircraft design – little bumps or features added to address stability
problems encountered during testing – an example being the little fore planes on the
Tupolev 144 supersonic airliner. But it seems Boeing
took a short cut with its approach and a lot of people paid for this with their lives. Only time will tell if it was a deep institutional
failure within Boeing or just a flaw caused by a rushed roll-out.
I've personal experience of a catastrophic design flaw (not one that could kill people, just one that could cost hundreds of
millions to fix) which was entirely down to the personal hang-ups of one particular project manager who was in a position to silence
internal misgivings. Of course, in aircraft design this is not supposed to happen.
I'm reminded of the famous "software is eating the world" quote by uber VC Marc Andreessen. He posits that in an era where
Silicon valley style, software led disruption stalks every established industry, even companies that "make things" (hardware)
need a radical rethink in terms of how they see themselves. A company like Boeing, under this worldview, needs to think of itself
as a software company with a hardware arm attached, otherwise it might have its lunch eaten by a plucky upstart (to say nothing
of Apple or Google) punching above its weight.
It's not farfetched to imagine an army of consultants selling this "inoculate yourself from disruption" thinking to companies
like Boeing and being taken seriously. With Silicon valley's obsession with taking humans out of the loop (think driverless cars/trucks,
operator-less forklifts etc) one wonders whether these accidents will highlight the limitations of technology and halt the seemingly
inexorable march towards complex automation reducing pilots to cockpit observers coming along for the ride.
Ad homimem and therefore logically invalid. Plus reading comprehension problem. The "native pitch stability" comment was from
Mike Slack, a former NASA engineer, and not Travis, the Cessna owner.
I think that the point is that there are aircraft that don't take over the controls and dive into the ground. It's possible
to have these kinds of aircraft. These kinds of aircraft are good to have. It's like an existence proof.
No, not dangerously pro-automation. More like dangerously stuck in the past, putting bandaids on a dinosaur to keep false profits
rolling in. AF447 could be argued against excessive automation, but not the Max.
i think they are real profits. And the automation that crashed two planes over a short time span and it wasn't excessive? Band
aids on what was one of the safest planes ever made (how many 737's crashed pre 737 max? the hardware problem was higher landing
gear along with engines that were larger and added lift to the plane. MCAS was intended to fix that. It made it worse. I won't
be flying on a MAX.
Thanks for the article but re the above comments–perhaps that 737 pilot commenter should weigh in because some expert commentary
on this article is badly needed. My impression from the Seattle Times coverage is that the MCAS was not implemented to keep the
plane from falling out of the sky but rather to finesse the retraining issue. In other words a competent pilot could handle the
pitch up tendency with no MCAS assist at all if trained or even informed that such a tendency existed. And if that's the case
then the notion that the plane will be grounded forever is dubious indeed.
This isn't quite correct, and I suggest you read the article in full.
The issue isn't MCAS. It is that MCAS was to compensate for changes in the planes aerodynamics that were so significant that
it should arguably have been recerttified as being a different plane. That was what Boeing was trying to avoid above all Former
NASA engineer Mike Slack makes that point as well. Travis argues that burying the existence of MCAS in the documentation was to
keep pilots from questioning whether this was a different plane:
It all comes down to money, and in this case, MCAS was the way for both Boeing and its customers to keep the money flowing
in the right direction. The necessity to insist that the 737 Max was no different in flying characteristics, no different in
systems, from any other 737 was the key to the 737 Max's fleet fungibility. That's probably also the reason why the documentation
about the MCAS system was kept on the down-low.
Put in a change with too much visibility, particularly a change to the aircraft's operating handbook or to pilot training,
and someone -- probably a pilot -- would have piped up and said, "Hey. This doesn't look like a 737 anymore." And then the
money would flow the wrong way.
I think you just said what I said. My contention is that the only reason the plane could ever be withdrawn is that the design
is so inherently unstable that this extra gizmo–the MCAS–was necessary for it to fly. Whereas it appears the MCAS was for marketing
purposes and if it had never been added to the plane the two accidents quite likely may never have happened–even if Boeing didn't
tell pilots about the pitch up tendency.
But I'm no expert obviously. This is just my understanding of the issue.
From what I've read at related links in the last week, a significant element is common type rating. Manufacturers don't have
to go through expensive recertification if their modifications are minor enough, earning a common type rating. Thus, the successive
incarnations of the 737 over the decades.
I'm only a layman, but a citizen who tries to stay informed and devours material on this topic. The common type rating merry
go round needs to stop. It seems at least that a new engine with a different position that alters the basic physics of the plane
shouldn't qualify for common type rating, which should be reserved only for the most minor of modifications.
As one who has followed the entirety of the MAX stories as detailed by the Seattle Times aviation reporters, it all comes back
to "first principles": a substantive change in aerodynamics by introduction of an entirely new pair of engines should have required
complete re-engineering of the airframe. We know that Boeing eschewed that approach, largely for competitive and cost considerations,
and subsequently tried to mate the LEAP engines to the existing 737 airframe by installing the MCAS, amongst other design "tweaks",
i.e., "kludging" a fix. Boeing management recognized that this wouldn't be the "perfect" aircraft, but with the help of a compliant
FAA and a huge amount of "self-assessment", got the beast certified and airborne -- -- until the two crashes, that is. Whether
the airlines and/or the flying public will ever accept the redo of MCAS and other ancillary fixes is highly problematic, as the
entire concept was flawed from the kick-off.
Also, it should be mentioned in passing that even the LEAP engines are having some material-wear issues:
https://www.flightglobal.com/news/articles/cfm-reviews-fleet-after-finding-leap-1a-durability-i-442669/
Th IEEE Spectrum piece is somewhat reasonable but the author obvious lacks technical knowledge of the 737. He also does not
understand why MCAS was installed in the first place.
For example:
– "However, doing so also meant that the centerline of the engine's thrust changed. Now, when the pilots applied power to the
engine, the aircraft would have a significant propensity to "pitch up," or raise its nose.
– The MAX nose up tendency is a purely aerodynamic effect. The centerline of the thrust did not change much.
– "MCAS is implemented in the flight management computer, "
– No. It is implemented in the Flight Control Computer of which there are two. (There is only on FMC unit.)
-" It turns out that the Elevator Feel Computer can put a lot of force into that column -- "
– The Elevator Feel unit is not a computer but a deterministic hydraulic-mechanical system.
– "Neither such [software] coders nor their managers are as in touch with the particular culture and mores of the aviation
world as much as the people who are down on the factory floor, "
– The coders who make the Boeing and Airbus systems work are specialized in such coding. Software development for aircrafts It
is a rigid formularized process which requires a deep understanding of the aviation world. The coders appropriately implement
what the design engineers require after the design review confirmed it. Nothing less, nothing more.
and more than a dozen other technical misunderstandings and mistakes.
If the author would have read some of the PPRUNE threads on the issue or asked an 737 pilot he would have known all this.
Given what has happened with Boeing manufacture (787s being delivered with tools and bottles rattling around in them), you
have no basis for asserting how Boeing does software in practice these days.
And you have incontrovertible evidence of a coding fail: relying on only one sensor input when the plane had more than one
sensor. I'm sorry, I don't see how you can blather on about safety and coders supposedly understanding airplanes with that coded
in.
JeffC who actually worked at Boeing years ago and said the coding was conservative (lots of people checked it) because they
were safety oriented but also didn't get very good software engineers, since writing software at Boeing was boring.
I still have some trouble blaming the 737 losses, ipso facto, on using automation to extend an old design. There are
considerably more complex aircraft systems than MCAS that have been reliably automated, and building on a thoroughly proven framework
usually causes less trouble than suffering the teething problems of an all new design.
At the risk of repeating the obvious, a basic principle of critical systems, systems which must be reliable, is that they can
not suffer from single point failures. You want to require at least two independent failures to disturb a system, whose combined
probability is so low that other, unavoidable failure sources predominate, for example, weather or overwhelming, human error.
This principle extends to the system's development. The design and programming of a (reliable) critical system can not suffer
from single point failures. This requires a good many, skilled people, paying careful attention to different, specific stages
of the process. Consider a little thing I once worked on: the indicator that confirms a cargo door is closed, or arguably, that
is neither open nor unlatched. I count at least five levels of engineers and programmers, between Boeing and the FAA, that used
to validate, implement and verify the work of their colleagues, one or more levels above and/or below: to insure the result was
safe.
I bet what will ultimately come out is that multiple levels of the validation and verification chain have been grievously degraded
("crapified") to cut costs and increase profits. The first and last levels for a start. I am curious and will ask around.
The MAX isn't a proven framework. Boeing fundamentally altered the 737 design by shifting the position of the engines. The
MCAS fudge doesn't fix that.
My own impression is that there seems to be a clash between three separate philosophies at work here. The first is the business
culture of Boeing which had supplanted Boeing's historical aviation-centric ways of doing things in aircraft design. The bean-counters
& marketing droids took over, outsourced aircraft construction to such places as non-union workshops & other countries, and thought
that cutting corners in aircraft manufacture would have no long-term ill effects. The second philosophy is that of software design
that failed to understand that the software had to be good to go as it was shipped and had little understanding of what happens
when you ship beta-standard software to an operational aircraft in service. This was to have fatal consequences. The third culture
is that of the pilots themselves which seek to keep their skills going in an aviation world that wants to turn them into airplane-drivers.
If there is any move afoot to have self flying aircraft introduced down the track, I hope that this helps kill it.
Boeing is going to take a massive financial hit and so it should. Heads should literally roll over this debacle and it did not
help their case when they went to Trump to keep this plane flying in the US without thought as to what could have happened if
a US or Canadian 737 MAX had augured in. The biggest loser I believe is going to be the US's reputation with aviation. The rest
of the aviation world will no longer trust what the FAA says or advise without checking it themselves. The trust of decades of
work has just been thrown out the door needlessly. Even in the critical field of aircraft crash investigation, the US took a hit
as Ethiopia refused the demands that the black boxes be sent to the US but sent them instead to France. That is something that
has flown under the radar. This is going to have knock-on effects for decades to come.
Beginning to look like a trade war with the EU. airbus, boeing, vw, US cars; but haven't seen Japan drawn into this yet. Mercedes
Benz is saying EV cars are nonsense, they actually create more pollution than diesel engines and they are recommending methane
gasoline (that sounds totally suicidal), and hydrogen power. Hydrogen has always sounded like a good choice, so why no acclaim?
It can only be the resistance of vested interests. The auto industry, like the airline industry, is frantically trying to externalize
its costs. Maybe we should all just settle down and do a big financial mutual insurance company that covers catastrophic loss
by paying the cost of switching over to responsible manufacturing and fuel efficiency. Those corporations cooperate with shared
subsidiaries that manufacture software to patch their bad engineering – why not a truce while they look for solutions?
The whole 737 development reminds me of a story a GM engineer told me. Similarly to the aviation industry, when GM makes modifications
to an existing part on a vehicle, if the change is small enough the part does not need to be recertified for mechanical strength,
etc. One of the vehicles he was working on had a part failure in testing, so they looked at the design history of the part. It
turns out that, similarly to 737, this was a legacy part carried over numerous generations of the vehicle.
Each redesign of the vehicle introduced some changes, they needed to reroute some cabling, so they would punch a new hole through
the part. But because the change was small enough the engineering team had the option of just signing off on the change without
additional testing. So this went on for years, where additional holes or slits were made in the original part and each change
was deemed to be small enough that no recertification was necessary. The cumulative change from the original certification was
that this was now a completely different part and, not surprisingly, eventually it failed.
The interesting part of the story was the institutional inertia. As all these incremental changes were applied to the part,
nobody bothered to check when was the last time part was actually tested and what was the part design as that time. Every step
of the way everybody assumed their change is small enough not to cause any issue and did not do any diligence until a failure
occured.
Which brings me back to the 737, if I am not mistaken, 737 MAX is, for certification purposes, considered an iteration of the
original 737. The aircraft though is very different than the original, increased wingspan (117′ vs 93′), length (140′ vs. 100′).
737 NG is similarly different.
So for me the big issue with the MAX is the institutional question that allowed a plane so different from the original 737
certification to be allowed as a variant of the original, without additional pilot training or plane certification. Upcoming 777X
has the same issue, it's a materially different aircraft (larger wingspan, etc.) that has a kludge (folding wingtips) to allow
it to pass as a variant of the original 777. It will be interesting to see, in the wake of the MAX fiasco, what treatment does
the 777X get when it comes to certification.
The FAA needs to be able to follow these tweaks. Maybe we citizens need a literal social contract that itemizes what we expect
our government to actually do.
BTW, I do not believe that the problems are insoluble, or as a result of a design philosophy, but rather it is a result of
placing sales over engineering.
There are a number of aerodynamic tweaks that could have dealt with this issue (larger horizontal tail comes to mind, but my
background is manufacturing not aerodynamics), but this would require that pilots requalify for a transition between the NG and
the MAX, which would likely mean that many airlines would take a second look at Airbus.
We should avoid blaming "software" or "automation" for this accident. The B737 MAX seems to be a case of "Money first, safety
second" culture, combined with insufficent regulatory control.
The root of the B737 MAX accidents was an erroneous safety hazard assessment: The safety asessment (and the FAA) believed the
MCAS had a 0.6 authority limit. This 0.6 limit meant that an erroneous MCAS function would only have limited consequences. In
the safety jargon, its severity was classifed as "Major", instead of "Catastrophic".
After the "Major" classification was assigned, the subsequente design decions (like using a single sensor, or perhaps insufficient
testing) are acceptable and in line with the civil aviation standards.
The problem is that the safety engineer(s) failed to understand that the 0.6 limit was self-imposed by the MCAS software, not
enforced by any external aircraft element. Therefore, the MCAS software could fail in such a way that it ignored the limit. In
consequence, MCAS should have been classifed "Catastrophic".
Everybody can make mistakes. We know this. That is why these safety assessments should be reviewed and challenged inside the
company and by the FAA. The need to launch the MAX fast and the lack of FAA oversight resources surely played a greater role than
the usage of software and automation.
Yves: Thanks for this post; it has (IMO) a level-headed perspective. It is not about assigning *blame*, it is about *What,
Why, and How to Prevent* what happened from re-occurring. Blame is for courts and juries. Good luck finding jurors who are not
predisposed; due to relentless bombardment with parroted misinformation and factoids.
I wonder how often MCAS kicked in on a typical 737MAX flight, in situation where the weather vane advising of angle attack
was working as per normal. Since we are excluding the time when auto-pilot is working and also the time when the flaps are down,
there is only a very small time window immediately after take off. I would venture to guess that the MCAS would almost always
adjust the plane at least once. This is once too many, if one is to believe that the notion of design improvement includes improvement
in aerodynamic behavior. The fact that MCAS could only be overridden by disabling the entire motor control of the trim suggests
that the MCAS feature is absolutely necessary for the thing to fly without surprise stalls. There is no excuse in a series of
a product for handling associated with basic safety becoming worse with a new model. Fuel efficiency is laudable and a marketable
thing, but not when packaged together with the bad compromise of bad flight behavior. If the fix is only by lines of code, they
really have not fixed it completely. We know they are not going to be able to move the engines or the thrust line or increase
the ground clearance of the plane so the software fix will be sold as the solution. While it probably does not mean that there
will be more planes being trimmed to crash into the ground, it does make for some anxiety for future passengers. Loss of sales
would not be a surprise but more of a surprise will be the deliveries that will be completed regardless.
MCAS was intended to rarely if ever activate. It is supposed to nudge the aircraft to a lower angle of attack if AoA is getting
high to cause instability in certain parts of the flight envelope. An overly aggressive takeoff climb would be an example. Part
of the problem is that a faulty AoA sensor resulted in the system thinking it was at this extreme case, repeatedly, and in a way
that was difficult for the pilots to identify since they had not been properly trained and the UX was badly implemented.
Yes I've heard that. But do not believe it, given how it is implemented. So I really would like to know how it behaves in non-catastrophic
situations. If so benign, why not allow it to turn off without turning off trim controls? Did not the earlier 737's not need this
feature?
In a non-catastrophic situation, and if functioning correctly, it's my understanding it would felt by the flight crew as mild
lowering of the nose by the system. This is is to keep the plane from increasing angle of attack, which could lead to a stall
or other instability.
It's my understanding MCAS should be treated as a separate system from the trim controls, although they both control the pitch
of the stabilator. Trim controls are generally not "highly dynamic", in that the system (or pilot) sets the trim value only occasionally
based primarily on things like the aircraft weight distribution (this could however change during a flight as fuel is burned,
for example). MCAS on the other hand, while monitoring AoA continuously in flight modes where it is activated only kicks in to
correct excessive inputs from the pilots, or as a result of atmospheric disturbances (wind shear would be one possible cause of
excessive AoA readings).
Neither trim nor MCAS are required to manually fly the plane safely if under direct pilot control and the the pilot is fully
situationally aware.
Earlier 737s did not need this feature due to different aerodynamic properties of the plane. They however still have assistive
features such as stick shakers to help prevent leaving the normal flight envelope.
I've read a bit more in regard to allowing MCAS to turn off without turning off trim, I have no idea why it was implemented
as it was, since previous 737s allow separate control of trim and MCAS. More here:
This however still doesn't change the fact that neither is required to fly the plane, given proper training and communication,
both of which were criminally lacking.
IBG, YBG corporate decisions by people who will probably never fly in these planes, complete regulatory capture and distract
with the little people squabbling over technical details. In China there would probably already have been a short trial, a trip
to the river bank, a bullet through the head, organ harvesting for the corporate jocks responsible. Team Amrika on the way down.
On the subject of software, the underlying issue of ship and patch later is because the process of software is full of bad
practice.
Two examples, "if" and "new".
If is a poor use of a stronger mechanism, FSMs, or Finite State Machines.
'new' is a mechanism that leads to memory leaks, and crashes.
I developed some middleware to bridge data between maineframs and Unix systems that ran 7×24 for 7 years continuously without
a failure, because of FSMs and static memory use.
In an email to me (and presumably to all AAdvantage program members) transmitted at 03:00 April 17 UTC ( i.e. , 11 PM
April 16 US EDT), American Airlines states that it is canceling 737 MAX flights through August 19 (instead of June 5 as stated
by the earlier newspaper story cited in this post).
Eliminating introductory and concluding paragraphs that are marketing eyewash (re. passenger safety and convenience), the two
payload paragraphs state in their entirety:
To avoid last-minute changes and to accommodate customers on other flights with as much notice as possible before their
travel date, we have made the decision to extend our cancellations for the Boeing 737 MAX aircraft through August 19, 2019,
while we await recertification of the MAX.
While these changes impact only a small portion of our more than 7,000 departures each day this summer, we can plan more
reliably for the peak travel season by adjusting our schedule now. Customers whose upcoming travel has been impacted as a result
of the schedule change are being contacted by our teams.
I'm surprised this has not already appeared in earlier comments. Anybody else get this?
Now do Tesla & their bs Tesla Autonomy Investor Day please.
It appears to have it all from beta testing several ton vehicles on public roads, (like BA's beta testing of the MAX) to regulatory
capture( of NTSB, & NTHSA as examples) and a currently powerful PR team.
Apparently they're going to show off their "plan" how one will be able to use their Tesla in full autonomous mode while every
other OEM sez it can't be done by the end of this year let alone within a couple decades as the average person perceives autonomous
driving.
First of all, I didn't read the article, so I'm not going to critique it. There were some comments in the excerpt that Yves
provided that I think require some clarification and/or correction.
The 737 is not a fly-by-wire (FBW) aircraft. There are multiple twisted steel control cables that connect the flight control
in the cockpit to the various control surfaces. The flight controls are hydraulically assisted, but in case of hydraulic (or electric)
failure, the cable system is sufficient to control the aircraft.
In both the 737NG and the MAX, there are automation functions that can put in control inputs under various conditions. Every
one of these inputs can be overridden by the pilot.
In the case of the recent MAX accidents, the MCAS system put in an unexpected and large input by moving the stabilizer. The
crews attempted to oppose this input, but they did so mostly by using elevator input (pulling back on the control column). This
required a great deal of arm strength which they eventually could not overcome. However, if either pilot had merely used the strength
of their thumb to depress the stabilizer trim switch on the yoke, they could have easily opposed and cancelled out whatever input
MCAS was trying to put in. Why neither pilot took this fairly basic measure should be one of the key areas of investigation.
These comments are not intended in any way to exonerate Boeing, the FAA, and the compromises that went into the MAX design.
There is a lot there to be concerned about. However, we are not dealing with a case of an automation system that was so powerful
and autonomous that pilots could not override what it was trying to do.
Bjorn over at Leeham had this analysis:
"the Flight Crew followed the procedures prescribed by FAA and Boeing in AD 2018-23-51. And as predicted the Flight Crew could
not trim manually, the trim wheel can't be moved at the speeds ET302 flew."
In other words, the pilots followed the Boeing recommended procedure to turn off the automatic trim, but at the speeds they
were flying and the large angle that MCAS has moved the stabilizer to, the trim wheels were bound up and could not be moved by
human effort.
They then turned electric trim on to try to help their effort, and MCAS put the nose down again.
Also: Did no one ever test the humans factors of this in a simulator? At HP, when we put out a new printer, we had human factors
bring in average users to see if using our documentation, they could install the printer.
It is mind-blowing to me that Boeing and the FAA can release an Air Worthiness Directive (The fix after the Lion crash) that
was apparently never simulator tested to see if actual humans could do it.
None of the above should have passed muster. None of the above should have passed the "OK" pencil of the most junior engineering
staff, much less a DER [FAA Designated Engineering Representative].
That's not a big strike. That's a political, social, economic, and technical sin .
This is the thing that has been nagging me all along about this story. The "most junior engineering staff" thing is not an
exaggeration – engineers get this drilled into them until it's part of their DNA. I read this and immediately thought that it
points to a problem of culture and values (a point I was pleased to see the author make in the next paragraph). Bluntly, it tells
us that the engineers are not the ones running the show at Boeing, and that extends even to safety critical situations where their
assessment should trump everything.
One of two things needs to happen as a result of this. Either Boeing needs to return to the old safety first culture, or it
needs to go out of business. If neither happens, we are going to see a lot more planes falling out of the sky.
I want to reemphasize that all airplane crashes are a chain of events; if one event does not occur there are no causalities.
Lion Air flight should never have flow with a faulty sensor. But afterwards when the elevator jackscrew was found in the full
nose down position that forced the plane to dive into the Java Sea, Boeing and FAA should have grounded the fleet until a fix
was found. The deaths in Ethiopia are on them. The November 2018 737-8 and -9 Airworthiness Directive was criminally negligent.
Without adequate training the Ethiopian Airline pilots were overwhelmed and not could trim the elevator after turning off the
jackscrew electric motor with the manual trim control due to going too fast with takeoff thrust from start to finish. With deregulation
and the end of government oversight, the terrible design of the 737 Max is solely on Boeing and politicians who deregulated certification.
Profit clearly drove corporate decisions with no consideration of the consequences. This is popping up consistently now from VW
to Quantitative Easing, or the restart of the Cold War. Unless the FAA requires pilot and copilot simulator training on how to
manually trim the 737 Max with all hell breaking loose in the cockpit, the only recourse for customers is to boycott flying Boeing.
Ultimately the current economic system that puts profit above all else must end if humans are to survive.
Before last month's crash of a flight that began in Ethiopia, Boeing Co. said in a legal
document that large, upgraded 737s "cannot be used at what are referred to as 'high/hot'
airports."
At an elevation of 7,657 feet -- or more than a mile high -- Addis Ababa's Bole
International Airport falls into that category. High elevations require longer runways and
faster speeds for takeoff.
remove Share link Copy Trump would have been better off Tweeting something like...
"The safety of the flying public worldwide is of the utmost importance to all of us. I have
been in constant contact with Boeings CEO and have complete confidence that the improvements
they are making will make the 737MAX one of the safest planes ever built. No 737 MAX will take
to the skies that I would not put my own family member on".
See the problem with the max is it will never be safe. What boeing did was try and put a
square peg in a round hole. To save costs both in certification and pilot training boeing
decided to just take the 737 airframe and put bigger more fuel efficient engines on it so
they wouldn't loose market share to airbus. That was a stupid mistake. The bigger engines
hung so low they had to mount them higher and more forward thus creating aerodynamic issues.
The new engine mounting causes air flow disruption over the inner wing during climb out. That
is why they messed with the mcas. You cannot break the laws of physics and then fix them with
software. Sorry that will never work.
Boeing is still delivering the 73NG and should make an offer to the airlines to replace
each MAX order 1 for 1 with a 737-800 or -900 at cost. The traveling public will have
immediate confidence, the airlines can fill schedules, and Boeing can clean house on the MAX
"leadership" team.
"... Boeing "effectively put profitability and growth ahead of airplane safety and honesty" by rushing the 737 MAX to market without "extra" or "optional" safety features - a practice that has outraged the company's critics - as it feared ceding market share to Airbus SE. Moreover, Boeing failed to disclose a conflict of interest surrounding its 'regulatory capture' of the FAA, which was revealed to have outsourced much of the approval process for the 737 MAX to Boeing itself. ..."
"... Of course, this shareholder lawsuit is only the tip of the legal iceberg for Boeing. The company will likely face a blizzard of lawsuits filed by family members of those killed during the Lion Air and Ethiopian Airlines crashes, the first of which has already been filed. ..."
Boeing shareholders who lost money selling their stock after the Ethiopian Airlines crash are suing
the company
for concealing unflattering material information from the public, defrauding
shareholders in the process,
Reuters
reports.
The class-action lawsuit, filed in Chicago, is seeking damages after the
March 10 crash of Ethiopian Airlines flight ET302 wiped $34 billion off Boeing's market cap within
two weeks. But if true, the crux of the lawsuit might have broader repercussions for the company as
it tries to convince regulators to lift a grounding order that has kept the Boeing 737 MAX 8
grounded since mid-March.
In essence, the suit alleges that
the company concealed safety concerns about the 737
MAX and its anti-stall software
following the Lion Air crash in October that killed 189
people,
but did nothing to alert the public or correct the issue.
Boeing "effectively put profitability and growth ahead of airplane safety and honesty" by
rushing the 737 MAX to market without "extra" or "optional" safety features - a practice that
has outraged the company's critics - as it feared ceding market share to Airbus SE. Moreover,
Boeing failed to disclose a conflict of interest surrounding its 'regulatory capture' of the
FAA, which was revealed to have outsourced much of the approval process for the 737 MAX to
Boeing itself.
Lead plaintiff Richard Seeks bought 300 Boeing shares in early March and sold them at a loss
after the shares dumped more than 12% in the weeks after the second crash, which would have left
him with a loss between $15,000 and $20,000. The lawsuit seeks damages for Boeing investors who
bought the company's shares from Jan. 8 to March 21. Boeing CEO Dennis Muilenburg and CFO Gregory
Smith have also been named as defendants.
Of course, this shareholder lawsuit is only the tip of the legal iceberg for Boeing. The company
will likely face a blizzard of lawsuits filed by family members of those killed during the Lion
Air and Ethiopian Airlines crashes, the
first of which
has already been filed.
Though its shares have recovered from their post-grounding lows, they have hit another bout of
turbulence this week after the company announced that it would slash production of the 737 MAX by
20%, before announcing that its aircraft orders in Q1 fell to 95 from 180 a year earlier.
Having grown up in Seattle within 15 miles of Plant 2 on Boeing
Field, I know a lot about The Boeing Company. I went to private
high school with Bill Boeing III and during college had a great
summer job at Troy Laundry delivering shop towels and uniforms to
all of the Boeing plants in the region.
I used to laugh because,
when I drove the laundries 20ft UPS style box van through those
enormous sliding doors into Everett's 747 Plant to deliver fresh
laundry and pickup soiled's, I would spend the next 4-hours
driving around 'inside' the building. I got to know dozens of
workers by name, who 'worked the line'.
After college, more than 20% of my graduating class went to
work at 'the lazy B' as it was commonly known. Not me. I went into
sales and started selling computers.....to Boeing and the FAA.
As the size my computer sales territory was increased to
include the entire West Coast I began to fly Boeing aircraft
almost everyday for 10-years. and on-board those aircraft I met
and flew with many Boeing executives.
One day I happened to sit next the 'current' Boeing HR
director, and after getting to know him confided that I
frequently smoked marijuana after work. To which he replied, "I
would gladly have the 15% of our work force that are alcoholics,
or into hard drugs smoke pot because it's effects are short-term
but when people come to work 'hung-over or jacked-up' that is when
bad **** happens and mistakes are made".
Even though, I had been 'on the line' and met many Boeing
employees I had not realized until that moment the seriousness of
what he was saying. The HR guy went on to say, that they 'had to
have redundancy at every step in the construction process to
ensure bad workmanship didn't make it into the final product'.
Fast forward 20-years; and Boeing airplanes are falling from
the sky......and it's not a surprise to me.
The legacy 737 "NG" is a solid aircraft, and its still being
produced down the same build lines as the MAX. Just the
previous generation. That plane drove the vast majority of
Boeings sales. It woulndt be hard to scale down MAX production
and just go back to producing the NG, but they wont do that.
They'll fix the MAX and move on, and as long as no more crashes
occur, eventually the public will forget.
The FED can't let the stock price fall on a company of that
size, so the FED trading desk will lend assistance. There is a
certain evil in this, because the stock
deserves
to
fall, and when it doesn't, it has the effect of vindicating the
company for the events that occurred. This is why free markets
should never be meddled with. It's actually immoral.
This is utterly predictable and something I've already said
repeatedly: Boeing did not tell pilots or its customers about the
mechanism. Boeing is criminally liable for the MURDER of 300+
people. Families will sue and cancellations will follow.
Then
this:
"In essence, the suit alleges that
the company concealed
safety concerns about the 737 MAX and its anti-stall software
following
the Lion Air crash in October that killed 189 people,
but did
nothing to alert the public or correct the issue.
Boeing
"effectively put profitability and growth ahead of
airplane safety and honesty"
Pilots complained about the problem and were IGNORED.
This is good to see. Boeing needs to be held accountable for
MURDER. But instead Trump slaps tariffs on the competitor, AIRBUS,
to pay for Boeing's criminality.
This will not stop companies choosing AIRBUS and its good
safety record over a bunch of psychopathic murderers. If Boeing
had put safety first, it's competitor would not be picking up
business..ironic...
I still don't understand the point of the MCAS. Clearly it causes
the plane to do a face plant into the ground. However, like in
that one situation where the jump seat pilot knew to turn it off,
the plane flew fine. Boeing says the MCAS is to prevent the plane
from stalling at steep angles of attack, but the plane seems to
stay in the air better without it. So which is it? The fact is the
Boeing neglected to put it in the manual suggests it was done on
purpose. The fact that they sold a version with no redundancy to
the AOC sensor seems to be have done on purpose. Since Boeing is
basically an arm of the DOD, the question should be who was on the
flights that crashed? That's the missing link in this debacle.
Check out "
moonofalabama.org
",
very good explanation, plus some further links to pilot forums.
From what I understand, the pilots get into some sort of "catch
22"....even if they switch of the MACS, they are doomed.
I'm not I anyway in the flying biz, but work in power
generating control systems, and funny enough, use quite a lot
of Rosemount sensors in ex areas. They are good sensors, but
always use two in mission critical operations.
Why Boeing opted for just one, really blows my mind.
What would an extra sensor cost, 10.000USD?, altogether with
new software..bla-bla.
Now look what this is costing them.
Well, this is what happens when MBA bean counters take over
a former proud engineering company.
From what I understand, the pilots get into some sort
of "catch 22"....even if they switch of the MACS, they
are doomed.
Sort of like that. The flight surface is controlled by a
big screw. Normally an electric motor spins the nut that
drives the screw up and down. The switch cuts out the motor,
and they have hand cranks to move the screw. But in this
last crash, the too-clever-by-half software system had
already run the screw all the way to the 'nose down' end,
and it would have taken them several minutes of hand
cranking to get it back to the center position. They didn't
have several minutes, and the motor is capable of driving
the screw the other way. Since the problem was intermittent
(software kicks in on a time interval), they were hoping it
would behave for a few seconds, and switched the motor back
on. It didn't.
On a side note, the Airbus does not have these hand-crank
controls. Everything is run by the computer -- so if
anything goes wrong, the pilot must 'reason' with the
computer to correct it. . . "Sorry Dave, I can't do that".
Well, this is what happens when MBA bean counters take
over a former proud engineering company.
This reminds me of Feynman's analysis of what went wrong
with the Space Shuttle Challenger. The engineers said the
O-rings would be too stiff and brittle, and the launch
should wait until it warmed up a bit. But a delay was
costing the shuttle program a million dollars a minute, or
whatever.
Feynman explained that the early space program was run by
the pocket-protector guys with slide rules. And it worked.
But over time the management had been replaced by people
whose careers depended on influencing other people and not
on matter, energy, and materials.
Another thing, the pilots had commanded full throttle and
never throttled back during the whole ordeal. So when
they killed the trim motor, they couldn't overcome the
aerodynamic force on the stab to move the trim screw back
into position.
Apparently they could have got the trim
corrected ENOUGH to make a difference if they could have
moved it more easily, but at the speeds they were going,
the airspeed over the stab was too high to manually move
the screw fast enough to make a difference.
Sort of. When you kill the electric trim motor, you have to
use a manual wheel to adjust trim. The issue came that their
airspeed was so high that the load on the stab made it
nearly impossible to move without the electric motor.
They
had been at full throttle from rotation until they hit the
dirt. The pilot had told the copilot to throttle back but it
got lost in the chaos somewhere and never happened.
So when they killed the trim motor and tried to move it
manually, they had to overcome all the aerodynamic force on
the stab, and they just couldnt do it at those airspeeds
without the electric motor to overcome the force.
The bigger the fuselage the bigger the engines needed. The
bigger the engines needed the more forward on the wing they
go to keep from scraping on the ground. The more forward on the
wing the more unbalanced then plane became. They've stretch a
frame which was developed in the 60's beyond its original
design.
The executives who oversaw the fiasco that is now Boeing, long ago
parachuted out with multi million dollar pensions and stock
options while their Seattle workers had their pensions slashed.
They're now assembling Dreamliners in NC with off the street non
unionized labor, former TacoBell and Subway workers. They moved
their Corp headquarters to Chicago away from where the actual work
was being performed to pursue the "work" of stock buy backs and
cozying up to the FAA. All the above a recipe for disaster. A
perfect mirror of how the 1/10th of 1% operate in the Oligarchy we
call America.
Boeing is in full on crisis mode because of the 737 Max fiasco.
Anything else they say or do is pure show and fraud.
The are not to far from losing the entire narrowbody airline
market, pretty much the meat and bones of Airline production.
Today Airbus still has the A-320 neo, and Russia and China are
chomping at the bit with the MC21 and C919, all far more advanced
and superior than a 1960's designed stretched pulled and too late
737 .
If Boeing loses market share and the narrow body airline
market, shame on the USA.
This will become a text book expample of the fall of a nation
and empire.
How can a Company like Boeing have technology like the B2 and
everything the DOD gives them and lose the international market
for narrowbody airliners..
To call this a national disgrace is a compliment to Boeing and
the US aerospace industies complete disregard and hubris in such
an important component of worldwide aviation.
This in not a sad chapter for Boeing, its sad for the USA
BeanCounters, Parasitoids, and Bells-WhistlesMktg Types Running
an Aerospace/Aviation Engineering and Defense Tech Conglomerate
into the Ground - Literally.
Civil Aviation Div "Jumped the
Shark" the moment they passed on a redesigned Successor to the
737 Base Model in the mid 2000s and decided to strap on Larger
Engines and GunDeck the Revision and Certifications.
Failure to disclose regulatory capture is a tough one. Do you
issue an 8K on that one? Maybe bury it in the 10K in risk
statements
"We maintain several regulatory relationships that
will rubber stamp approvals for our aircraft. In the event of a
major safety violation, those cozy relationships could be exposed
and we be found to not only be negligent, but also nefariously so
through regulatory capture."
You bought an airline manufacturer that had a malfunction.
There's plenty of people to blame, but it's part of the business
you own.
The 737 Max is a legacy of its past, built on
decades-old systems, many that date back to the original version. The strategy, to keep
updating the plane rather than starting from scratch, offered competitive advantages.
Pilots were comfortable flying it, while airlines didn't have to invest in costly new
training for their pilots and mechanics. For Boeing, it was also faster and cheaper to
redesign and recertify than starting anew.
But the strategy has now left the company in crisis, following two deadly crashes in less
than five months. The Max stretched the 737 design, creating a patchwork plane that left
pilots without some safety features that could be important in a crisis -- ones that have
been offered for years on other planes. It is the only modern Boeing jet without an
electronic alert system that explains what is malfunctioning and how to resolve it.
Instead pilots have to check a manual.
The Max also required makeshift solutions to keep the plane flying like its ancestors,
workarounds that may have compromised safety. While the findings aren't final,
investigators suspect that one workaround, an anti-stall system designed to compensate for
the larger engines, was central to the crash last month in Ethiopia and an earlier one in
Indonesia.
"They wanted to A, save money and B, to
minimize the certification and flight-test costs," said Mike Renzelmann, an engineer who
worked on the Max's flight controls. "Any changes are going to require recertification."
Mr. Renzelmann was not involved in discussions about the sensors.
... ... ...
On 737s, a light typically indicates the
problem and pilots have to flip through their paper manuals to find next
steps. In the doomed Indonesia flight, as the Lion Air pilots struggled
with MCAS for control, the pilots consulted the manual moments before
the jet plummeted into the Java Sea, killing all 189 people aboard.
"Meanwhile, I'm flying the jet," said
Mr. Tajer, the American Airlines 737 captain. "Versus, pop, it's on your
screen. It tells you, This is the problem and here's the checklist
that's recommended."
Boeing decided against adding it to the
Max because it could have prompted regulators to require new pilot
training, according to two former Boeing employees involved in the
decision.
The Max also runs on a complex web of
cables and pulleys that, when pilots pull back on the controls, transfer
that movement to the tail. By comparison, Airbus jets and Boeing's more
modern aircraft, such as the 777 and 787, are "fly-by-wire," meaning
pilots' movement of the flight controls is fed to a computer that
directs the plane. The design allows for far more automation, including
systems that prevent the jet from entering dangerous situations, such as
flying too fast or too low. Some 737 pilots said they preferred the
cable-and-pulley system to fly-by-wire because they believed it gave
them more control.
In the recent crashes, investigators
believe the MCAS malfunctioned and moved a tail flap called the
stabilizer, tilting the plane toward the ground. On the doomed Ethiopian
Airlines flight, the pilots tried to combat the system by cutting power
to the stabilizer's motor, according to the preliminary crash report.
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Once the power was cut, the pilots tried
to regain control manually by turning a wheel next to their seat. The
737 is the last modern Boeing jet that uses a manual wheel as its backup
system. But Boeing has long known that turning the wheel is difficult at
high speeds, and may have required two pilots to work together.
In the final moments of the Ethiopian
Airlines flight, the first officer said the method wasn't working,
according to the preliminary crash report. About 1 minute and 49 seconds
later, the plane crashed, killing 157 people.
The Seattle Times published what I consider a
devastating article a few Sundays ago. It highlighted the depth to which Boeing and the FAA cut
corners on the certification of the Max, more specifically the characterization of the impact of
a failure of the new MCAS system. This allowed them to utilize the cheaper single sensor AOA
vane instead of 2 or 3. The aircraft also got delivered with the MCAS system applying many more
nose down units of trim than what was published in the certification process. Topping it off was
the failure of Boeing to disclose to its customers that the MCAS system was installed or what
abnormal or emergency procedures would accompany the system.
True, there are two kinds of pilots, and some are
better. BUT no pilot should be put in a critical situation by bad and rushed design. What was
Boeing thinking? `Yes, there is slight chance that things can go wrong... but if the pilot is
experienced, if the weather is fine, if the FO is focused (and so on...) they will surely make
it.' Why taking that risk? They should design a plane that even a drunk pilot can handle.
The MCAS moves the entire horizontal tail (aka
horizontal stabilizer) not just "a tail flap called the stabilizer". Normal stabilizer trim also
moves the whole horizontal stabilizer. Presumably the "flap" being referred to here,
incorrectly, is the elevator, a flight control surface on the trailing edge of the horizontal
tail, which is control by pulling and pushing the flight control column. Both horizontal
stabilizer trim and elevator affect the pitch (nose up, nose down) of the aircraft. Typically,
horizontal stabilizer trim is used to maintain a particular attitude (e.g. level flight in
cruise) without requiring the pilot to continously apply significant forces to the control
column, which is tiring. When MCAS engages it effectively is attempting to "cancel out" the
pilot's elevator command (pulling back on the control column to bring the nose up by ) by moving
the horizontal stabilizer to counteract the pilots action (rotating the the horizontal
stabilizer so that it's leading edge points down).
Boeing should have gone with a clean sheet of
paper design. Look at the Airbus A220, previously known as Bombardier C Series. It has nearly
similar seating, yet it carries less fuel, but has a longer range than the MAX8. Modern wing
design. Heck, Boeing should have just bought Bombardier 10 years ago. Now they are in the arms
of Airbus.
Why doesn't BA just trash the entire max8 program
and become a subcontractor for A320s instead? After all there is a demand for 5000 aircraft that
now will not be fulfilled. Boeing management should be put on trial for criminal negligence.
Finally, a comprehensive report that doesn't go on
and on about software. The problem was a mechanical and training one, and instead of fixing the
problems, the Bean Counters took over and went on the cheap.
Pilots start some new Boeing planes by turning a knob and flipping two
switches.
The Boeing 737 Max, the newest passenger jet on the market, works differently.
Pilots follow roughly the same seven steps used on the first 737 nearly 52 years ago: Shut off the cabin's
air-conditioning, redirect the air flow, switch on the engine, start the flow of fuel, revert the air flow,
turn back on the air conditioning, and turn on a generator.
The 737 Max is a legacy of its past, built on decades-old systems, many that
date back to the original version. The strategy, to keep updating the plane rather than starting from scratch,
offered competitive advantages. Pilots were comfortable flying it, while airlines didn't have to invest in
costly new training for their pilots and mechanics. For Boeing, it was also faster and cheaper to redesign and
recertify than starting anew.
But the strategy has now left the company in crisis, following
two deadly crashes in less than five months
. The Max stretched the 737 design, creating a patchwork plane
that left pilots without some safety features that could be important in a crisis -- ones that have been offered
for years on other planes. It is the only modern Boeing jet without an electronic alert system that explains
what is malfunctioning and how to resolve it. Instead pilots have to check a manual.
The Max also required makeshift solutions to keep the plane flying like its
ancestors, workarounds that may have compromised safety. While the findings aren't final, investigators suspect
that one workaround, an anti-stall system designed to compensate for the larger engines, was central to the
crash last month in Ethiopia and an earlier one in Indonesia.
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The Max "ain't your father's Buick," said Dennis Tajer, a spokesman for the
American Airlines pilots' union who has flown the 737 for a decade. He added that "it's not lost on us that the
foundation of this aircraft is from the '60s."
Dean Thornton, the president of Boeing, with an engine on the first
737-400 in 1988 in Seattle. The larger engines for Boeing's new Max line of jets prompted a number of
design issues.
Credit
Benjamin
Benschneider/The Seattle Times, via Associated Press
Image
Dean Thornton, the president of Boeing, with an engine on the first 737-400 in 1988 in Seattle. The larger
engines for Boeing's new Max line of jets prompted a number of design issues.
Credit
Benjamin
Benschneider/The Seattle Times, via Associated Press
The Max, Boeing's best-selling model, with more than 5,000 orders, is suddenly
a reputational hazard. It could be weeks or months before regulators around the world lift their ban on the
plane, after Boeing's expected
software fix was delayed
. Southwest Airlines and American Airlines have canceled some flights through May
because of the Max grounding.
The company has
slowed production
of the plane, putting pressure on its profits, and some buyers are reconsidering their
orders. Shares of the company fell over 4 percent on Monday, and are down 11 percent since the Ethiopia crash.
"It was state of the art at the time, but that was 50 years ago," said Rick
Ludtke, a former Boeing engineer who helped design the Max's cockpit. "It's not a good airplane for the current
environment."
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The 737 has long been a reliable aircraft, flying for decades with relatively
few issues. Gordon Johndroe, a Boeing spokesman, defended the development of the Max, saying that airlines
wanted an updated 737 over a new single-aisle plane and that pilots were involved in its design.
"Listening to pilots is an important aspect of our work. Their experienced
input is front-and-center in our mind when we develop airplanes," he said in a statement. "We share a common
priority -- safety -- and we listen carefully to their feedback." He added that American regulators approved the
plane under the same standards they used with previous aircraft.
Video
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Boeing introduced the 737 Max as a reliable fuel- and cost-efficient solution to air travel in the 21st century.
After two fatal Max crashes, all of the Max aircraft in the world are believed to have been grounded.
Credit
Credit
Chang
W. Lee/The New York Times
Boeing's chief executive, Dennis Muilenburg, said in a statement on Friday that
the crashes in Indonesia and Ethiopia appeared to have been caused by the Max's new anti-stall system. "We have
the responsibility to eliminate this risk, and we know how to do it," he said.
At a factory near Seattle on Jan. 17, 1967, flight attendants christened the
first Boeing 737, smashing champagne bottles over its wing. Boeing pitched the plane as a smaller alternative
to its larger jets, earning it the nickname the "Baby Boeing."
Early on, sales lagged Boeing's biggest competitor, McDonnell Douglas. In 1972,
Boeing had delivered just 14 of the jets, and it considered selling the program to a Japanese manufacturer,
said Peter Morton, the 737 marketing manager in the early 1970s. "We had to decide if we were going to end it,
or invest in it," Mr. Morton said.
Ultimately, Boeing invested. The 737 eventually began to sell, bolstered by
airline deregulation in 1978. Six years later, Boeing updated the 737 with its "classic" series, followed by
the "next generation" in 1997, and the Max in 2017. Now nearly one in every three domestic flights in the
United States is on a 737, more than any other line of aircraft.
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Each of the three redesigns came with a new engine, updates to the cabin and
other changes. But Boeing avoided overhauling the jet in order to appease airlines, according to current and
former Boeing executives, pilots and engineers, some of whom spoke on the condition of anonymity because of the
open investigations. Airlines wanted new 737s to match their predecessors so pilots could skip expensive
training in flight simulators and easily transition to new jets.
Boeing 737 Max: What's Happened After Ethiopian Airlines and Lion Air Crashes
Boeing's strategy worked. The Federal Aviation Administration never required
simulator training for pilots switching from one 737 to the next.
"Airlines don't want Boeing to give them a fancy new product if it requires
them to retrain their pilots," said Matthew Menza, a former 737 Max test pilot for Boeing. "So you iterate off
a design that's 50 years old. The old adage is: If it's not broke, don't fix it."
It did require engineering ingenuity, to ensure a decades-old jet handled
mostly the same. In doing so, some of the jet's one-time selling points became challenges.
For instance, in the early years of the 737, jet travel was rapidly expanding
across the world. The plane's low-slung frame was a benefit for airlines and airports in developing countries.
Workers there could load bags by hand without a conveyor belt and maintain the engines without a lift, Mr.
Morton said. In the decades that followed, the low frame repeatedly complicated efforts to fit bigger engines
under the wing.
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By 2011, Boeing executives were starting to question whether the 737 design had
run its course. The company wanted to create an entirely new single-aisle jet. Then Boeing's rival Airbus added
a new fuel-efficient engine to its line of single-aisle planes, the A320, and Boeing quickly decided to update
the jet again.
The 737 Max 8 at Boeing's plant in Renton, Wash. Nearly one in every
three domestic flights in the United States is on a 737, more than any other line of aircraft.
Credit
Ruth
Fremson/The New York Times
Image
The
737 Max 8 at Boeing's plant in Renton, Wash. Nearly one in every three domestic flights in the United States is
on a 737, more than any other line of aircraft.
Credit
Ruth
Fremson/The New York Times
"We all rolled our eyes. The idea that, 'Here we go. The 737 again,'" said Mr.
Ludtke, the former 737 Max cockpit designer who spent 19 years at Boeing.
"Nobody was quite perhaps willing to say it was unsafe, but we really felt like
the limits were being bumped up against," he added.
Some engineers were frustrated they would have to again spend years updating
the same jet, taking care to limit any changes, instead of starting fresh and incorporating significant
technological advances, the current and former engineers and pilots said. The Max still has roughly the
original layout of the cockpit and the hydraulic system of cables and pulleys to control the plane, which
aren't used in modern designs. The flight-control computers have roughly the processing power of 1990s home
computers. A Boeing spokesman said the aircraft was designed with an appropriate level of technology to ensure
safety.
When engineers did make changes, it sometimes created knock-on effects for how
the plane handled, forcing Boeing to get creative. The company added a new system that moves plates on the wing
in part to reduce stress on the plane from its added weight. Boeing recreated the decades-old physical gauges
on digital screens.
As Boeing pushed its engineers to figure out how to accommodate bigger, more
fuel-efficient engines, height was again an issue. Simply lengthening the landing gear to make the plane taller
could have violated rules for exiting the plane in an emergency.
Boeing 737 engines at the company's factory in 2012. By 2011, Boeing
executives were starting to question whether the 737 design had run its course.
Credit
Stephen
Brashear/Associated Press
Image
Boeing 737 engines at the company's factory in 2012. By 2011, Boeing executives were starting to question
whether the 737 design had run its course.
Credit
Stephen
Brashear/Associated Press
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Instead, engineers were able to add just a few inches to the front landing gear
and shift the engines farther forward on the wing. The engines fit, but the Max sat at a slightly uneven angle
when parked.
While that design solved one problem, it created another. The larger size and
new location of the engines gave the Max the tendency to tilt up during certain flight maneuvers, potentially
to a dangerous angle.
To compensate, Boeing engineers created the automated anti-stall system, called
MCAS, that pushed the jet's nose down if it was lifting too high. The software was intended to operate in the
background so that the Max flew just like its predecessor. Boeing didn't mention the system in its training
materials for the Max.
Boeing also designed the system to rely on a single sensor -- a rarity in
aviation, where redundancy is common. Several former Boeing engineers who were not directly involved in the
system's design said their colleagues most likely opted for such an approach since relying on two sensors could
still create issues. If one of two sensors malfunctioned, the system could struggle to know which was right.
Airbus addressed this potential problem on some of its planes by installing
three or more such sensors. Former Max engineers, including one who worked on the sensors, said adding a third
sensor to the Max was a nonstarter. Previous 737s, they said, had used two and managers wanted to limit
changes.
The angle of attack sensor, bottom, on a Boeing 737 Max 8.
Credit
Ruth
Fremson/The New York Times
Image
The
angle of attack sensor, bottom, on a Boeing 737 Max 8.
Credit
Ruth
Fremson/The New York Times
"They wanted to A, save money and B, to minimize the certification and
flight-test costs," said Mike Renzelmann, an engineer who worked on the Max's flight controls. "Any changes are
going to require recertification." Mr. Renzelmann was not involved in discussions about the sensors.
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The Max also lacked more modern safety features.
Most new Boeing jets have electronic systems that take pilots through their
preflight checklists, ensuring they don't skip a step and potentially miss a malfunctioning part. On the Max,
pilots still complete those checklists manually in a book.
A second electronic system found on other Boeing jets also alerts pilots to
unusual or hazardous situations during flight and lays out recommended steps to resolve them.
On 737s, a light typically indicates the problem and pilots have to flip
through their paper manuals to find next steps. In the doomed Indonesia flight, as the Lion Air pilots
struggled with MCAS for control, the pilots consulted the manual moments before the jet plummeted into the Java
Sea, killing all 189 people aboard.
"Meanwhile, I'm flying the jet," said Mr. Tajer, the American Airlines 737
captain. "Versus, pop, it's on your screen. It tells you, This is the problem and here's the checklist that's
recommended."
Boeing decided against adding it to the Max because it could have prompted
regulators to require new pilot training, according to two former Boeing employees involved in the decision.
The Max also runs on a complex web of cables and pulleys that, when pilots pull
back on the controls, transfer that movement to the tail. By comparison, Airbus jets and Boeing's more modern
aircraft, such as the 777 and 787, are "fly-by-wire," meaning pilots' movement of the flight controls is fed to
a computer that directs the plane. The design allows for far more automation, including systems that prevent
the jet from entering dangerous situations, such as flying too fast or too low. Some 737 pilots said they
preferred the cable-and-pulley system to fly-by-wire because they believed it gave them more control.
In the recent crashes, investigators believe the MCAS malfunctioned and moved a
tail flap called the stabilizer, tilting the plane toward the ground. On the doomed Ethiopian Airlines flight,
the pilots tried to combat the system by cutting power to the stabilizer's motor, according to the preliminary
crash report.
Advertisement
Once the power was cut, the pilots tried to regain control manually by turning
a wheel next to their seat. The 737 is the last modern Boeing jet that uses a manual wheel as its backup
system. But Boeing has long known that turning the wheel is difficult at high speeds, and may have required two
pilots to work together.
In the final moments of the Ethiopian Airlines flight, the first officer said
the method wasn't working, according to the preliminary crash report. About 1 minute and 49 seconds later, the
plane crashed, killing 157 people.
Correction :
April
8, 2019
An earlier version of this article transposed the death tolls
in two crashes involving Boeing's 737 Max jets. In the Lion Air crash in Indonesia last year, 189 people
died, not 157; 157 people were killed in the Ethiopian Airlines crash last month, not 189.
Rebecca R. Ruiz and Stephen Grocer contributed reporting. Kitty Bennett contributed research.
A version of this article appears in print on
April 9, 2019
, on Page A 1 of the New York edition with the headline:
Boeing's 737 Max: '60s Design Meets '90s Computing Power.
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Donald Trump Is Trying to Kill You:
Trust the pork producers; fear the wind turbines.
By Paul Krugman
There's a lot we don't know about the legacy Donald Trump will leave behind. And it is, of
course, hugely important what happens in the 2020 election. But one thing seems sure: Even if
he's a one-term president, Trump will have caused, directly or indirectly, the premature
deaths of a large number of Americans.
Some of those deaths will come at the hands of right-wing, white nationalist extremists,
who are a rapidly growing threat, partly because they feel empowered by a president who calls
them "very fine people."
Some will come from failures of governance, like the inadequate response to Hurricane
Maria, which surely contributed to the high death toll in Puerto Rico. (Reminder: Puerto
Ricans are U.S. citizens.)
Some will come from the administration's continuing efforts to sabotage Obamacare, which
have failed to kill health reform but have stalled the decline in the number of uninsured,
meaning that many people still aren't getting the health care they need. Of course, if Trump
gets his way and eliminates Obamacare altogether, things on this front will get much, much
worse.
But the biggest death toll is likely to come from Trump's agenda of deregulation -- or
maybe we should call it "deregulation," because his administration is curiously selective
about which industries it wants to leave alone.
Consider two recent events that help capture the deadly strangeness of what's going
on.
One is the administration's plan for hog plants to take over much of the federal
responsibility for food safety inspections. And why not? It's not as if we've seen safety
problems arise from self-regulation in, say, the aircraft industry, have we? Or as if we ever
experience major outbreaks of food-borne illness? Or as if there was a reason the U.S.
government stepped in to regulate meatpacking in the first place?
Now, you could see the Trump administration's willingness to trust the meat industry to
keep our meat safe as part of an overall attack on government regulation, a willingness to
trust profit-making businesses to do the right thing and let the market rule. And there's
something to that, but it's not the whole story, as illustrated by another event: Trump's
declaration the other day that wind turbines cause cancer.
Now, you could put this down to personal derangement: Trump has had an irrational hatred
for wind power ever since he failed to prevent construction of a wind farm near his Scottish
golf course. And Trump seems deranged and irrational on so many issues that one more bizarre
claim hardly seems to matter.
But there's more to this than just another Trumpism. After all, we normally think of
Republicans in general, and Trump in particular, as people who minimize or deny the "negative
externalities" imposed by some business activities -- the uncompensated costs they impose on
other people or businesses.
For example, the Trump administration wants to roll back rules that limit emissions of
mercury from power plants. And in pursuit of that goal, it wants to prevent the Environmental
Protection Agency from taking account of many of the benefits from reduced mercury emissions,
such as an associated reduction in nitrogen oxide.
But when it comes to renewable energy, Trump and company are suddenly very worried about
supposed negative side effects, which generally exist only in their imagination. Last year
the administration floated a proposal that would have forced the operators of electricity
grids to subsidize coal and nuclear energy. The supposed rationale was that new sources were
threatening to destabilize those grids -- but the grid operators themselves denied that this
was the case.
So it's deregulation for some, but dire warnings about imaginary threats for others.
What's going on?
Part of the answer is, follow the money. Political contributions from the meat-processing
industry overwhelmingly favor Republicans. Coal mining supports the G.O.P. almost
exclusively. Alternative energy, on the other hand, generally favors Democrats.
There are probably other things, too. If you're a party that wishes we could go back to
the 1950s (but without the 91 percent top tax rate), you're going to have a hard time
accepting the reality that hippie-dippy, unmanly things like wind and solar power are
becoming ever more cost-competitive.
Whatever the drivers of Trump policy, the fact, as I said, is that it will kill people.
Wind turbines don't cause cancer, but coal-burning power plants do -- along with many other
ailments. The Trump administration's own estimates indicate that its relaxation of coal
pollution rules will kill more than 1,000 Americans every year. If the administration gets to
implement its full agenda -- not just deregulation of many industries, but discrimination
against industries it doesn't like, such as renewable energy -- the toll will be much
higher.
So if you eat meat -- or, for that matter, drink water or breathe air -- there's a real
sense in which Donald Trump is trying to kill you. And even if he's turned out of office next
year, for many Americans it will be too late.
Trump does not want to go back to the 50s when government policy was to greatly increase
costs by paying more workers more, while driving down prices, and elinimating rents and
scarcity profits.
Trump wants to kill jobs that are paid, but force work that is unpaid.
Well, if you means 1850, by the 50s, that's when Trump would have excelled by raping his
slaves to create more workers he would force to work, probably Brazil style, worked to death
to cut costs, based on continued enslavement of slaves, ie, no ban on slave imports after
1808.
Trump may be trying to kill us...but do Democrats have a plan to save us? So far, I can
discern no coherent message or plan from corrupt, comatose Democrats other than 'Trump is
guilty [of something or other.]
You are simply rejecting Democrats calls to reverse policies since 1970 to MAGA as failed
liberal policies because its not new, never tried before, and not free.
The growth of the 50s and 60s was too costly, requiring people to work, save, and pay ever
rising prices, taxes, and living costs.
You want economics where you can buy a million dollar home for $50,000 and have schools
funded by modest property taxes on million dollar homes, but with low tax rates on houses
assessed at $40,000.
TANSTAAFL
The only way working class families get better off is by paying higher costs.
Meet the democratic socialist who sent Rahm's floor leader packing
By Mark Brown
There's never been a Chicago politician who quite fits the profile of Andre Vasquez, the
former battle rapper and current democratic socialist who just took down veteran 40th Ward
Ald. Patrick O'Connor, Mayor Rahm Emanuel's city council floor leader.
That probably scares some people.
But those folks might want to nod to the wisdom of the 54 percent of voters in the North
Side ward who waded through an onslaught of attack ads and concluded they have nothing to
fear from the 39-year-old AT&T account manager, his music or his politics.
I stopped by Vasquez's campaign office to satisfy my own curiosity about this new breed of
aldermen. Vasquez will be part of a Chicago City Council bloc of at least five, probably six
democratic socialists who, if nothing else, will alter the debate on a range of issues.
Vazquez said he understands democratic socialism as "just injecting a healthy dose of
democracy in a system we already have.
"Where we see the influence of big money and corporations in our government, where we see
the corruption in the council, where we see elected officials as bought and paid for, to me,
democratic socialism is providing a counterbalance," he said.
Vasquez also reminded me that generalizing about democratic socialists is as foolish as
generalizing about Democrats.
"I think even within democratic socialism there's such a spectrum of different folks,
right? I tend to be a counterbalance to some of the louder stuff, the louder hardcore, what
some would view as extreme," said Vasquez, noting that he sometimes takes flak within
democratic socialist circles because he's never read Marx and doesn't "bleed rose red."
"Everyone's got their part to play," he said. "Somebody's going to be the loud one in the
room because you need that kind of impetus to move things forward. And someone's got to be
the one who's making deals on legislation. You can't have ideological fights and think you're
going to come up with solutions."
Though Vasquez prefers the dealmaker role, his background suggests he also could get loud
if the occasion demanded.
Until he decided it was time to do something else with his life around 2010, Vasquez was a
battle rapper who performed under the stage name Prime. He had enough success to pay the
bills for a while, touring nationally and appearing on MTV's "Direct Effect" and HBO's "Blaze
Battle."
For old people like me who are unclear on the concept (begging the pardon of the rest of
you), battle rapping involves performers trading insults in rhyme put to music.
"Then, imagine you have a crowd around you," Vasquez explained. "And now people are
cheering you on, and the insults are getting more vicious and intricate, and it becomes a
sporting match. Right? So, in that arena, you're getting heralded for how well you can insult
the person in front of you while rhyming and improvising all as this stream of consciousness
is coming out."
I suggested a battle rap might occasionally be just the antidote to the drudgery of a
council meeting, but Vasquez wasn't amused.
The problem with battle rapping, as 40th Ward voters were reminded ad nauseam during the
runoff campaign, is that the genre relies heavily on crude insults invoking disrespectful
terms for women and LGBTQ individuals.
"The issue is toxic masculinity plagues everything," said Vasquez, who obliquely fronted
an apology for his past verbal misdeeds early in the campaign -- and more directly when hit
with a barrage of negative mailers detailing a greatest hits of his transgressions.
A lesser candidate would have been toast at that point, but Vasquez had girded himself in
advance through his door-to-door organizing.
By then, enough 40th Ward residents knew who Vasquez really was -- the son of Guatemalan
immigrants, a city kid from the neighborhoods who had become a family guy with two young kids
and a late-discovered talent for politics -- that they couldn't be scared off.
Vasquez, who lives in Edgewater, was introduced to politics when he felt the Bern in 2014
and volunteered for Bernie Sanders presidential campaign. A left-leaning community group,
Reclaim Chicago, then recruited Vasquez to expand upon his organizing talents -- and taught
him how to build a classic grassroots campaign.
The result is a new Latino alderman in a ward where fewer than one-fifth of the voters are
Latino. And a Democratic Socialist representing a ward previously ruled by Emanuel's floor
leader.
"I'm not trying to plant a flag," Vasquez said. "I'm trying to make sure that people can
live here and not be forced out."
"Vasquez, who lives in Edgewater, was introduced to politics when he felt the Bern in 2014
and volunteered for Bernie Sanders presidential campaign. A left-leaning community group,
Reclaim Chicago, then recruited Vasquez to expand upon his organizing talents -- and taught
him how to build a classic grassroots campaign."
I like the centrists like Krugman and liberals here like EMike who dismiss Bernie as a
cult of personality. No he's spurring local organizing which doesn't revolve around him.
Will Bernie as president build walls around big cities like Chicago, build iron Curtains, to
keep the rich inside these cities where all their wealth is taxed away every year, and they
are prevented from moving to the towns outside Chicago city limits?
"... In fact Airbus 320 series never had the same issue as it was properly designed from scratch and not like Max 8 retrofitted to carry bigger engines by that changing distribution of balance of the Aircraft and hence requiring steeper ascending angle and faster speed (for the same wing design) and hence by design more prone to stalling while in takeoff phase. ..."
"... So what is the same in B737 Max and A320 was response of AI software to sensor failures and specific external conditions of flight. In both cases such scenarios were never trained in simulators. ..."
Thanks for the report but I may add that AI auto pilot systems on Airbus are not same or
similar to MCAS as they are all integrated in autopilot on A320 series while on B737 Max 8
they are completely separate from one another not communicating at all.
In fact Airbus 320 series never had the same issue as it was properly designed from
scratch and not like Max 8 retrofitted to carry bigger engines by that changing distribution
of balance of the Aircraft and hence requiring steeper ascending angle and faster speed (for
the same wing design) and hence by design more prone to stalling while in takeoff phase.
The problem with A320 crash over Atlantic was failure of one or two of two sensors and
while in cruise phase of flight autopilot AI software response was just inappropriate in fact
detrimental as pilots were blinded disoriented during night over the ocean trying to figure
out where they are as conflicting data was coming in.
It seems by some accounts they trusted
autopilot decisions and suggestions and simply descended, hit into ocean almost
horizontally.
So what is the same in B737 Max and A320 was response of AI software to sensor failures
and specific external conditions of flight. In both cases such scenarios were never trained
in simulators.
"... Evidence has mounted implicating in both crashes an automated anti-stall system, the Maneuvering Characteristics Augmentation System (MCAS), which was installed by Boeing in response to the new plane's tendency to pitch upward and go into a potentially fatal stall. On a whole number of fronts -- design, marketing, certification and pilot training -- information from the black boxes of the two planes points to a lack of concern for the safety of passengers and crew on the part of both Boeing and the Federal Aviation Administration, reaching the level of criminality. ..."
"... Despite the presence on the plane of two angle-of-attack sensors, which signal a potential stall and trigger the automated downward pitch of the plane's nose, MCAS relied on data from only one of the sensors. This means the standard redundancy feature built into commercial jets to avert disasters resulting from a faulty sensor was lacking. Boeing's main rival to the 737 Max, the European-built Airbus A320neo, for example, uses data from three sensors to manage a system similar to MCAS. ..."
"... Pilot certification for a commercial plane typically requires hundreds of hours of training, both in simulators and in actual flights. Boeing itself is now mandating at least 21 days of training on new Max planes. ..."
"... There is no innocent explanation for these obvious safety issues. They point to reckless and arguably criminally negligent behavior on the part of Boeing executives, who rushed the new plane into service and marketed it against the Airbus A320neo on the basis of its cost-saving features. ..."
"... This is highlighted by a press release the day of the Ethiopian Airlines crash in which Boeing stated that "for the past several months and in aftermath of Lion Air Flight 610," the company "has been developing a flight control software enhancement for the 737 MAX." ..."
"... In other words, both Boeing and the FAA were aware, possibly even before the October 2018 Lion Air crash and certainly afterward, that a system critical to the safe operation of the aircraft needed to be fixed, and still allowed the plane to continue flying. The wording also suggests that the plane shouldn't have been certified for flight in the first place. ..."
"... This was aided and abetted by the Trump administration, which shielded Boeing as long as it could by not ordering the FAA to ground the plane immediately after the Ethiopian Airlines crash. There were no doubt immense concerns that such a move would cut into Boeing's multibillion-dollar profits and affect its stock price, which has nearly tripled since the election of Trump in November 2016, accounting for more than 30 percent of the increase in the Dow Jones index since then. ..."
"... The relationship between Trump and Muilenburg is only a symptom of the much broader collusion between the airline industry and the US government. Starting in 2005 and expanded during the Obama administration, the FAA introduced the Organization Designation Authorization (ODA) program, which allows the agency to appoint as "designees" airplane manufacturers' employees to certify their own company's aircraft on behalf of the government. ..."
"... This is the logical end of the deregulation of the airline industry as a whole that was spearheaded by the Democratic Carter administration, which passed the Airline Deregulation Act in 1978. With the help of liberal icon Edward Kennedy, the legislation disbanded the Civil Aeronautics Board, which up to that point treated interstate airlines as a regulated public utility, setting routes, schedules and fares. ..."
It is nearly a month since the crash of Ethiopian Airlines Flight 302, which slammed into
the ground only six minutes after takeoff from Addis Ababa airport, killing all 157 people on
board. That disaster came less than five months after the fatal crash of Lion Air Flight 610
only 13 minutes after takeoff from Jakarta airport, killing all 189 passengers and crew
members.
Both crashes involved the same airplane, the Boeing 737 Max 8, and both followed wild
up-and-down oscillations which the pilots were unable to control.
In the weeks since these disasters, there have been no calls within the media or political
establishment for Boeing executives to be criminally prosecuted for what were evidently
entirely avoidable tragedies that killed a total of 346 people. This speaks to the corrupt
relationship between the US government and the aerospace giant -- the biggest US exporter and
second-largest defense contractor -- as well as the company's critical role in the stock market
surge and the ever-expanding fortunes of major Wall Street investors.
Black box recordings and simulations show that in the 60 seconds the pilots had to respond
to the emergency, faulty software forced the Lion Air flight into a nose dive 24 separate
times, as the pilots fought to regain control of the aircraft before plunging into the ocean at
more than 500 miles per hour.
Evidence has mounted implicating in both crashes an automated anti-stall system, the
Maneuvering Characteristics Augmentation System (MCAS), which was installed by Boeing in
response to the new plane's tendency to pitch upward and go into a potentially fatal stall. On
a whole number of fronts -- design, marketing, certification and pilot training -- information
from the black boxes of the two planes points to a lack of concern for the safety of passengers
and crew on the part of both Boeing and the Federal Aviation Administration, reaching the level
of criminality.
The most recent revelations concerning the March 10 Ethiopian Airlines crash, based on
preliminary findings from the official investigation, show that the pilots correctly followed
the emergency procedures outlined by Boeing and disengaged the automated flight control system.
Nevertheless, the nose of the plane continued to point downward. This strongly suggests a
fundamental and perhaps fatal flaw in the design of the aircraft. Numerous questions have been
raised about the design and certification process of the 737 Max 8 and MCAS,
including:
Despite the presence on the plane of two angle-of-attack sensors, which signal a
potential stall and trigger the automated downward pitch of the plane's nose, MCAS relied on
data from only one of the sensors. This means the standard redundancy feature built into
commercial jets to avert disasters resulting from a faulty sensor was lacking. Boeing's main
rival to the 737 Max, the European-built Airbus A320neo, for example, uses data from three
sensors to manage a system similar to MCAS.
Boeing Vice President Mike Sinnett admitted last
November that cockpit warning lights alerting pilots of a faulty angle-of-attack sensor were
only optional features on the Max 8. The MCAS system was absent from pilot manuals and flight
simulators, including for the well-known flight training program X-Plane 11, which came out in
2018, one year after the first commercial flight of the 737 Max 8. Pilot training for the 737
Max 8, which has different hardware and software than earlier 737s, was a single one-hour
computer course.
Pilot certification for a commercial plane typically requires hundreds of
hours of training, both in simulators and in actual flights. Boeing itself is now mandating at
least 21 days of training on new Max planes.
There is no innocent explanation for these obvious safety issues. They point to reckless and
arguably criminally negligent behavior on the part of Boeing executives, who rushed the new
plane into service and marketed it against the Airbus A320neo on the basis of its cost-saving
features.
Threatened with a loss of market share and profits to its chief competitor, Boeing
reduced costs by claiming that no significant training on the new Max 8 model, with the money
and time that entails, was necessary for pilots with previous 737 experience.
Such imperatives of the capitalist market inevitably downgrade safety considerations. This
is highlighted by a press release the day of the Ethiopian Airlines crash in which Boeing
stated that "for the past several months and in aftermath of Lion Air Flight 610," the company
"has been developing a flight control software enhancement for the 737 MAX."
In other words, both Boeing and the FAA were aware, possibly even before the October 2018
Lion Air crash and certainly afterward, that a system critical to the safe operation of the
aircraft needed to be fixed, and still allowed the plane to continue flying. The wording also
suggests that the plane shouldn't have been certified for flight in the first place.
This was aided and abetted by the Trump administration, which shielded Boeing as long as it
could by not ordering the FAA to ground the plane immediately after the Ethiopian Airlines
crash. There were no doubt immense concerns that such a move would cut into Boeing's
multibillion-dollar profits and affect its stock price, which has nearly tripled since the
election of Trump in November 2016, accounting for more than 30 percent of the increase in the
Dow Jones index since then.
Trump himself received a call from Boeing CEO Dennis Muilenburg two days after the Ethiopian
Airlines crash, during which Muilenburg reportedly continued to uphold the Max 8's safety. The
FAA finally grounded the plane on March 13, after every other country in the world had done
so.
The relationship between Trump and Muilenburg is only a symptom of the much broader
collusion between the airline industry and the US government. Starting in 2005 and expanded
during the Obama administration, the FAA introduced the Organization Designation Authorization
(ODA) program, which allows the agency to appoint as "designees" airplane manufacturers'
employees to certify their own company's aircraft on behalf of the government.
As a result, there was virtually no federal oversight on the development of the 737 Max 8.
FAA Acting Administrator Dan Elwell told Congress, "As a result of regular meetings between the
FAA and Boeing teams, the FAA determined in February 2012 that the [Max 8] project qualified
[a] project eligible for management by the Boeing ODA." This extended to the MCAS system as
well.
This is the logical end of the deregulation of the airline industry as a whole that was
spearheaded by the Democratic Carter administration, which passed the Airline Deregulation Act
in 1978. With the help of liberal icon Edward Kennedy, the legislation disbanded the Civil
Aeronautics Board, which up to that point treated interstate airlines as a regulated public
utility, setting routes, schedules and fares.
In a rational world, the ongoing Senate hearings and Department of Justice investigations
would have already brought criminal charges against Muilenburg, Sinnett, Elwell and all those
involved in overseeing the production, certification and sale of the 737 Max 8. This would
include the executives at Boeing and all those who have helped to deregulate the industry at
the expense of human lives.
Under capitalism, however, Boeing will get little more than a slap on the wrist. Experts
estimate the company will likely be fined at most $800 million, less than one percent of the
$90 billion Boeing expects in sales from the Max 8 in the coming years. As in Hurricane
Katrina, the Wall Street crash in 2008, the Deepwater Horizon oil spill in 2010 and Hurricanes
Harvey and Maria in 2017, the brunt of this disaster will be borne by the working class.
The Boeing 737 Max 8 disasters point to the inherent incompatibility between safe,
comfortable and affordable air transport and private ownership of the airline industry, as well
as the division of the world economy between rival nation-states. These catastrophes were
driven by both the greed of Boeing executives and big investors and the intensifying trade
conflict between the United States and Europe.
The technological advances that make it possible for travelers to move between any two
points in the world in a single day must be freed from the constraints of giant corporations
and the capitalist system as a whole. Major airlines and aerospace companies must be
expropriated on an international scale and transformed into publicly owned and democratically
controlled utilities, as part of the establishment of a planned economy based on social need,
not private profit.
Too many hooray, we are the USSA, America is the best cheerleaders, have no idea of the
gravity of the situation they will face, when the dollar and by extension the Petrodollar
implodes.
The rejection of the USSA has already started, but the average Yank hasn't noticed. When
Ethiopia, can reject a direct request from Uncle Scam and send the Black-Boxes to Europe,
because the USSA cannot be trusted, says it all. It is the little things we miss, things that
seem small and insignificant, that actually reveals a lot and the Ethiopian rejection was
one.
The world has simply had enough of USSA diktats and subsidising them. The USSA is merely
4% of the worlds population, that consumes 24.8% of the worlds resources and this situation
is totally untenable. A nation of exceptionalists. 5%? Yes. The rest? lol
A technical issue that Boeing flagged in a safety warning after the deadly 737 MAX 8 crash
in Indonesia could happen to any other aircraft, and it's "not unlikely" that the manufacturer
knew about it, aviation experts told RT. Earlier this week, Boeing issued a safety update
to pilots flying its newest 737 MAX airliner, warning of a possible fault in a sensor that
could send the aircraft into a violent nosedive.
That sensor measures air flow over a plane's wings, but its failure can lead to an
aerodynamic stall.
International aviation experts told RT that a problem of this kind could doom aircraft of
any type. The tragedy that happened to Lion Air's Boeing 737 MAX is not the first of its kind
to involve a faulty
"Pitot tube" – a critical air-speed sensor that measures the flow velocity
– explained Elmar Giemulla, a leading German expert in air and traffic law.
"This is not unusual in the way it happened before," he noted, mentioning incidents
similar to the Lion Air crash. Back in 1996, a Boeing 757 operated by Turkey's Birgenair
stalled and crashed in the Caribbean because of a blocked pitot tube. Likewise, erroneous
air-speed indications, coupled with pilot errors, led to the crash of an Air France Airbus A330
over the Atlantic in 2009.
While the problem is not entirely new, it is unclear how Boeing had tackled it, according to
Giemulla. "It is not very unlikely" that Boeing knew about the problem, he said, warning
that "more than 200 planes are concerned and this could happen tomorrow again."
There is so much experience with [using Pitot tubes] that it surprises me very much
that this could happen to a newly developed plane.
However, the expert doubted that there has been any cover-up of the issue, instead
suggesting that "obviously gross negligence" had been involved.
A 737 MAX 8 servicing Lion Air flight 610 last week ploughed into the waters of the Java Sea
shortly after take-off from Jakarta, killing all 189 people on board. Investigators say there
is a possibility that inaccurate readings fed into the MAX's computer could have sent the plane
into a sudden descent.
If markets were truly free and there was real capitalism then airlines would be looking at
the new and excellent Russian MC-21 which does what Boeing was trying to do with the 737 Max.
The MC-21 will safely handle passengers in the 140 to 160 passengers and is a mid range plane
that can go as far as 4,000 miles.
Instead – Boeing lobbies the corrupt U.S. AIPAC Congress to keep a Boeing
monopoly of death traps like the 737 Max allowing some Airbus sales. They also blocked a nice
Bombardier mid range jet from Canada.
I've flown in the Bombardier in South America– it is a fine aircraft.
"... "Sadly, these two entirely preventable airline crashes demonstrate that the FAA is ill-equipped to oversee the aerospace industry and will downplay serious hazards and safety risks to the public rather than sound the alarm about safety concerns, problems, issues and hazards that pose substantial, probable, and/or foreseeable risks to human life," attorneys for Stumo said in the lawsuit. ..."
"... "Boeing, and the regulators that enabled it, must be held accountable for their reckless actions." The chairman of the Senate Commerce Committee said this week that whistleblowers have come forward to report that FAA safety inspectors, including those involved with approvals for the 737 Max, lacked proper training and certifications. ..."
"... But legal experts have said the second disaster could prove even more damaging for the company. That's because plaintiffs will argue the manufacturer was put on notice by the earlier tragedy that there was something dangerously wrong with its planes that should have been fixed. ..."
The parents of Samya Stumo, 24, alleged Boeing was "blinded by its greed" and rushed the 737
Max 8 to market with the "knowledge and tacit approval" of the FAA, while hiding defects in its
automated flight-control system. The suit also cites a similar flaw in the
Lion Air flight of a 737 Max 8 jet that crashed into the Java Sea on October 29 , killing
189.
The complaint alleges that decisions by Boeing leaders contributed to the crash and
"demonstrate Boeing's conscious disregard for the lives of others," including designing an
aircraft with a flight-control system that is "susceptible to catastrophic failure" in the
event of a single defective sensor made by Rosemount Aerospace.
'Ill-equipped'
"Sadly, these two entirely preventable airline crashes demonstrate that the FAA is
ill-equipped to oversee the aerospace industry and will downplay serious hazards and safety
risks to the public rather than sound the alarm about safety concerns, problems, issues and
hazards that pose substantial, probable, and/or foreseeable risks to human life," attorneys for
Stumo said in the lawsuit.
"Boeing, and the regulators that enabled it, must be held
accountable for their reckless actions." The chairman of the Senate Commerce Committee said
this week that whistleblowers have come forward to report that FAA safety inspectors, including
those involved with approvals for the 737 Max, lacked proper training and certifications.
Senator Roger Wicker, a Mississippi Republican, said those claims prompted him to investigate
potential connections between training and certification shortcomings and the FAA's evaluation
of the airliner.
The Senate panel's probe is the latest in a string of investigations by US
officials and lawmakers into how the FAA cleared the 737 Max as safe to fly. The Transportation
Department's inspector general is reviewing the FAA's process for approving the airworthiness
of new jets and aiding a Justice Department criminal probe.
Criminal probe
A grand jury convened by US prosecutors last month subpoenaed a former Boeing engineer
demanding he provide testimony and documents related to the 737 Max.
FAA Acting Administrator Dan Elwell has said the agency "welcomes external review of our
systems, processes and recommendations." Boeing faces the prospect of substantial payouts to
the families of passengers if it's found responsible for both the Ethiopia Air and Lion Air
crashes.
But legal experts have said the second disaster could prove even more damaging for the
company. That's because plaintiffs will argue the manufacturer was put on notice by the earlier
tragedy that there was something dangerously wrong with its planes that should have been
fixed.
The company failed itself by replacing engineers with Wall Street accountants.... typical
US corporation destroyed from withing by asset strippers, chiselers, deregulators... the
complete gamut of "free enterprise" vampires leaving the US economy in shambles.
Agree with that, theres been a serious drive to focus on bean-counting and bringing in
"mainstream" business leadership from companies like GE/Toyota/3m (think outsourcing/stock
buybacks/automate/layoff type)
Its one of the few companies that has a real hard time getting rid of skilled labor,
because building an aircraft is an incredibly huge undertaking, with lots of hand fitting and
a wide array of technical skills, so getting rid of the labor hasnt worked to this point.
But they're trying hard to get inline with the typical "modern" business model, and it
hasnt been great for morale.
Boeing has been working on a fix to the anti-stall software for some time now. However,
Reuters today reported that regulators including EASA knew that the MAX's trim control was
confusing.
"... No. Possibly Boeing & the FAA will solve the immediate issue, but they have destroyed Trust. ..."
"... It has emerged on the 737MAX that larger LEAP-1B engines were unsuited to the airframe and there is no way now to alter the airframe to balance the aircraft. ..."
"... Boeing failed to provide training or training material to pilots or even advise them the existence of MCAS. There was a complex two step process required of pilots in ET302 and JT610 crashes and their QRH handbook did not explain this: ..."
No. Possibly
Boeing & the FAA will solve the immediate issue, but they have
destroyed Trust.
Other brands of
aircraft like Airbus with AF447 established trust after their A330
aircraft plunged into the Atlantic in a mysterious accident.
With Airbus
everyone saw transparency & integrity in how their accidents were
investigated. How Boeing & FAA approached accident investigation
destroyed public Trust.
By direct
contrast in the mysterious disappearance of MH370, Boeing
contributed nothing to the search effort and tried to blame the
pilot or hijackers.
With the 737MAX
in Lion Air and Ethiopian crashes Boeing again tried to blame
pilots, poor training, poor maintenance and then when mechanical
defect was proven, Boeing tried to downplay how serious the issue
was and gave false assurances after Lion Air that the plane was
still safe. ET302 proved otherwise.
It is no longer
possible to trust the aircraft's certification. It is no longer
possible to trust that safety was the overriding principle in
design of the Boeing 737 MAX nor several other Boeing designs for
that matter.
The Public have
yet to realize that the Boeing 777 is an all electric design where
in certain scenarios like electrical fire in the avionics bay, an
MEC override vent opens allowing cabin air pressure to push out
smoke. This silences the cabin depressurization alarms.
As an
electrical failure worsens, in that scenario another system called
ELMS turns off electrical power to the Air Cycle Machine which
pumps pressurized air into the cabin. The result of ELMS cutting
power means the override vent fails to close again and no new
pressurized air maintains pressure in the cabin. Pilots get no
warning.
An incident in
2007 is cited as AD 2007–07–05 by the FAA in which part but not
all of this scenario played out in a B777 at altitude.
MH370 may have
been the incident in which the full scenario played out, but of
course Boeing is not keen for MH370 to be found and unlike Airbus
which funded the search for AF447, Boeing contributed nothing to
finding MH370.
It has emerged
on the 737MAX that larger LEAP-1B engines were unsuited to the
airframe and there is no way now to alter the airframe to balance
the aircraft.
It also emerged
that the choice to fit engines to this airframe have origins in a
commercial decision to please Southwest Airlines and cancel the
Boeing 757.
Boeing failed
to provide training or training material to pilots or even advise
them the existence of MCAS. There was a complex two step process
required of pilots in ET302 and JT610 crashes and their QRH
handbook did not explain this:
The MAX is
an aerodynamically unbalanced aircraft vulnerable to any sort of
disruption, ranging from electrical failure, out of phase
generator, faulty AOA sensor, faulty PCU failure alert, digital
encoding error in the DFDAU.
Jason Eaton
Former Service Manager
Studied at University of
Life
Lives in Sydney,
Australia
564k answer views
50.7k
this month
Answered Mar 24, 2019
·
No I wouldn't.
I'm not a pilot or an aerospace technician but I am a mechanical
engineer, so I know a little bit about physics and stuff.
The 737–8
is carrying engines it was never designed for, that cause it to
become inherently unstable. So unstable in fact, that it can't be
controlled by humans and instead relies on computer aided control
to maintain the correct attitude, particularly during ascent and
descent.
The MCAS system
is, effectively, a band aid to fix a problem brought about by poor
design philosophy. Boeing should have designed a new airframe that
complements the new engines, instead of ruining a perfectly good
aircraft by bolting on power units it's not designed to carry, and
then trying to solve the resulting instability with software. And
if that isn't bad enough, the system relies on data from just the
one sensor which if it doesn't agree with, it'll force the
aircraft nose down regardless of the pilots' better judgement.
That might be
ok for the Eurofighter Typhoon but it's definitely not ok for fare
paying passengers on a commercial jetliner.
So, no. I won't
be flying on a 737–8 until it's been redesigned to fly safely. You
know, like a properly designed aeroplane should.
4.8k
Views
·
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"... Under the circumstances, Boeing's best option was to just take the hit for a few years and accept that it was going to have to start selling 737s at a discount price while it designed a whole new airplane. That would, of course, be time-consuming and expensive, and during the interim, it would probably lose a bunch of narrow-body sales to Airbus. ..."
"... As late as February 2011, Boeing chair and CEO James McNerney was sticking to the plan to design a totally new aircraft. ..."
"... Committing to putting a new engine that didn't fit on the plane was the corporate version of the Fyre Festival's "let's just do it and be legends, man" moment, and it unsurprisingly wound up leading to a slew of engineering and regulatory problems. ..."
"... The problem is that an airplane is a big, complicated network of interconnected parts. To get the engine under the 737 wing, engineers had to mount the engine nacelle higher and more forward on the plane. But moving the engine nacelle (and a related change to the nose of the plane) changed the aerodynamics of the plane, such that the plane did not handle properly at a high angle of attack ..."
"... But note that the underlying problem isn't really software; it's with the effort to use software to get around a whole host of other problems. ..."
"... Looking back, Boeing probably wishes it had just stuck with the "build a new plane" plan and toughed out a few years of rough sales, rather than ending up in the current situation. Right now the company is, in effect, trying to patch things up piecemeal -- a software update here, a new warning light there, etc. -- in hopes of persuading global regulatory agencies to let its planes fly again. ..."
"... That said, on March 27, FAA officials faced the Senate Commerce Committee's Subcommittee on Aviation and Space at a hearing called by subcommittee Chair Ted Cruz (R-TX). Regulators committed at the hearing to revamp the way they certify new planes , in light of the flaws that were revealed in the previous certification process. ..."
"... a central element of this story is the credibility of the FAA's process ..."
Claiming responsibility was part of an attempt to get the planes approved to fly again.
Boeing was trying to say that it now understands why the planes crashes -- flawed software --
and has a plan in place to replace it with new software that will eliminate the problem and
persuade regulators to get the planes off the ground. But then Friday morning, the company
announced that it had found a second,
unrelated software flaw that it also needs to fix and will somewhat delay the process of
getting the planes cleared to fly again.
All of which, of course, raises the question of why such flawed systems were allowed to fly
in the first place.
And that story begins nine years ago when Boeing was faced with a major threat to its bottom
line, spurring the airline to rush a series of kludges through the certification process --
with an underresourced Federal Aviation Administration (FAA) seemingly all too eager to help an
American company threatened by a foreign competitor, rather than to ask tough questions about
the project.
The specifics of what happened in the regulatory system are still emerging (and despite
executives' assurances, we don't even really know what happened on the flights yet). But the
big picture is coming into view: A major employer faced a major financial threat, and
short-term politics and greed won out over the integrity of the regulatory system. It's a
scandal. The A320neo was trouble for Boeing
Jet fuel is a major cost for airlines. With labor costs largely driven by collective
bargaining agreements and regulations that require minimum ratios of flight attendants per
passenger, fuel is the cost center airlines have the most capacity to do something about.
Consequently, improving fuel efficiency has emerged as one of the major bases of competition
between airline manufacturers.
If you roll back to 2010, it began to look like Boeing had a real problem in this
regard.
Airbus was coming out with an updated version of the
A320 family that it called the A320neo , with "neo" meaning "new engine option." The new
engines were going to be more fuel-efficient, with a larger diameter than previous A320
engines, that could nonetheless be mounted on what was basically the same airframe. This was a
nontrivial engineering undertaking both in designing the new engines and in figuring out how to
make them work with the old airframe, but even though it cost a bunch of money, it basically
worked. And it raised the question of whether Boeing would respond.
Initial word was that it wouldn't. As CBS Moneywatch's Brett
Snyder wrote in December 2010 , the basic problem was that you couldn't slap the new
generation of more efficient, larger-diameter engines onto the 737:
One of the issues for Boeing is that it takes more work to put new engines on the 737 than
on the A320. The 737 is lower to the ground than the A320, and the new engines have a
larger diameter . So while both manufacturers would have to do work, the Boeing guys
would have more work to do to jack the airplane up. That will cost more while reducing
commonality with the current fleet. As we know from last week, reduced commonality means
higher costs for the airlines as well.
Under the circumstances, Boeing's best option was to just take the hit for a few years and
accept that it was going to have to start selling 737s at a discount price while it designed a
whole new airplane. That would, of course, be time-consuming and expensive, and during the
interim, it would probably lose a bunch of narrow-body sales to Airbus.
The original version of the 737 first flew in 1967, and a decades-old decision about how
much height to leave between the wing and the runway left them boxed out of 21st-century engine
technology -- and there was simply nothing to be done about it.
Unless there was.
Boeing decided to put on the too-big engines anyway
As late as February 2011, Boeing chair and CEO James McNerney was sticking to the plan to
design a totally new aircraft.
"We're not done evaluating this whole situation yet," he
said on an analyst call , "but our current bias is to move to a newer airplane, an all-new
airplane, at the end of the decade, beginning of the next decade. It's our judgment that our
customers will wait for us."
It's not entirely clear what happened, but, reading between the lines, it seems that in
talking to its customers Boeing reached the conclusion that airlines would not wait for them.
Some critical mass of carriers (American Airlines seems to have been particularly influential)
was credible enough in its threat to switch to Airbus equipment that Boeing decided it needed
to offer 737 buyers a Boeing solution sooner rather than later.
Committing to putting a new engine that didn't fit on the plane was the corporate version of
the Fyre Festival's "let's
just do it and be legends, man" moment, and it unsurprisingly wound up leading to a slew of
engineering and regulatory problems.
New engines on an old plane
As the industry trade publication Leeham News and Analysis explained earlier in March,
Boeing engineers had been
working on the concept that became the 737 Max even back when the company's plan was still
not to build it. In a March 2011 interview with Aircraft Technology, Mike Bair, then the head of 737 product
development, said that reengineering was possible. "There's been fairly extensive engineering work on it," he said. "We figured out a way to
get a big enough engine under the wing."
The problem is that an airplane is a big, complicated network of interconnected parts. To
get the engine under the 737 wing, engineers had to mount the engine nacelle higher and more
forward on the plane. But moving the engine nacelle (and a related change to the nose of the
plane) changed the aerodynamics of the plane, such that the plane did not handle properly at a
high angle of attack.
That, in turn, led to the creation of the Maneuvering Characteristics Augmentation System
(MCAS). It fixed the angle-of-attack problem in most situations, but it created new problems in
other situations when it made it difficult for pilots to directly control the plane without
being overridden by the MCAS.
On Wednesday, Boeing rolled out a software patch that it says corrects the problem, and it
hopes to persuade the FAA to agree.
But note that the underlying problem isn't really software; it's with the effort to use
software to get around a whole host of other problems.
1of x: BEST analysis of what really is happening on the #Boeing737Max
issue from my brother in law @davekammeyer , who's a pilot,
software engineer & deep thinker. Bottom line don't blame software that's the band aid
for many other engineering and economic forces in effect.
Recall, after all, that the whole point of the 737 Max project was to be able to say that
the new plane was the same as the old plane. From an engineering perspective, the preferred
solution was to actually build a new plane. But for business reasons, Boeing didn't want a "new
plane" that would require a lengthy certification process and extensive (and expensive) new
pilot training for its customers. The demand was for a plane that was simultaneously new and
not new.
But because the new engines wouldn't fit under the old wings, the new plane wound up having
different aerodynamic properties than the old plane. And because the aerodynamics were
different, the flight control systems were also different. But treating the whole thing as a
fundamentally different plane would have undermined the whole point. So the FAA and Boeing
agreed to sort of fudge it.
The new planes are pretty different
As far as we can tell, the 737 Max is a perfectly airworthy plane in the sense that
error-free piloting allows it to be operated safely.
But pilots of planes that didn't crash kept noticing the same basic pattern of behavior that
is suspected to have been behind the two crashes, according to a Dallas Morning News review of
voluntary aircraft incident reports to a NASA database:
The disclosures found by the News reference problems with an autopilot system, and they
all occurred during the ascent after takeoff. Many mentioned the plane suddenly nosing down.
While records show these flights occurred in October and November, the airlines the pilots
were flying for is redacted from the database.
These pilots all safely disabled the MCAS and kept their planes in the air. But one of the
pilots reported to the
database that it was "unconscionable that a manufacturer, the FAA, and the airlines would
have pilots flying an airplane without adequately training, or even providing available
resources and sufficient documentation to understand the highly complex systems that
differentiate this aircraft from prior models."
The training piece is important because a key selling feature of the 737 Max was the idea
that since it wasn't really a new plane, pilots didn't really need to be retrained for the new
equipment. As the New York Times reported, "For many new airplane models, pilots train for
hours on giant, multimillion-dollar machines, on-the-ground versions of cockpits that mimic the
flying experience and teach them new features" while the experienced 737 Max pilots were
allowed light refresher courses that you could do on an iPad.
That let Boeing get the planes into customers' hands quickly and cheaply, but evidently at
the cost of increasing the possibility of pilots not really knowing how to handle the planes,
with dire consequences for everyone involved.
The FAA put a lot of faith in Boeing
In a blockbuster March 17 report for the Seattle Times, the newspaper's aerospace reporter
Dominic Gates details the extent to which
the FAA delegated crucial evaluations of the 737's safety to Boeing itself . The
delegation, Gates explains, is in part a story of a years-long process during which the FAA,
"citing lack of funding and resources, has over the years delegated increasing authority to
Boeing to take on more of the work of certifying the safety of its own airplanes."
But there are indications of failures that were specific to the 737 Max timeline. In
particular, Gates reports that "as certification proceeded, managers prodded them to speed the
process" and that "when time was too short for FAA technical staff to complete a review,
sometimes managers either signed off on the documents themselves or delegated their review back
to Boeing."
Most of all, decisions about what could and could not be delegated were being made by
managers concerned about the timeline, rather than by the agency's technical experts.
It's not entirely clear at this point why the FAA was so determined to get the 737 cleared
quickly (there will be more investigations), but if you recall the political circumstances of
this period in Barack Obama's presidency, you can quickly get a general sense of the issue.
Boeing is not just a big company with a significant lobbying presence in Washington; it's a
major manufacturing company with a strong global export presence and a source of many
good-paying union jobs. In short, it was exactly the kind of company the powers that be were
eager to promote -- with the Obama White House, for example, proudly going to bat for the
Export-Import Bank as a key way to sustain America's aerospace industry.
A story about overweening regulators delaying an iconic American company's product launch
and costing good jobs compared to the European competition would have looked very bad. And the
fact that the whole purpose of the plane was to be more fuel-efficient only made getting it off
the ground a bigger priority. But the incentives really were reasonably aligned, and Boeing has
only caused problems for itself by cutting corners.
Boeing is now in a bad situation
One emblem of the whole situation is that as the 737 Max engineering team piled kludge on
top of kludge, they came up with a cockpit
warning light that would alert the pilots if the plane's two angle-of-attack sensors
disagreed.
But then, as
Jon Ostrower reported for the Air Current , Boeing's team decided to make the warning light
an optional add-on, like how car companies will upcharge you for a moon roof.
The
light cost $80,000 extra per plane and neither Lion Air nor Ethiopian chose to buy it,
perhaps figuring that Boeing would not sell a plane (nor would the FAA allow it to) that was
not basically safe to fly. In the wake of the crashes, Boeing has decided to revisit this
decision and make the light standard on all aircraft.
This, fundamentally, is one reason the FAA has become comfortable working so closely with
Boeing on safety regulations: The nature of the airline industry is such that there's no real
money to be made selling airplanes that have a poor safety track record. One could even imagine
sketching out a utopian libertarian argument to the effect that there's no real need for a
government role in certifying new airplanes at all, precisely because there's no reason to
think it's profitable to make unsafe ones.
The real world, of course, is quite a bit different from that, and different individuals and
institutions face particular pressures that can lead them to take actions that don't
collectively make sense. Looking back, Boeing probably wishes it had just stuck with the
"build a new plane" plan and toughed out a few years of rough sales, rather than ending up in
the current situation. Right now the company is, in effect, trying to patch things up piecemeal
-- a software update here, a new warning light there, etc. -- in hopes of persuading global
regulatory agencies to let its planes fly again.
But even once that's done, Boeing faces the task of convincing airlines to actually buy its
planes. An
informative David Ljunggren article for Reuters reminds us that a somewhat comparable
situation arose in 1965 when three then-new Boeing 727 jetliners crashed.
There wasn't really anything unsound about the 727 planes, but many pilots didn't fully
understand how to operate the new flaps -- arguably a parallel to the MCAS situation with the
737 Max -- which spurred some additional training and changes to the operation manual.
Passengers avoided the planes for months, but eventually came back as there were no more
crashes, and the 727 went on to fly safely for decades. Boeing hopes to have a similar happy
ending to this saga, but so far it seems to be a long way from that point. And the immediate
future likely involves more tough questions.
A political scandal on slow burn
The 737 Max was briefly a topic of political controversy in the United States as foreign
regulators grounded the planes, but President Donald Trump -- after speaking personally to
Boeing's CEO -- declined to follow. Many members of Congress (from both parties) called on him
to reconsider, which he rather quickly did, pushing the whole topic off Washington's front
burner.
But Trump is generally friendly to Boeing (he even has a former Boeing executive, Patrick
Shanahan, serving as acting
defense secretary, despite an ongoing ethics inquiry into charges that Shanahan unfairly
favors his former employer), and Republicans are generally averse to harsh regulatory
crackdowns. The most important decisions in the mix appear to have been made back during the
Obama administration, so it's also difficult for Democrats to go after this issue. Meanwhile,
Washington has been embroiled in wrangling over special counsel Robert Mueller's investigation,
and a new health care battlefield opened up as well.
That said, on March 27, FAA officials faced the Senate Commerce Committee's Subcommittee
on Aviation and Space at a hearing called by subcommittee Chair Ted Cruz (R-TX). Regulators
committed at the hearing to revamp the way they certify new
planes , in light of the flaws that were revealed in the previous certification
process.
The questions at stake, however, are now much bigger than one subcommittee. Billions of
dollars are on the line for Boeing, the airlines that fly 737s, and the workers who build the
planes. And since a central element of this story is the credibility of the FAA's
process -- in the eyes of the American people and of foreign regulatory agencies -- it
almost certainly won't get sorted out without more involvement from the actual decision-makers
in the US government.
Ralph Nader, the noted consumer rights advocate, called for a recall and consumer boycott of the
Boeing
jet grounded by regulators across the globe after two deadly crashes.
His niece, 24-year-old Samya
Stumo, was among the 157 victims of an Ethiopian Airlines flight crash last month, less than six months after a
flight on the same aircraft, the Boeing 737 Max 8, crashed in Indonesia.
"Those planes should never fly again," said Nader, speaking by phone at a news conference after Stumo's family
filed a lawsuit against Chicago-based Boeing, one of its suppliers and Ethiopian Airlines. The family also filed a
claim against the
Federal Aviation Administration
.
Stumo's family's lawsuit is one of several filed by relatives of passengers killed in the Ethiopian Airlines and
Lion Air crashes. All those families have "such huge holes" because of the aircraft's problems, said Nadia Milleron,
Stumo's mother, who said she had met others who lost loved ones in Ethiopia.
"As someone who's lost the dearest person in my life, I want her death not to be in vain. I don't want anybody
else to die," she said at the news conference in Chicago.
"Those in charge of creating and selling this plane did not treat Samya as they would their own daughters," said
Milleron, who was visibly emotional as she spoke about her daughter.
"This could have been prevented, and that's what makes me cry," she said.
Nader's book "Unsafe at Any Speed"
helped bring about a series of auto safety laws
, including the creation the federal agency that became the
National Highway Traffic Safety Administration, which oversees the auto industry. He later turned his attention to
various consumer protection efforts related to food, drug and workplace safety and clean air and water.
On Thursday, he took aim at Boeing, blaming the crashes on design problems that he argued were the result of the
company's focus on getting the plane on the market quickly to compete with its rival manufacturer Airbus.
He also criticized the relationship between Boeing and the federal agency tasked with overseeing aviation industry
safety.
"If we don't end the cozy relationship between the patsy FAA and the Boeing company, 5,000 of these fatally flawed
planes will be in the air all over the world with millions of passengers," Nader said.
Boeing said Thursday it is reviewing a preliminary report on last month's crash from Ethiopian authorities that
said the same anti-stall system that came under scrutiny in the Lion Air crash was activated on the Ethiopian
Airlines flight.
Most accidents are the result of a chain of events, but when that system is activated in error, it adds to "what
is already a high-workload environment," Boeing CEO Dennis Muilenburg
said in
a video
released by the company on Thursday.
"It's our responsibility to eliminate this risk. We own it, and we know how to do it," he said.
Boeing said it is still working with the FAA and regulatory agencies to develop and certify a software update
designed to keep the system from being activated unintentionally, along with additional training for pilots.
Nader said he doesn't think the software fix is enough to make the plane safe since it can't predict all potential
problems with a plane that is "prone to stall."
While Boeing has worked to show it is taking steps to address safety concerns, the FAA is planning changes to its
oversight of airplane development, which delegates some authority for certifying new aircraft to their manufacturers,
the Associated
Press reported
.
"... [We] can now reveal how it's possible the aircraft can crash despite using the Cut-Out switches. To verify, we ran it all in a simulator together with MentourPilot Youtube channel over the last days. ..."
"... Nowhere is it described the trim could be impossible to move if the Cut-Out switches were cut at the slightest miss-trim at the speeds flown. And there is no warning on when to move the Cut-Out switches, the checklist says "Cut, then trim manually." This is not the whole truth . ..."
"... The high speed of 340kts indicated airspeed and the trim at 2.3 units causes the Stabilator manual trim to jam, one can't move it by hand. The crew is busy trying to hand trim the next two minutes but no trim change is achieved. ..."
"... It's easy to say "Why didn't they trim then?". Because they are going down at 20 degrees nose down (which is a lot, a normal landing approach is 3°) and at 400kts. Then you just pull for all you have. And the aircraft is not reacting to the largest Control Column displacement since takeoff. This makes them pull even harder, the aircraft is unresponsive and they are fighting for theirs and all the passenger lives. ..."
"... Moreover their description of the MCAS was incomplete . It is only now known that the MCAS trims the stabilizer at a speeed of 0.27 units (degrees) per second while the pilots electric trim moves the stabilizer at only 0.18 units per second: ..."
"... If MCAS keeps tripping, and if pilots do not shut off electric trim entirely, the result is what Tajer describes as a two-steps-back, one-step-forward scenario, with MCAS maintaining an edge. ..."
"... "The MCAS knows but one speed, which is 0.27, which is the most-aggressive speed," Tajer says. "If you look at the balance sheet on it, MCAS is winning, and you are losing." ..."
"... That additional problem pertains to software affecting flaps and other flight-control hardware and is therefore classified as critical to flight safety, said two officials with knowledge of the investigation. ..."
"... This is not about sensor failure. It is about the profit of cheap parts and greed. The insiders at Boeing tipped off the Big Boys that they needed more than the gizmos installed on export versions if they were going to survive. ..."
"... Engineering Manufacturing company with a sales division works alright. But a Sales Company with a manufacturing subsidiary does not, as we see. Boeing is typical for end-stage Imperial Corporations - all show, no go, and get the money quick... ..."
"... A mistake is one or two errors. This was one horrible string of deliberate corner cutting, about 7-8 totally disastrous decisions by the management, that could have only led to deaths of people uninformed enough to purchase the travel risk from this plane supplier. ..."
< to include the new system into training material for the pilots which Boeing, for
commercial reasons, did not do.>
After the Lion Air crash the Federal Aviation Administration
issued an Airworthiness
Directive 2018-23-51 which adviced 737 MAX pilots how to handle an MCAS failure.
The FAA told 737 MAX pilots to use the Stabilizer Trim Cutoff switches to interupt the
power supply for the system's actuator, a motor driven jackscrew in the back of the airplane.
The pilots should then use the manual trim wheels in the cockpit, which move the jackscrew
and stabilizer via steel cables, to righten the aircraft.
On March 10 a 737 MAX flown by Ethiopian Airline crashed shortly after take off. 157
people died. Radar data and debris found showed that the cause was likely a similar MCAS
failure as had happened on the Indonesian Lion Air flight.
All 737 MAX planes were grounded with the U.S. being the last country to order it.
Some U.S. pilots, as well as some commentators here, publicly blamed the darker skin
pilots for not using the simple procedure the FAA had put out: "Why didn't they just flip the
switches? Stupid undertrained third-world dudes."
The preliminary report clearly showed that the Ethiopian Airlines pilots who were
commanding Flight ET 302/10 March have followed the Boeing recommended and FAA approved
emergency procedures to handle the most difficult emergency situation created on the
airplane. Despite their hard work and full compliance with the emergency procedures, it was
very unfortunate that they could not recover the airplane from the persistence of nose
diving.
The procedure Boeing and the FAA advised to use was insufficient to bring the aircraft
back under control. It was in fact impossible to recover the plane. The possibility of this
to happen was discussed in pilot fora and on specialized websites for some time.
The MCAS system moves the front of the stablizer up to turn the nose of the airplane down.
The plane then decends very fast. The aerodynamic forces (the "wind") pushing against the
stabilizer gets so strong that a manual counter-trim becomes impossible.
With the 737MAX cutout switches, MCAS runaway is stopped by throwing both switches, losing
electric trim altogether. In this case, the flight crew must rely on manual trim via
turning the trim wheel/crank. As discussed above, the manual crank can bind up , making
flying much more difficult.
Bjorn Fehrm, a senior engineeer and pilot now writing at Leeham News , came to a
similar
conclusion :
[We] can now reveal how it's possible the aircraft can crash despite using the Cut-Out
switches. To verify, we ran it all in a simulator together with MentourPilot Youtube
channel over the last days.
...
At a miss-trimmed Stabilator, you either have to re-engage Electric trim or off-load the
Stabilator jackscrew by stick forward, creating a nose-down bunt maneuver, followed by
trim.
Stick forward to trim was not an option for ET302, they were at 1,000ft above ground.
According to The Wall Street Journal, the ET302 crew re-engaged electrical trim to save the
situation, to get the nose up. It was their only chance. But too late. The aggressive MCAS
kicked in and worsened the situation before they could counter it.
On the FAA's Airworthiness Directive Fehrm writes:
Nowhere is it described the trim could be impossible to move if the Cut-Out switches were
cut at the slightest miss-trim at the speeds flown. And there is no warning on when to move
the Cut-Out switches, the checklist says "Cut, then trim manually." This is not the whole
truth .
An detailed analysis of the flight recorder data as documented in the preliminary crash
report confirms
the conclusions :
The high speed of 340kts indicated airspeed and the trim at 2.3 units causes the Stabilator
manual trim to jam, one can't move it by hand. The crew is busy trying to hand trim the
next two minutes but no trim change is achieved.
The pilots then do the only thing possible. They reengage the electric stabilizer trim to
righten the aircraft.
But the aggressive MCAS, trimming with a speed 50% higher than the pilot and for a full
nine seconds, kicks in at 8 with a force they didn't expect. Speed is now at 375kts and
MCAS was never designed to trim at these Speed/Altitude combinations. Dynamic pressures,
which governs how the aircraft reacts to control surface movements, is now almost double it
was when last MCAS trimmed (Dynamic pressure increases with Speed squared).
The Pilots are thrown off their seats, hitting the cockpit roof. Look at the Pitch
Attitude Disp trace and the Accel Vert trace. These are on the way to Zero G and we can see
how PF loses stick pull in the process (Ctrl Column Pos L). He can barely hold on to the
Yoke, let alone pull or trim against.
His reduced pull increases the pitch down further, which increases the speed even more.
At 05.45.30 the Pilots have hit the seats again (Accel Vert trace and Ctrl Columns force
trace) and can start pulling in a desperate last move. But it's too late. Despite them
creating the largest Control Column movement ever, pitch down attitude is only marginally
affected.
The pilots and their passengers lose the fight:
It's easy to say "Why didn't they trim then?". Because they are going down at 20 degrees
nose down (which is a lot, a normal landing approach is 3°) and at 400kts. Then you
just pull for all you have. And the aircraft is not reacting to the largest Control Column
displacement since takeoff. This makes them pull even harder, the aircraft is unresponsive
and they are fighting for theirs and all the passenger lives.
A diligent safety anlysis would have predicted this outcome. Neither Boeing nor the FAA
seems to have done such after the first 737 MAX crashed. They provided an Airworthiness
Directive with procedures that were insufficiant to correct the system induce
misbehavior.
Moreover their description of the MCAS
was incomplete . It is only now known that the MCAS trims the stabilizer at a speeed of
0.27 units (degrees) per second while the pilots electric trim moves the stabilizer at only
0.18 units per second:
"It's like a Tasmanian devil in there," says Dennis Tajer, a 737 pilot and communications
chair for Allied Pilots Association, which represents American Airlines' pilots.
... If MCAS keeps tripping, and if pilots do not shut off electric trim entirely, the result is
what Tajer describes as a two-steps-back, one-step-forward scenario, with MCAS maintaining
an edge.
"The MCAS knows but one speed, which is 0.27, which is the most-aggressive speed," Tajer
says. "If you look at the balance sheet on it, MCAS is winning, and you are losing."
The insufficient advice to pilots given after the first crash only adds to the long list
of criminal mistakes Boeing made and which the FAA allowed to pass.
Boeing confirmed to The Washington Post that it had found a second software problem that
the Federal Aviation Administration has ordered fixed -- separate from the anti-stall
system that is under investigation in the two crashes and is involved in the worldwide
grounding of the aircraft.
That additional problem pertains to software affecting flaps and other flight-control
hardware and is therefore classified as critical to flight safety, said two officials with
knowledge of the investigation.
The criminals at Boeing again offer no explanation and play down the issue:
In a statement, Boeing called the additional problem "relatively minor" but did not offer
details of how it affects the plane's flight-control system. "We are taking steps to
thoroughly address this relatively minor issue and already have the solution in work to do
that," it said.
What other 'features' were secretly implemented into the 737 MAX without sufficiant
analysis about their side effects and consequences?
---
Previous Moon of Alabama posts on the 737 MAX crashes:
"... The Pilots are thrown off their seats, hitting the cockpit roof
..."
I should think that at that point in the narrative, one of the flight crew must either
have fallen unconscious or ended up too injured to be able to do anything, let alone fight a
rogue MCAS system.
I presume the pilots would still have their seatbelts on, unless the forces generated by
the constant battle to stabilise the aircraft while fighting the MCAS system were too strong
and broke the seatbelts or dislocated the seats themselves.
As for other "features" that were secretly placed into the 737 MAX jets that Boeing
"neglected" to tell FAA or its clients about, what about the "features" that should have been
made compulsory but which Boeing decided were optional at the clients' own expense?
As a layman, my main question at this stage is: "Who is going to prison and for how long?" Everyone involved in the decision to sell those flying death traps should be tried for
manslaughter at the least. The guilty ones should serve prison sentences appropriate for
criminals who caused hundreds of people to die for their own profit.
How long a sentence does a poor man get, who kills a well-off tourist for the money in his
wallet - or even for his shoes?
Now multiply that by several hundred - adding on, of course, extra years to allow for the
Boeing executives' privileged lives, top-flight education, and (above all) the generous
sufficiency they already enjoy.
In China such people are routinely shot, which seems the right course. In the USA, while
poor people are executed all the time, apparently the wealthy and privileged get a free
pass.
Is a direct result of Boing monopoly - they are division of the military.
And why did european agency roll-over?
Will this warrant cancellation of orders?
Oh, and the people at the FAA need to be tried in a criminal court too. Not only were they
criminally negligent - they did it while being generously remunerated by the taxpayer. Perhaps a few years as galley slaves would be appropriate punishment - to teach them not
to be lazy.
This cheap seat Boeing export death trap was doomed from the beginning. Once these
planes nose 'up' it is heading to a crash. Any engineer with a basic understanding of aero
dynamic/physics knows this. This is not about sensor failure. It is about the profit of cheap
parts and greed. The insiders at Boeing tipped off the Big Boys that they needed more than
the gizmos installed on export versions if they were going to survive.
Tom @3 makes note the Chinese have a great quality control program. Boeing execs will up
their kickback slop to US politicians and the final report will say, 'well accidents will
happen'.
You can be sure that if this was Airbus, and two were crashed in the USA, that there would be
hearings, threats, congressional investigations, lawsuits, calls for criminal investigations,
Wall Street shorting the company, ...and on and on until the company would be disbanded.
Criminal, well yes but so what! Peons do not matter, right.
Engineering Manufacturing company with a sales division works alright. But a Sales Company
with a manufacturing subsidiary does not, as we see.
Boeing is typical for end-stage Imperial Corporations - all show, no go, and get the money
quick...
Sorta like GE's BWR's and Fukushima, fake it on the cheap and run with the money to
retirement.
The Pilots are thrown off their seats, hitting the cockpit roof ..."
Posted by: Jen | Apr 5, 2019 6:27:26 AM | 1
My interpretation is the same as yours. It's an incident report which is supposed to be
bland statements of fact - neither overstated nor understated. If the report says the pilots
hit the roof then that's what happened (airliner cockpits don't have cathedral ceilings so
only inches clearance when standing erect).
OTOH I find it hard to believe that the pilots would unbuckle before they had achieved cruise
status and given passengers the OK to do the same.
Seat belts can break but not under the relatively mild stresses generated by violent flight
maneuvers of an intact aircraft.
When I purchase an airline ticket I purchase the risk profile of the airline and the risk
profile of the plane manufacturer, because either can kill me.
A mistake is one or two errors. This was one horrible string of deliberate corner cutting,
about 7-8 totally disastrous decisions by the management, that could have only led to deaths
of people uninformed enough to purchase the travel risk from this plane supplier.
Uninformed just like I was before I recently saw some old investigative footage about
Boeing's disregard for elementary quality in the earlier 737 hull manufacturing and the
company's treatment of the whistleblowers trying to help the company by exposing such wrong
doing: "Just put a coat of paint on it".
Intentionally (spin) or unintentionally, there is too much talk about detail such as
software, pilot capability and decisions, training and the lack of it and so on. This only
hides the big picture of an utter disregard for the value of human life, traded off for
management bonuses and stock holder dividends. It is a complete reversal of the original
engineering-focused Boeing which made Boeing an icon that it used to be. Perhaps, somewhere
in the Washington lobbying swamp the dividing line between the engineering for killing people
and the engineering for transporting people became too blurred. As the profit strategy, on
MIC business overcharge, on airliner business underdeliver, and ruthlessly so on both:
rip-off money from the tax-payers and lives from the travellers.
Please convince me that this is not a symptom of the rot of the whole society, when an
icon such as Boeing sinks deep into nastiest morally debased profiteering. I posit that the
society which so easily kills people using bombs, rockets and drones cannot make good quality
products any more. This is because killing and destroying is just too easy compared with
creating something good . Without the good will of the people in a society to morally
rebalance, the societal endeavours for creation can never compete against the endeavours for
destruction. In other words, US had become too much about destruction to be still capable of
creation.
Finally, there would be one way to get back on the right track - life-in-jail for both
Boeing and FAA involved. It is ultimately ironic that in the highly criticised China the
shitbags would probably be put in front of a firing squad for corruption. In US, they will
receive bonuses and continue on to the next killing enterprise. Until they finally launch
nuclear tipped missiles against the creation oriented foreign competitors. Do they still know
of any other way to win?
Touching and informative press conference with the Stumo family (Ralph Nader's grandniece,
Samyo Stumo, was killed on the 737 MAX crash in Ethiopia) and two law firms that filed a
lawsuit against Boeing and others. At @ 28 min one lawyer displays an anonymous email from a
737 MAX pilot detailing how the MCAS system can thwart a pilot's ability to recover control
of the jet. This email was posted to a pilots' forum/aviation network after the Lion Air
crash in Indonesia last October.
@Steve...if you say it, then it's true. Of course, if you knew more about it, then you would
say something else.
But real expert Gundersen says differently. I worked with some of the GE engineers, and I
know what they said.
You are 100% incorrect about the diesels, the problem included primary, ultimate heat sink
loss due to the elevation of the pumps, and the pressure vessels we know to be unsafe.
GE BWR's designed in the US by US GE engineers, some of whom quit rather than sign off on
the design..."fuze was lit for Fukushima in 1965" >see fairewinds, amigo.
@SteveK9 12
As far as I understand, the main Fukushima problem was the concrete reactor encasing design
which did not cater for the possibility of excessive hydrogen release from the reactor. It
worked well when not in trouble, but in an accident situation (who would have expected an
accident) the concrete encasing without a release valve became a pressure cooker filled with
flammable hydrogen. What a surprise that it went boom!?
What you write here about the water cooling system generators you probably believe in but
it resembles the pilot blaming spin of Boeing. The truth has a nasty tendency to end up owned
by those with most money.
I always remember how our old friend pharaoh Ramses paid hundreds of stone masons to go
around Egypt and chisel out the achievements of all the previous pharaohs and chisel in his.
Then even several thousands of years later, when the archeologists finally learned to read
hieroglyphs, they only had propaganda and spin left to read. Thus nothing less than the son
of the supreme Egyptian deity the sun god Ra, the propaganda paying Ramses became the
greatest pharaoh of all time.
"As a layman, my main question at this stage is: 'Who is going to prison and for how
long?'"
The first to go should obviously be the individuals in charge of the FAA. These people, I
imagine, were appointed by Obama. When we look at the regulatory system in the US bear in
mind that the current irresponsibility arose in a long descent-since the days of Nixon I
suspect-into neo-liberal corporate capture.
Just recently the deceits practised in the fake science which allowed the licensing of Round
Up were revealed. The entire system is rotten and nowhere is it more corrupt than in the
United States.
" They reengage the electric stabilizer trim to righten the aircraft"
That's the problem. While the plane may have remained unstable due to the lack of rapid
response of the manual trim control and difficulties turning.the wheel at high speed low
altitude flight,the planes altitude was still increasing. They should have either returned to
the airport or continued ascent in the hope they could restore trim at high altitude and low
air pressure.
Altitude immediately plummeted when they rengaged the MCAS and the plane was not
recoverable at that point.
Such mistakes should be made in flight simulators . Hence it's lack of training at fault
here, and the blame for that is still on Boeing.
Not sure even the flight simulator training will solve this mess
TBH
This whole business is sickening and infuriating. What is especially infuriating is that the
FAA is extremely onerous in enforcement of ancient regulations with respect to general
aviation. The owner of a small plane is actually prohibited from casually upgrading any of
the antiquated instruments, even radios, on his Made in 1975 private plane, and must stick
with what was originally certified by the manufacturer as originally constructed--unless he
is willing to expend huge amounts of money to find an updated, certified (e.g., "safe")
upgraded component from someone willing to go the lengthy and expensive process of having the
FAA certify that product, then have a certified mechanic install the certified part and
certify it was done according to the precise procedures established. In effect, the FAA
actively discourages safety improvements of the general aviation fleet by unthinking
resistance to technological change.
Unless you're Boeing.
Having experience with the "other" FAA, this is what's especially dumbfounding to me.
While there may be some justification in permitting a trusted manufacturer to establish and
certify as safe minor details, anything involving the actual flight characteristics of the
plane should NEVER be delegated, and doubly so with respect to commercial airliners. And how
could any regulator be anything but incredulous if a manufacturer says "Well, we've decided
to make this commercial airliner INHERENTLY UNSTABLE, but we have a whole box of bandaids
which should do a bang-up job of keeping it in the air!" WTF!! "Fail-safe" isn't actually a
fix or a mechanism, the term is supposed to describe a design philosophy, in which if there
is a failure, the resulting condition is still safe (well, at least not less safe). Ditto
redundancy, which is why it is unheard-of that such an apparently vital bandaid relied on
only one sensor.
It's one thing to build a fighter that is inherently unstable (although even that is
perhaps questionable), but an airliner filled with passengers? Ludicrous. And the FAA and
Boeing both know it, and knew it from the start. In a just world heads would literally roll,
but sadly, nothing real is likely to happen.
I already thought that the whole setup had faulty logic. If the plane could be adequately
controlled by pilots, "manually", then extra training would be cheaper than introducing an
automatic system. If the plane could not be adequately controlled by the pilots, "switching
to manual" is futile.
I have a minor experience with "automatic control" when the chip of my car went wrong. In
old, old times one has to add a bit of extra gas to start the car engine, and as a result one
could flood the engine, then wait a few minutes for the gasoline to evaporate and try again.
In contemporary cars you do not press gas at all when you start, and the chip regulates how
much gasoline should be injected to the engine based on its temperature. Then after 10 years
of happy use the chip "noticed" that the engine is cold when it is actually hot. So I am
driving on a windy narrow road and the car accelerates going 40 mph without pressing the gas
(65 kmh), 15 mhp above the legal speed limit, and did I mention that the road had curves?
Frankly, it happened few times before that, but on a straight road you just get the feel of
cruise control. Anyway, brakes remedied the situation, luckily, they could overcome the
engine and the chip was replaced for mere 800 dollars.
Here it seems that Boeing designers entered the kludge road and kept compensating for this
or that and lost the total picture. Isn't it suspicious that the automatic trim was so
aggressive? I also do not understand at all what "manual" means, seem impossible that actual
muscle force of the pilot was applied to the tail? Should there be an emergence procedure in
which a cabin steward under voice control of the captain adjusts the tail with a crank, or
perhaps something like a capstan that could be moved by the entire cabin crew? That would be
a true manual system.
My conclusion is that once you rely on automatic solutions because the crew cannot do it
in some situations, you must crank up the reliability to something "average million years
without failure or more". It is not a ship that can drop anchors, giving a few days to figure
out the problem etc. (although this is something that should be avoided too). Boeing setup
was something that should flunk students in Industrial Engineering (they have courses on
control systems). For example, an internal device with a gyroscope could track the speed and
its three-dimensional angle, so if one of external sensors malfunction the system can
automatically decide which reading makes more sense. External sensor measure speed in respect
to air which is important too, but if the plane approaches the ground, that should be noted
to,. With few gismos you could get sufficient redundancy with some "voting scheme" or a
"decision tree".
Just use logic for a moment. Boeing: We're presenting this new (redesigned) plane for
certification, and it comes with it's very own MCRASH system. FAA: MCRASH system...what's
that? Boeing: Well, the plane has a pronounced tendency to go into stalls and fall out of the
sky. FAA: That's an interesting feature. Are pilots going to be able to handle these
aggravated power-on stalls (the worst kind, incidentally)? Boeing: Oh, no. There's no way
pilots would be able to detect the condition and react quickly enough to save the plane, so
we've devised an automated system that is faster than a human can react to save the day. We
present MCRASH.
From annals of idiocy in design. Some time in the 1st decade of this century the Polish state
rail road decided to embrace modernity and introduced automatic ticketing system. It would
fabulously till the end of that year when it shut down. Apparently, there was a "sanity
check" disallowing tickets to have arrival before the departure, someone forgot about the
pesky case of arrival after New Year following departure in December, and the system could
not cope with a wave of "illegal requests". Luckily, because the system did not operate that
long prior to collapse, there were still people who could manually write the tickets until
the bug was removed.
would -> work, I must say that the setup not allowing to correct the post after it is made
is also an example of a "suboptimal" design, many sites give you 10-15 minutes with a
permission to edit or delete.
would -> work, I must say that the setup not allowing to correct the post after it is
made is also an example of a "suboptimal" design, many sites give you 10-15 minutes with a
permission to edit or delete.
B hosts Moon of Alabama on Typepad. Typepad costs $15/month, including hosting and support
(best value in web hosting for a busy weblog). Typepad apparently doesn't have a post-comment
grace period editing option or B would have added it.
I used to be an advocate of MoA moving over to WordPress (I'm a full time software
architect/designer who builds WordPress driven web application and a pro video player).
There's lots of nice bells and whistles which could be added including comment editing and a
much more attractive and innovative design.
Having seen the endless security issues and silly site breaking updates which Matt
Mullenweg and Automattic have pushed out over the last four years, B would be wise to stay
put on Typepad. Typepad is clunky, it's a bit ugly but it works reliably and is inexpensive.
Maintaining and updating a WordPress site costs either lots of man hours or lots of money
(good IT help is not cheap).
terrorist lieberal , Apr 5, 2019 11:37:47 AM |
link
Tom @ 5,
Obviously you know no one will ever be prosecuted or lose anything. This country is in the
hands of the rich and powerful, just note how the great Obama couldn't jail one crooked
banker and they all got to keep everything they stole at the expense of millions and millions
of people, lives ruined, and they live the high life as some exceptional people, yeah right,
God Bless America, home of the biggest terrorist organization the world has known.
terrorist lieberal , Apr 5, 2019 11:39:09 AM |
link
thank you b! who is going to be held accountable? i say no one...
@13 donkeytale.. that sounds about right... i imagine it's happening in any industry where
money is involved in the usa - which is basically every industry.. get rid of the mechanisms
for protecting people and just make sure to protect the moneyed interests..
capitalism devoid of morals and ethics is just peachy..
Thanks for the comprehensive account of what happened. I really hope this will result in a
hefty judicial price tag for the cynicals and greedies at Boeing.
You can be sure that if this was Airbus, and two were crashed in the USA, that there
would be hearings, threats, congressional investigations, lawsuits, calls for criminal
investigations, Wall Street shorting the company, ...and on and on until the company would be
disbanded.
There were two Boeing MAX crashes outside of the U.S. and there ARE now hearings, threats,
congressional investigations, lawsuits and even a criminal investigation. Boeing's stock
price fell by some 10% since the second crash.
-
@Hoarsewhisperer @14
It's an incident report which is supposed to be bland statements of fact - neither
overstated nor understated. If the report says the pilots hit the roof then that's what
happened (airliner cockpits don't have cathedral ceilings so only inches clearance when
standing erect).
The phrase "the Pilots are thrown off their seats, hitting the cockpit roof" is not from
the incident report but from an interpretation at the Leeham News site. It is not meant
literally.
It is based on a suddden change on g-force in the plane which goes from around 1g to 0g
when MCAS again kicks in. This has the effect that the pilots are suddenly weightless and no
longer have power to pull the yoke back.
Source and effect of this are visible in the diagram.
-
Do airline pilots wear seatbelts on take off. I take it there would be some rules and
regulations on this. I have always taken it for granted the pilots would be wearing seatbelt
on take off and landing, also if expecting turbulence during a flight.
Impossible to control anything if you're getting tossed around.
Unless the EU and other governing bodies divorce themselves from our seemingly privatized
FAA, expect more of this. Unless, of course, ALL flight safety orgs, globally, are equally
corrupted.
I have no idea if global corruption is the case/or worse, but there is now pretty strong
evidence that the US FAA is not the unassailable leader in certification protocols that the
whole planet has depended upon - up to now.
Hmmm.... Proper retribution. Load Boeing's Board of Directors, senior engineers that signed
off on the entire MAX project, senior accountants, any others tied to the entire boondoggle,
all FAA "regulators" who approved boondoggle, and all others who helped cause the fatalities
into several MAX airplanes designed to fail just as the ill-fated jets did manned by the
Boeing pilots who approved the faulty design and force them to takeoff with flight paths over
water. Yes, proper retribution for the crime. Cruel and unusual objections? No. Proper
retribution.
The entire Neoliberal philosophy must suffer a similar fate along with its promoters and
their Neocon allies. The Class War has always been deadly. It's high time elites began taking
casualties. Too radical? Take a good look at the world and the circumstances of those
besieged by Neoliberals and Neocons and try to argue against.
That is a true statement, but with so many things going wrong – you need to
understand that it is a basic instinct of pilots to keep engine power up so you can climb and
get out of trouble.
Very basic: Power = Good and No-Power = Bad.
So they should have reduced power and done a slight nose down to unload the jack screw and
re-trimmed manually. The problem was they had no altitude to work with, just 1000 ft or
so.
So the end story is that not only did the pilot do well, but the low-hour co-pilot was
also surprising competent. It was team work all the way.
So the bottom line is that our Western system has become so corrupt that it is no longer
even safe to fly. And this is just the beginning. It is all downhill from now on. More gender
studies and who needs engineers anyway?
Boeing Max 8 was a flying design mistake.
Boeing, You Ain't no Airbus!
You can' t just slap some heavier bulkiet engines on a tinny single body crap that barely
flew straight at the first time and expect everything to be right, slapping some hiden
software autocorrections on just in case.. and sell this crap all over the world. Enjoy the
torrent of lawsuits now!
You ain't no European aircraft maker. They tend to think 2 to 3 design steps ahead in to the
future.
You guys at the US cant even barrely ellect a pres. who is right in the head.
Apologies to everyone for the thread hijack, but nuclear power nonsense annoys me.
@Walter 18
Gundersen is a very well-known anti-nuke fanatic and a liar. His qualifications are BS. At
this point I think you and I can leave it and either of us can read more if we are so
inclined.
@Kiza 20
Hydrogen release was an effect from the overheating and meltdown, caused by the lack of
emergency cooling. There were no hydrogen recombiners present in these reactors, although
they had been installed in every BWR in the US long before.
As I mentioned the reactor nearest the quake suffered no damage, because its emergency
generators continued to operate, as they were not flooded. I forgot the plant name ... you
could look it up ... it actually served as a shelter during the flood. As a consequence there
was no release of hydrogen there (this happens when the zirconium cladding on the fuel reacts
with water at high temperature to release hydrogen).
I'm not an expert in reactor design (although I have a PhD in Chemical Physics). I reached
my own conclusions a very long time ago, and am not really interested in digging up evidence
or providing explanations. There is a mountain of information out there if one wants to look
... and I don't mean Greenpeace (although the founder, Patrick Moore is currently a supporter
of nuclear power).
Oh and btw, about United States aviation related products leading the race in global
aviation...
Struggling to produce an effective design for an airframe for the Martian atmosphere
(planet Mars) back in the earlier decade, using the top of the line comercial aviation
simulation products with aircraft design options bundled in, as a way of researching a NASA
info web campaign about flying vehicles on Mars, managed after much trying to produce a
somehow reliable generic airframe for that very thin atmosphere and low gravity environments,
which it would generaly resemble a mix of U2's and Predator drones frames (twice large than a
U2 wing span) but with major tail wings modifications and you would get adequate performance
if you flew it inside the enormous Martian cannyons which have a higher atmosphere pessure
than rest of Martian surface. Mil air force drones were generally non existant as information
back then. The software was the only product FAA approved a license for actual comercial
aviation simulation training hours for training of real pilots...End of story, this design
came third ...and the actual algorithms in the software decided that an actual UFO shaped
craft would be behaving much better in Martian wind/atmosphere... We incorporated the
solution of small rockets for generating initial lift for take off and emergency
altitude.
FAA and the leading edge researchers decided that the ALIENS WOULD WIN!
I was almost sure that even Nasa people (which names was on the program approval credits)
used same software without noticing anything strange before the Aliens stole the win...
So the jack screw that manually controls the stabilizer did not work due to high speed. Isn't
that what hydraulics are for?
After all, Slim Pickens managed to kick that bombay door open in Strangelove
Hoarse, I also was confused by the reasoning in the Seattle paper. But then again, I
learned all I know about the affect of air flowing over a surface in flight by sticking my
hand out the car window as a kid.
To avoid such crashes, training is needed more professionally and, in addition, the worn-out
parts of the planes should be removed and replaced with new ones. In the vast majority of
aircraft, due to high costs, little importance is given to worn parts, which causes people to
fall and get dead.
Scotch Bingeington , Apr 5, 2019 4:44:34 PM |
link
@ Meshpal | 38
More gender studies and who needs engineers anyway?
I think you're barking up the wrong tree there. I wholeheartedly agree with the second
(sarcastic) bit, no doubt about that. But the guy who had overall responsibility for the 737
MAX desaster holds a "degree" in "Business Administration". James McNerney, B.A. from Yale,
MBA from Harvard, member of Delta Kappa Epsilon - Chairman, President and CEO of The Boeing
Company 2005-2016. I have a strong feeling that gender studies wouldn't exactly be his cup of
tea. Just an ordinary, boring, utterly predictable, Pavlovian, run-of-the-mill business
tosser. He thought he could do it all, and so off he went, again and again. From British
United Provident Association (healthcare) to G.D. Searle (pharmaceuticals) to Procter &
Gamble to McKinsey to General Electric to 3M. And what the heck, let's add Boeing into the
mix with a pay of 30 million USD in 2014 alone. What a spec-taaaa-cular career!
Easy to anticipate a consumer boycott of this plane. I wouldn't buy a ticket on a Max 8
flight, and began double-checking the airliner after the crash last October.
In horizontal flight the stabilizer exerts a moderate amount of downward force to keep the
tail level (so as to balance the torques on the airplane). When the infographic says "a small
downward force pushes the nose down" it is merely saying the downward force on the tail was
now less than that required to keep the plane level, so the tail rose and the nose fell.
With respect for your PhD in Chemistry Physics, you are obviously not an engineer. In most
societies, it is around the third year of study that engineers learn about redundancy and
contingency planning. Therefore, not thinking trough all the possible disaster scenarios when
designing life-critical contraptions is simply criminal: Fukushima nuclear power plants.
Perhaps Boeing should have hired a couple of engineering interns to tell them that they
must not:
1) slap unsuitable new engines on an obsolete old air frame,
2) try to fix a serious hardware problem using software,
3) override pilots with their lives on the line by the decisions of some software cretin paid
by the hour with no skin in the game,
4) hang lives of 180 people on a single sensor unavailable for replacement on an airport in
Timbuktu,
5) play the no-training-needed tune when the structure of the product was substantially
changed and operator training was essential and so on.
The engineers are blue collar workers, the more so the closer they are to the assembly
floor. They have no decision power, they do what they are told. Yet, it is a society in deep
moral crisis when the engineers keep silent whilst virtually all basic tenants of the proper
design are broken by the profiteers managing them. Doing all the wrong things and expecting
the right result? No, not really, just grab the money and run. Après nous le
déluge.
BTW, I heard from a Lockheed lobbyist that Lockheed would never do something like this.
They only rip off the US tax payers for godzillion of dollars whilst making the best killing
machines that money can buy.
God,,, What humans will do to save little pieces of paper loosely called money. This is
criminal. The entire board should be charged with murder or at least manslaughter. But it
won't happen. Corpgov will step in to save them as they're to big to jail.
It is my understanding, and please correct me if I'm wrong, that the only thing the pilots
could have done was to realize -- by a pure miracle -- that the captain's AoA sensor has
failed and switch to the first officer's flight computer, which was connected to another,
working AoA sensor. Of course, if Boeing had installed their "mismatching AoA data" indicator
as a standard feature, the pilots wouldn't really need a miracle.
Boeing is slowing the production rate of 737 Max by 20%. Another chicken has come home to
roost. To safely fly the aircraft with passengers, a new flight control system is required
with multiple sensors including gyroscopes plus triple redundant electronics. Not just two
position sensors as proposed by Boeing which is the pilot flipping a coin in the chaotic 40
seconds to do the right thing while the plane is trying to kill you. Pilot and co-pilot
training on flight simulators is also required. If the FAA approves anything less, sooner or
later, another 737 Max will crash. Similarly, the Trump Administration is turning over pork
inspection to the slaughter houses. A million Chinese pigs were culled to attempt to stop the
spread of African Swine Fever but the deadly pig disease continues to spread through Asia.
One day soon the contagion will be fatal to humans. Climate change is here. The forever wars
continue. The bottom line is that public safety which is the basic function of government is
collapsing. Oligarchs are getting rich on the bodies of the dead.
@38 Meshpal "Zerohedge has an article that says the pilots should have reduced engine power."
From the report: "At 05:39:42, Level Change mode was engaged. The selected altitude was
32000 ft. Shortly after the mode change, the selected airspeed was set to 238 kt."
Then a minute later: "From 05:40:42 to 05:43:11 (about two and a half minutes), the
stabilizer position gradually moved in the AND direction from 2.3 units to 2.1 units. During
this time, aft force was applied to the control columns which remained aft of neutral
position. The left indicated airspeed increased from approximately 305 kt to approximately
340 kt (VMO). The right indicated airspeed was approximately 20-25 kt higher than the
left."
Note that the pilots were getting conflicting airspeed readings (the difference would
eventually grow to around 50 kt).
There is nothing in the report that suggests that either of the pilots opened the
throttles, and by the time the "overspeed clacker" started its warning the pilots had rather
more pressing problems to deal with.
I don't quite understand why this isn't addressed in the report: the pilots set the speed
to 238 kt, and if they then opened the throttles the report should have said so (it doesn't).
But if they didn't touch the throttle then what accounts for the speed being at 305 kt
(rather than 238 kt) when the plane started its first dive?
There is a mountain of information out there if one wants to look ... and I don't mean
Greenpeace (although the founder, Patrick Moore is currently a supporter of nuclear power).
Patrick Moore Did Not Found Greenpeace
Patrick Moore frequently portrays himself as a founder or co-founder of Greenpeace, and
many news outlets have repeated this characterization. Although Mr. Moore played a
significant role in Greenpeace Canada for several years, he did not found Greenpeace. Phil
Cote, Irving Stowe, and Jim Bohlen founded Greenpeace in 1970. Patrick Moore applied for a
berth on the Phyllis Cormack in March, 1971 after the organization had already been in
existence for a year.
Thanks for confirming that the retribution I prescribe @36 is right and proper as is what
must follow. Only one quibble with your comment, the death trap MAXs should never, ever
again be certified as airworthy as they clearly are not .
> I forgot the plant name ... you could look it up
@SteveK9 | Apr 5, 2019 3:26:36 PM | 40
It was all the same. Fukushima Dai-Ichi (Number One) was the Nuclear Power Plant
consisting of 6 "Reactor Buildings"
#1 was relatively small, US-designed US-built one. It had passive residual cooling -
gravity-powered water flow from the tank.
#2 was larger reactor in the same Mark-1 containment, US-designed and US-buit. The
residual cooling though could not be gravity-driven. It required the pump (or maybe there was
a way to set temperature-driven convection, if valves could be put right - i heard it but did
not dig into it)
Obviously, USA does not care about tsunami-driven floods: USA has enough soil to build
NPPs away from sea shores.
#3 and #4 were those larger reactors in more modern containment, US-designed but build by
Japanese companies. Japanese did know what tsunami is, but they dared not to deviate from USA
designs until they make succesfulyl working verbatim coopies.
#5 and #6 were Japanese-built after they got experience with #3 and #4 and proived they
can do verbatim copies. Those latter blocks were altered: for #1 to #4 shore ground was
removed to almost ocean sea levelm as close to the shorelines earth was considered wet and
unreliable, but #5 and #6 were instead moved away from the sea enough to earth be stable even
on elevation.
When the wave came, blocks #1 to $4 were flooded (with their electric circuits probably
located in basements a la Americana, thus immediately got short-circuited with salted sea
water), and diesels were located immediately at water edge with all the consequences for the
communications. Blocks #5 and #6, located away from the sea shopre and on elevated grounds,
and their diesels located near them, were not reached by the tsunami.
P.S. but people still repeat old propaganda about Chernobyl being sabotaged by suicidal
operating crew, what do you want... When people read MSM they do not care much what exactly
happened, so they just swallow it without labour of critical acclaim. If much later they
suddenly grow interested in some issues - their "point of view" is already long internalized,
so they do search relentlessly now - but for ideas supporting their pre-formed cognitive
bias.
P.P.S. I agree though that hi-jacking Boeing-related thread for in-depth discussion of NP
issues would be not proper to do.
"THE BOEING 737 MAX MUST NOT BE ALLOWED TO FLY AGAIN." {Emphasis original]
The discussion here resembles that being conducted by Boeing to exonerate itself. The MAX
was purposely designed to be unsafe. Nader puts it thusly:
" The overriding problem is the basic unstable design of the 737 Max. An aircraft
has to be stall proof not stall prone . An aircraft manufacturer like Boeing,
notwithstanding its past safety record, is not entitled to more aircraft disasters that are
preventable by following long-established aeronautical engineering practices and
standards." [My Emphasis]
Trying to fix something so fundamentally broken that people with priceless lives are
jeopardized if the fix(es) fail is so utterly immoral words fail to detail just how deep that
immorality is. It's not just Righteous Indignation or even Righteous Indignation on
Steroids--it goes well beyond that to the utterly dysfunctional immorality of placing profit
over the safety of something money cannot buy or replace-- PEOPLE'S LIVES .
You know that I and others agree as well with your strong sentiments.
It will be interesting to see how this plays out as a telltale of empire's demise or
resilience.
It is not just the 737 Max that I would stay off. Think about the profit mentality that
built/allowed the Max to go forward and extrapolate that to the replacement parts for all the
other Boeing planes. Do people not understand that the same mentality of profit over safety
that brought down the 737 Max is putting other, considered more reliable, Boeing planes at
risk....for a few pennies more
Americans are brainwashed into believing that profit belongs between them and good health
care so it could be described as a slippery slope to write of 99% of humans not valuing their
lives very highly......because brainwashed by TV is my observation
There are people in Boeing that need to see the inside of a prison cell forever.
I remember in 2008 during the recession depression seeing an idiot at the beach wearing a
Goldman Sachs t shirt. I looked at the idiot in disbelief saying nothing. The next time I see
an idiot in SC/Georgia I will not be holding my tongue. "Relentlessly focused on safety" my
ass. The crapification continues.
And the "AoA Disagree" indicator is not even a physical light indicator, as I initially
thought, but a purely software
feature for the primary flight display ! Unbelievable! 346 people had to die because
someone decided to charge an exorbitant fee for a few lines of code that basically consist of
two conditionals, a timer variable, and a bitmap blit call.
'It looks like the 55 year old 737 air-frame design, which is very low to the ground when
compared to more modern designs, is incompatible with the bigger engines required for fuel
efficiency.
Being very low to the ground, Boeing was forced to put the engines out in front, which
upset the airplane's balance, making the plane essentially unstable. To counter the
instability they added the 'MCAS?' control system.
This solution violates a fundamental tenant of design for safety-critical systems. The
tenant of 'fail-safe'. If something goes wrong the system is supposed to fail in a manner
that preserves safety. For the 737 Max, when the this stability control system fails, the
plane is fundamentally unstable. For this system it is not 'fail-safe'. It is
'fail-crash'.'
This is pretty much in agreement with (Posted by: karlof1 | Apr 5, 2019 8:39:49 PM |
58).
I fully agree with the sentiment that this plane should never fly again. I can't imagine
any thinking person volunteering to get on to such a fundamentally flawed aircraft.
That is a true statement, but with so many things going wrong – you need to
understand that it is a basic instinct of pilots to keep engine power up so you can climb
and get out of trouble.
Very basic: Power = Good and No-Power = Bad.
This is what I've heard for as long as I've been reading about airplanes. A search turned
up some "sayings" popular with pilots.
It's best to keep the pointed end going forward as much as possible.
The only time you have too much fuel is when you're on fire.
Speed is life, altitude is life insurance. No one has ever collided with the sky.
If you're gonna fly low, do not fly slow! ASW pilots know this only too well.
I've just visited a West Australian newspaper - the one where the brand spanking new
Aviation Editor spoke of stupid pilots and unbearably wonderful Boeing. They have a new essay
about the Report, but 1) the jackass troll for Boeing has been given a minder in the form of
a co-author, and 2) the article plays it straight this time.
Boeing admits 737 software was factor in crashes
The Ethiopian crew performed all of the procedures provided by Boeing but was unable
to control the aircraft.
The problems of the B737 Max are not a disaster for Boeing, but for the over 300
fatalities.
They lost no shareholder value or return, they lost their lives.
They are also certainly not represented by expensive top lawyers like Boeing itself, who can
then mitigate, delay or even completely avert the consequences of Boeing's decisions.
They, the people (who had confidence in American technology/products), crashed on the ground,
burned or plunged into the sea without ever having had the slightest chance of averting the
disaster.
Interesting story you linked on the Boeing KC-46. The Air Force pilots won't fly it
because the loose tools and debris they found in the planes raised doubts about the planes
manufacturing integrity. The crisis was/is one degree (of four graduated degrees of
seriousness) away from shutting down the production line completely.
What's key is how Boeing proceeded to address the problem: by taking employee time away
from production in order to perform final inspection, i.e. quality control. Which makes it
clear where the original quality control was lost, by being absorbed into production, to make
more product per employee hour.
And this is just one, visible part of the process, where we can observe concrete examples
of inadequate QC.
Commenters here who point to these plane crashes as a failure in the integrity of Boeing
itself are exactly correct. The flawed plane built by the flawed company was an inevitable
fruit of the poisoned tree.
And I agree that one would be mad to trust anything bearing Boeing's name ever again. One
would be wise also to look for similar poisoned trees in all fields, and thread one's way
cautiously though this perilous, neoliberalized world.
So the jack screw that manually controls the stabilizer did not work due to high speed.
Isn't that what hydraulics are for?
By design.
The screw is designed to work within certain criteria.
1.Load,caused by thick or thin air pressure depending on altitude, on the moving part.
2. Speed, which again increases the load depending on the planes speed through the air, on
the moving part.
The speed and altitude are known from the panes onboard sensors.
Great load will possibly damage or break away the moving part, leading to an
uncontrollable crash.
Hence use of the jack screw adjustment, by the hydraulic system, will only be available
within its design envelope of load and speed.
We had already been told that in the
Ethiopian Airlines flight ET302 crash which killed all 157 people on board, the 4-month old 737 MAX
8's anti-stall software reengaged itself four times in 6 minutes as the pilots struggled to
straighten the plane post-takeoff. In the end, the anti-stall software won and pushed the plane
nose-down towards the earth. Now, Ethiopia -finally?!- released its report in the March 10 crash:
Minister of Transport Dagmawit Moges said that the crew of the Ethiopian Airlines flight
from Addis Ababa to Nairobi on 10 March "performed all the procedures repeatedly provided by the
manufacturer but were not able to control the aircraft." As result, investigations have
concluded that Boeing should be required to review the so-called manoeuvring characteristics
augmentation system on its 737 Max aircraft before the jets are permitted to fly again, she
said.
The results of the preliminary investigation led by Ethiopia's Accident Investigation
Bureau and supported by European investigators were presented by Ms Moges at a press conference
in Addis Ababa on Thursday morning.
Ethiopia is being kind to Boeing. However, though the anti-stall software played a big role in
what happened, Boeing's assertion (hope?!) that a software fix is all that is needed to get the
737MAX's back in the air around the globe rests on very shaky ground (no pun intended whatsoever).
737 MAX 8. The angle-of- attack (AOA) sensor is the lower device below the cockpit
windshield on both sides of the fuselage. (Mike Siegel/The Seattle Times)
The Seattle Times did an article on March 26 that explains a lot more than all other articles on
the topic combined. The paper of course resides in Boeing's backyard, but can that be the reason we
haven't seen the article quoted all over?
If the assertions in the article are correct, it would appear that
a software fix is the
least of Boeing's problems. For one thing, it needs to address serious hardware, not software,
issues with its planes. For another, the company better hire a thousand of the world's best lawyers
for all the lawsuits that will be filed against it.
Its cost-cutting endeavors may well be responsible for killing a combined 346 people in the
October 29 Lion Air crash and the Ethiopian Airlines one. Get a class-action suit filed in the US
and Boeing could be fighting for survival.
Boeing has long embraced the power of redundancy to protect its jets and their passengers
from a range of potential disruptions, from electrical faults to lightning strikes. The company
typically uses two or even three separate components as fail-safes for crucial tasks to reduce
the possibility of a disastrous failure. Its most advanced planes, for instance, have
three
flight computers that function independently, with each computer containing three different
processors manufactured by different companies
. So even some of the people who have
worked on Boeing's new 737 MAX airplane were baffled to learn that the company had designed
an
automated safety system that abandoned the principles of component redundancy, ultimately
entrusting the automated decision-making to just one sensor -- a type of sensor that was known to
fail.
That one paragraph alone is so potentially damaging it's hard to fathom why everyone's still
discussing a software glitch.
Boeing's rival, Airbus, has typically depended on three such sensors.
"A single
point of failure is an absolute no-no,"
said one former Boeing engineer who worked on
the MAX, who requested anonymity to speak frankly about the program in an interview with The
Seattle Times. "That is just a huge system engineering oversight. To just have missed it, I
can't imagine how." Boeing's design made the flight crew the fail-safe backup to the safety
system known as the Maneuvering Characteristics Augmentation System, or MCAS. The Times has
interviewed eight people in recent days who were involved in developing the MAX, which remains
grounded around the globe in the wake of two crashes that killed a total of 346 people.
The Maneuvering Characteristics Augmentation System (MCAS) was already a late addition
that Boeing had not planned for initially.
They wanted a plane that was so like older ones
that no training would be needed, but did put a much heavier engine in it, which was why MCAS was
needed. As I wrote earlier today,
they cut corners until there was no corner left.
On hardware, on software, on pilot training (simulator), everything was done to be cheaper than
Airbus.
The angle-of-attack (AOA) sensor of the 737 MAX is the bottom piece of equipment below just
below the cockpit windshield. (Mike Siegel / The Seattle Times)
A faulty reading from an angle-of-attack sensor (AOA) -- used to assess whether the plane
is angled up so much that it is at risk of stalling -- is now suspected in the October crash of a
737 MAX in Indonesia, with data suggesting that MCAS pushed the aircraft's nose toward Earth to
avoid a stall that wasn't happening. Investigators have said another crash in Ethiopia this
month has parallels to the first.
Boeing has been working to rejigger its MAX software in recent months, and that includes
a plan to have MCAS consider input from both of the plane's angle-of-attack sensors, according
to officials familiar with the new design. "Our proposed software update incorporates additional
limits and safeguards to the system and reduces crew workload," Boeing said in a statement. But
one
problem with two-point redundancies is that if one sensor goes haywire, the plane may not be
able to automatically determine which of the two readings is correct
, so Boeing has
indicated that the MCAS safety system will not function when the sensors record substantial
disagreement.
The underlying idea is so basic and simple it hurts: safety come in groups of three:
three
flight computers that function independently, with each computer containing three different
processors manufactured by different companies
, and three sensors. The logic behind this
is so overwhelming it's hard to see how anyone but a sociopathic accountant can even ponder
ditching it.
And then here come the clinchers:
Some observers, including the former Boeing engineer, think the safest option would be
for Boeing to have
a third sensor to help ferret out an erroneous reading, much like the
three-sensor systems on the airplanes at rival Airbus. Adding that option, however, could
require a physical retrofit of the MAX.
See? It's not a software issue. It's hardware, and in all likelihood not just computer hardware
either.
Clincher no. 2:
Andrew Kornecki, a former professor at Embry-Riddle Aeronautical University who has
studied redundancy systems in Airbus and Boeing planes, said operating
the automated
system with one or two sensors would be fine if all the pilots were sufficiently trained in how
to assess and handle the plane in the event of a problem.
But, he said, if he were
designing the system from scratch, he would emphasize the training while also building the plane
with three sensors.
The professor is not 100% honest, I would think. There is zero reason to opt for a two-sensor
system, and 1001 reasons not to. It's all just about cost being more important than people. That
last bit explains why Boeing went there against better judgment:
[..] Boeing had been exploring the construction of an all-new airplane earlier this
decade. But
after American Airlines began discussing orders for a new plane from Airbus
in 2011, Boeing abruptly changed course
, settling on the faster alternative of
modifying its popular 737 into a new MAX model. Rick Ludtke, a former Boeing engineer who worked
on designing the interfaces on the MAX's flight deck, said managers mandated that any
differences from the previous 737 had to be small enough that they wouldn't trigger the need for
pilots to undergo new simulator training.
That left the team working on an old architecture and layers of different design
philosophies that had piled on over the years, all to serve an international pilot community
that was increasingly expecting automation. "It's become such a kludge, that we started to
speculate and wonder whether it was safe to do the MAX," Ludtke said. Ludtke didn't work
directly on the MCAS, but he worked with those who did. He said that
if the group had
built the MCAS in a way that would depend on two sensors, and would shut the system off if one
fails, he thinks the company would have needed to install an alert in the cockpit to make the
pilots aware that the safety system was off.
There you go: A two-sensor system is fundamentally unsound, and it's therefore bonkers to even
discuss, let alone contemplate it.
And if that happens, Ludtke said, the pilots would potentially need training on the new
alert and the underlying system. That could mean simulator time, which was off the table. "The
decision path they made with MCAS is probably the wrong one," Ludtke said. "It shows how the
airplane is a bridge too far."
Kudos to the Seattle Times for their research. And yeah, we get it, at over 5000 orders
for the plane, which costs $121 million each, there's big money involved. Here's hoping that Boeing
will find out in the courts just how much.
The preliminary report contains flight data recorder information indicating the airplane had an
erroneous angle of attack sensor input that activated the Maneuvering Characteristics Augmentation
System (MCAS) function during the flight, as it had during the Lion Air 610 flight.
To
ensure unintended MCAS activation will not occur again, Boeing has developed and is planning to
release a software update to MCAS and an associated comprehensive pilot training and supplementary
education program for the 737 MAX.
As previously announced, the update adds additional layers of protection and will prevent
erroneous data from causing MCAS activation. Flight crews will always have the ability to override
MCAS and manually control the airplane.
Boeing continues to work with the U.S. Federal Aviation Administration and other
regulatory agencies worldwide on the development and certification of the software update and
training program.
Boeing also is continuing to work closely with the U.S. National Transportation Safety Board
(NTSB) as technical advisors in support of the AIB investigation. As a party providing technical
assistance under the direction of investigating authorities, Boeing is prevented by international
protocol and NTSB regulations from disclosing any information relating to the investigation. In
accordance with international protocol, information about the investigation is provided only by
investigating authorities in charge.
* * *
Update (1100ET)
: Ethiopian investigators have called on Boeing to carry
out a full review of the anti-stall system on its 737 Max aircraft after finding pilots of a plane
that crashed near Addis Ababa last month had followed the stipulated emergency procedures but were
unable to save the aircraft.
Key highlights from the report make it very clear this is Boeing's problem...
*ALTITUDE, AIRSPEED READINGS FROM 737 WERE ERRONEOUS ON ONE SIDE
*ETHIOPIAN ANGLE OF ATTACK SENSORS DIFFERED BY 59.2 DEGREES
*AUTOMATIC NOSE-DOWN COMMANDS SHOW ANTI-STALL SYSTEM ACTIVATED
*ETHIOPIAN REPORT: NOSE DOWN PITCH EVENTUALLY REACHED 40 DEGREES
*CAPTAIN REQUESTED COPILOT `PITCH UP WITH HIM': REPORT
As The FT reports,
Ethiopian minister of transport Dagmawit Moges called on the
embattled aircraft manufacturer to
carry out a full review of the anti-stall system on its
737 Max aircraft before they are allowed to fly again
, after finding that the
pilots were not to blame
for the crash last month.
Boeing stock is higher somehow on the back of all this??
A lawsuit against Boeing Co was filed in U.S. federal court on Thursday in what appeared to
be the first suit over a March 10 Ethiopian Airlines 737 MAX crash that killed 157
people.
The lawsuit was filed in Chicago federal court by the family of Jackson Musoni, a
citizen of Rwanda, and alleges that Boeing, which manufactures the 737 MAX, had defectively
designed the automated flight control system.
Boeing said it could not comment on the lawsuit.
"Boeing ... is working with the authorities to evaluate new information as it becomes
available," it said, adding all inquiries about the ongoing accident investigation must be
directed to the investigating authorities.
The 737 MAX planes were grounded worldwide following the Ethiopian Airlines disaster, which
came five months after a Lion Air crash in Indonesia that killed 189 people.
Boeing said on Wednesday it had reprogrammed software on its 737 MAX to prevent erroneous
data from triggering an anti-stall system that is facing mounting scrutiny in the wake of two
deadly nose-down crashes in the past five months.
The planemaker said the anti-stall system, which is believed to have repeatedly forced the
nose lower in at least one of the accidents, in Indonesia last October, would only do so once
per event after sensing a problem, giving pilots more control.
The crash of Boeing's passenger jet in Ethiopia raised the chances that families of the
victims, even non-U.S. residents, will be able to sue in U.S. courts, where payouts are much
larger than in other countries, some legal experts have said.
Wednesday's complaint was filed by Musoni's three minor children, who are Dutch citizens
residing in Belgium.
The lawsuit says Boeing failed to warn the public, airlines and pilots of the airplane's
allegedly erroneous sensors, causing the aircraft to dive automatically and uncontrollably.
Ethiopian officials and some analysts have said the Ethiopian Airlines jet behaved in a
similar pattern as the 737 MAX involved in October's Lion Air disaster. The investigation into
the March crash, which is being led by the Ethiopian Transport Ministry, is still at an early
stage.
Thought it hasn't been publicly released yet, a preliminary report on the circumstances that caused
flight ET302 to plunge out of the sky just minutes after takeoff was completed earlier this week,
and some of the details have leaked to Reuters and the Wall Street Journal. And for Boeing
shareholders, the findings aren't pretty.
Appearing to contradict Boeing's insistence that
procedures for deactivating its MCAS anti-stall software were widely disseminated, and that pilots
at airlines around the world had been trained on these procedures,
WSJ
reported that the pilots of ET302 successfully switched off MCAS as they struggled to right
the plane after the software had automatically tipped its nose down. As they struggled to right the
plane, the pilots ended up reactivating the software, while trying a few other steps from their
training, before the plane began its final plunge toward a field outside Addis Ababa, where the
ensuing crash killed all 157 people on board.
Though the pilots deviated from Boeing's emergency checklist as they tried to right the plane,
investigators surmised that they gave up on the procedures after they failed to right the plane.
But when MCAS reengaged, whether intentionally, or on accident, it pushed the nose of the plane
lower once again.
The pilots on Ethiopian Airlines Flight 302 initially reacted to the emergency by shutting
off power to electric motors driven by the automated system, these people said, but then appear
to have re-engaged the system to cope with a persistent steep nose-down angle.
It wasn't
immediately clear why the pilots turned the automated system back on
instead of
continuing to follow Boeing's standard emergency checklist,
but government and industry
officials said the likely reason would have been because manual controls to raise the nose
didn't achieve the desired results.
After first cranking a manual wheel in the cockpit that controls the same movable surfaces on
the plane's tail that MCAS had affected, the pilots turned electric power back on, one of these
people said. They began to use electric switches to try to raise the plane's nose, according to
these people. But the electric power also reactivated MCAS, allowing it to continue its strong
downward commands, the people said.
Reuters
, which was also the recipient of leaks from investigators, offered a slightly different
version of events. It reported that MCAS was reengaged four times as pilots scrambled to right the
plane,
and that investigators were looking into the possibility that the software might
have reengaged without prompting from the pilots.
After the Lion Air crash that killed 189 people back in October, Boeing and the FAA published a
bulletin reminding pilots to follow the emergency procedures to deactivate the software if a faulty
sensor - like the one that is believed to have contributed to the Lion Air crash - feeds erroneous
data to the system.
The data show the pilots maneuvered the plane back upward twice before deactivating the
software. But between the two reports, one detail is made abundantly clear.
The software's
reengagement is what doomed everybody aboard. That is an unequivocally bad look for Boeing, which
has been deflecting questions about the software's bugs, and gaps in the dissemination of its
training materials, while working on an update that the company says will make the software less
reliant on automated systems.
The aviation industry has been trying to make the human pilots
obsolete, just as in so many industries. But they all do their,
these days, their R & D on the job. Recall the Amazon Robot that
went berserk recently. The idea is to rid all industry of people
progressively so that they can end up not needing people at all.
They'll end up with nothing. Some how they think that if they take
people out then profits will be assured, which is actually
psychotic. They have had remote auto pilot for 7 decades now. They
can bring down any aircraft at will, and do so regularly. They can
shut down or affect engines remotely, or alter the actions as is
imbedded into just about all new machinery, other than knives,
forks and spoons. Yet they still need consumers and workers to
create hedged exchange to profit from. That is the dilemma
industry owners are facing, that without pesky people they are
doomed as much as the doom they are creating for even their own
off spring = psychosis.
The 757 and 767 are a more obvious airframe to build upon, as a response to the Airbus the
new 737MAX design was very poorly thought out, it's airframe vs. engine placement and thrust.
Having trained on Boeing 767-300ERs myself a pilot becomes very in tune with it's quirks and
it does have them, speed bugs and so on.
When you watch certain aircraft taking off in routine operations, unreasonable angles of
attack V-speed, now many pilots will engage 1 autopilots minutes after take off while flaps
are partially extended still(it stabalizes a positive rate of climb), this is so that the
aircraft is more efficient, cost effective and reaches it's crusie altitude and destination
on time.
The 767 has 3 autopilot computers, 2 of them receive data as to angle of attack and speed
when the stall warning activates as the stick shakes, the autopilots are off, period, no more
input from the computers other than warnings - these too can often lead to confusion and
sometimes with fatal results.
Sometimes you will re-engage one after you've corrected the airspeed (nose down) and stall
to regain and maintain a efficient airflow lift. Although in some cases the pitot tubes
malfunction to due ice, so trusting what the machine was telling the pilots can be fatal.
[In 737MAX] The pilot simply cannot take full control the aircraft when he needs to do so.
Hence the pilots in the 737MAX cases scrambling to work through the problem by checklist, if
you're doing this something is going wrong and will be wrong.
Ever notice the difference between a soft smooth landing and a 'rough one' that shakes
passengers - note these are totally normal landings, the computer assisted ones in clear blue
skies and calm winds are not.
That's the pilots on a VFR or visual landing which the computer usually tries to interfere
with, if a hybrid semi-assisted landing, especially on an ILS glideslope in bad weather.
A pilot should know these skills but many now do not. They have to rely on the input from
the computers and Boeing tried unsuccessfully to introduce this new MCAS system seamlessly,
when you've got 3 autopilots why is only 1 receiving the flight data of angle of attack and
v-speed?!
There was a prominent no-show among the 200 regulators, pilots and airline managers that
Boeing Co.
invited to preview a crucial software update for the 737 Max this week, said people familiar with
the matter: European safety officials.
The planemaker is sending a team across the Atlantic to brief the European Union Aviation Safety Agency on the
proposed changes after two of the jetliners plunged to the ground within five months, said one of the people, who
asked not to be identified because the discussions are private. Representatives of EASA didn't return requests for
comment.
Intentional or not, EASA's snub points to the delicate politics Boeing faces in convincing regulators the Max
is safe as the company seeks to restore confidence in its best-selling jet, which has been grounded for more than
two weeks. The reputation of U.S. regulators has taken a hit in the scrutiny of the 737 Max's approval process,
and foreign agencies are less likely to rubber-stamp aircraft certifications simply because they have been cleared
by the Federal Aviation Administration.
EASA is expected to play an influential role in determining how long and complicated the review of the Max will
be, while safety officials from China to Canada have vowed to conduct their own rigorous analysis.
"EASA's determination should be important for the rest of the world, given its sophistication and perceived
independence," Seth Seifman, analyst with JPMorgan Chase & Co., said in a note to clients.
A spokesman for the FAA declined to comment.
'Productive' Sessions
"We had productive information sessions this week and continue to work closely with our customers and
regulators on software and training updates for the 737 Max," Boeing spokesman Paul Bergman said by email.
As of late Friday, the Chicago-based planemaker was still finishing up paperwork needed to certify a software
upgrade and revised pilot training for the 737 Max. One prominent pilots union criticized the proposed training as
insufficient.
The software changes, intended to prevent stall-prevention software from engaging in normal flight, have been
in the works since the system pointed a Lion Air jet's nose downward about two dozen times before pilots lost
control Oct. 29. That accident killed 189 people, while 157 died when an Ethiopian Airlines 737 Max 8 crashed
March 10.
While certifying the software upgrade is the first step toward returning the Max to flight, it doesn't assure
the grounding will be speedily lifted by the FAA or its counterparts around the world. The EU, China and Canada
all grounded the 737 Max more quickly than the FAA in the wake of the Ethiopian crash.
Software Changes
The break between FAA and overseas authorities on the initial decision to ground the plane, combined with
worldwide public furor and a U.S. criminal probe of the Max certification, "all make it hard for us to see how
foreign regulators can avoid coming back with their own questions and doing some of their own due diligence,"
Seifman said in his report.
Crash investigators suspect that a damaged or malfunctioning sensor triggered anti-stall technology in the
Ethiopian Airlines plane, Bloomberg
reported
Friday. Investigators think that caused the plane's nose to point downward, and the pilots struggled
to counteract the software-based system, according to people familiar with the crash probe. That scenario would be
similar to the crash that brought down the Lion Air flight last year in Indonesia.
Boeing is planning software revisions that restrict the number of times the Maneuvering Characteristics
Augmentation System, or MCAS, kicks in to a single interaction. The update is also designed so that MCAS can't
command the horizontal stabilizer to push a plane's nose down with more force than what pilots can counter by
pulling back on the steering column.
The enhancements appeared to work as billed, said pilots who viewed demonstrations of the upgrades by company
test pilots in flight simulators at the event March 27 in Renton, Washington.
"We were confident flying the aircraft in its present state," said Roddy Guthrie,
American Airlines Group Inc.
's 737 fleet captain, who was at the Boeing briefings. The improvements "were
needed. They've put some checks and balances in the system now that will make the system much better."
Simulator Demonstrations
Still, Boeing representatives faced caustic comments from some at the Wednesday session, said one of the people
familiar with the discussions. As Boeing test pilots demonstrated old and new versions of MCAS, attendees were
especially interested in re-enacting the sequence of events leading to the Lion Air crash, the person said. Pilots
also demonstrated how the 737 Max would behave if an angle-of-attack vane was sheared off by, say, a bird strike.
One pilot group walked away from the event feeling that Boeing needs to do more work on a new 30-minute iPad
course, followed by a test, that is intended to help pilots of the older generation of 737 planes prepare for the
Max. The newest version of Boeing's workhorse single-aisle jet debuted less than two years ago.
Pilots who saw the preliminary version of the training "characterized it as nice for an elementary level of
understanding, but pilots will definitely need a more textured and layered instructional piece," said Dennis Tajer,
spokesman for the Allied Pilots Association, which represents pilots at American. "That was the hands-down
consensus."
"... Boeing compromised on sound engineering with the 737 Max . Recall the origins of the problem: Boeing was at risk of losing big orders to a more fuel-efficient Airbus model. Rather than sacrifice market share, Boeing put more fuel-efficient, larger engines on the existing 737 frames. The placement of the engine created a new safety risk, that under some circumstances, the plane could "nose up" at such a steep angle as to put it in a stall. The solution was to install software called MCAS which would force the nose down if the "angle of attack" became too acute. ..."
"... Merriam-Webster defines kludge -- sometimes spelled kluge -- as "a haphazard or makeshift solution to a problem and especially to a computer or programming problem." Oxford defines it as, in computing, "A machine, system, or program that has been badly put together, especially a clumsy but temporarily effective solution to a particular fault or problem." ..."
"... In the case of the 737 Max, it's the combination of how two separate problems interacted -- a plane whose design introduced aerodynamics issues and what now appears to have been a poorly designed anti-stall system -- that seems to be drawing many to turn to Granholm's term. The problems were compounded in many ways, including by the fact that pilots were not told of or trained for the Maneuvering Characteristics Augmentation System (MCAS) before the Lion Air crash, which killed all 189 on board. ..."
"... "My concern is that Boeing may have developed the MCAS software as a profit-driven kludge to mitigate the Max 8's degraded flight characteristics due to the engine relocation required to maintain ground clearance," commented Philip Wheelock on a New York Times story about the plane's certification process this week. "Not convinced that software is an acceptable solution for an older design that has been pushed to its inherent aeronautical design limits." ..."
"... "Indeed, it seems the 737 MAX was a kludge to an existing design, and that MCAS was a kludge on top of that," said a commenter on Hackaday . ..."
"... Boeing has long embraced the power of redundancy to protect its jets and their passengers from a range of potential disruptions, from electrical faults to lightning strikes. The company typically uses two or even three separate components as fail-safes for crucial tasks to reduce the possibility of a disastrous failure. So even some of the people who have worked on Boeing's new 737 MAX airplane were baffled to learn that the company had designed an automated safety system that abandoned the principles of component redundancy, ultimately entrusting the automated decision-making to just one sensor -- a type of sensor that was known to fail. ..."
"... That no one who wrote the MCAS software for the 737 MAX seems to have even raised the issue of using multiple inputs, including the opposite angle of attack sensor, in the computer's determination of an impending stall is mind-blowing. ..."
"... As a lifetime member of the software development fraternity, I don't know what toxic combination of inexperience, hubris, or lack of cultural understanding led to this. But I do know that it's indicative of a much deeper and much more troubling problem. The people who wrote the code for the original MCAS system were obviously terribly far out of their league and did not know it. How can we possibly think they can implement a software fix, much less give us any comfort whatsoever that the rest of the flight management software, which is ultimately in ultimate control of the aircraft, has any fidelity at all? ..."
"... And we're giving short shrift to how Boeing compounded the problem, for instance, by making it an upcharge to have the 737 Max have a light showing that its angle of attack sensors disagreed (the planes did have two, but bizarrely, only one would be giving data to the MCAS system on any day), or hiding the fact that there was a new safety automated safety system in two paragraphs after page 700 in the flight manual. ..."
"... It's about an airplane manufacturer that put engines on an airframe they weren't designed for, having to add a flight control override to guard against said airplane's new tendency to nose up, and then adding insult to injury by driving that system with a single sensor when two are available. Oh – and charging airlines extra for the privilege of their pilots being told when one of those sensors is providing bad data. ..."
"... Officials investigating the fatal crash of a Boeing Co. BA 0.06% 737 MAX in Ethiopia have reached a preliminary conclusion that a suspect flight-control feature automatically activated before the plane nose-dived into the ground, according to people briefed on the matter, the first findings based on data retrieved from the flight's black boxes. ..."
"... Boeing is doubling down on its mistakes . The lesson of the Tylenol poisoning is that if a company has a safety problem, even if it isn't its fault, it needs to do everything it can to rectify the defects and protect customers. If there is any doubt, the company needs to err of the side of safety. ..."
"... Here, unlike with Johnson & Johnson, the failings that led to 737 Max groundings all originated with Boeing. Yet rather than own the problems and go overboard on fixing them to restore confidence in the plane and in Boeing, Boeing is acting as if all it has to put in place are merely adequate measures. ..."
"... [Former Boeing engineer Mr. [Rick] Ludtke [who worked on 737 MAX cockpit features] recalled midlevel managers telling subordinates that Boeing had committed to pay the airline $1 million per plane if its design ended up requiring pilots to spend additional simulator time. "We had never, ever seen commitments like that before," he said. ..."
"... I hope the pilots in our readership speak up, but as a mere mortal, I've very uncomfortable with pilots being put in a position of overriding a system in emergency conditions when they haven't even test driven it. When I learn software, reading a manual is useless save for learning what the program's capabilities are. In order to be able to use it, I have to spend time with it, hands on. Computer professionals tell me the same thing. It doesn't seem likely that pilots are all that different. ..."
"... Boeing does not seem to comprehend that it is gambling with its future. What if international flight regulators use the Max 737 as a bloody flag and refuse to accept FAA certifications of Boeing planes, or US origin equipment generally? Do you think for a nanosecond that the European and Chinese regulators wouldn't use disregarding the FAA as a way to advance their interests? Europe would clearly give preference to Airbus, and the Chinese could use Boeing to punish the US for going after Huawei. ..."
"... And yet we do not see anyone suggesting the obvious solution to this problem; eliminating the 737 MAX type of aircraft altogether. ..."
"... I don't think that Boeing can afford to drop the 737 MAX. This aircraft was in response to the Airbus as they did not have any new aircraft designs on the boards to take it on. So they modified a 1970s design as a profitable stopgap solution. ..."
"... Boeing were designing a follow-on to the 737, but panicked when the A320Neo came and went for the MAX instead as they could deliver it much quicker and cheaper than a new aircraft. ..."
"... If its true that they are another example of a once great engineering company enslaved to the quarterly results, then it may well be that all work on the replacement stopped when they put their engineers to work on the MAX line. If that's the case, then they really are screwed. Ten years is an absolute minimum to get a brand new aircraft delivered to customers from a standing start. ..."
"... The newer versions of the 737 have nearly twice the max takeoff weight of the original, but with the same landing gear and nearly the same wing area. ..."
"... Airbus probably can't produce enough Neo to make up for the shortfall, but they essentially own the Bombardier C-Series now (ironically, made in Mobile, Alabama and relabelled the Airbus 220) which could prove an excellent investment by Airbus. ..."
"... Regarding the FAA I have read in Spanish press that Daniel Elwell declared in the congress (translated from Spanish) that "I can't believe that airline companies tried to save a few thousand dollars on a feature that increases safety". This is a bad try to shift blame from Boeing to airline companies and if anything will reduce (eliminate) the international confidence on FAA regulations. ..."
"... Managers telling this to engineers before a plane is designed is one thing. Telling it to them after the plane been designed but while its user interface is being designed is outrageous. ..."
"... And I think the plane actually has two (one on each side) , but for some reason, their inputs weren't combined. There's a slight subtlety that the air flow is 3 dimensional, so when the plane is turning, and particularly turning+climbing, the readings of the two might vary slightly – but that's for the software to sort out. They reportedly didn't hook both of them up to both flight computers – why is an interesting question. There's probably a practical reason, but ..."
"... What the folks at Boeing may not realise is that the more they double-down on this bizarre tactic of using spin-doctoring as a crisis management tool aimed at an audience that is rapidly losing trust in the company ( and frankly may no longer believe anything coming out of the corporate communications department at Boeing), the harder it's going to be to reverse course by coming out and saying "we screwed up and will do whatever it takes to fix this". This debacle has all the makings of a large scale cover up and the continued mala fide attempts to deflect focus away from taking ownership of and accountability for this crisis will only result in continued assault on an already battered reputation. ..."
"... As an aside, the malaise at the FAA has been much documented on these pages and elsewhere recently, from the egregious abdication of its regulatory responsibilities to Boeing to having a top position go unfilled for over a year, my question to US readers is whether a comparable level of capture by corporate interests has similarly defanged the FDA? ..."
Boeing compromised on sound engineering with the 737 Max . Recall the origins of the problem: Boeing was at risk of losing
big orders to a more fuel-efficient Airbus model. Rather than sacrifice market share, Boeing put more fuel-efficient, larger engines
on the existing 737 frames. The placement of the engine created a new safety risk, that under some circumstances, the plane could
"nose up" at such a steep angle as to put it in a stall. The solution was to install software called MCAS which would force the nose
down if the "angle of attack" became too acute.
Merriam-Webster defines kludge -- sometimes
spelled
kluge -- as "a haphazard or makeshift solution to a problem and especially to a computer or
programming problem." Oxford defines it as,
in computing, "A machine, system, or program that has been badly put together, especially a clumsy but temporarily effective solution
to a particular fault or problem."
In the case of the 737 Max, it's the combination of how two separate problems interacted -- a plane whose design introduced
aerodynamics issues and what now appears to have been a poorly designed anti-stall system -- that seems to be drawing many to
turn to Granholm's term. The problems
were compounded in many ways,
including by the fact that pilots were not told of or trained for the Maneuvering Characteristics Augmentation System (MCAS) before
the Lion Air crash, which killed all 189 on board.
"My concern is that Boeing may have developed the MCAS software as a profit-driven kludge to mitigate the Max 8's degraded
flight characteristics due to the engine relocation required to maintain ground clearance,"
commented Philip Wheelock on
a New York Times
story about the plane's certification process this week. "Not convinced that software is an acceptable solution for an older
design that has been pushed to its inherent aeronautical design limits."
"Indeed, it seems the 737 MAX was a kludge to an existing design, and that MCAS was a kludge on top of that," said
a commenter
on Hackaday .
Lambert found more damning takes, which he featured in Water Cooler yesterday. First
from the Seattle Times :
Boeing has long embraced the power of redundancy to protect its jets and their passengers from a range of potential disruptions,
from electrical faults to lightning strikes. The company typically uses two or even three separate components as fail-safes for
crucial tasks to reduce the possibility of a disastrous failure. So even some of the people who have worked on Boeing's new 737
MAX airplane were baffled to learn that the company had designed an automated safety system that abandoned the principles of component
redundancy, ultimately entrusting the automated decision-making to just one sensor -- a type of sensor that was known to fail.
Boeing's rival, Airbus, has typically depended on three such sensors. "A single point of failure is an absolute no-no," said one
former Boeing engineer who worked on the MAX, who requested anonymity to speak frankly about the program in an interview with
The Seattle Times. "That is just a huge system engineering oversight. To just have missed it, I can't imagine how."
And the second, from software developer Greg Travis who happens also to be a pilot and aircraft owner:
That no one who wrote the MCAS software for the 737 MAX seems to have even raised the issue of using multiple inputs, including
the opposite angle of attack sensor, in the computer's determination of an impending stall is mind-blowing.
As a lifetime member of the software development fraternity, I don't know what toxic combination of inexperience, hubris,
or lack of cultural understanding led to this. But I do know that it's indicative of a much deeper and much more troubling problem.
The people who wrote the code for the original MCAS system were obviously terribly far out of their league and did not know it.
How can we possibly think they can implement a software fix, much less give us any comfort whatsoever that the rest of the flight
management software, which is ultimately in ultimate control of the aircraft, has any fidelity at all?
Ouch.
And we're giving short shrift to how Boeing compounded the problem, for instance, by making it an upcharge to have the 737
Max have a light showing that its angle of attack sensors disagreed (the planes did have two, but bizarrely, only one would be giving
data to the MCAS system on any day), or hiding the fact that there was a new safety automated safety system in two paragraphs after
page 700 in the flight manual. As Wall Street Journal reader Erich Greenbaum said in comments on an older article,
How Boeing's 737 MAX Failed :
No – this isn't about "planes that fly by themselves." It's about an airplane manufacturer that put engines on an airframe
they weren't designed for, having to add a flight control override to guard against said airplane's new tendency to nose up, and
then adding insult to injury by driving that system with a single sensor when two are available. Oh – and charging airlines extra
for the privilege of their pilots being told when one of those sensors is providing bad data.
The 737 Max has gotten a bad name not just for itself but also for the airlines that were big buyers. Southwest had taken the
most 737 Max deliveries, and American was second. I happened to be looking at American for flights last night. This is what I got
when I went to aa.com:
I came back to the page later to make sure I hadn't hit the 737 Max message randomly, by loading the page just when that image came
up in a cycle .and that doesn't appear to be the case. I landed on the 737 Max splash a second time.
This result suggests that American has gotten so many customer queries about the 737 Max that it felt it had to make providing
information about it a priority. If you click through, the next page explains how all 737 Max planes have been grounded, that American
is using other equipment to fly on routes previously scheduled for those planes, but it has still had to cancel 90 flights a day.
Officials investigating the fatal crash of a Boeing Co. BA 0.06% 737 MAX in Ethiopia have reached a preliminary conclusion
that a suspect flight-control feature automatically activated before the plane nose-dived into the ground, according to people
briefed on the matter, the first findings based on data retrieved from the flight's black boxes.
The emerging consensus among investigators, one of these people said, was relayed during a high-level briefing at the Federal
Aviation Administration on Thursday, and is the strongest indication yet that the same automated system, called MCAS, misfired
in both the Ethiopian Airlines flight earlier this month and a Lion Air flight in Indonesia, which crashed less than five months
earlier. The two crashes claimed 346 lives.
Boeing is doubling down on its mistakes . The lesson of the Tylenol poisoning is that if a company has a safety problem, even
if it isn't its fault, it needs to do everything it can to rectify the defects and protect customers. If there is any doubt, the
company needs to err of the side of safety.
Here, unlike with Johnson & Johnson, the failings that led to 737 Max groundings all originated with Boeing. Yet rather than
own the problems and go overboard on fixing them to restore confidence in the plane and in Boeing, Boeing is acting as if all it
has to put in place are merely adequate measures.
Reuters, which has a bias towards understatement, has an atypically pointed farming Boeing's refusal to recommend pilot simulator
training for the MCAS:
Boeing Co said it will submit by the end of this week a training package that 737 MAX pilots are required to take before a
worldwide ban can be lifted, proposing as it did before two deadly crashes that those pilots do not need time on flight simulators
to safely operate the aircraft.
In making that assessment, the world's largest planemaker is doubling down on a strategy it promoted to American Airlines Group
Inc and other customers years ago. Boeing told airlines their pilots could switch from the older 737NG to the new MAX without
costly flight simulator training and without compromising on safety, three former Boeing employees said.
The company had promised Southwest Airlines Co. , the plane's biggest customer, to keep pilot training to a minimum so the
new jet could seamlessly slot into the carrier's fleet of older 737s, according to regulators and industry officials.
[Former Boeing engineer Mr. [Rick] Ludtke [who worked on 737 MAX cockpit features] recalled midlevel managers telling subordinates
that Boeing had committed to pay the airline $1 million per plane if its design ended up requiring pilots to spend additional
simulator time. "We had never, ever seen commitments like that before," he said.
I've never flown Southwest and now I will make sure never to use them.
I hope the pilots in our readership speak up, but as a mere mortal, I've very uncomfortable with pilots being put in a position
of overriding a system in emergency conditions when they haven't even test driven it. When I learn software, reading a manual is
useless save for learning what the program's capabilities are. In order to be able to use it, I have to spend time with it, hands
on. Computer professionals tell me the same thing. It doesn't seem likely that pilots are all that different.
In other words, Boeing's refusal to recommend simulator training looks to be influenced by avoiding triggering a $31 million penalty
payment to Southwest. This is an insane back-assward sense of priorities. Boeing had over $10 billion in profits in 2018. A $31 million
payment isn't material and would almost certainly be lower after tax.
Boeing does not seem to comprehend that it is gambling with its future. What if international flight regulators use the Max
737 as a bloody flag and refuse to accept FAA certifications of Boeing planes, or US origin equipment generally? Do you think for
a nanosecond that the European and Chinese regulators wouldn't use disregarding the FAA as a way to advance their interests? Europe
would clearly give preference to Airbus, and the Chinese could use Boeing to punish the US for going after Huawei.
Boeing's comeuppance is long overdue. The company's decision to break its union, outsource, and move to Chicago as a device for
shedding seasoned employees was a clear statement of its plan to compromise engineering in the name of profit. Something like the
Max 737 train wreck was bound to happen.
And yet we do not see anyone suggesting the obvious solution to this problem; eliminating the 737 MAX type of aircraft
altogether.
The crashes of the early de Havilland Comet commercial jet aircraft all but destroyed English commercial jet production. Boeing
should suffer a similar fate as de Havilland. Indeed, since the Comet crashes were the result of a previously unsuspected design
flaw, and Boeing's problems are self inflicted, Boeing should suffer a more drastic punishment.
I don't think that Boeing can afford to drop the 737 MAX. This aircraft was in response to the Airbus as they did not have
any new aircraft designs on the boards to take it on. So they modified a 1970s design as a profitable stopgap solution.
If they dump the 737 MAX then they have nothing good to go for years. In that space of time Airbus would move in and take over
many of Boeing's markets and there would be new aircraft from Russia and China coming online as well.
I do not think that it would destroy Boeing as the US government would bail it out first, but it would be a colossal setback.
I doubt that they would end up on this list-
I understand that it can take up to ten years to develop a new aircraft, but the basic design of the 737 has been around since
the Jefferson Airplane's "White Rabbit" (!). Given that Airbus, like Avis, was going to be trying harder for more market share,
was it totally beyond Boeing's capacity to develop a follow-on for the 737 over the past, say, 20 years?
Boeing were designing a follow-on to the 737, but panicked when the A320Neo came and went for the MAX instead as they could
deliver it much quicker and cheaper than a new aircraft. What I don't know is if they are still working on a replacement
or if they shelved the plans entirely.
If its true that they are another example of a once great engineering company enslaved to the quarterly results, then it
may well be that all work on the replacement stopped when they put their engineers to work on the MAX line. If that's the case,
then they really are screwed. Ten years is an absolute minimum to get a brand new aircraft delivered to customers from a standing
start.
The 737 was designed to be low to the ground because it was to serve small airports where the passengers had to climb stairs
to enter (which I remember doing at Burbank and Ontario years ago) The 737 Max is what you would get if the 757 and 737 had a
child. The newer versions of the 737 have nearly twice the max takeoff weight of the original, but with the same landing gear
and nearly the same wing area.
Perhaps a shorter version of the 757 would have been the correct move, but Southwest would have screamed bloody murder.
The problem for airlines is the need to have more energy efficient aircraft for both cost and environment pressure reasons.
The 737 max is a response to the airbus 321neo, but as I understand it, Airbus does not have the capacity to takeover cancelled
orders for the 737 max.
Do airlines stick with older 737 or brazen it out with Boeing that the max problems have been resolved? And passengers. I imagine
they will fall into the brackets I will never fly on a 737 max, or I trust Boeing/airline, or a fatalistic if my number is up,
my number is up'.
I regularly fly with Norwegian in Europe. However I for one will never fly a max and will now prefer SAS with the 321neo. As
for Ryanair, that has max on order, if they take delivery, bye bye them.
Maybe the new Russian and Chinese versions can be an option? Or will Trump sanction any airline brave enough to order them
instead of Boeing?
Airbus probably can't produce enough Neo to make up for the shortfall, but they essentially own the
Bombardier C-Series now (ironically, made in Mobile, Alabama
and relabelled the Airbus 220) which could prove an excellent investment by Airbus.
There are four other potential competitors –
the Sukhoi Superjet (which is a little
smaller so may not be a direct replacement),
The French have a significant input to the Sukhoi, while Bombardier were involved with the Comac. None of those are direct
replacements (they are generally smaller and shorter range), but they might suit many airlines who need aircraft quickly but won't
touch the Max.
None of the above can match the Boeing or Airbus for state of the art engineering, but they are cheaper to buy, so they may
well now be more attractive to budget airlines and third world airlines. The big one to look out for is Ryanair – they've long
been Boeings biggest customer outside the US and have stuck with 737's consistently.
They will do their usual tactic of demanding huge discounts every time Boeing look weak, and no doubt they will do the same
now. But they may decide to look elsewhere (especially as they don't really need the longer range as they operate exclusively
in Europe). If they opt for something like the A220 or the Irkut, then that will be an enormous blow to Boeing, because others
will follow Ryanairs lead.
PK, you said that the Sukhoi Superjet had significant French input. Does that mean physical components as well? If so, I would
be surprised after the Mistral amphibious assault ships fiasco. On this topic, I saw this week how the French were taking out
German components out of joint French-German weapons systems and replacing them with French ones as the Germans are wary about
arming countries like Saudi Arabia and so have a say in these joint systems much to the disgust of the French, hence the swap-out
so the French can continue to sell these systems.
I was thinking of the engines , which are a joint
project between a French and Russian company. Ironically, the core of the engine for the Sukhoi is the M88, the engine the French
developed for the Rafaele fighter. The French are exceptionally good at using military research to help their commercial companies,
and vice versa.
The French are also very ruthless (i.e. immoral) when it comes to export sales. This is why they usually only partner with
the British, as they know the British share their rather loose definition of ethical policy in weapons sales. And they insist
on Frenchifying their systems as much as they can so there is nobody to interfere with sales.
Kludge translates in spanish into "chapuza" and in my view expresses very well the "solution" that Boeing brougth to the 737
Max.
Regarding the FAA I have read in Spanish press that Daniel Elwell declared in the congress (translated from Spanish) that
"I can't believe that airline companies tried to save a few thousand dollars on a feature that increases safety". This is a bad
try to shift blame from Boeing to airline companies and if anything will reduce (eliminate) the international confidence on FAA
regulations.
Boeing is doubling down on its mistakes. The lesson of the Tylenol poisoning is that if a company has a safety problem,
even if it isn't its fault , it needs to do everything it can to rectify the defects and protect customers. If there is any
doubt, the company needs to err of the side of safety.
And that might, precisely the difference between the Tylenol and the 737 MAX affairs. Boeing knows it is their fault and the
blame feeling prevents them to act as rationally as Johnson&Johnson did.
The Reuters article also says the following, which seems incredibly damning:
At Boeing's factory in Renton, Washington, managers told engineers working on the MAX, including its anti-stall system known
as MCAS, their designs could not trigger Level C or D training designations from the U.S. Federal Aviation Administration,
the three former Boeing employees and a senior industry executive with knowledge of MAX development told Reuters. Otherwise,
pilots would have to spend time in simulators before flying the new planes.
Managers telling this to engineers before a plane is designed is one thing. Telling it to them after the plane been designed
but while its user interface is being designed is outrageous.
Certainly a relatively delicate sensor with external moving parts is a super obvious point of failure that any engineer would
flag down instantly.
And I think the plane actually has two (one on each side) , but for some reason, their inputs weren't combined. There's
a slight subtlety that the air flow is 3 dimensional, so when the plane is turning, and particularly turning+climbing, the readings
of the two might vary slightly – but that's for the software to sort out. They reportedly didn't hook both of them up to both
flight computers – why is an interesting question. There's probably a practical reason, but
Sometimes in industry what happens is you are updating a system or product, you don't want to re-certify your electronics (to
make schedule or cost) , but you used all the input capacity on your logic systems/comms/wiring and still need more. So you have
to "get creative" squeezing functionality into your legacy electronics. I really hope it wasn't something like that.
ISTR that there was a crash in South America a few years back because both artificial horizons were getting info from a single
pitot tube that had been taped over when the plane was being washed. The thing is, there was a switch in the cockpit to select
whether the dual instruments were both using the left pitot, both the right one, or one on each. Using two sensors is not a new
idea.
As a business owner who also happens to be a pilot and aircraft owner, I've been following this fiasco with great care. While
not widely reported, Boeing submitted a software update to the FAA back in January. They're still dragging their feet and as a
consequence, folks needlessly died the EA crash. To those who would say, "Nope, this is all on Boeing and the FAA for letting
them run roughshod over the regulations!", let me share a bit of news with you to help you grok what dealing with the FAA is like.
Did you know AVGAS (aviation gasoline, e.g. the fuel used in the entire piston-powered fleet) still has lead in it? This, decades
after MOGAS (motor vehicle gasoline, e.g. what we buy for our automobiles) was banned from using tetraethyl lead (TEL) as an antiknock
compound!
Yet there's a drop in replacement available. Drop in meaning, refiners like Shell, Mobile, et al can begin mixing and distributing
it using existing pipelines and trucks without so much as having to first clean the equipment or change anything whatsoever. So
why isn't it used? It's because the FAA has been dragging their feet on approval. Put another way, the FAA would rather people
continue being adversely affected by lead in the environment than fast tracking this.
Source? I know the owner of the company, and stand up guy if ever there was on, plus I've got friends who have flown with this
fuel – extensively to help with testing. Bottom line? It works!
And while there's speculation this has to do with big oil not wanting to pay the patent holder and thus lobbying the FAA to
obstruct permission, I'm not going down that rabbit hole. Suffice to say this stuff has been available for years and the patent
clock is running down so you figure it out. Me? I do believe it's all about the Benjamins and am greatly saddened we're still
damaging the environment when a replacement fuel is available we could begin using by next week! I kid you not.
Just to confirm, my town is on the Colonial pipeline that runs up the east coast and one of the local terminal's operators
told me that they do add the lead for avgas here at the distribution facility. Switching to a different octane booster would be
quite possible.
On the other hand I'm not sure the limited amount of leaded gas used by prop planes should be considered that big an environmental
hazard (perhaps as someone who hangs around airports you feel differently).
–I'm guessing that sort of safety practice wasn't inculcated into the software engineers in the same way that it was for old
school aerospace engineers. Software is often a poorly documented, partially tested black box.
Trim systems have been a part of airplanes from the earliest experiments with powered flight. They can be as simple as a bungee
cord pulling on a stick, or as complex as multiple computers interacting in a *fly-by-wire* scenario. Pilots have to demonstrate
more than awareness of these systems; they must demonstrate competency in their operation and oversight.They have been trained
in how to identify, override, and compensate for malfunctions in any misbehaving flight control system in the aircraft for which
they receive authorization. One big unknown here (in my mind) is whether a malfunctioning trim system would (or should) have been
obvious to the flight crew. Another other big question is whether means of deactivation (not speaking of *override*) of the system
was the same as in the previous 737 variants. Typically; this might involve pulling a labeled circuit breaker to remove power,
and then manually adjusting a trim wheel on the console; or near the flight controls.
"an aircraft is a mechanical device; any component of which can fail" which I remember but increasingly; a COMPLEX electrical-mechanical
device .with input from multiple people's minds and hands
The history of aircraft design and flight testing is full of unanticipated complications; frequently addressed by tweaks to
details of structure and/or operational limits. The goal is to cover all possible permutations of problematic interactions of
aircraft; environment, and human beings. There is a great deal of precedence in this topic.
What the folks at Boeing may not realise is that the more they double-down on this bizarre tactic of using spin-doctoring
as a crisis management tool aimed at an audience that is rapidly losing trust in the company ( and frankly may no longer believe
anything coming out of the corporate communications department at Boeing), the harder it's going to be to reverse course by coming
out and saying "we screwed up and will do whatever it takes to fix this". This debacle has all the makings of a large scale cover
up and the continued mala fide attempts to deflect focus away from taking ownership of and accountability for this crisis will
only result in continued assault on an already battered reputation.
As an aside, the malaise at the FAA has been much documented on these pages and elsewhere recently, from the egregious
abdication of its regulatory responsibilities to Boeing to having a top position go unfilled for over a year, my question to US
readers is whether a comparable level of capture by corporate interests has similarly defanged the FDA? I only ask because
I see a lot of supplements and other medicinal products sold here in South Africa with the "Approved by the US FDA" seal of approval
and wonder whether deferring to US regulators by international regulatory bodies is still a good idea under the current climate.
The following statistical categories might generate interesting numbers.
#1: Total flight operations of all 737 types since introduction. (wheels up to wheels down)
#2: Same for Max variant in question.
#3: Difficulty reports filed for all 737 (flight related)
#4: Difficulty reports filed for Max (flight related)
Flight simulators are expensive and scheduling will likely be backed up, given the large number of existing and planned 737
Max aircraft. It's an important problem to fix, but not with the current workaround, which seems to be to use a tablet computer
instead.
One would think a tablet computer would be a poor platform for a computer game, let alone to simulate flying a commercial aircraft
with new s/w or h/w, the flight conditions under which they fail, and how to respond to them. All a tablet computer could simulate
is turning the pages in the flight manual.
Your note should be a useful reminder to the current generation of executives at Johnson & Johnson.
They and their peers at other companies seem to have discarded the crisis management gold standard established by J & J during
the Tylenol scare. It is cheaper, it seems, and provides fewer avenues of attack for the tort bar, to substitute scripts provided
by the apology industry, which can trace its origins to that same Tylenol scare.
"... All this is ignoring the real issue with complex aircraft today. To save money airlines pushed to eliminate the Flight Engineer. ..."
"... As the MCAS system has such authority to cause the plane to crash, a system like this should be quadruple-redundant to prevent a single source of bad data from causing a catastrophic loss of life. ..."
All this is ignoring the real issue with complex aircraft today. To save money airlines
pushed to eliminate the Flight Engineer.
The one time this scenario was avoided was when a jump seat pilot saw what was going on.
Both the captain and the co pilot had tunnel vision just trying to fly the damn plane. It's a
myth modern aircraft are less complex the older generation aircraft that required a Flight
Engineer. The computers work fine when everything is ok or the issue is straight forward but
when complexity enters during an emergency its far more complex than any old piston or early
jet aircraft.
None of these crashes would have occurred if a flight engineer was onboard. They have the
big picture on the air-frame and train to know that air frame backwards an forwards. The
pilots fly the aircraft while the flight engineer operates the systems.
Ask any qualified pilot these questions. You will get the same answer as above.
As the MCAS system has such authority to cause the plane to crash, a system like this
should be quadruple-redundant to prevent a single source of bad data from causing a
catastrophic loss of life.
This is compounded by the fact the pilots were unable to easily override the system and
unable to know _why_ they could not control the plane when MCAS malfunctioned.
There should be outrage that this was allowed to go into production.
These aircraft would be impossible to fly without automation. You would need at least 3 or
4 pilots and 15 engineers to keep on top of everything. There are hundreds of systems running
in the background. Airbus A series for example have anywhere between 80 to 120 million lines
of code depending on the type and configuration. Pilot's these days are computer terminal
operators. Errors are unavoidable in software until they fail.
The trick is simulation ,
clearly Boeing did not simulate any of this , this aircraft should not have been
certified.
The solution is less reliance on automation, at least not until AI is actually able to
intervene when sensors and software malfunction, and ESPECIALLY not with aircraft, for God's
sake.
One H1b to anotherH1b, "I thought you were supposed to fix those 297 stubbed out error
conditions on the MCAS stall sensor?" "No, I fixed the stubbed out error conditions on the
SQUALL sensor!"
"It's right there on the assignment schedule."
"What's the matter can't you read English?"
( The H-1B is a visa in the United States under the Immigration and Nationality Act,
section 101(a)(15)(H) that allows U.S. employers to temporarily employ foreign workers in
specialty occupations. )
I got out of the coding business when they started putting these MFturkeys in charge!
This tragedy is as much about government corruption (FAA approvals) as it is about a POS
company, it's shitbag execs, or third world pilots for that matter.
Without cross limiting; where 2 or more inputs cross reference each other and limit output
if the variation exceeds a predetermined setpoint; Boeing employed a control system with a
single point failure.
Analogous to a cars cruise control speeding up if the speedometer failed and registered
zero mph.
I read that the Operator's Manual for this aircraft is 1400 pages. Is that possible? And
if so, is this MCAS system info just hidden on page 419 like in a financial document? 1400
pages is almost as long as the cautions in a new drug advertisement. And I'm sure the
technical translations for Indonesian and Ethiopian pilots are perfectly done and readily
understood.
That is why commercial pilots get paid high wages to do their jobs and know the aircraft
they are flying. They just don't walk into a new aircraft cold turkey. This issue is covered
in the manual and it is an issue that any pilot would note as a big deal. In 1965/66 the
well-loved 727 had 4 crashes because pilots didn't know the aircraft. This is the same
thing.
As the MCAS system has such authority to cause the plane to crash, a system like this
should be quadruple-redundant to prevent a single source of bad data from causing a
catastrophic loss of life.
This is compounded by the fact the pilots were unable to easily override the system and
unable to know _why_ they could not control the plane when MCAS malfunctioned.
There should be outrage that this was allowed to go into production.
The FAA had the final call on this and they failed to do their job. The MCAS was never
designed to mask the airflow issues created by hanging over sized engines on an airframe
designed for smaller nacelles. These bigger engines had to be mounted higher and more forward
creating airflow disruption over the wing during critical climb out conditions. This bird
should never have flown! It was flawed from the get go and the FAA let it slide. Now hundreds
of people are dead!
If the US government doesn't intervene, all would be very easy lawsuits to win. But I
suspect there will be political pressure placed to limit the liability of Boeing or a deal
struck to have US taxpayers bail them out.
I do not believe this story or any other story of how the Boeing 737 crashed. On a private
jet the engines are set in the tail. If the angle of attack is high, little to no air will
flow into the engines as the wings block sufficient air movement thus stalling. Hondajet has
improved this by placing the engines on the wing. The engines of a Boeing 737 are placed in
front of the wing, thus there should be very little effect to the airflow, unless of course
the angle of attack is approaching a very large attack angle of over 70 degrees.
With power settings reduced to lower fuel consumption aka costs, it doesn't really make a
damn where the engines are mounted.
Fed-up with being Sick and Tired , 33 minutes ago
link
The question is thus begged: did this NEW Anti-Stall System replace one that had caused
issues in the past? WAS THIS NEW SYSTEM needed? Are pilots not trained to invoke changes to
NOSE ATTITUDE when stall indicators, in the past, were alarmed?
The "let's assassinate some peps" system, through which remote control access and false
data injection into a so called "closed" system exists. The public are done being played as
fools, Boeing. How much did you sell the encryption keys for access into that closed system
to 3rd parties? Why did that northern Scandinavian country spend millions removing this very
system from their purchased Boeing planes? Was it because they knew? The CEO of Lion Air
knows also.
This makes a big assumption, that being the AOA was faulty and MCAS came on for no reason.
That's a big assumption and probably very wrong. MCAS comes on in stalls or high bank turns
which we know the ethiopian pilot executed a high bank turn. The likely scenario is that the
inexperienced third world pilot with his 0 hours of training on the Max miscalculated the
weight of the plane on takeoff and stalled it in a turn right after he put the gear up and
took the flaps off. MCAS came on as it was supposed to do, and would be the right thing to do
to save the plane. If he had taken his hands off the yoke and gone to have a pee, all those
people would still be alive as the computer, which is much smarter than the third world
pilot, would have flown the plane. Not understanding his plane, the 28 year old pilot fought
the MCAS at 1000 feet and bought the farm. The next shoe to drop will be the more interesting
one. They have already released the innuendo, next to come will be the hard facts. Let's
see.
The only winners in this will be the lawyers. My Dad frequently told me that lawyers were
bleached souls in tan suits. I didn't understand at the time but I do now.
We know that's not exactly what happened because Trump called them out with his double
meaning "737 killers" talking about CA death penalty and this obvious deep state distraction
murder.
Surely this will mean the plane has to be 're-certified' after maybe modifications like
additional sensors, software updates and extra pilot training have been factored in.
Increasingly looking like there will be no 'quick fix', and admitting MCAS was at fault is
going to open Boeing up to tons of lawsuits, not to mention cancelled orders. They'll need to
drop the 737 MAX name too I would guess, it's too tarnished now.
I'm very surprised that a responsible company like Boeing would put out such a bad system.
The program should have used readings from both sensors to ensure accuracy, and the cockpit
warning mechanism should not have been optional equipment given the critical nature of the
system.
"... The stall-prevention system on the Boeing Co. 737 Max jet automatically switched on before the crash in Ethiopia this month, the Wall Street Journal reported, citing preliminary findings from data on the aircraft's black boxes. ..."
The stall-prevention system on the Boeing Co. 737 Max jet automatically switched on before
the crash in Ethiopia this month, the Wall Street Journal reported, citing preliminary findings
from data on the aircraft's black boxes.
The conclusion was relayed at a briefing at the U.S. Federal Aviation Administration on
Thursday and is the strongest indication yet that the same system malfunctioned in both the
Ethiopian Airlines flight and the
Lion Air disaster in Indonesia in October, the newspaper said.
"... The MCAS system is poorly engineered and the design should never have been certified in the first place. But the issue is even worse. The certification that was given relied on false data. ..."
"... The first MCAS design, on which the safety analysis and certification was based, allowed for a maximum trim movement by MCAS of 0.6 degree of a maximum of 5 degree. Flight tests proved that to be too little to achieve the desired effects and the maximum movement was changed to 2.5 degree. ..."
"... No safety analysis for the much greater movement was conducted. The FAA and foreign regulators were not informed of it. Their certification of the 737 MAX was based on misleading data. ..."
"... But even those certifications were only conditional. They required from Boeing to include relevant training material that explained the MCAS trim system and its potential problems to the pilots. ..."
"... The original certification for the 737 MAX was issued by the U.S. regulator FAA. The European regulator EASA based its certification on the one the FAA provided but it added several of its own requirements. There is now documentary evidence that Boeing neglected to fulfill at least one of those requirements. ..."
"... The FAA is as regulator far too cozy with lobbyists and aircraft manufacturers. It outsources too much of the certification testing to the manufacturers. It should not have allowed Boeing to install a MCAS that depended on a sole sensor. ..."
"... "It's become such a kludge, that we started to speculate and wonder whether it was safe to do the MAX," Ludtke said. ..."
"... MCAS was not the only change that made the 737 MAX a 'kludge'. The design errors were inexcusable . Boeing did not inform the regulators when it quadrupled the maximum effect the MCAS system could have. These changes had side effects that were not properly analyzed. Failure of the system was hazardous and extremely difficult to handle . Indicators lights showing that the system may have failed, a safety feature, were sold as extras . ..."
"... It will take quite long to certify the changes Boeing announced for the 737 MAX. Lawsuits were filed against the company. Orders were canceled . The company is under criminal investigation. The commercial damage to Boeing will likely be larger than currently estimated. It comes on top of a recent WTO ruling that Boeing illegally received billions of dollars in subsidies and will need to compensate its competition. ..."
"... The development and production of the 787 Dreamliner, announced in 2003, was outsourced all over the world. That led to years of delays and billions in development cost overruns. In 2010 Airbus announced the A-320 NEO as a better alternative to the 737 NG. Boeing was still busy to get the 787 into the air. It had neither the engineering capacity nor the money to counter the NEO with a brand new plane. It hastily revamped the 737, a design from the 1960s, into the 737 MAX. It promised to airlines that the new plane would not require to retrain their pilots. MCAS was specifically designed to allow for that. It was a huge mistake. ..."
"... Boeing once was an engineering company with an attached sales department. It 2001, when it moved its headquarter to Chicago , it became a dealership with an attached engineering wing. The philosophical difference is profound. It is time for the company to find back to its roots. ..."
For commercial reasons Boeing wanted the new 737 version to handle like the old ones. But
changes in the new version required an additional system to handle certain flight situations.
The development of that system and the safety analysis of its implications were rushed
through. Pilots were not informed of it and not trained to counter its failure.
The added 'maneuver characteristics augmentation system' (MCAS) depended on only one sensor.
When the sensor provided false data MCAS engaged and pointed the planes towards the ground.
Manual trim using the plane's trim wheel was required to regain flight stability. The pilots
were not aware of that. The regulators who certified the plane as safe
were unaware of the extend of the problem:
The MCAS system is poorly engineered and the design should never have been certified in the
first place. But the issue is even worse. The certification that was given relied on false
data.
The first MCAS design, on which the safety analysis and certification was based, allowed
for a maximum trim movement by MCAS of 0.6 degree of a maximum of 5 degree. Flight tests
proved that to be too little to achieve the desired effects and the maximum movement was
changed to 2.5 degree.
No safety analysis for the much greater movement was conducted. The FAA and foreign
regulators were not informed of it. Their certification of the 737 MAX was based on misleading
data.
But even those certifications were only conditional. They required from Boeing to include
relevant training material that explained the MCAS trim system and its potential problems to
the pilots.
The original certification for the 737 MAX was issued by the U.S. regulator FAA. The
European regulator EASA based its certification on the one the FAA provided but it added
several of its own requirements. There is now documentary evidence that Boeing neglected to
fulfill at least one of those requirements.
Page 15 of the Explanatory Note discusses "Longitudinal trim at Vmo". Vmo is the maximum
operational speed. The trim sets the nose of the plane up or down, independent of other pilot
input. Too high up and the plane with lose lift and stall, too low down and the plane will hit
terrain.
A failure of the MCAS system could trim the nose down. As a countermeasure the pilots would
have to switch the trim system off. They would then manually trim the plane back into a level
flight. This was a concern. The EASA note says:
Subsequent to flight testing, the FAA-TAD expressed concern with compliance to the reference
regulation based on an interpretation of the intent behind "trim". The main issue being that
longitudinal trim cannot be achieved throughout the flight envelope using thumb switch trim
only.
EASA considered the need to use manual trim "unusual". But it allowed it to pass because the
required training material would "clearly explain" the issue:
The need to use the trim wheel is considered unusual, as it is only required for manual
flight in those corners of the envelope.
The increased safety provided by the Boeing design limits on the thumb switches (for
out-of-trim dive characteristics) provides a compensating factor for the inability to use the
thumb switches throughout the entire flight envelope. Furthermore, the additional crew
procedures and training material will clearly explain to pilots the situations where use of
the trim wheel may be needed due to lack of trim authority with the wheel mounted
switches.
While the EASA was convinced (by Boeing?) that those situations would be discussed in
"additional crew procedures and training material", Boeing did not include it in the training
materials for the airlines that bought the planes:
Those situations, however, were not listed in the flight manual, according to a copy from
American Airlines seen by Reuters.
Without the additional procedures and training material the 737 MAX would not have been
certified. By providing the plane without the required training material Boeing essentially
handed incomplete planes to its customers.
The FAA is as regulator
far too cozy with lobbyists and aircraft manufacturers. It outsources too much of the
certification testing to the manufacturers. It should not have allowed Boeing to install a MCAS
that depended on a sole sensor.
But the bigger culprit here is clearly Boeing. The plane was developed in a rush
. Even its own engineers
doubted that it was safe:
Rick Ludtke, a former Boeing engineer who worked on designing the interfaces on the MAX's
flight deck, said managers mandated that any differences from the previous 737 had to be
small enough that they wouldn't trigger the need for pilots to undergo new simulator
training.
That left the team working on an old architecture and layers of different design
philosophies that had piled on over the years, all to serve an international pilot community
that was increasingly expecting automation.
"It's become such a kludge, that we started to speculate and wonder whether it was safe to
do the MAX," Ludtke said.
MCAS was
not the only change that made the 737 MAX a 'kludge'. The design errors were
inexcusable . Boeing did not inform the regulators when it quadrupled the maximum effect
the MCAS system could have. These changes
had side effects that were not properly analyzed. Failure of the system was hazardous and
extremely difficult
to handle . Indicators lights showing that the system may have failed, a safety feature,
were sold as
extras .
And today we learned that Boeing did not even provide its customers with the "clear
explanations" the certifications required it to deliver.
These were not 'mistakes' by some lowly technicians. These were breaches of legal
requirements and of trust.
It will take quite long to certify the
changes Boeing announced for the 737 MAX. Lawsuits
were filed against the company. Orders were
canceled . The company is under criminal investigation. The commercial damage to Boeing
will likely be larger than currently estimated. It comes on top of
a recent WTO ruling that Boeing illegally received billions of dollars in subsidies and
will need to compensate its competition.
All these are consequences of bad management decisions.
The development and production of the 787 Dreamliner, announced in 2003, was outsourced all
over the world. That led to years of delays and
billions in development cost overruns. In 2010 Airbus announced the A-320 NEO as a better
alternative to the 737 NG. Boeing was still busy to get the 787 into the air. It had neither
the engineering capacity nor the money to counter the NEO with a brand new plane. It hastily
revamped the 737, a design from the 1960s, into the 737 MAX. It promised to airlines that the
new plane would not require to retrain their pilots. MCAS was specifically designed to allow
for that. It was a huge mistake.
Boeing once was an engineering company with an attached sales department. It 2001, when it
moved its headquarter
to Chicago , it became a dealership with an attached engineering wing. The philosophical
difference is profound. It is time for the company to find back to its roots.
Posted by b on March 29, 2019 at 09:29 AM |
Permalink
The recent Ethiopian Airlines crash led to the grounding of Boeing's 737 MAX planes across
much of the globe. But as new details emerge about the cause of the model's second crash within
five months, questions are being raised about how the plane's safety was approved in the first
place. John Yang talks to Jeff Wise, a pilot and author of a book about MH370, the flight that
vanished in 2014.
$80,000 for a safety warning light! It should have been standard. How could they justify
charging $80,000 for a warning light? It's like Ford charging $800 for Brake Fluid warning
light, they would never have gotten away with that!
With the 737 Max still grounded after last week's deadly Ethiopian Airlines crash, the focus
turns to Boeing. The company offered a warning system that -- for a price -- might have helped
prevent the crashes. Kris Van Cleave reports.
$80 thousand for a warning light??? Unbelievable.... How much money can an indicator light
cost? Software for detecting sensor malfunction should've been there in the first place....
For such a critical sensor, those safety systems should've been built into the systems in a
$120 million dollar plane in the first place.
Why charge more for safety? It should be included by default. Then they kept saying it was
safe for flight but excluded a crucial piece. It's all for profit... smh. 🧐 they are
trying to deflect blame on the airline. Those planes should have never been sold in the first
place.
Actually they should be charged with manslaughter for both plans ! Enough playing games
with just a public court hearing then a fine ! Some Big People need to be held accountable by
full law ! Jail time !
I would bet that the actual labor and materials are less than $2000. The engineering had
already been completed as it is an option. Why then would safety be optional? Criminal greed,
or a low value placed on human lives. Whomever is responsible has no moral or social compass
and should be punished. Not with a fine but a lengthy prison term in Leavenworth.
if we can have recalls for cars, why cant we have the same for aircraft and force those
chaps to install foolproof sensors in triplicate, complete with warning inidicators at no
additional cost to the airlines!
"... Profit before people. Computer says no! Failsafe failed. No manual over ride. Sorry folks. Say Your prayers. The problem maybe rebranded. Best case scenario. Impeccable flying from technical progress made. ..."
"... Totally unnecessary crash that was caused by cutting corners and greed. ..."
Ethiopian Airlines is one of the best known safe reputation. Of course Indonesian Airlines
is the best too. The crash was very similar after take off and dive into the ground. Boing is
just protecting itself for its market.
Boeing needs to be sued for $2 billion for each victim of the Lion Air and Ethiopian
Airlines plus $300 billion in punitive damages, and jail time for some executives ~ they
knowingly put up unsafe planes. In its early days, the 737 also had several
cashes.
Obviously Boeing knew about the shortcomings of their design in earlier stages and instead
of fixing their design they chose to use a software to fix it without informing the airlines
or giving pilots adequate training in order to save costs.
Profit before people. Computer says no! Failsafe failed. No manual over ride. Sorry folks.
Say Your prayers. The problem maybe rebranded. Best case scenario. Impeccable flying from
technical progress made.
Boeing must be lobbying really hard and it's a shame that a respectable entity like
Washington Post is helping the narrative to shift the blame to pilots who are now dead. If
it's a Boeing, I'll have second thoughts.
1. Boeing wanted a new plane with larger enginers but without spending money on a new
fuselage. 2. Sold their planes to customers saying that Max type is same as the NG and that
no cost is involved for retraining pilots. 3. Make the MCAS system so that the new and plane
and old plane feel theoretically same to the pilot. 4. Not tell pilots about MCAS or hide
critical details about the system. 5. 300+ people dead. I hope the Boeing management can
sleep well knowing they have blood on their hands.
Sounds like they created a dangerously unstable craft that requires a computer system to
keep from stalling. Even if pilot turns off plane may have already got in situation hard to
recover from manually especially near ground. Two planes found this out.
At the root of almost every problem today is 'cost cutting' for short term profits to
satisfy roaming vulture capitalist greed. Why is the FAA 'under funded'? Why is it 'too
expensive' to give pilots the sim time they need even after hundeds of people are
dead??
Engines too far forward wings too swept back computer and pilot can't find center of
balance and it piledrives into earth, its not a mystery. If I wanted to take a perfectly good
737 and turn it into an unflyable plane, well they did it.
Just fix the auto pilot issue. Also, what in all of God's green earth? Pilots only learned
about flying this new model with just textual information? No simulation? No wounder pilots
of both airlines were confound by the conflicting warnings blaring at them in the
cockpit.
Ha ha ha there is no money for the faa, but the government had enough money to go on a
bombing run around the world. So now who is responsible ? Boeing faa or other aviation
authorities like the icao or others ? Who is going to be jailed for this mass murdering?
Since they have accepted it so the faa chief should be put behind bars for lying about the
inspection and the certificate !!!!!!
FAA rep is a clown! It is not FAA fault and Boeing was under pressure. If one of your family
was in one of those crashes, you would never shill for those corporate murders.
He is a clown! It is not FAA fault and Boeing was under pressure. If one of your family
was in one of those crashes, you would never shill for those corporate murders.
Ex FAA employees have come out and say FAA doesn't have the expertise and have to rely on
Boeing for aspects of the certifications, why? because dumb Americans buy politicians ever
selling lower taxes. Hey dudes, u gotta spend money to hire good people duh! something gotta
give. Cheap government, cheap results. U deserve what u paid for America.
The MCAS system was not revealed to the first receivers of the Max 8's, nor was it in the
Manuals. Boeing thought it would quietly do it's job in the background, but they were wrong.
After the first accident from Lion Air, out of Indonesia, then all airliners were informed of
this. The pilots in Ethiopia may or may not have been aware of this, and if they were they
lacked insufficient training on how to deal with this problem. The MCAS system works to bring
the nose of the plane down so it can fly at a level flight. MCAS get's it's information from
AOA sensors that send info to the plane as to what angle the plane is flying at. Pilots have
reported that the AOA sensors are faulty and sending "wrong information" and "activating" the
MCAS system when it shouldn't have, causing the planes nose to point downward, and causing
the plane to go into a nose dive, and this is what happened. Basically the MCAS was needed
because Boeing redesigned the engines, that were bigger, and were mounted differently -- more
forward and up on the wing, throwing off the center of gravity of the new 737 Max 8.The old
737 does not have this problem. AOA sensors, stands for Angle of Attack, to make sure air
flow is right both over and under the wings, to make the plane aerodynamic. According to
reports from pilots, you can "disengage" the MCAS SYSTEM, buy pulling back on the yoke, and
this will do it. At the same time there are wheels by the throttle that you turn manually, to
trim the planes stabilizer manually by yourself. This was done many times by well trained
American pilots, who averted crashes with this jet. So, proper training and awareness could
have saved a lot of lives. Let's not forget these MAX 8 jets have been flying for a couple
years, with thousands of flights in North America and developed countries with "no"
accidents, and pilots say the plane flies beautifully. They say it's a very smooth flying
aircraft, and a pleasure to pilot. So, who's responsible for this -- well it's Boeing, for
non disclosure of the MCAS system, and what to do, if it functions in error, and how to
manually disengage the system. In my opinion, all pilots should know how to manually take a
plane from takeoff, and land it smoothly with no automation, or computers to help them --
just like in the old days. Over the last 20 years, there have been so very few major aircraft
go down. I'm all for automation, but I fully support proper pilot training should some of
this automation fail -- like faulty sensors. It's completely crazy to rely on robots or
Artificial Intelligence ( AI ) to fly planes, if you don't understand how the computers work,
and how they fly the plane, and in the event of a failure of the computer, you can then shut
it off, and have "no problem" , and take control of the aircraft yourself,- "manually" with a
lot of confidence. I SHOULD ADD - this MCAS system and it's AOA sensors, should all be
mandatory on a plane, and not be sold as extras, same as brakes on a car. You don't play
around with peoples lives, to make a few extra dollars, selling "options." These features
"must be standard equipment", on all these aircraft sold, PERIOD. This is why I'm "very
against" self driving cars'. Can you imagine all the accidents that will happen from "faulty
sensors." WOW , it will be a nightmare. Faulty sensors could be caused by snow, ice, extreme
heat or cold. Are we getting so lazy that we need to have Artificial Intelligence driving our
cars. No thanks for me, I'll drive my own car, and hope that people will rebel against this
idea, and the makers of these cars, won't sell any of them, and thus, taking them off the
market.This Boeing Max 8 should send a good example, of things to come if we allow driverless
cars. Not for me, and I hope the general public will agree with this.
Terrorists aren't needed to bring down airliners and frighten the public. Boeing and a
failed Trump policy, that won't staff FAA department with a permanent and qualified leader,
are managing the same thing through their fashionable neglect and arrogance.
Just look at the investigation of sinking and tilting Mellilium Tower in sanfransico.
Building concrete Foundation and glasses are cracking and investigators are still studying
what caused the two glass windows to crack. Similar investigation is going on how these two
Boeing max crashed.
Deadly strategie from Boeing for quick profits and market shares . Airliners are built to
be operated for at least a couple of decades Boeing was providing worldwidely flying coffins
made by mixing new technologies (leap engine ) with cheap and old technologies (1/2 century
old airframe).A new well designed aircraft is stable, well-balanced without extra software's
help.
Trump nominated his personal pilot to head up the FAA. After 2 years, they still have an
"acting" director. Tim Boeing shows up at Mar-a-lago every weekend. What could possibly go
wrong?
This been a long time coming. Who cut the FAA? BOTH PARTIES DID! The system is gonna fall
apart because too much damage has been done. Just keep paying people peanuts and have them
try to do a skilled job. My cousin quit the airline industry because they don't want people
to be able to pay for the education needed for these jobs. Like who program these
systems.
Looks like I'll be getting that 🚲 sooner than later. I won't be traveling by plane
for a few Give it time for all the smoke to clear and heads to roll😳
"... "It's a very, very serious investigation into basically, was there fraud by Boeing in the certification of the 737 MAX 8 ?" Arthur Rosenberg, an aviation attorney who is representing six families whose relatives died in the Ethiopian Airlines and Lion Air crashes, explained. ..."
"... Rosenberg expects the criminal probe to question whether Boeing fully disclosed to the FAA the engineering of the 737 Max 8's MCAS flight control system, called MCAS (Maneuvering Characteristics Augmentation System), during the plane's certification process. The flight control system was designed to prevent the plane from stalling. ..."
"... Unfortunately for Boeing and the passengers its crashed aircraft were carrying, the MCAS system was very poorly implemented. ..."
"... The single sensor was the result of regulatory capture, not to say gaming; see below. ..."
"... Black box data retrieved after the Lion Air crash indicates that a single faulty sensor -- a vane on the outside of the fuselage that measures the plane's "angle of attack," the angle between the airflow and the wing -- triggered MCAS multiple times during the deadly flight, initiating a tug of war as the system repeatedly pushed the nose of the plane down and the pilots wrestled with the controls to pull it back up, before the final crash. ..."
"... Regulatory Capture : Commercial aircraft need to be certified by the FAA before launch. The Washington Post labels today's process "self-certification": ..."
"... In practice, one Boeing engineer would conduct a test of a particular system on the Max 8, while another Boeing engineer would act as the FAA's representative , signing on behalf of the U.S. government that the technology complied with federal safety regulations, people familiar with the process said. ..."
"... (Note that a 10-year-old process would have begun in the Obama administration, so the regulatory process is bipartisan.) I understand that " safety culture " is real and strong, but imagine the same role-playing concept applied to finance: One bankers plays the banker, and the other banker plays Bill Black, and after a time they switch roles . Clearly a system that will work until it doesn't. More: ..."
"... The process was occurring during a period when the Transportation Department's Office of Inspector General was warning the FAA that its oversight of manufacturers' work was insufficient. ..."
"... The FAA, citing lack of funding and resources, has over the years delegated increasing authority to Boeing to take on more of the work of certifying the safety of its own airplanes. ..."
"... Alert readers will note the similarity to the Neoliberal Playbook , where government systems are sabotaged in order to privatize them, but in this case regulatory capture seems to have happened "by littles," rather than out of open, ideological conviction (as with the UKs's NHS, or our Post Office, our Veteran's Administration, etc.). ..."
"... Several FAA technical experts said in interviews that as certification proceeded, managers prodded them to speed the process. Development of the MAX was lagging nine months behind the rival Airbus A320neo. Time was of the essence for Boeing . ..."
"... In this atmosphere, the System Safety Analysis on MCAS, just one piece of the mountain of documents needed for certification, was delegated to Boeing . ..."
"... It should be clear at this point that the central claims of Muilenburg's letter are false. ..."
"... The self-certification debacle that allowed MCAS to be released happened on Muilenburg's watch and is already causing Boeing immense reputational damage, and a criminal case, not to mention the civil cases that are surely coming, will only increase that damage. Mr. Market, the Beltway, and even Trump, if his trade deals are affected, will all soon be bellowing for a sacrificial victim. Muilenburg should recognize the inevitable and gracefully resign. Given his letter, it looks unlikely that he will do the right thing. ..."
"... Beyond that ultimate problem is the ultimate regulatory problem: regulatory capture of the FAA by the airline companies. As a result, the FAA represents "its customers" the airplane makers, not the public users and customers. This is like the banks capturing the Fed, the Justice Dept. and Treasury to promote their own interests by claiming that "self-regulation" works. Self-regulation is the polite word for fraudulent self-indulgence. ..."
"... I would be surprised if the European Airbus competitors do not mount a campaign to block the 737-Max's from landing, and insisting that Boeing buy them back. This gives Airbus a few years to grab the market for these planes. ..."
"... This probably will throw Trump's China trade fight into turmoil, as China was the first country to ground the 737-Max's and is unlikely to permit their recovery without a "real" federal safety oversight program. Maybe Europe, China and other countries henceforth will each demand that their own public agencies certify the plane, so as to represent users and stakeholders, not only stockholders. ..."
"... The moral: Neoliberalism Kills. ..."
"... Rule #2 of Neoliberalism: Go die. ..."
"... > "Maybe Europe, China and other countries henceforth will each demand that their own public agencies certify the plane." ..."
"... As if the 737 MAX were the chlorinated chicken of aircraft. ..."
"... "This gives Airbus a few years to grab the market for these planes." ..."
"... Regulatory capture is rampant throughout the economy. Boeing self-certification being delegated by the FAA is not unlike the situation with electric transmission utilities. ..."
"... that is subject to both FERC and NERC regulation. ..."
"... In hindsight Boeing would have perhaps been better off to leave off the MCAS altogether and depend on pilot retraining to cover the altered handling. ..."
"... Reports I've read indicates that Boeing ignored even the clearly inadequate certification. "Documentation provided to the FAA claims that the MCAS system can only adjust the horizontal tail on the plane by 0.6 degrees out of a maximum of five-degrees of nose-down movement. But that limit was later increased to 2.5-degrees of nose-down movement. Boeing didn't communicate the change from 0.6-degrees to 2.5-degrees until after Lion Air." ..."
"... Boeing could also be liable for damages due to 737 groundings and due to delays in delivery of contracted planes. ..."
"... The analogy has been made between this the 737 MAX story and the Tylenol story. J&J got out in front of the problem and saved the product (and their company). Boeing's problem is of that order, and Muilenberg -- that letter! -- seems incapable of understanding that; insular, arrogant. One more reason to fire the dude toot sweet. If he comes out of his next review with a raise -- Everything Is Like CalPERS™ -- consider shorting Boeing ..."
"... Allowing this to happen seems the ultimate in short term thinking by Boeing. US manufacturers have always had an advantage over competitors because the FAA was held in such high regard worldwide that it was the de facto world safety regulatory body – every country followed its lead. But this chipping away of its authority has led to a near fatal loss of faith, and will no doubt lead to European and Asian regulatory authorities being strengthened. And no doubt commercial realities will mean they will look much more closely at US manufactured aircraft if there is some benefit to their own manufacturers. ..."
"... The Times thinks Boeing is too big to fail. Without a blockbuster Max, I don't see how Boeing maintains its current status in the industry. ..."
"... I also think they have been completely afflicted by the defense contractor mentality. ..."
"... Yes, the famous McDonnell-Douglas reverse takeover , where financial engineers inserted their sucking mandibles into an actual ..."
"... Note that Muilenberg came up through the defense side of the company not the commercial aircraft side. He may simply not have been equipped to understand FAA regulation at any deep level, hence the rot that finally surfaced. ..."
"... The tragedy is that corporate media in pursuit of profits will keep us up to date but will never mention the 6 or 8 minutes of terror for the 346 souls aboard the two flights. They will cover the criminal negligence trial if there are ever indictments. But, the news reports never will say that neoliberalism, deregulation, and privatization are the root causes of the deaths. ..."
"... Boeing also clearly did not know its customers . It should be engineering for the sort of pilots who are going to be hired by Lion Air, or any rapidly expanding airline in what we used to all the Third World. Hegemony, it seems, makes you insular and provincial. ..."
"... "The FAA, citing lack of funding and resource": I don't suppose I'll survive to see any arm of government not blame lack of funds for its boneheaded or corrupt incompetence. ..."
"... That's how I feel. The tech doc department at Boeing sounds like a horrible place to work; MBAs or their goons telling you all the time to do stuff you know is wrong. It's not surprising people were willing to talk to the Seattle Times; I bet there are more people. (Hey, Seattle Times! How about people testing the 737 MAX in simulators (assuming this is done)). ..."
"... Interestingly, and maybe relevant to the problem of confusion for the pilots, is that Boeing has had another automatic trim-modifier operating on its 737s for some time, the speed-trim system (STS): ..."
"... This system also modifies the stabilizer position during manual flight. Like MCAS, it was brought in to improve stability under certain flight conditions (the reasons for which are far beyond my knowledge). There is an indication that the pilots on the flight before the Lion Air crash misinterpreted MCAS actions for STS behavior. ..."
"... authority would revert to the pilot ..."
"... How many years ago did Wall Street take over the fortunes of the company? Why did they move their headquarters from their birthplace of Seattle to Chicago? Why did they start assembling planes in South Carolina and China? Was it to improve aviation safety? Or, to allow the profiteering parasites to feed off the carcass of the company? ..."
"... President Trump, here's a reelection tip: "Today I am declaring that all American registered aircraft flying in American airspace must be maintained in the U.S." ..."
"... Amazingly, Trump seems to have done OK on this. First, he didn't cave to Muilenberg's (insane, goofy, tone-deaf) request to keep the 737 flying; then he frames the issue as complexity (correct, IMNSHO), and then he manages to nominate a Delta CEO as head of the FAA . ..."
"... we're seeing signs that a crapification process has begun on the safety side in this industry. (It has been proceeding for years on the service/amenities side.) ..."
"... Considering the fact that all these 737s are grounded as no airline trust them to not kill a plane load of passengers and crew, this is a really big deal. Putting aside the technical and regulatory issues, the fact is that the rest of the world no longer trusts the US in modern aviation so what we have here is a trust issue which is an even bigger deal. ..."
"... Loss or at least wobbliness of imperial hegemony, like. It's not just the aircraft, it's US standards-setting bodies, methods, "safety culture," even -- dare we say it -- English as the language of aviation. French is no longer the language of diplomacy, after all, though it had a good run. ..."
"... Because markets. Neoliberalism puts everything up for sale. Including regulation. Oversimplifying absurdly: And so you end up with the profit-driven manufacturer buying the regulator, its produce killing people, and the manufacturer canceling its future profits. That's what the Bearded One would call a contradiction.* ..."
"... know your customer ..."
"... Like you, I am a retired software engineer, so I have followed an aviation blog discussion of this issue quite closely since it emerged as a probable software and system design failure. As the blog is open to all, its signal-to-noise ratio is pretty low, but it seems not too difficult for any technically-minded person to separate the wheat from the chaff. My current understanding, which I believe others here are in a position to correct, if necessary: ..."
"... this story is really fascinating and seems to be true a sign of the times. ..."
"... The Post's article on the FAA and Regulatory Capture is incomplete. The process for the FAA (and probably MANY government agencies) started under Reagan, did not revert to safety under Clinton (make government smaller and all that), and then accelerated under Bush II in 2005 (not a bi-partisan time). In particular, big changes to the FAA were made in 2005 that were executive in nature and did not require Congressional approval. CF: https://www.seattletimes.com/business/delegating-aircraft-safety-assessments-to-boeing-is-nothing-new-for-the-faa/ ..."
At some point in the future, I'd like to do failure matrix for the pathways to misfortune (
example of such a matrix here ) that precipitated
two deadly Boeing 737 MAX crashes on take-off in five months , but I don't feel that I have enough information yet. (I'm not
unsympathathetic to the view
that the wholesale 737 MAX grounding was premature on technical grounds , but then trade and even geopolitical factors enter
in, given that Boeing is a "national champion.") We do not yet have results from the cockpit voice and flight data recorders of either
aircraft, for example. But what we do know is sufficiently disturbing -- a criminal investigation into Boeing had already been initiated
after the Lion Air crash, but before the Ethiopian Airlines crash -- that I think it's worthwhile doing a play-by-play on the causes
of the crashes, so far as we can know them.
About that criminal investigation
:
According to the Wall Street Journal, a Washington D.C. grand jury issued a March 11 subpoena requesting emails, correspondence,
and other messages from at least one person involved in the development of the aircraft.
"It's a very, very serious investigation into basically, was there fraud by Boeing in the certification of the 737
MAX 8 ?" Arthur Rosenberg, an aviation attorney who is representing six families whose relatives died in the Ethiopian Airlines
and Lion Air crashes, explained.
"Nobody knows the answer to that yet," Rosenberg cautioned, adding that he had not yet seen the Justice Department's subpoena
and therefore could not know its full scope.
Rosenberg expects the criminal probe to question whether Boeing fully disclosed to the FAA the engineering of the 737 Max
8's MCAS flight control system, called MCAS (Maneuvering Characteristics Augmentation System), during the plane's certification
process. The flight control system was designed to prevent the plane from stalling.
A possible criminal investigation during an aircraft accident investigation is highly unusual . While airline accidents
have at times raised criminal issues, such as after the 1996 crash of a ValuJet plane in the Florida Everglades, such cases are
the exception.
Safety is at the core of who we are at Boeing, and ensuring safe and reliable travel on our airplanes is an enduring value
and our absolute commitment to everyone. This overarching focus on safety spans and binds together our entire global aerospace
industry and communities. We're united with our airline customers, international regulators and government authorities in our
efforts to support the most recent investigation, understand the facts of what happened and help prevent future tragedies. Based
on facts from the Lion Air Flight 610 accident and emerging data as it becomes available from the Ethiopian Airlines Flight 302
accident, we're taking actions to fully ensure the safety of the 737 MAX. We also understand and regret the challenges for our
customers and the flying public caused by the fleet's grounding.
Boeing has been in the business of aviation safety for more than 100 years, and we'll continue providing the best products,
training and support to our global airline customers and pilots. This is an ongoing and relentless commitment to make safe
airplanes even safer .
Soon we'll release a software update and related pilot training for the 737 MAX that will address concerns discovered in the
aftermath of the Lion Air Flight 610 accident.
Fine words. Are they true? Can Boeing's "commitment to everyone to ensure " safe and reliable travel" really be said to be "absolute"?
That's a high bar. Let's see!
I've taken the structure that follows from
a tweetstorm by Trevor Sumner (apparently derived from
a Facebook post by his brother-law,
Dave Kammeyer ). However, I've added topic headings, changed others,
and helpfully numbered them all, so you can correct, enhance, or rearrange topics easily in comments (or even suggest new topics).
Let me also caveat that this is an enormous amount of material, and time presses, so this will not be as rich in links as I would
normally like it to be. Also note that the level of abstraction for each topic varies significantly: From "The Biosphere" all the
way to "Pilot Training." A proper failure matrix would sort that out.
* * *
(1) The Biosphere : The 737 MAX story beings with a customer requirement for increased fuel efficiency. This is, at bottom,
a carbon issue (and hence a greenhouse gas issue , especially as the demand for air travel increases, especially in Asia). New
biosphere-driven customer demands will continue to emerge as climate change increases and intensifies, and hence the continued 737
MAX-like debacles should be expected, all else being equal. From
CAPA – Centre for Aviation :
The main expected impacts of climate change on aviation result from changes in temperature, precipitation (rain and snow),
storm patterns, sea level and wind patterns. In addition, climate change is expected to lead to increased drought, impacts on
the supply of water and energy, and changes in wildlife patterns and biodiversity. Consequences for aviation include reduced aircraft
performance, changing demand patterns, potential damage to infrastructure, loss of capacity and schedule disruption.
All of these factors will affect aircraft design, manufacturing, maintenance, and use, stressing the system.
(2) Choice of Airframe :
The Air Current
describes the competitive environment that led Boeing to upgrade the 737 to the 737 MAX, instead of building a new plane:
Boeing wanted to replace the 737. The plan had even earned the endorsement of its now-retired chief executive. We're gonna
do a new airplane," Jim McNerney
said in February of that same year. "We're not done evaluating this whole situation yet, but our current bias is to not re-engine,
is to move to an all-new airplane at the end of the decade." History went in a different direction. Airbus, riding its
same decades-long incremental strategy and chipping away at Boeing's market supremacy, had made no secret of its plans to
put new engines on the A320. But its own re-engineered jet somehow managed to take Boeing by surprise. Airbus and American forced
Boeing's hand. It had to put new engines on the 737 to stay even with its rival .
Why? The earlier butchered launch of the 787:
Boeing justified the decision thusly: There were huge and excruciatingly painful near-term obstacles on its way to a new single-aisle
airplane. In the summer of 2011, the 787 Dreamliner wasn't yet done after billions invested and years of delays. More than 800
airplanes later here in 2019, each 787 costs less to build than sell, but it's
still running a $23 billion production
cost deficit. .
The 737 Max was Boeing's ticket to holding the line on its position "both market and financial" in the near term. Abandoning
the 737 would've meant walking away from its golden goose that helped finance the astronomical costs of the 787 and the development
of the 777X.
So, we might think of Boeing as a runner who's tripped and fallen: The initial stumble, followed by loss of balance, was the 787;
with the 737 MAX, Boeing hit the surface of the track.
(3) Aerodynamic Issues : The
Air Current
also describes the aerodynamic issues created by the decision to re-engine the 737:
Every airplane development is a series of compromises, but to deliver the 737 Max with its promised fuel efficiency, Boeing
had to fit 12 gallons into a 10 gallon jug. Its bigger engines made for creative solutions as it found a way to mount the larger
CFM International turbines under the notoriously low-slung jetliner. It lengthened the nose landing gear by eight inches, cleaned
up the aerodynamics of the tail cone, added new winglets, fly-by-wire spoilers and big displays for the next generation of pilots.
It pushed technology, as it had done time and time again with ever-increasing costs, to deliver a product that made its jets more-efficient
and less-costly to fly.
In the case of the 737 Max, with its nose pointed high in the air, the larger engines "generating their own lift" nudged it
even higher. The risk Boeing found through analysis and later flight testing was that under certain high-speed conditions both
in wind-up turns and wings-level flight, that upward nudge created a greater risk of stalling.
Its solution was MCAS , the Maneuvering Characteristics Augmentation System control law that would allow for both generations
of 737 to behave the same way. MCAS would automatically trim the horizontal stabilizer to bring the nose down, activated with
Angle of Attack data. It's now at the center of the Lion Air investigation and stalking the periphery of the Ethiopian crash.
(4) Systems Engineering : Amazingly, there is what in a less buttoned-down world that commercial aviation would be called a Boeing
737 fan site, which describes the MCAS system in more technical terms
:
MCAS was introduced to counteract the pitch up effect of the LEAP-1B engines at high AoA [Angle of Attack]. The engines were
both larger and relocated slightly up and forward from the previous NG CFM56-7 engines to accomodate their larger diameter. This
new location and size of the nacelle causes it to produce lift at high AoA; as the nacelle is ahead of the CofG [Center of Gravity]
this causes a pitch-up effect which could in turn further increase the AoA and send the aircraft closer towards the stall. MCAS
was therefore introduced to give an automatic nose down stabilizer input during steep turns with elevated load factors (high AoA)
and during flaps up flight at airspeeds approaching stall.
Unfortunately for Boeing and the passengers its crashed aircraft were carrying, the MCAS system was very poorly implemented.Reading between the lines (I've helpfully labeled the pain points):
Boeing have been working on a software modification to MCAS since the Lion Air accident. Unfortunately although originally
due for release in January it has still not been released due to both engineering challenges and differences of opinion among
some federal and company safety experts over how extensive the changes should be.
Apparently there have been discussions about potentially adding [A] enhanced pilot training and possibly mandatory [B] cockpit
alerts to the package. There also has been consideration of more-sweeping design changes that would prevent [C] faulty signals
from a single sensor from touching off the automated stall-prevention system.
[A] Pilot training was originally not considered necessary, because MCAS was supposed to give 737 MAX the same flight
characteristics as earlier 737s; that's why pilots weren't told about it. (This also kept the price low.) [B] Such alerts exist now,
as part of an optional package, which Lion did not buy. [C] The single sensor was the result of regulatory capture, not to say
gaming; see below.
(The MCAS system is currently the system fingered as the cause of both the Lion Air and Ethiopian crashes; we won't know for sure
until the forensics are complete. Here, however, is
the scenario for an MCAS-induced crash :
Black box data retrieved after the Lion Air crash indicates that a single faulty sensor -- a vane on the outside of the
fuselage that measures the plane's "angle of attack," the angle between the airflow and the wing -- triggered MCAS multiple times
during the deadly flight, initiating a tug of war as the system repeatedly pushed the nose of the plane down and the pilots wrestled
with the controls to pull it back up, before the final crash.
(5) Regulatory Capture : Commercial aircraft need to be certified by the FAA before launch. The
Washington Post labels today's process "self-certification":
The FAA's publication of pilot training requirements for the Max 8 in the fall of 2017 was among the final steps in a multiyear
approval process carried out under the agency's now 10-year-old policy of entrusting Boeing and other aviation manufacturers to
certify that their own systems comply with U.S. air safety regulations.
In practice, one Boeing engineer would conduct a test of a particular system on the Max 8, while another Boeing engineer
would act as the FAA's representative , signing on behalf of the U.S. government that the technology complied with federal safety
regulations, people familiar with the process said.
(Note that a 10-year-old process would have begun in the Obama administration, so the regulatory process is bipartisan.) I
understand that " safety culture " is real and strong, but imagine the same
role-playing concept applied to finance: One bankers plays the banker, and the other banker plays Bill Black, and after a time they
switch roles . Clearly a system that will work until it doesn't. More:
The process was occurring during a period when the Transportation Department's Office of Inspector General was warning
the FAA that its oversight of manufacturers' work was insufficient.
Four years after self-certification began, fires aboard Boeing's 787 Dreamliner jets led to the grounding of the fleet and
a wave of questions about whether self-certification had affected the FAA's oversight.
Why "self-certification"? Investigative reporting from
the Seattle Times -- the article is worth reading in full -- explains:
The FAA, citing lack of funding and resources, has over the years delegated increasing authority to Boeing to take on more
of the work of certifying the safety of its own airplanes.
Alert readers will note the similarity to
the Neoliberal Playbook , where government systems are sabotaged in order to privatize them, but in this case regulatory capture
seems to have happened "by littles," rather than out of open, ideological conviction (as with the UKs's NHS, or our Post Office,
our Veteran's Administration, etc.).
(6) Transfer of Authority to Boeing : In the case of the 737 Max, regulatory capture was so great that certification authority
was transferred to Boeing. In order to be certified, a "System Safety Analysis" for MCAS had to be performed.
The Seattle Times :
The safety analysis:
Understated the power of the new flight control system, which was designed to swivel the horizontal tail to push the nose of the
plane down to avert a stall. When the planes later entered service, MCAS was capable of moving the tail more than four times farther
than was stated in the initial safety analysis document.
Failed to account for how the system could reset itself each time a pilot responded, thereby missing the potential impact of
the system repeatedly pushing the airplane's nose downward. Assessed a failure of the system as one level below "catastrophic."
But even that "hazardous" danger level should have precluded activation of the system based on input from a single sensor --
and yet that's how it was designed.
So who certified MCAS? Boeing self-certified it. Once again
The Seattle Times :
Several FAA technical experts said in interviews that as certification proceeded, managers prodded them to speed the process.
Development of the MAX was lagging nine months behind the rival Airbus A320neo. Time was of the essence for Boeing .
"There wasn't a complete and proper review of the documents," the former engineer added. "Review was rushed to reach certain
certification dates."
In this atmosphere, the System Safety Analysis on MCAS, just one piece of the mountain of documents needed for certification,
was delegated to Boeing .
(I'm skipping a lengthy discussion of even more technical detail for MCAS, which includes discrepancies between what Boeing self-certified,
and what the FAA thought that it had certified, along with the MCAS system acting like a ratchet, so it didn't reset itself, meaning
that each time it kicked in, the nose was pitched down even lower. Yikes. Again, the article is worth reading in full; if you've
ever done tech doc, you'll want to scream and run.)
(7) Political Economy : This tweet is especially interesting, because even I know that
Muddy Waters Research is a famous short seller:
What's the
result? Two $BA planes have been grounded:
787 and Max. Last FAA grounding of a type of plane was 1979. In the case of the Max, FAA outsourced more than planned bc BA was
9 months behind Airbus 320neo 3/4 2 replies 4 retweets 19 likes
This is a great example of real short-termism by a corporate. It's clearly in
$BA LT interest to have robust cert system,
but those chickens come home to roost years later, allowing mgmt to meet ST expectations. BTW, semi-annual reporting would do
NOTHING to fix this mentality. 4
And here we are! There are a myriad of other details, but many of them will only prove out once the black boxes are examined and
the forensics are complete.
* * *
It should be clear at this point that the central claims of Muilenburg's letter are false. I understand that commercial
aviation is a business, but if that is so, then Muilenburg's claim that Boeing's commitment to safety is "absolute" cannot possibly
be true; indeed, the choice to re-engine the 737 had nothing to do with safety. Self-certification makes Boeing "a judge in its own
cause," and that clearly contradicts Muilenburg's absurd claim that "safety" -- as opposed to profit -- "is at the core of who we
are."
The self-certification debacle that allowed MCAS to be released happened on Muilenburg's watch and is already causing Boeing
immense reputational damage, and a criminal case, not to mention the civil cases that are surely coming, will only increase that
damage. Mr. Market, the Beltway, and even Trump, if his trade deals are affected, will all soon be bellowing for a sacrificial victim.
Muilenburg should recognize the inevitable and gracefully resign. Given his letter, it looks unlikely that he will do the right thing.
IIRC, one of the big constraints that was leveled was the need to keep the 737, regardless of version, into the same height
relative to all other generations of the 737, whereas Airbus kept their height a lot higher than the 737.
If you look at many 737's over the years, some of the engine's nacelles were flat at the bottom to accommodate larger engine.
Why? Boeing kept the height the same in order to maintain built-in stairs that, with virtually all airports having adjustable
jetways, was basically redundant.
When you compare an A320xeo against a B737, you'll find that the Airbus rides higher when it comes to the jetways.
It seems to me that the Boeing 737-Max with the heavier, larger fuel-saving engines is so unbalanced (tilting over and then
crashing if not "overridden" by a computer compensation) that it never should have been authorized in the first place.
When Boeing decided to add a much larger engine, it should have kept the airplane in balance by (1) shifting it forward or
backward so that the weight did not tip the plane, and (2) created a larger landing-gear base so that the large engines wouldn't
scrape the ground.
The problem was that Boeing tried to keep using the old chassis with the larger engines under the wings – rather than changing
the wings, moving them forward or aft, and expanding the plane to permit a more appropriate landing gear.
The computer system has been blamed for not being a "smart enough" workaround to tell the plane not to plunge down when it
already is quite close to the ground – with no perception of altitude, not to mention double-checking on the wind speed from both
sensors.
Beyond that ultimate problem is the ultimate regulatory problem: regulatory capture of the FAA by the airline companies.
As a result, the FAA represents "its customers" the airplane makers, not the public users and customers. This is like the banks
capturing the Fed, the Justice Dept. and Treasury to promote their own interests by claiming that "self-regulation" works. Self-regulation
is the polite word for fraudulent self-indulgence.
I would be surprised if the European Airbus competitors do not mount a campaign to block the 737-Max's from landing, and
insisting that Boeing buy them back. This gives Airbus a few years to grab the market for these planes.
This probably will throw Trump's China trade fight into turmoil, as China was the first country to ground the 737-Max's
and is unlikely to permit their recovery without a "real" federal safety oversight program. Maybe Europe, China and other countries
henceforth will each demand that their own public agencies certify the plane, so as to represent users and stakeholders, not only
stockholders.
> "Maybe Europe, China and other countries henceforth will each demand that their own public agencies certify the plane."
As if the 737 MAX were the chlorinated chicken of aircraft.
* * *
I'm not sure about redesigning the wing and the landing gear. That might be tantamount to designing a new plane. (I do know
that the landing gear is so low because the first 737s needed to accommodate airports without jetways, and so there may be other
facets of the design that also depend on those original requirements that might have to be changed.)
Regulatory capture is rampant throughout the economy. Boeing self-certification being delegated by the FAA is not unlike
the situation with electric transmission utilities.
After the 2003 northeast & Canada blackout, Congress passed the Energy Policy Act of 2005. It directed FERC to create an "electric
reliability organization". Previously there were voluntary organizations set up after the 1966 blackout to establish operating
standards in the industry. One of them was the North American Electric Reliability Council which morphed into the North
American Electric Reliability Corporation (NERC) in 2006.
NERC is headquartered in Atlanta and employs hundreds of people. The standards setting generally takes place in NERC Committees
and Subcommittees and sometimes from FERC itself. These are typically packed with industry people, with a patina of diversity
that includes some governmental types and large industrial consumers. Let it suffice to say the electric transmission industry
itself largely sets the rules how it operates.
Now consider the article in yesterday's NYT "
How PG&E Ignored
California Fire Risks in Favor of Profits ". The transmission circuit featured in the article (the Caribou-Palermo line) that
caused the destruction of Paradise is a transmission line that is subject to both FERC and NERC regulation. As described
in the article the circuit had many previous failures and was well beyond its design life.
However, both FERC and NERC have a laser focus on "market players" (think Enron or JP Morgan) and system operations (e.g.,
prevent collapses like the blackout of 2003). AFIK, neither FERC or NERC have prescriptive standards for routine maintenance or
inspection and replacement (i.e., very expensive capital replacement that was not done on the Caribou-Palermo line), these are
left to the discretion of the transmission owner. While substantive information about electric reliability is maintained by industry
trade groups and submitted to FERC, what is available to the public is generally useless and subjected to scrubbing and polishing
(often under the guise of Critical Energy Infrastructure Information).
We can see how self-policing work, can't we??? Rent-seeking market players can arbitrage markets, inflating prices consumers
pay and make billions in profits, while California burns.
The neglectful rot in California is endemic in the industry as a whole.
That Seattle Times investigative story is indeed very good and a rare instance of newspaper writers troubling to carefully
and cogently explain a technical issue.
In hindsight Boeing would have perhaps been better off to leave off the MCAS altogether and depend on pilot retraining
to cover the altered handling.
One reason they may not have was that crash several years ago of a commuter plane in upstate NY where the plane started to
stall and the confused pilot pulled up on the controls rather than making the airplane dive to regain speed. Still one has to
believe that no automation is better than badly designed or malfunctioning automation.
"depend on pilot retraining to cover the altered handling"
IANAP, but maybe the problem is that "nose up" situations can go south very quickly. For those with the stomach for it, there
are videos on youtube of the 747 freighter that went nose up at Bagram a few years ago (perhaps due to loose cargo shifting backwards
on takeoff). It was over very quickly.
Yes, I was impressed with it. Unfortunately the investigation precludes Boeing from responding as they did indicate they would
have had something to say about it otherwise. But the analysis looks pretty cut and dried:
Boeing underestimated the risk rating for the sensor, excluding the possibility of a catastrophic failure as occurred in
the two incidents to date;
Boeing also failed to implement the redundancy that would have been required even for their lower risk rating;
Manual correction by the pilot as a possible risk mitigation was constrained by the fact that pilots weren't trained on
the new system due to commercial factors.
Fixing any one of those three issues would have averted the disasters, although #3 is pretty precarious as you're relying on
manual pilot actions to correct what is a clear systems defect at that point.
It sounds like #1 was partly because they failed to account for all the scenarios, like repeat activation raising the risk
profile in certain circumstances. This is very easy to do and a robust review process is your best defense. So we could add the
tight timelines and rushed process as a contributing factor for #1, and probably the others as well.
People who work on accident investigation would probably agree on 2 things:
(o) Accidents are invariably a confluence of a myriad of factors that all happened to line up on one day. There is never
a single cause of an accident.
(o) A minor change to some part of the system would have prevented the accident.
So while there is much to be profitably learned by investigating everything here, an effective "fix" may be surprisingly (or
suspiciously) small in scope. There will be much clamoring for the whole plane to be resigned or scrapped, for better or worse.
The Colgan crash, whose pilot, Renfrew, was chatting with the co-pilot below the allowed altitude? And who had apparently lied
about his background, and had a pay-to-play pilot's license?
I think the Air France Airbus 447 also had a high-altitude stall (due to a faulty air speed sensor) and needed its nose pushed
down, not up (which the copilots didn't realize).
Also, very informative article / OP, thanks for posting.
MCAS was added to change the behavior of the plane from to tend to stall as speed increases. That is stall and crash, because
such a high speed stall makes polit recovery very, very difficult.
In addition the MCAS driven amount of elevator change was initially 0.6 to 2.5, which indicates the 0.6 increment was found
to be too low.
According to a detailed FAA briefing to legislators, Boeing will change the MCAS software to give the system input from
both angle-of-attack sensors.
It will also limit how much MCAS can move the horizontal tail in response to an erroneous signal. And when activated, the
system will kick in only for one cycle, rather than multiple times.
Boeing also plans to update pilot training requirements and flight crew manuals to include MCAS.
–Seattle Times
So apparently the greater elevator setting is not so necessary that they are not willing to reduce it. Also the max power setting
would normally be on take off when the pilots are required to manually fly the plane.
Yes, that was an excellent Seattle times piece. Surprising to see that kind of truth-telling and, especially, *clarity* in
an MSM piece these days. So what's the angle?
Reports I've read indicates that Boeing ignored even the clearly inadequate certification. "Documentation provided to the
FAA claims that the MCAS system can only adjust the horizontal tail on the plane by 0.6 degrees out of a maximum of five-degrees
of nose-down movement. But that limit was later increased to 2.5-degrees of nose-down movement. Boeing didn't communicate the
change from 0.6-degrees to 2.5-degrees until after Lion Air."
Apparently this was done after simulations showed that 0.6 degrees was inadequate and the new 2.5 degree setting was not extensively
tested before the planes were rolled out. IANAL, but this may be a serious problem for Boeing. Boeing could also be liable
for damages due to 737 groundings and due to delays in delivery of contracted planes.
Big question is how 737 issues will affect 777X rollout, due at the end of the year. If 777X certification is called into question,
this may cause further delays and put it at a further disadvantage against A350.
The 777 has been a great plane. Let's all pray the MBAs didn't fuck it up, too.
If I were Boeing, I'd have a team looking into the 777 certification process right now. And I'd set up a whistleblower line
(so the Seattle Times doesn't get to the story first).
The analogy has been made between this the 737 MAX story and the Tylenol story. J&J got out in front of the problem and
saved the product (and their company). Boeing's problem is of that order, and Muilenberg -- that letter! -- seems incapable of
understanding that; insular, arrogant. One more reason to fire the dude toot sweet. If he comes out of his next review with a
raise -- Everything Is Like CalPERS™ -- consider shorting Boeing
Thanks, Lambert, for post and comments. I don't know if this angle has been covered or explored: the relatively new way that
Boeing now "manufactures" "tests" and "assembles" parts of its planes. I had dinner with new acquaintance, Boeing engineer for
decades (I live near a plant in WA state). For the last few years, this engineer is stationed half year in Russia annually to
oversee assembly there. In this newish, more profitable manufacturing system for Boeing, the parts come in from around the world
with sketchy quality control, are then assembled by Russian workers this engineer (and other Boeing employees sent from States)
supposedly oversees. But the engineer doesn't speak Russian and has too little access to translators .Needless to say, this engineer
is planning an exit as soon as possible. Having grown up in WA state for 60 years with neighbors/friends who were Boeing engineers,
assemblers, line workers, etc it makes me heart sick to see the current decimation of talent, rigor and wages with additional
far-flung assembly factories (Russia with few translators?! who knew?). Might these manufacturing/assemblying "improvements" also
be a contributing factor in these terrifying woes for Boeing?
Thanks for this Lambert, fantastically informative and interesting post.
Self regulation only works when liability is transferred with it – over example, in construction whereby certification by the
engineers or architects designing the building are also taking on liability in the event something goes wrong. It seems unlikely
that this is the situation with Boeing.
Allowing this to happen seems the ultimate in short term thinking by Boeing. US manufacturers have always had an advantage
over competitors because the FAA was held in such high regard worldwide that it was the de facto world safety regulatory
body – every country followed its lead. But this chipping away of its authority has led to a near fatal loss of faith, and will
no doubt lead to European and Asian regulatory authorities being strengthened. And no doubt commercial realities will mean they
will look much more closely at US manufactured aircraft if there is some benefit to their own manufacturers.
Airbus will no doubt try to take advantage – just as Boeing (with some justification) tried to focus attention on the Air France
Airbus loss which was attributed at least in part to excessive automation. China is pushing hard with its new Comac aircraft,
but they seem to be poorly regarded worldwide (only Chinese airlines are buying). The Canadians have missed their chance with
the Bombadier C-series.
The more I read of this the more baffling it is. What was there stopping Boeing from just highlighting the changes and installing
an easy manual override instead of this hidden change with effectively no way to permanently do so? Especially when in crisis
mode? One could make a case of no extra training needed so long as the pilot knows about it and can easily turn it off.
I didn't see this before I posted my response. A more concise statement of my thoughts. This plus more robust redundant sensors.
Penny wise and pound foolish.
The Times thinks Boeing is too big to fail. Without a blockbuster Max, I don't see how Boeing maintains its current status
in the industry.
I am leaning towards thinking the kludgy design of the 727 Max could have been rolled out with no major problems if Boeing
had been up front about design changes, made a robust and conservative MCAS, fully at the command of the pilot, and provided ample
training for the new aircraft.
They still could have saved billions on the airframe. They would have had to acknowledge the significant modifications to the
airlines with the attendant training and other costs and delays. They would have lost some sales. They still would have been far
ahead of Airbus and light years ahead of where they are now.
I also think they have been completely afflicted by the defense contractor mentality.
Note that Muilenberg came up through the defense side of the company not the commercial aircraft side. He may simply not
have been equipped to understand FAA regulation at any deep level, hence the rot that finally surfaced.
The 737 Max crashes and Brexit are the chickens coming home to roost. NC is a treasure for your coverage of both.
Clearly upper management in Chicago only knows short term finance. Boeing stuck with old fashion hydraulic controls in the
737 but faced with an unacceptable flight characteristics of the larger more efficient engines added a fly-by-wire system to compensate
for it.
The criminal charges are that besides being a faulty design (it relies on one fragile exposed sensor that if out of position
keeps triggering dives until switched off) but Boeing hid it and self-certified that it was safe. Adding a discrepancy warning
and position indicator for the two independent flight sensors to the cockpit video display is an extra cost feature.
Neither of the planes that crashed had the added safety display. All are cost saving measures. Finally, if a faulty sensor
triggers dives, the pilot at the controls is busy with both hands on the yoke forcing the airplane to stay in the air with stall
and proximity warnings are sounding. The second pilot also must realize what's going on, immediately turn off the electricity
to the screw jack motor and manually turn the stabilizer trim wheel to neutral.
You can't learn this on an iPad. Both pilots should practice it together in a Flight Simulator. If the co-pilot was experienced,
unlike the one in the Ethiopian crash; just maybe, they could have survived the repeated attempts by the airplane to dive into
the ground on takeoff.
The tragedy is that corporate media in pursuit of profits will keep us up to date but will never mention the 6 or 8 minutes
of terror for the 346 souls aboard the two flights. They will cover the criminal negligence trial if there are ever indictments.
But, the news reports never will say that neoliberalism, deregulation, and privatization are the root causes of the deaths.
> if a faulty sensor triggers dives, the pilot at the controls is busy with both hands on the yoke forcing the airplane
to stay in the air with stall and proximity warnings are sounding. The second pilot also must realize what's going on, immediately
turn off the electricity to the screw jack motor and manually turn the stabilizer trim wheel to neutral. You can't learn this
on an iPad. Both pilots should practice it together in a Flight Simulator. If the co-pilot was experienced, unlike the one
in the Ethiopian crash; just maybe, they could have survived the repeated attempts by the airplane to dive into the ground
on takeoff.
That's what I mean by horrid UI/UX. Might as well as both pilots to pat their heads and rub their tummies in synch. And since
the two pilots have to both understand what's going on, we've multiplied the chances for failure.
Boeing also clearly did not know its customers . It should be engineering for the sort of pilots who are going to be hired
by Lion Air, or any rapidly expanding airline in what we used to all the Third World. Hegemony, it seems, makes you insular and
provincial.
Added cost, "mandatory" safety feature. Does not seem to square with the [soon to be former?] CEO's apology-industry written
claim to be committed to absolute safety.
"The FAA, citing lack of funding and resource": I don't suppose I'll survive to see any arm of government not blame
lack of funds for its boneheaded or corrupt incompetence.
But the bigger picture: suppose the FAA is to do its job properly. From where is it going to recruit its staff?
Smaller picture: it doesn't really matter whether the cocked-up MCAS killed all those people or not. Even if it's innocent
of the charge, the account of its development and application is a horror story.
Bigger picture: what other horrors have been hidden by Boeing?
> the account of its development and application is a horror story.
That's how I feel. The tech doc department at Boeing sounds like a horrible place to work; MBAs or their goons telling
you all the time to do stuff you know is wrong. It's not surprising people were willing to talk to the Seattle Times; I bet there
are more people. (Hey, Seattle Times! How about people testing the 737 MAX in simulators (assuming this is done)).
Sounds like the MBAs in Chicago have been busy planting land mines everywhere. Somebody stepped on this one; there are others.
The unfortunate pilots were made test pilots; the unsuspecting passengers: Guinea pigs. Lab rats. And paid for the privilege.
Some others may share this opinion. Change one little thing? Chaos Theory Rules. Same with weather/climate; folks. That rant is
for later.
Boeing stuck with old fashion hydraulic controls in the 737 but faced with an unacceptable flight characteristics of the
larger more efficient engines added a fly-by-wire system to compensate for it.
Interestingly, and maybe relevant to the problem of confusion for the pilots, is that Boeing has had another automatic
trim-modifier operating on its 737s for some time, the speed-trim system (STS):
This system also modifies the stabilizer position during manual flight. Like MCAS, it was brought in to improve stability
under certain flight conditions (the reasons for which are far beyond my knowledge). There is an indication that the pilots on
the flight before the Lion Air crash misinterpreted MCAS actions for STS behavior.
At what point does "crapification" become insufficient to describe Boeing's product and process here? At what point do we have
to speak of " ford-pintofication"?
OK, I'm told to resubmit my crib re: "Boeing options" from the ZeroHedge "tweetstorm" by Trevot Sumner, and include a link
got it:
Economic problem. Boeing sells an option package that includes an extra AoA vane, and an AoA disagree light, which lets
pilots know that this problem was happening. Both 737MAXes that crashed were delivered without this option. No 737MAX with
this option has ever crashed
Ooops! "Options package"? Wait, a "package" that in the interim corrects a potentially catastrophic mfg. defect and airlines
have to pay for it? Whoa, here's your late capitalism in play.
> Boeing sells an option package that includes an extra AoA vane, and an AoA disagree light
This is one of the details I could not get to (and we don't 100% know this is an issue until the forensics are done. Right
now, we have narrative. Truly excellent narrative to be sure -- if only we thought of government the same way as pilots think
of their aircraft! -- but narrative nonetheless).
Let me see if I have this right. Pilots, chime in!
"Authority" is one of the big words in this discussion; MCAS takes authority away from the pilot (and can do in such a drastic
fashion as to crash the plane). Worse, the default case is that it can do so on the basis of a single sensor reading. In a design
appropriate to the consequences for failure (i.e., a different design from that described in the "System Safety Analysis" that
Boeing self-certified) MCAS would take readings from two sensors, and if they disagreed, authority would revert to the pilot
. That's a general principle at Boeing, and so it's reasonable for pilots to assume that they retain authority of MCAS has not
told them they don't have it any more.
Hence, the disagree light, which tells the pilots to take back authority because the sensors are confused. However, I think
there are UI/UX issues with that, given that the 737 cockpit is extremely noisy and pilots have a lot to do on take-off. So a
light might not be the answer. (The light also strikes me as a kludge; first, MCAS feels to me like a kludge, in that we're making
the aircraft flyable only through software.* Fine for fighter jets, which can be inherently unstable, but perhaps not so fine
for commercial aircraft? Then we have a second kludge, a light to tell us that the first kludge has kicked in. I dunno.)
NOTE * However, it's also true that automation affects flight characteristics all the time. So I'm not sure how savage to make
this indictment.
The AOA indication is Service Bulletin 737-31-1650 (there may be others) and is on the both Pilot Flight Displays (PFDs). Pilots
would likely abort a takeoff if they saw the indication come on before getting airborne.
"Boeing has been in the business of aviation safety for more than 100 years, "
How many years ago did Wall Street take over the fortunes of the company? Why did they move their headquarters from their
birthplace of Seattle to Chicago? Why did they start assembling planes in South Carolina and China? Was it to improve aviation
safety? Or, to allow the profiteering parasites to feed off the carcass of the company?
I want to fly on Boeing planes put together by well paid members of the Seattle Machinists Union, not low wage peons. Let's
not even mention the maintenance of American aircraft in China and El Salvador.
President Trump, here's a reelection tip: "Today I am declaring that all American registered aircraft flying in American
airspace must be maintained in the U.S."
> "Today I am declaring that all American registered aircraft flying in American airspace must be maintained in the U.S."
Amazingly, Trump seems to have done OK on this. First, he didn't cave to Muilenberg's (insane, goofy, tone-deaf) request
to keep the 737 flying; then he frames the issue as complexity (correct, IMNSHO), and then he manages to
nominate a Delta CEO as head of the FAA .
And your suggestion is very good one. I wonder if he could do that by executive order? And I wonder how many grey-beards would
come off the golf courses to help out? I bet a lot.
The aircraft is NOT CRAP!!! However. It should have been flown A WHOLE LOT MORE before receiving certification.
*Real* test pilots should have their a–es on the line ; operating for a lot more hours at *the edge of the envelope*, as it
is known. Stability should be by design; not software*patch*. Patch this!
What portion of its' MCAS system flight testing was in computer simulation? Like the so-called Doppler Radar; which *magically*
predicts what the future will bring; while the experts pitch it as fact? And make life-or-death decisions on the theoretical data???
Rush to market; markets rule. We can die.
Agreed, but I think we're seeing signs that a crapification process has begun on the safety side in this industry. (It
has been proceeding for years on the service/amenities side.)
Didn't say it was. The headline reads "Boeing Crapification," not "737 Crapification."
That said, the 737 clearly has issues, as Boeing itself knew, since if they'd had their druthers, they would have launched
a new plane to replace it. See point #2.
> What portion of its' MCAS system flight testing was in computer simulation?
That is a very good question. If I understand the aerodynamics issues aright, MCAS would be most likely to kick in at takeoff,
which raises a host of UI/UX issues because the pilots are very busy at that time. So was MCAS not tested in the simulators? If
so, how on earth was a scenario that included sensor failure not included? It may be that there are more issues with Boeing's
engineering process than the documentation issues raised by the Seattle Times, though those are bad enough.
I say the 737-whatever is a flying Turd, and always has been. It has a bad wing design which means it has to fly nose up compared
to other models( I always remember that when going to the restroom while going somewhere on one). And because of its poor design
it has to takeoff and land at higher speeds. So when flying into someplace like Mexico City it can be quite a harrowing experience,
and the smell of cooking brakes is relatively normal.
Boeing never should have let go of the 757. Now that was a good plane that was simply ahead of its time.
Considering the fact that all these 737s are grounded as no airline trust them to not kill a plane load of passengers and
crew, this is a really big deal. Putting aside the technical and regulatory issues, the fact is that the rest of the world no
longer trusts the US in modern aviation so what we have here is a trust issue which is an even bigger deal.
We now know that the FAA does not audit the work done for these aircraft but the airlines themselves do it. It cannot be just
Boeing but the other aircraft manufacturers as well. Other countries are going to be asking some very hard questions before forking
over their billions to a US aircraft manufacturer in future. Worse is when Ethiopia refused to hand over the black boxes to the
US but gave them instead to a third party.
That was saying that based on how you treated the whole crash, we do not trust you to do the job right and not to change some
of the results. It has been done before, ironically enough by France who the Ethiopians gave the black boxes to. And when you
lose trust, it takes a very long time to gain it back again – if ever. But will the changes be made to do so? I would guess no.
But if the discount foreign airlines had just trained their pilots and paid for the non-crashintothegroundat500mph upgrade,
all of this could have been avoided.
> we have here is a trust issue which is an even bigger deal
Loss or at least wobbliness of imperial hegemony, like. It's not just the aircraft, it's US standards-setting bodies, methods,
"safety culture," even -- dare we say it -- English as the language of aviation. French is no longer the language of diplomacy,
after all, though it had a good run.
Because markets. Neoliberalism puts everything up for sale. Including regulation. Oversimplifying absurdly: And so you
end up with the profit-driven manufacturer buying the regulator, its produce killing people, and the manufacturer canceling its
future profits. That's what the Bearded One would call a contradiction.*
NOTE * There ought to be a way to reframe contradiction in terms of Net Present Value which would not be what we think it is,
under that model.
I wish it were as complete as it should be! There are a ton of horrid details about sensors, the UI/UX for the MCAS system,
737 cockpit design, decisions by the marketing department, and training and maintenance for Asian airlines that I just couldn't
get to. (Although most of those presume that the forensics have already been done.) But I felt that dollying back for the big
picture was important to. Point #1 is important, in that all the factors that drove the 737 decision making are not only still
in place, they're intensifying, so we had better adjust our systems (assuming Boeing remains a going concern -- defenestrating
Muilenberg would be an excellent way to show we accept the seriousness of customer and international concern).
Bloomberg is reporting that : "The Indonesia safety committee report said the plane had had multiple failures on previous flights
and hadn't been properly repaired."
And the day before when the same plane had the problem that killed everyone the next day: "The so-called dead-head pilot on
the earlier flight from Bali to Jakarta told the crew to cut power to the motor driving the nose down, according to the people
familiar, part of a checklist that all pilots are required to memorize."
There's an enormous expansion of air travel in Asia. The lower end -- not flag -- carriers like Lion Air and also Air Asia
are in that business to be cheap ; they're driven by expansion and known to be run by cowboys.
That said, know your customer . I would translate this into an opportunity for Boeing to sell these airlines a service
package for training their ground operations. But it seems that cutting costs is the only thing the MBAs in Chicago understand.
Pilots, pipe up!
Pilot training and requirements are in the hands of the country, not Boeing. If the story that the copilot of the Ethiopian
Airlines plane had only 200 hours of experience that is astounding.
In the US that requirement is 1500 hours. In addition most US airlines would require more than that. And then they slot 'beginning'
pilots for flights in good (better) weather as high minimums pilot.
"sell these airlines a service package" That won't help an airline that is in the business to be cheap. The Indonesia airplane
was repeatedly reported for problems in prior days/flights that was never fixed.
and this quote makes an interesting follow-on to the thread yesterday with 737 Pilot (which Lambert linked to in the first
paragraph here):
"The combination of factors required to bring down a plane in these circumstances suggests other issues may also have occurred
in the Ethiopia crash, said Jeffrey Guzzetti, who also directed accident investigations at FAA and is now a consultant.
"It's simply implausible that this MCAS deficiency by itself can down a modern jetliner with a trained crew," Guzzetti said."
Setting aside Mr Guzzetti's background (dismissing his claim here as tendentious right off the bat would strike me as uncharitable),
and without wishing to exculpate anyone, it does lend some credence to the idea that Ethiopia Airlines may have some contributory
negligence here, staffing the flight with such an inexperienced first officer.
Setting aside Mr Guzzetti's background (dismissing his claim here as tendentious right off the bat would strike me as uncharitable),
and without wishing to exculpate anyone, it does lend some credence to the idea that Ethiopia Airlines may have some contributory
negligence here, staffing the flight with such an inexperienced first officer.
One can often point to inexperience, incompetence, stupidity, incompetence or just bad luck when some disaster happens, but
Boeing counted on perfect performance from flight crews to successfully work with a workaround needed for other workarounds that
needed perfect performance to not catastrophically fail. I know enough about complexity that you cannot depend on perfection because
something will always fail.
Your excellent summary lacks some MCAS details that are not widely reported by the general-audience press.
Like you, I am a retired software engineer, so I have followed an aviation blog discussion of this issue quite closely
since it emerged as a probable software and system design failure. As the blog is open to all, its signal-to-noise ratio is pretty
low, but it seems not too difficult for any technically-minded person to separate the wheat from the chaff. My current understanding,
which I believe others here are in a position to correct, if necessary:
A. The requirement for MCAS apparently emerged very late in the MAX's development, when it became clear that the upper cowling
around the larger engines, being moved up and forward with respect to earlier 737 versions, adds nose-up force as the angle of
attack (AoA) approaches the upper limits of the MAX's operating envelope because at such angles, the cowling itself generates
lift beyond that of the wing.
B. As perceived by a pilot flying manually (not on autopilot), this added nose-up force makes it easier to pull back on the
control column ("stick"), increasing the AoA further. This is like a car running off the asphalt onto a muddy shoulder: the steering
wheel wants to turn the wrong way (toward the ditch) rather than the right way (back on the road).
C. An FAA regulation prohibits certification of an aircraft that presents the pilot with changing stick forces near stall that
nudge the pilot toward the wrong reaction, 14 CFR 25.203(a)
, IIRC (unfortunately, I can't find the original blog citation).
D. MCAS was put in place to satisfy this certification requirement -- not to automagically correct stalls without pilot action.
E. Other means of meeting this requirement exist, ranging from an airframe redesign that avoids the extra nose-up effect of
the larger repositioned engines down to a "stick pusher" that increases the force a pilot would need to pull the stick back further
in this situation.
F. Any of the other options would negate one or both of the MAX's chief selling points: little cost or schedule impact to Boeing
(in a rush to meet the Airbus 320 NEO challenge) and to its customers ("No new flight crew training necessary, because to the
pilot, the MAX feels just like its 737 predecessors.") That is, all the other options introduce new hardware to a completed design
and the more fundamental changes could require new type certification.
G. The easiest fix was pure software: at high indicated AoA, under manual control, and with flaps up, automatically rotate
the horizontal stabilizer a little bit nose-down, which increases the pressure needed to pull the stick back (nose-up). No need
to tell the pilot about this in training or real time, since it's just to make MAX feel like any other 737.
H. The design presented for certification described a single small rotation. Testing showed this was insufficient to provide
the tactile feedback necessary for certification in all cases, so the software fix was obvious: if the trigger conditions still
hold after a 5 sec. pause, do it again.
I. Apparently nobody asked at that point, "What if the AoA indication is stuck high?" We're under schedule and cost pressure,
so who wants to complexify things by (1) adding additional sanity-checking to the aircraft's AoA computations or (2) limiting
how many times we add a little bit of nose-down.
J. When these details combine with a consistently erroneous AoA reading, MCAS can -- if not repeatedly countermanded or disabled
and manually reversed -- eventually rotate the horizontal stabilizer to its maximum nose-down position, where it was found in
both recent incidents, IIRC.
Even if the pilots figure out that's what's happening amid a cacophony of seemingly contradictory instrument readings and warnings
(stick-shaker, trim wheel clacking, alarm chimes, and synthesized voices), the pilots still have to (1) cut power to the electrical
trim systems and (2) restore the required trim, which may then require as many as 50 manual turns of a trim wheel. If you're near
the ground, time is short
A minority of commenting pilots assert that any competently trained cockpit crew should be able to identify MCAS misbehavior
quickly and power off automatic trim per the same checklist that was prescribed for "runaway automatic trim" on every 737 variant,
MAX included. Most seem to agree that with aircraft control difficulties, multiple alarms, and disagreement among the pilot's
and first officer's airspeed and AoA readings almost from the moment of takeoff (not yet officially confirmed), an MCAS-commanded
runaway trim event may feel very different from the runaway trim flavors for which pilots have had simulator training, making
problem identification difficult even given knowledge of the earlier Lion Air incident.
I imagine most software developers and engineers have seen cost/schedule pressures lead to short cuts. If their life was at
stake, I doubt that many would think self-certification that such a project complies with all relevant safety requirements is
a good idea.
Thank you for that. And just 'wow'. I don't really know anything about aircraft/flying but this story is really fascinating
and seems to be true a sign of the times. I guess we'll know what the current 'temperature' is out there when the fallout
(civil liability, criminal liability, plane orders cancelled/ returned, etc) manifests. If Boeing skates, we'll know we've got
a long way to go.
The Post's article on the FAA and Regulatory Capture is incomplete. The process for the FAA (and probably MANY government
agencies) started under Reagan, did not revert to safety under Clinton (make government smaller and all that), and then accelerated
under Bush II in 2005 (not a bi-partisan time). In particular, big changes to the FAA were made in 2005 that were executive in
nature and did not require Congressional approval. CF:
https://www.seattletimes.com/business/delegating-aircraft-safety-assessments-to-boeing-is-nothing-new-for-the-faa/
Yes, but. Part of what we are seeing in this case is a rush to judgement based on less than full evidence and analysis, and
so prejudices and ideological positions (which I share actually) are plainly to be seen (and perhaps worth analyzing). "Crapification,"
says the headline.
Yet, I cannot say that I disagree with BA's business decisions as such in a highly competitive environment as regards the tradeoffs
in the development of the MAX and there is a certain absurdity in the idea that Boeing would knowingly take a high reputational
risk, in an industry where failure is front page news (contrast banking or pharma failures).
I have no reason to believe that an FAA fully in charge of all aspects of certification would have prevented these crashes,
as banking and drug regulators have not kept us safe either. What seems worthy of note is that neither the airlines that buy the
product nor the foreign aviation regulators nor pilots' associations do their own testing and certification, in an area where
more redundancy would be good. Nor is there any kind of private third party watchdog testing, like a Moody's or S&P, evaluating
potentially toxic products and services for a price.
Finally, I suppose we have to ask ourselves why the price of the stock is holding up fairly well even as the news flow on these
tragedies is helping the short sellers. Lest we forget that Boeing is the 5th largest defense contractor in the US.
Is engine throttle automated in the flight regime where these accidents occurred? Or are the pilots controlling power? Is the
lag in thrust response interacting with the MCAS in an unanticipated way? Aerodynamic lift of nacelles is mentioned several times;
there is another lift factor relating to the thrust angle; which is not necessarily aligned with the fuselage axis in flight.
Departure procedures often require speed limits and altitude changes; so it is likely multiple power demand levels get set through
takeoff and climb until cruise altitude is reached. Does Autopilot/Flight Director integrate with MCAS; or are they independent
systems? Even without touching flight controls; power changes affect pitch forces. I am wondering if consequences of manual power
changes on an otherwise automated departure were adequately investigated in the certification of the MCAS. Please excuse my ignorance
of these details.
Regulatory elements that have been getting attention include the use of *standard* weights for passengers; IIRC, 170 lbs for
US (and possibly ICAO) passengers comes to mind . Many aircraft accidents have an element of disregard for proper weight distribution,
either accidental, or negligent. For instance: Tail-heavy bad! Intentional loading outside of subsequently approved C.G. and/or
max weight limits is a common, if not ubiquitous part of determining certification limits.There is a safety factor in the certificated
limits; but banking on this; using estimates; is proven risky or disastrous when actual weights, and distribution thereof, is
uncertain. Cargo with false weight values could also occur. One might find incentive to claim lower weights than actual to save
on freight charges. How many 170 lb passengers do you know? I am not familiar with scales being used to check aircraft weight
and balance before takeoff; only calculations; based on formulas and charts.
Scales ARE USED during certain maintenance procedures; for airworthiness certificates; and following certain modifications.
Here is an interesting article by a professional pilot blogger Patrick Smith. He calls the 737, "the Frankenplane", and traces
its history all the way back to the 707 in 1959. According to Smith, "We wonder if the 737 MAX even needed to exist in the first
place. Somewhere deep down, maybe the heart of this whole fiasco is Boeing's determination to keep the 737 line going, variant
after variant, seemingly forever. I'm not saying this is the reason for what happened in Indonesia or Ethiopia, but the whole
737 program just seems misguided and unnecessary. Instead of starting from scratch with a new airframe, they took what was essentially
conceived as a regional jet in the mid-1960s, and have pushed and pushed and pushed the thing -- bigger and bigger engines, fancier
avionics and more seats -- into roles it was never intended for. The "Frankenplane," I call it.
See the article here .
As a pilot myslef, I feel the airlines have a lot to answer for as well. Their constant "dumbing down" of pilots, which comes
from making pilots work long hours for low pay, results in pilots not being the best of the best. And training is a cost to airlines.
Training doesn't result in revenue. Better to have the pilots actually flying, hence Boeing selling this new version of the 737
as not requiring further training. But, training and practice is everything in flying. Flying a plane is actually a relatively
easy skill to acquire. Most people can learn to fly a trainer in 5 hours or so. Most people solo (fly the plane without an instructor)
with only 10-20 hours of instruction. It takes a lot longer to learn how to drive a car for most people (45 hours is the average).
So it really isn't that difficult .until something goes WRONG. That is when the training kicks in. An often quoted flying truism,
is that flying is "99% boredom and 1% stark terror". What happened with these two crashes is that you had some inexperienced pilots
who were not fully trained on the systems (a lot of that blame goes to Boeing). When things start going wrong, information overload
can easily occur if you have not been properly trained, even with two pilots.
Thanks for that correction. We can expect a deluge of blame-the-other-guy PR from the aircraft manufacturer and certification
agencies. Billions are on the line for Boeing if a cascade of judgments it made materially contributed to these crashes. The usual
strategic corporate bankruptcy might follow. I presume Boeing is considered much TBTF by the USG.
Great job summarizing and connecting dots Lambert. I might add one more bullet point though. Items #5 and #6 were aided, abetted
and perhaps somewhat necessitated by 'ye ole NeoLiberal playbook' you spoke of, but more specifically, the current regulatory
FAA/Boeing milieu is attributable to years of budget cuts and strategically applied austerity. The old Grover Norquist, ' not
destroyed, but small and weak enough to be drowned in a shallow bath' saw. Exact same thing we've witnessed with other formally
effective regulators like the EPA, the SEC or the IRS.
I remember having a conversation with an FAA maintenance inspector, an old timer, about ten years ago. He looked to be upwards
of seventy, and he told me he was eight years beyond eligibility for a full retirement. He informed me that a few years back he
was supervising a team of ten people that was now down to two. Their positions had been cut outright or eliminated after they
resigned or transferred when the remaining positions were made miserable by the increased workload and bureaucratic headaches.
The inspector said he had not retired yet because he knew he would not be replaced and he felt the work was important. I asked
him if his department was atypical and he said it was not. Same thing, across the board, with the exception of the executive level
desk jobs in DC and Oklahoma City. Readers can draw their own conclusions but when it comes to funding Federal regulators, I believe
you should never attribute anything to incompetence that you could attribute to malice.
No doubt Neo-Liberal ideologues in high places pushing the corrosive "customer/client" model of regulating along with the requisite
deference and obsequious to industry played a large role as well.
I understand the published materials to boil down to this possible scenario:
To remain competitive and profitable, Boeing needed to improve the fuel efficiency and flight characteristics of a mainstay
medium-haul aircraft. Instead of designing a new aircraft, it modified an existing airframe. Among other changes, it added more
powerful engines, new lift and control surfaces, and enhanced computerized controls.
The modified Max aircraft **did not** fly like the earlier version. That meant Boeing would have to disclose information about
those changes. It would need to train pilots in them, in how to integrate new protocols into existing ones, and in what to do
if the enhanced computer controls malfunctioned, requiring the pilot to regain manual control.
These steps could have increased cost and time to market, might have involved new certifications, and might have reduced sales.
Boeing appears to have relied on enhanced computer flight controls to avoid them.
The newly enhanced computerized controls meant that the computer would do more of the actual flying – the part that was different
from the pre-Max version – and the pilot less. It gave the pilot the virtual – but not real – experience of flying the older aircraft,
obviating the need, in Boeing's judgment, for additional disclosures and training. That worked except when it didn't. (See, driverless
car development.)
One possible failure mode derives from the Max's reliance on a single sensor to detect its angle of attack, the aircraft's
nose-up or nose-down deviation from level flight. Reliance on a single sensor would make it harder to detect and correct a fault.
(Boeing's version of commitment to "absolute" safety.)
In these two crashes, the sensor may have given a faulty reading, indicating that the aircraft's nose was higher than it should
have been for that stage of flight, an attitude that risked a stall. The programmed response was to drop the nose and increase
power. A normal reaction to a real stall, this response can become catastrophic when unexpected or when the pilot cannot correct
it.
In both crashes, it appears that the pilot did attempt to correct the computer's error. Doing so, however, reset the automated
control, leading the computer to reread the faulty sensor to mean "stall." It again dropped the nose and increased speed. The
pilot recorrected the error in what would become a deadly loop, a tug of war that ended in a powered dive into the ground.
What is interesting is what comes next. The FAA was drowned in the bath tub along with the EPA, FDA, SEC, etc. It doesn't have
the money or staff to recertify the 737 Max. An incompetent Administration that is interested only in extracting resources is
in charge. It is clear that Boeing hid the changes to save money and time. Adding a warning indicator that the flight sensors
are not in the correct position to the pilot's display, including it in the preflight checklist, plus flight training would have
prevented the Indonesian crash. But these changes would have raised questions on the adequacy of the new flight critical system
and may have delayed certification overseas. It is easy to overlook problems if your paycheck is at risk. The Boeing managers
who pushed this through deserve jail time for manslaughter.
Canada said it will recertify the 737 Max before it flies in their airspace. China won't recertify the Max until the Trump
Trade War is over. Also, a delay boosts their replacement airliner. If Chicago and DC paper this over like the 2008 Great Recession;
the final nails will have been hammered into the coffin of the hegemon. Trust is gone
The Other Recent Deadly Boeing Crash No One Is Talking About
(nymag.com)
65 Posted by EditorDavid on Saturday March 23, 2019 @01:34PM from the
searching-for-answers dept. New York magazine's Intelligencer remembers last month's
crash of a Boeing 767 carrying cargo for Amazon and the U.S. Postal Service -- and shares a
new theory that its cause wasn't a suicidal pilot or an autopilot malfunction:
In online pilot discussion forums, a third idea has been gaining adherents: that the
pilots succumbed to a phenomenon called somatogravic illusion, in which lateral acceleration
due to engine thrust
creates the sensation that one is tipping backward in one's seat .
The effect is particularly strong when a plane is lightly loaded, as it would be at the
end of a long flight when the fuel tanks are mostly empty, and in conditions of poor
visibility, as Atlas Air 3591 was as it worked its way through bands of bad weather. The idea
is that perhaps one of the pilots accidentally or in response to wind shear set the engines
to full power, and then believed that the plane had become dangerously nose-high and so
pushed forward on the controls.
This would cause a low-g sensation that might have been so disorienting that by the
time the plane came barreling out of the bottom of the clouds there wasn't enough time to
pull out of the dive.
It has been speculated that this might have been the cause of another bizarre and
officially unsolved accident from three years ago: Flydubai Flight 981, which crashed 2016 in
Rostov-on-Don, Russia....
While it's still too early to draw any kind of conclusions about Atlas Air 3591, the
possibility exists that a firm conclusion will never be drawn -- and if it is, the cause
could turn out not to be a design flaw or software malfunction that can be rectified, but a
basic shortcoming in human perception and psychology that cannot be fixed as long as humans
are entrusted with the control of airplanes.
Yes, commercial pilots are taught to "fly their instruments". General aviation pilots may
enjoy more "seat-of-the-pants" flying, but even they are taught to trust instruments over
human perceptions, which are easily fooled, as even simple demos will show.
I used to work for an aircraft instrument maker, and our user interfaces, everything the
pilot interacts with, got more care and attention than the rest of the instrument. Of course
we had to display nothing but totally accurate data, and do so promptly, but we also had to
do so in ways that were obvious and clear, so the pilot can take in the most important
information with a quick glance.
The pilot's standard "scan" is perhaps the most-trained skill. To look at everything on
the instrument panels and outside the windows often enough to not miss anything, yet slow
enough to take in all vital information.
When things get hectic, the pilot still does this scan, interrupting it as needed to
deal with situations, but still doing it. Because, as the saying goes, "trouble often comes
in threes": Stopping everything to handle an initial situation may mask what's really going
on, and lead to a cascade of failures.
With ever more data being aimed at the pilot, there is a distinct risk of information
overload, especially when tired, or during tense but otherwise normal situations, such as
take-off, landing, or flying through turbulence. This overload often encourages the pilot to
rely more on signals from the body, which need less conscious processing, rather than focus
on all that data.
Here, again, is where commercial pilots receive extra training, but perhaps not often
enough. This is one of the factors that keep commercial pilot mandatory retirement ages so
low: The risk of overload increases with age, even when all other factors match those of a
younger person.
Plus, staying in peak training for decades is fatiguing, and relatively few can do so
"naturally". Which is one of the reasons we're running out of commercial aircraft
pilots.
It may seem counter-intuitive, but this overload risk is often handled by adding more
automation, more automatic systems to "help" the pilot. So much so that actually manually
"driving" a commercial aircraft, with hands on the controls, is an increasingly rare part of
a normal flight.
Our instruments also tried to take pilot fatigue into account, saving our brightest and
loudest alarms only for the most desperate situations, to punch-through that overload to help
ensure prompt and correct reactions.
One product I worked on was a TAWS (Terrain Awareness and Warning System) instrument,
which basically stayed quiet unless there was a risk of the pilot flying into the ground, to
help prevent "CFIT" accidents (Controlled Flight Into the Ground). It has special modes for
take-off and landing, though our instrument was designed to actually *avoid* making the pilot
depend on it's display: Useful for information as part of the scan, but not to be used to
navigate the aircraft. Our main function was to provide visual and audible alerts only when
needed.
I believe 100% of US commercial aircraft (and perhaps now even biz-jets) are required to
have TAWS on-board and active. Any TAWS-equipped plane approaching the ground outside of an
approved approach path for a know airport will give the pilot "Terrain ahead. Pull up! Pull
up!" alerts until the hazard no longer exists.
Unfortunately, if a stall is also immanent, the pilot will simultaneously receive an alert
to push the nose down. And increase power. And other things as well. An overload of alerts,
which a skilled and calm pilot will respond to with the most correct action. But which can
overload a stressed or tired pilot, or one with the beginnings of a cold or flu.
The thing is, every alert can be silenced, to reduce the confusion and distractions.
But an overloaded pilot can forget even this simple aid to keeping full awareness and
control.
This is a big part of why pilots are so often blamed for crashes: Because, for whatever
reason, they failed to take the appropriate action demanded by the situation.
As a former aircraft instrument developer, I was always well aware of my instruments'
contribution to the pilot's mental load. Our teams agonized over tiny changes to font
selection and sizes and colors and contrast. And how many button presses were needed to
accomplish a function. And how easy it was to switch modes or silence an alert. Which is why
we had a massive alpha test system that got even the earliest versions of our instruments in
front of pilots with experimental aircraft and ratings. (Experimental aircraft and the pilots
who fly them are rare and precious things to instrument developers, even when we owned and
operated our own corporate test aircraft.)
Fortunately, our efforts paid off, and pilots (and the FAA) loved our instruments. Some of
our design innovations were adopted into instrument regulations by the FAA, so all
manufacturers had to build to our standard. But always hovering over our success was the fear
of news of the crash of a plane flying our instruments. And the fear that information
overload from our instruments would be shown to be a contributing factor.
Which is why part of our required reading was any and all reports (mainly NTSB and NASA)
that even mention pilot overload. Even a decade after leaving that industry, I still read
these reports.
``...the cause could turn out not to be a design flaw or software malfunction that can
be rectified, but a basic shortcoming in human perception and psychology that cannot be
fixed as long as humans are entrusted with the control of airplanes.''
On the other hand, we have two recent examples of what can happen when a flight computer
is given control of the plane and it is unable to avoid doing something stupid like -- as the
old euphemism goes -- `make inadvertent contact with the terrain'.
Until we know more about how this was supposed work and exactly why it
didn't , I think I'll trust the human with his hands on the controls more than the flight
computer.
(Thankfully, the occasions for my needing to fly are few and far between.)
If you look at it and you are headed down (and you have good airspeed), you don't need to
keep trying to nose down - regardless of what your senses are telling you.
What about looking at how the altimeter is changing?
The artificial horizon gives you a lot of information when your sense of direction is
playing tricks on you (in the clouds and feeling like you are going up,down, rolling,
etc.)
Is Donald Trump
starting to look like a softie on the trade conflict with China compared to sections of the U.S. business and political
elite?
Dorian
Bon
explains the background.
WHEN DONALD Trump
launched
his
trade war on China
last spring, he had to drag the U.S. political and business establishment along with him.
Most elected
officials in both parties and a large majority of corporate execs cringed at the thought of a protracted trade war that
would disturb the ordinary flow of profits and investments between the world's two largest economies.
Now, as Trump and
his team seek a negotiated settlement with Chinese President Xi Jinping, Trump finds himself in the opposite position --
facing bipartisan pressures not to back down or compromise in any U.S.-China trade deal.
Even Trump's own
trade negotiator Bob Lighthizer -- who helped bend Japanese auto companies to the will of the Reagan administration in the
mid-1980s -- has
grown
frustrated with the president
, wanting him to take a harder line on Chinese telecom giant Huawei and keep the threat of
further tariff increases on the table.
Donald Trump and Xi Jinping meet during the 2018 G20 Summit in Buenos Aires
The context for this
strange turnabout is the new common sense across the political spectrum: the idea that China poses a threat to U.S. jobs,
security and technological dominance.
Trump's advisers
fully expect the eventual Democratic nominee in 2020 to try to outflank him to the right on China and the defense of U.S.
manufacturing. And the political competition over anti-Chinese toughness could very well throw a wrench into the continuing
bilateral negotiations with China.
Even big American
capital -- which, outside of the steel industry, has been almost universally opposed to Trump's tariffs -- is warming to the
administration's more aggressive stance toward China.
Most U.S. CEOs are
still hostile to the use of tariffs as an economic weapon, especially against their North American and European trading
partners. But they also have serious concerns about the rapid development of Chinese high-tech manufacturing, the transfer
-- by contract and by coercion -- of U.S. technologies to Chinese firms, and investment restrictions for U.S. companies in
China.
Somewhat to their
surprise, Corporate America sees Trump forcing Xi's hand on these issues more effectively than Barack Obama or George W.
Bush before him.
Josh Bolten,
president of the Business Roundtable -- an association of the U.S.'s largest companies, collectively worth $8 trillion and
employing 15 million workers --
put
it this way
during a recent interview with Washington trade experts Scott Miller and Bill Reinsch on their podcast
The
Trade Guys
:
The CEOs of the
Business Roundtable have found themselves in agreement...with the Trump administration on most of the objectives of the
very aggressive posture that the administration has taken with respect to China.
As both of you
also know, that is an evolution...of the business community's position. The Roundtable doesn't speak for the whole
business community, but I think there has been an evolution throughout the business community on this. And that is that
the posture of waiting for democratic, market-oriented capitalism gravity to have its effect on the Chinese has proven
not to be a viable approach.
Bolten went on to
lament the defeat of the Trans-Pacific Partnership (TPP) -- a major Obama-era economic agreement that Trump opposed on the
campaign trail and terminated once he took office -- as a missed opportunity to contain China's rise and secure crucial
markets where U.S. and Chinese companies are in direct competition.
Bolten and most of
the U.S. ruling class see -- somewhat in contrast to Trump -- the strengthening of a multilateral alliance of Western and
pro-Western countries as the best strategy to counter the threat of a growing Chinese rival.
But Bolten is
unambiguous and Trump-sounding about the goal of the strategy. "All of our interests are actually consistent with each
other in confronting the threat that an economically hegemonic China poses for the entire world," he explained.
HEARING A leading
representative of the American corporate elite talk about the threat of Chinese economic hegemony on "the entire world" is
alarming to say the least -- and demonstrates that Trump doesn't have a monopoly on anti-China discourse by any stretch of
the imagination.
That isn't to
underplay the serious disagreements over strategy between the Trump administration and most of the U.S. business world.
Many corporate
leaders are concerned about the fact that Trump is simultaneously in tense trade negotiations with the European Union and
brandishing
the threat of tariffs on car imports
(primarily impacting Germany and Japan), a move which virtually every single
American auto-company angrily opposes.
And they appear to
be signing on only half-heartedly to Trump's renegotiated NAFTA, now dubbed the U.S.-Mexico-Canada Agreement -- which
contains some attractive updates on digital trade (mostly lifted from the TPP, ironically enough), but is broadly seen as a
step backwards for corporate profits and preferable only to a collapse of NAFTA altogether.
These raise question
for U.S. corporate rulers: If Trump is so concerned with the Chinese threat, why doesn't he focus his fire in that
direction, instead of toward allies?
This will be the
line of attack against Trump from much of the political and corporate establishment, including those who are Democrats or
support them, moving forward into the new election cycle.
To Trump and his
team, however, trade disputes and negotiations with Canada, Mexico, the European Union, Japan and China are all so many
elements of a larger plan to keep as much of global industry as possible within the continental U.S.
For the largest
American companies -- which have positioned themselves at the technological peak of a globalized network of supply chains,
markets and investments -- Trump's economic nationalism poses an opportunity to challenge China, but new problems in
relation to the rest of the world.
The biggest CEOs and
industry lobbies are still figuring out a response.
THE REVERBERATIONS
of the U.S.-China trade war have been felt across the corporate world, perhaps nowhere more starkly than in
telecommunications.
As geopolitical
tensions between the U.S. and China have deepened, telecom companies and state governments have been preparing for the
highly anticipated rollout of 5G cellular networks. 5G, or fifth generation, technology is expected to speed up data flows
(and increase data volumes) across cell phone and other digital communication systems.
Many analysts
predict the degree of change brought on by 5G will be similar to that of the 3G and 4G evolutions, which underpinned the
smartphone boom. This time around, however, most eyes are trained on what the new networks will mean for digitized and
computerized manufacturing, commerce and transportation more broadly.
For the leadership
of both main U.S. political parties, the excitement around 5G has been muted by hostility toward the world's largest
telecom equipment supplier (and second largest cell phone seller), the Chinese corporation Huawei.
With $7.55 billion
in profits in 2017 and the most cost-competitive telecom equipment in the world, Huawei has been widely predicted to be one
of the main beneficiaries of the 5G expansion.
But Congress has
been on an offensive against the company
since
2012
, and the Trump administration has escalated the attacks.
Trump has gone on a
global campaign with broad bipartisan support to persuade allied states to ban Huawei entirely from their domestic markets.
He has also planned to issue an executive order to bar the company from the U.S. economy as well, though he seems to have
now turned this threat into a bargaining chip in his dealmaking with Xi and China.
The justification
for bans is that Huawei could use its access to the cellular networks it builds overseas to spy on foreign governments. The
extraordinary hypocrisy of this claim coming from the main surveillance power in world history has not been lost on most
people following the debate.
Meanwhile, Trump
instructed the Canadian government to arrest and extradite Huawei's Chief Financial Officer Meng Wanzhou, daughter of
Huawei founder and President Ren Zhengfei, during a routine visit to Vancouver. The charges against Wanzhou stemmed from
alleged violations of U.S. sanctions on Iran.
Wanzhou's
extradition hearing
began this week and could drag on for months.
Wanzhou's arrest
could also be used as a bargaining chip by Trump, though most of Trump's staff is reticent to bring a separate legal
proceeding into a trade agreement for fear of discrediting the courts.
PART OF what is so
striking about the case of Huawei and 5G is how it flatly contradicts the whole logic of the current neoliberal world order
of free markets and free trade.
According to the
propaganda, under neoliberalism, any buyer should be allowed to make their purchases from any company that offers the best
products for the lowest prices. For many buyers, including national governments, that company is clearly Huawei.
Now, however, the
U.S. state is attempting to restrict the field and eliminate the Chinese option from the market. In other words, what we're
witnessing in this crucial sector of the global economy is an open attempt by the world's most powerful state to create
trade blocs in telecommunications that shut out one of China's most prominent companies.
While both
Republicans and Democrats in Congress are rallying behind the attacks on Huawei, the response from the U.S. and European
information technology industries has been much more conflicted.
The main lobby for
telecom and technology companies in the U.S., the Information Technology Industry Council, has been clamoring for Trump to
strike a deal with Xi and drop the tariffs. Chuck Robbins, CEO of the largest American telecom equipment maker, Cisco
Systems, insists Trump's tariffs and sanctions are unnecessary.
"We don't need
anything else to beat these guys or to beat any of our competition in the marketplace,"
Robbins
said in February
. Huawei competitors Ericsson and Nokia -- multinational companies based in Sweden and Finland,
respectively -- have claimed that
they're
ready to supply Europe's 5G infrastructures
in the event of a Huawei ban, indicating they may have some sympathy with
Trump's efforts.
AS OF now, the Trump
administration's campaign to block Huawei from the world's markets has had mixed results. Both
British
and
German
intelligence
agencies are leaning toward accepting Huawei as a legitimate business partner, as is the
French
Senate
.
In the Czech
Republic,
a
conflict has emerged
pitting President Miloš Zeman, who wants to strengthen ties with China, and the Czech
cybersecurity agency, which has labeled Huawei a threat to national security. Debates on the same topic are also underway
in
Italy
and
Canada
.
Australia's Foreign
Minister Marise Payne, staking out the most extreme anti-Huawei position, has
fully
embraced Trump's ban
and vowed to maintain it, even if Trump himself backs away from his current position. New
Zealand's Prime Minister Jacinda Ardern, on other the hand,
rejected
the idea of a blanket ban
.
Despite ongoing
China-India tensions, the offer of cheap telecommunications equipment to expand India's cellular infrastructure seems too
attractive for Modi and his business allies to decline. The fact that the Trump administration is simultaneously
weighing
raising tariffs and restrictions
on Indian products is certainly not helping to convince Modi to further antagonize
Beijing.
However unsuccessful
the Trump White House has been in forcing the hand of other states, the president and congressional leaders are well aware
of the economic leverage they have against key Chinese companies.
Last year, the Trump
administration brought China's second telecom corporation, ZTE, to the brink of collapse when he issued
a
temporary ban on trade
between the company and American suppliers. ZTE is totally dependent on U.S. imports of advanced
communications equipment and might have been destroyed if Trump had not chosen to lift the ban before entering negotiations
with Xi.
Similar bans by the
Trump administration have nearly brought down the Chinese state-owned chipmaking company Fujian Jinhua, which has announced
it will have to
cease
production altogether in March
if it cannot buy more imports of crucial American equipment.
WITH ALL of these
variables at play, the next year in the U.S.-China economic relationship is impossible to predict.
The financial costs
of unraveling one of the largest state-to-state commercial relationships in modern history may prove too high for either
side to escalate the 2018-19 trade conflict any further, especially as the global economy passes the high point of the
business cycle and heads toward
another
likely recession
.
The two heads of
state plan to meet at the end of March, possibly at Trump's Mar-a-Lago resort in Florida, to sign a trade agreement.
For Trump to sell
the deal to an increasingly hawkish Congress, he will have to demonstrate "progress" on the goals he articulated at the
outset of the trade war: more Chinese purchases of American products, stronger intellectual property safeguards for U.S.
corporations and less state subsidies for Chinese companies. It remains to be seen whether Trump will decide to incorporate
a compromise on Huawei into the deal.
Whatever the outcome
of this round of negotiations -- and it is still possible that they could fall apart -- what is unfolding today is
undoubtedly just the first act in a long and tempestuous drama.
China is clearly a
growing geopolitical rival to the U.S., and Chinese corporations are quickly developing the capacity to compete with their
U.S. counterparts on a global scale in the most advanced areas of high-tech manufacturing.
This means that many
more economic confrontations between the two states are inevitable. And as politicians on both sides of the aisle have made
abundantly clear, Trump will not be the last president to stoke tensions with China.
Then there is the
question of how the perspectives of the largest American businesses will change as this conflict develops.
Josh Bolten, the
Business Roundtable president, claims that the CEOs he represents have been through an "evolution" in their views that
brings them closer to Trump's "aggressive posture" toward China. Yet at the same time, there continues to be near-universal
opposition to tariffs and trade wars within these elite strata.
So what kind of
"aggressive posture" do these leading American capitalists hope to adopt? With more money and power concentrated in their
hands than any other ruling class in the world, the stance that these elites take toward U.S.-China relations will be very
important.
If the American 1
Percent drifts any further toward the rising economic nationalism articulated by their political representatives in
Washington, future flare-ups between the two countries may be a great deal worse.
The people who died in last Sunday's plane crash were not just killed by Boeing. Their deaths stemmed from an ideology that puts
business interests above human life.
... ... ...
Boeing is not just a lobbying juggernaut that donates prodigiously to politicians all over the country; it's also a company in
which numerous
members
of Congress
are personally invested, and it cultivates
mutually
beneficial
financial relationships with
top
officials
. Meanwhile, as William McGee of Consumer Reports
told
Amy Goodman
, these issues are rooted in the FAA's lax, business-friendly oversight of the very industry it's meant to
regulate, a case of
regulatory
capture
that stretches back long before this administration.
Whatever the black box from the Ethiopian Airlines flight reveals, the lives put at risk by
lax
regulations
are not apolitical tragedies; they are caused by an administration that time and again has shown itself to be
callous and indifferent to the lives of the people it claims to fight for, whether Puerto Ricans left to
fend
for themselves
in the wake of natural disaster, or federal workers used as
bargaining
chips
in a game of political brinkmanship.
But more than that, they are victims of an ideology that tells us the greatest insult to human life is not the death and misery
that comes from unchecked greed, but efforts to democratically control it through public institutions. The real problems aren't
unsafe products, pollution, dangerous chemicals, and the like, we're told, but "red tape" and the taxes used to fund the bodies
regulating them. Meanwhile, activists like Nader have long been
painted
as
"
wacky
"
extremists in the pursuit of some quixotic ideological crusade simply for trying to do things like prevent people from
dying
in cars without seat belts
.
When social-democratic policies are enacted, wealthy people take less home after taxes, and businesses are inconvenienced by
regulations meant to secure the common good. But when neoliberal policies are put in place, people and their families go hungry,
they lose their homes, they get injured on the job, they get sick, and, sometimes, they die. The public should be enraged by the
actions of governments like Trump's and Trudeau's; but we should also be angry at a political narrative that tells us trying to
stop such tragedies is "ideological" instead of common sense. We owe it to the crash victims to create no more of them.
On May 12, 2010, the New York Times ran an article by economics editor Catherine Rampell
titled "The New Poor: In Job Market Shift, Some Workers Are Left Behind"that focused on the
largely middle-aged unemployed who will probably never work again. For example, 52 year old
administrative assistant Cynthia Norton has been working part-time at Walmart while sending
resumes everywhere but nobody gets back to her. She is part of a much bigger picture:
Ms. Norton is one of 1.7 million Americans who were employed in clerical and
administrative positions when the recession began, but were no longer working in that
occupation by the end of last year. There have also been outsize job losses in other
occupation categories that seem unlikely to be revived during the economic recovery. The
number of printing machine operators, for example, was nearly halved from the fourth quarter
of 2007 to the fourth quarter of 2009. The number of people employed as travel agents fell by
40 percent.
But Ms. Rampell finds the silver lining in this dark cloud:
This "creative destruction" in the job market can benefit the economy.
Pruning relatively less-efficient employees like clerks and travel agents, whose work can be
done more cheaply by computers or workers abroad, makes American businesses more efficient.
Year over year, productivity growth was at its highest level in over 50 years last quarter,
pushing corporate profits to record highs and helping the economy grow.
The term "creative destruction" might ring a bell. It was coined by Werner Sombart in his
1913 book "War and Capitalism". When he was young, Sombart considered himself a Marxist. His
notion of creative destruction was obviously drawn from Karl Marx, who, according to some, saw
capitalism in terms of the business cycle. With busts following booms, like night follows day,
a new round of capital accumulation can begin. This interpretation is particularly associated
with Volume Two of Capital that examines this process in great detail. Looking at this
material, some Marxists like Eduard Bernstein drew the conclusion that capitalism is an
infinitely self-sustaining system.
By 1913, Sombart had dumped the Marxist commitment to social revolution but still retained
the idea that there was a basis in Karl Marx for upholding the need for "creative destruction",
a view buttressed by an overly positive interpretation of this passage in the Communist
Manifesto:
The bourgeoisie cannot exist without constantly revolutionizing the instruments of
production, and thereby the relations of production, and with them the whole relations of
society. Conservation of the old modes of production in unaltered form, was, on the contrary,
the first condition of existence for all earlier industrial classes. Constant revolutionizing
of production, uninterrupted disturbance of all social conditions, everlasting uncertainty
and agitation distinguish the bourgeois epoch from all earlier ones.
By the 1930s, Sombart had adapted himself fairly well to the Nazi system although he was not
gung-ho like Martin Heidegger or Carl Schmitt. The wiki on Sombart notes:
In 1934 he published Deutscher Sozialismus where he claimed a "new spirit" was beginning
to "rule mankind". The age of capitalism and proletarian socialism was over and with "German
socialism" (National-Socialism) taking over.
But despite this, he remained critical. In 1938 he wrote an anthropology text that found
fault with the Nazi system and many of his Jewish students remained fond of him.
I suspect, however, that Rampell is familiar with Joseph Schumpeter's use of the term rather
than Sombart since Schumpeter was an economist, her chosen discipline. In 1942, he wrote a book
titled Capitalism, Socialism and
Democracy that, like Sombart, retained much of Karl Marx's methodology but without the
political imperative to destroy the system that utilized "creative destruction". He wrote:
The opening up of new markets, foreign or domestic, and the organizational development
from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of
industrial mutation–if I may use that biological term–that incessantly
revolutionizes the economic structure from within, incessantly destroying the old one,
incessantly creating a new one. This process of Creative Destruction is the essential fact
about capitalism. It is what capitalism consists in and what every capitalist concern has got
to live in. . . .
The wiki on Schumpeter claims that this theory is wedded to Nikolai Kondratiev's "long wave"
hypothesis that rests on the idea that there are 50 year cycles in which capitalism grows,
decays and enters a crisis until a new round of capital accumulation opens up. Not only was the
idea attractive to Schumpeter, it was a key part of Ernest Mandel's economic theories. Unlike
Schumpeter, Mandel was on the lookout for social agencies that could break the cycle and put
development on a new footing, one based on human need rather than private profit.
Returning to Rampell's article, there is one dimension entirely missing. She assumes that
"creative destruction" will operate once again in order to foster a new upswing in the
capitalist business cycle. But how exactly will that manifest itself? All the signs point to a
general decline in business activity unless there is some kind of technological breakthrough
equivalent to the computer revolution that fueled growth for decades. Does anybody believe that
"green manufacturing" will play the same role? I don't myself.
One thing does occur to me. Sombart's book was written in 1913, one year before WWI and was
even titled eerily enough "War and Capitalism". One wonders if the Great War would be seen as
part and parcel of "creative destruction". War, after all, does have a knack for clearing the
playing field with even more finality than layoffs. Schumpeter wrote his in 1942, one year into
WWII. My guess is that he did not theorize war as the ultimate (and necessary?) instrument of
creative destruction but history will record that WWII did introduce a whole rafter of new
technology, including aluminum, radar, nuclear power, etc., while bombing old modes of
production into oblivion. What a great opportunity it was for capitalism to rebuild Japan,
especially after firebombing and atomic bombs did their lovely work.
In my view, there's something disgusting about this "creative destruction" business
especially when it is articulated by a young, pro-capitalist Princeton graduate like Catherine
Rampell who wrote for Slate, the Village Voice and other such b-list publications before
crawling her way up into an editorial job at the NYT. She clearly has learned how to cater her
reporting to the ideological needs of the newspaper of record, growing more and more
reactionary as the crisis of capitalism deepens.
hen United Airlines flight 1462 made an unexpected landing in Chicago last month, it was not due to mechanical issues, weather
conditions, or flight logistics, but a battle over legroom in the aisles. As one passenger
tried
to
recline her seat and another used a $20 device called a
Knee
Defender
to prevent the occupant ahead of him from leaning back, the battle over personal space descended into a scuffle. The
pilot opted to make an additional stop to remove the unruly passengers.
Flight 1462 hasn't been alone. Not just the random dispute of irate travelers, similar flights have been diverted because of the
airlines' frenzied drive to wring as much money out of customers as possible. Airlines are increasingly cramming more passengers
onto each flight, termed "densification," and regularly overbooking flights. Any aspect of a flight that was once provided free
of charge -- from a checked bag to a complementary drink to using a credit card to pay for a ticket -- can now be charged à la
carte.
So relentless has this nickel and diming been that when
news
reports
claimed the discount airline Ryan Air was about to start charging for in-flight bathroom use, many people took them
seriously. But the story wasn't true -- it was all a ploy for free press from a company unwilling to pay for advertising,
help
disabled
passengers, or
provide
ice
for drinks.
Such frugality is only one of the problems wrought by airline deregulation. If the greatest benefit of deregulation has been that
more people can afford to fly, it has come at the cost of increased tumult within the industry and
reduced
pay
for workers.
Before the airlines were deregulated under President Jimmy Carter, the Civil Aeronautics Bureau (CAB) maintained flight pricing
structures, airport gate access, and flight paths. There were rules that stipulated which airlines could compete in which market
and what prices they could charge. Loosening restrictions meant abandoning the CAB and its pricing structures, and allowing an
unmediated flow of competition.
With fewer restrictions, upstart fly-by-night airlines could compete against major airlines like American/US Airways, United,
Delta, Alaskan, and Hawaiian Airways. Such competition, conservative and
liberal
advocates
claimed, would bring down flight costs, providing more savings and convenience to the customer.
But allowing this level of competition also unleashed chaos. While the discount airlines would win over passengers for a time by
offering flights half as expensive, the major airlines would respond by slashing their prices in an attempt to drive the upstarts
out of business.
By drastically reducing ticket costs, the major airlines would take on an unsustainable amount of debt that, combined with the
loss of business to the new entrants, would lead to layoffs or bankruptcy. Pension funds were then raided and labor contracts
voided to pay for the price wars. With each airline company collapse, thousands of employees were laid off, decimating union
membership.
To compete, the legacy airlines also
drove down
the
salaries of their pilots, and cut benefits and vacation time. Besides a reduction in compensation, a two-tiered pay system has
been set up with decent pay for incumbent pilots and markedly low wages for new entrants.
Starting
salaries
for pilots are now as low as $15,000 a year, even as CEO pay rises inexorably.
Remarking
on
a career in which he had seen his pay cut in half and his pension eliminated, captain Sully Sullenberger told the BBC in 2009
that he did not know "a single professional pilot who wants his or her children to follow in their footsteps."
While unions were still strong in the industry, they were constantly embroiled in bitter labor disputes. Between the voided
contracts and the hemorrhaging membership caused by regular bankruptcy, they were left fighting to maintain wage standards in an
unnecessarily competitive industry.
The only way discount airlines could offer such low prices was by paying their workers less, using less experienced pilots and
sometimes non-unionized labor, offering fewer frills, and running spartan operations that only serviced a handful of routes with
a single type of jet liner (thus simplifying pilot and mechanic training). Instead of a single union representing
employees across the industry -- typified by the Air Line Pilots Association (ALPA), which represented a majority of pilots --
some discount airlines maintained relationships with offshoot unions with smaller membership rolls and less leverage.
The discount airlines also depended on secondary, class-B airports that charged less in landing fees. But those discounts
eventually disappeared when the secondary airports no longer needed to cut their fees to attract business.
To maintain their dominance over the market, the major airlines shifted from a direct city-to-city flight standard to the
hub-and-spoke system of today. The hub-and-spoke setup allowed large centralized airports like Dallas-Ft. Worth and Atlanta to be
ruled by a single company that determines which flights can use which terminals and at what cost.
While the hub-and-spoke system has some benefits, it's largely inefficient, dependent as it is on multi-stage connecting flights.
Combined with the need to cut costs, it would also cause longer airport delays as planes were left waiting on the tarmac to make
sure all passengers from connecting flights made it aboard. A single delay in a connecting flight could throw passengers'
itineraries askew, leaving them stuck in a random airport overnight.
The major airlines used other tricks to keep out nascent airlines. They paid off travel agents and travel reservation sites to
give preference to their particular airline. They introduced frequent flier miles to maintain brand allegiance.
Upstart discount airlines like
Southwest
were
able to survive the vicious price wars by leaning on quality of service and direct flights, but most did not. The list of
companies that were liquidated, temporarily or permanently, as a result is impressively long considering what it takes to start
an airline: America West, PanAm, TransWorld, Western, Piedmont, Frontier, Northwest, National, Texas International, People
Express, ValuJet, Air Florida, Eastern, Braniff, Skytrain, Pacific Southwest, Western Pacific, and many more.
Once bankrupt, the major airlines then bought the upstarts, creating an effective oligopoly. So much for competition.
Already on a spending spree during the heady years of the 1990s dot-com boom, buying up failed companies only saddled major
airlines with more debt. While most people assume that the airlines had to be bailed out in 2001 because of the decrease in
traffic after the September 11 attacks, it was also because the airlines
were
insolvent
from previous financial problems, largely as a result of the price wars.
The actions of the major airlines may seem ruthless, but they were largely protecting their position in a deregulated industry
that allowed the discount airlines to undercut labor standards just to offer cheaper prices to customers. They were defending
themselves from disruption.
Considering the skill, education, and investment needed to maintain a safe and reliable airline, it is not exactly a business
that needs to be disrupted. Running an airline is labor intensive, and it only turns a profit at random intervals. There's little
money to be skimmed off.
With profit margins so thin, tickets on a half-empty flight have to cost twice as much as a fully booked one. Which is why, for a
time, smaller cities that weren't necessarily travel hubs bore the brunt of deregulation. Routes that weren't fully booked
experienced skyrocketing flight costs, which, for small-town travelers, was a huge disincentive to fly.
The bilking of transportation costs to and from smaller cities after a run of chaotic competition is eerily similar to what
happened during the railway mania of the 1800s. Investors rushed to build rail lines everywhere and anywhere while money was
flush. But once cash became tight, the rail industry used their monopoly power to charge exorbitant prices for anybody trying to
ship in and out of smaller towns like Cincinnati. Such predatory pricing is what led to transportation regulation in the first
place.
Since the 2001 airline bailout, things have calmed down a bit. It no longer costs $600 to fly from New York to Pittsburgh. Fewer
discount airlines are entering the market, and the handful that are still in operation work with the major airlines on various
routes (e.g. "flight provided by Frontier"). The price wars have settled to a quiet struggle played out on online travel
registration websites like Kayak.com and Hipmunk.com, which have wholly replaced the job of travel agents.
But for airlines, the lower revenue from cheaper tickets has to be made up somewhere, and convenience may be the easiest element
to remove. Airlines are pushing petty indignities on passengers and flight attendants by way of a million miscellaneous charges.
Half the time, the discounts saved by cheaper tickets from deregulation are recouped in add-on fees. Eventually airlines may just
offer extra-saver flights devoid of the most basic accommodations and simply force passengers who can't afford first-class seats
to be stacked in the cargo hold like cord wood.
So what's the alternative? The airline industry is close to being a natural monopoly, there's little reason to foster
competition. Indeed, the industry would benefit from nationalization or a well-regulated public option. At the very least, more
regulation is necessary.
Without subsidization and some rules about flight costs, there is little incentive for the airline industry to provide affordable
flights to locations that aren't fully booked. The irony is that we already subsidize airline travel. It just occurs through
bailouts and bankruptcies after each airline has fought tooth and nail for market dominance. Public funds wind up paying for a
wasteful, inefficient system characterized by irrational, destructive competition.
Through regulation or more aggressive means, it's quite possible to ensure good wages and working conditions and safe,
affordable, reliable service -- all without blackout dates, three layovers, or all-out battles for legroom.
He has long been a vocal critic of the Federal Aviation Administration, saying the agency
lacks the resources and willpower to aggressively police airlines and manufacturers.
Mr. Nader said Boeing may be exposed to civil and possibly criminal liability. After the
first fatal crash in October -- a Lion Air flight that crashed into the Java Sea minutes after
takeoff -- company officials "were put on notice about the problem" with an automated
stall-prevention system that can misfire and override pilot commands by repeatedly pushing down
an aircraft's nose, he said.
The Justice and Transportation Departments are
scrutinizing Boeing's dealings with the FAA over safety certifications, people familiar
with the matter have said.
... ... ...
Mr. Nader has expressed his concerns to lawmakers and former regulators, and called for
congressional hearings. Before
the U.S. grounded the planes last week, he championed the idea of a sweeping boycott of all
versions of 737 MAX aircraft. He also has stressed the importance of having Mr. Muilenburg,
Boeing's CEO, testify on Capitol Hill about safety issues with the fleet.
Criticizing Boeing's original design of the automated flight-control feature, dubbed MCAS,
Mr. Nader said it reflected a misguided view driven by engineering overconfidence and called it
"the arrogance of the algorithms."
RALPH NADER : Boeing is used to getting its way with the patsy FAA . And this time, however,
it's in really hot water. If it continues to dig its heels in, it's going to expose itself and
its executives to potential criminal prosecution, because they are now on notice, with two
crashes -- Indonesia and Ethiopia. There's probably a lot more to come out in terms of the
technical dissent, in the, what was called, "heated discussions" about the plane software
between the FAA , the pilots' union, Boeing. And you can't suppress technical dissent forever.
And Senators Markey and Blumenthal are calling for the release of all the relevant information.
And while that happens, the planes must be grounded. You see, they're on notice now. This is
the future of passenger business for Boeing. They've got orders for over 3,000 planes from all
over the world. They've produced and delivered about 350. Southwest is the leading owner and
operator of these planes. It's digging its heels in, and so is American Airlines, I believe,
and Air Canada. And Boeing is not going to get away with this, because this is not some old
DC-9 about to be phased out. This is their future strategic plan. And they better own up. 2013,
they grounded the 787 because of battery fires, and they had about 50 or 60 of those planes.
So, there's plenty of precedent.
And the most important thing that people can do is: Do not fly this plane, the 737 MAX 8 and
9. Ask the airline, when you book the flight, whether it's that plane. The airline should not
dare charge you for reservation changes. And I'm calling for a boycott of that plane. If
several hundred thousand air passengers boycott that plane and there are more and more empty
seats, that will do more to bring Boeing around than the patsy FAA and a rather serene
Congress, which, by the way, gets all kinds of freebies from the airlines that ordinary people
don't get. We've sent a survey last year, twice, to every member of Congress, asking them to
disclose all these freebies. We didn't get one answer. And that helps account for, over the
years, the total reluctance of members of Congress even to do such things as deal with seat
size, restroom space and other conveniences, never mind just the safety of the aircraft. So,
this is important for consumers. Just don't fly 737 MAX 8 or 9. Make sure that you're informed
about it. And for up-to-date information, you can go to FlyersRights.org . That's run by Paul Hudson, who lost his
daughter in the Pan Am 103, 30 years ago, and has been a stalwart member of the FAA Advisory
Committee. And that's where you get up-to-date information, FlyersRights.org .
JUAN GONZÁLEZ: Well, we're also joined by William McGee, who's the aviation adviser
for Consumer Reports . Could you give us your perspective on what's happened here? And
also, could you expand on what Ralph Nader was talking about, about the use of artificial
intelligence in these new planes?
WILLIAM McGEE: Sure, absolutely, Juan. You know, there are so many unanswered questions
here, but many of them are focused on the time period between the first crash in late October
with Lion Air and the crash on Sunday with Ethiopian. Again, for perspective here, as Ralph
noted, we're not talking about old aircraft. This is an airplane that's only been in service
since 2017. This is the Boeing 737 MAX 8, a recent derivative of the 737. Now, in that time
period, the aircraft that crashed in October was 2 months old; the one that crashed on Sunday
was 4 months old. This is really unprecedented in all the years that I've been in this
industry. We don't see brand-new airplanes crash on takeoff like this under similar
circumstances.
... ... ...
WILLIAM McGEE: Absolutely. And, you know, this goes back many years. Ralph mentioned that
the FAA is known throughout the industry, even among some of its own employees and to airline
employees, as the "tombstone agency." And that phrase comes from the fact that the FAA has
shown time and time again that it is reluctant to act unless there's a tragedy and,
unfortunately, unless there are fatalities. Now, we have seen this as recently as last year,
when, you may recall, over Philadelphia, a Southwest 737 had a major engine malfunction that
punctured a hole in the fuselage and killed a woman who was nearly sucked out of the aircraft.
Well, what wasn't as well reported was that two years prior, that same engine type and that
same airline, Southwest, same aircraft type, 737, also had an uncontained engine failure. But
in 2016, there were no injuries, and there were no fatalities. Instead of the FAA stepping in
and saying, "We need to, you know, have all of these engine blades inspected on this engine
type, on all the carriers that are operating it," the FAA asked the industry, "What would you
like to do? How long would you like to take to look at this?" And the industry dragged its
heels, not surprisingly, and said, "We need more time." Two years later, in 2018, there was a
fatality. And then, two days after that, last April 2018, two days after that woman was killed,
the FAA issued what's called an AD, an airworthiness directive. That's what should have been
issued in 2016, where that death wouldn't have happened. So, we have seen this time and
again.
And you mentioned Attention All Passengers , my book. Much of the book, about a third
of it, is devoted to the issue of the FAA oversight of airline maintenance. We could easily
talk about it for two or three more days. But the bottom line is that the entire model of how
the airline industry works in the United States has been changed dramatically in the last 15
years or so. All airlines in the United States -- without question, all of them -- in 2019,
outsource some or most or just about all of their maintenance, what they call heavy
maintenance. Much of it is done outside of the United States -- El Salvador, Mexico, Brazil,
China, Singapore. Again, we're talking about U.S. airlines. And although the FAA , on paper,
says there is one standard for maintenance of U.S. airlines, the reality is there isn't. There
are waivers given all the time, so that when work is done outside the United States, there are
waivers so that there are no security background checks, there are no alcohol and drug
screening programs put in place. And, in fact, many -- in some cases, most -- of the
technicians cannot even be called mechanics, because they're not licensed. They're not licensed
as they're required to be in the U.S. So, basically, you have two sets of rules. You have one
that's for in-house airline employees and another for the outsourced facilities. And this all
leads back to the FAA . I have sat in a room with FAA senior officials and asked them about
this, and they say that they don't think it's a problem. It is a problem.
JUAN GONZÁLEZ: And what impact --
WILLIAM McGEE: I've spoken to --
JUAN GONZÁLEZ: What impact have the mergers, of the constant mergers of airlines,
had, so we basically have a handful of U.S. airlines now, on all of this?
WILLIAM McGEE: Oh, no question. We have an oligopoly now. And, you know, even just going
back as far as 2001, you know, there were four or five major carriers that we don't have
anymore: America West, Continental, US Airways, TWA . You know, so what we have now is
effectively an oligopoly. And this is unprecedented in the history of the aviation industry
here in the United States. And so, you know, even when -- Ralph was talking about boycotts,
and, you know, it's an excellent idea. But it's more challenging now than it would have been a
few years ago. You know, there might have been more pressure on Southwest and American 10 or 15
years ago, when consumers had more choices. Now it's getting harder and harder for consumers to
express their displeasure. We saw this after the Dr. Dao incident, where that passenger was
dragged off United. In the long term, it didn't really affect United's bookings. It would have
in another time, but so many people are locked in, particularly outside New York, Washington,
Los Angeles. They're locked in, where they don't have a lot of choice on carriers.
AMY GOODMAN : Ralph Nader, I wanted to get your response both to this news that they were
working on a fix -- they know there's a software glitch, that somehow, when on automatic pilot,
when the plane is taking off, it takes this precipitous dive, and the way to deal with it is to
take it off automatic and put it on manual. Now, AP has been doing a deep dive into the
database of pilots complaining over and over again about this problem and saying they have to
quickly switch to manual to prevent the plane from nosediving into the ground. And this latest
news from The Wall Street Journal that while they're talking about this glitch being
fixed in the next five weeks or so, that five weeks were lost in January because of the
government shutdown.
RALPH NADER : Well, that's what Paul Hudson wrote in his press release at Flyers
Rights. The focus has got to be on inaccurate or nonexisting information in Boeing's training
manuals and inadequate flight training requirements. They sold this plane on the basis, among
other things, of having larger engines. It's supposed to be 10 percent more fuel-efficient. But
they sold it on the grounds that "You don't have to really train your pilots, airlines. This is
really just a small modification of the reliable 737 that's all over the world." The question
really comes down to cost cutting. They tantalize the airlines by saying, "This isn't really a
new plane. It's very easy to fly, if you can fly a 737." And that turned out to be quite
false...
The Pentagon's inspector general has formally opened an investigation into a watchdog
group's allegations that acting Defense Secretary Patrick Shanahan has used his office to
promote his former employer, Boeing Co.
Citizens for Responsibility and Ethics in Washington filed an ethics complaint with the
Pentagon's inspector general a week ago, alleging that Shanahan has appeared to make statements
promoting Boeing and disparaging competitors, such as Lockheed Martin.
Shanahan, who was traveling with President Donald Trump to Ohio on Wednesday, spent more
than 30 years at Boeing, leading programs for commercial planes and missile defense systems. He
has been serving as acting Pentagon chief since the beginning of the year, after James Mattis
stepped down.
The probe comes as Boeing struggles to deal with a public firestorm over two deadly crashes
of the Boeing 737 Max 8 jetliner within the last five months. And it focuses attention on
whether Trump will nominate Shanahan as his formal pick for defense chief, rather than letting
him languish as an acting leader of a major federal agency.
Dwrena Allen, spokeswoman for the inspector general, said Shanahan has been informed of the
investigation. And, in a statement, Pentagon spokesman Tom Crosson said Shanahan welcomes the
review.
"Acting Secretary Shanahan has at all times remained committed to upholding his ethics
agreement filed with the DoD," said Crosson. "This agreement ensures any matters pertaining to
Boeing are handled by appropriate officials within the Pentagon to eliminate any perceived or
actual conflict of interest issue(s) with Boeing."
During a Senate hearing last week, Shanahan was asked by U.S. Sen. Richard Blumenthal,
D-Conn., about the 737 Max issue. Shanahan said he had not spoken to anyone in the
administration about it and had not been briefed on it. Asked whether he favored an
investigation into the matter, Shanahan said it was for regulators to investigate.
On Wednesday, Blumenthal said that scrutiny of Shanahan's Boeing ties is necessary. "In
fact, it's overdue. Boeing is a behemoth 800-pound gorilla -- raising possible questions of
undue influence at DOD, FAA and elsewhere," said Blumenthal.
Shanahan signed an ethics agreement in June 2017, when he was being nominated for the job of
deputy defense secretary, a job he held during Mattis' tenure. It outlined the steps he would
take to avoid "any actual or apparent conflict of interest," and said he would not participate
in any matter involving Boeing.
The CREW ethics complaint, based to a large part on published reports, including one by
Politico in January, said Shanahan has made comments praising Boeing in meetings about
government contracts, raising concerns about "whether Shanahan, intentionally or not, is
putting his finger on the scale when it comes to Pentagon priorities."
One example raised by the complaint is the Pentagon's decision to request funding for
Boeing 15EX fighter jets in the 2020 proposed budget. The Pentagon is requesting about $1
billion to buy eight of the aircraft.
Shanahan, 56, joined Boeing in 1986, rose through its ranks and is credited with rescuing
a troubled Dreamliner 787 program. He also led the company's missile defense and military
helicopter programs.
Trump has seemed attracted to Shanahan partially for his work on one of the president's
pet projects -- creating a Space Force. He also has publicly lauded Shanahan's former employer,
Boeing, builder of many of the military's most prominent aircraft, including the Apache and
Chinook helicopters, the C-17 cargo plane and the B-52 bomber, as well as the iconic
presidential aircraft, Air Force One.
This is only the third time in history that the Pentagon has been led by an acting chief,
and Shanahan has served in that capacity for longer than any of the others.
Presidents typically take pains to ensure the Pentagon is being run by a Senate-confirmed
official, given the grave responsibilities that include sending young Americans into battle,
ensuring the military is ready for extreme emergencies like nuclear war and managing overseas
alliances that are central to U.S. security.
3 hours ago Why did Trump
appoint a former Boeing executive and industry lobbyist to the the Secretary of Defense to
replace General Mattis? What in Shananhan's background makes him qualified to lead our nation's
military forces? 3 hours ago WITHOUT A DOUBT HE DID., ALSO INVESTIGATE NIKKI HALEY'S APPOINTED
ON BOEING'S BOARD TO REPLACE SHANAHAN. FOLLOW THE HOEING KICKBACKS(MONEY), TO DONALD TRUMP'S
FAMILY. 3 hours ago
Shanahan probably helped Boeing on the promise of a later payback just like Ms. Nikki Haley did
while Gov of SC where Boeing built a new plant on her watch. She helped big time to keep the
Unions out of the new Boeing plant and now Boeing is going to put her on their board of
directors. Nothing like a bit of an obvious payoff. 2 hours ago Reminds me of the Bush Jr days in
the White House. During the Gulf War (#2) Vice President #$%$ Cheney awarded oil company
Halliburton (Cheney was CEO before accepting the VP job) to deliver meals for the troops. The
contract was ?No Bid.? Why was an oil company delivering food to troops with a no bid contract?
After Cheney?s Job was over being VP he went back to being CEO at Halliburton and moved
Halliburton?s headquarters to Dubai. What an American! 2 hours ago Now we understand why Boeing
& the FAA hesitated to ground those planes for few days despite many countries who did
grounded those plane which is a precedent for a country to ground & NOT wait for the
manufacturer. ONLY after Canada grounded those planes Boeing & the FAA & that's because
Canada IS a the #1 flight partner of the US ! 4 hours ago Years ago there was a Boeing
procurement scandal and Trump does love the swamp he claims to hate.
he crash of the Ethiopian Max-8 Flight 409 on March 10, 2019, resulted in the grounding of
all the Boeing 737 Max series aircraft – even the last hold-out, the United States,
belatedly grounded them when President Trump acted and overruled the Federal Aviation
Administration (FAA) that opposed any halt to flights.
In the United States, the FAA certifies aircraft as airworthy, puts out bulletins and
advisories on problems and fixes and often is the "go to" agency for many aviation flight
authorities around the world.
The 737 Max series is a new version of the venerable 737, equipped with new engines and
other modifications that have impacted the aircraft's performance in good ways and bad.
Almost every expert today puts the blame for both flight disasters on faulty software that
took over running the plane's flight control system. Many have pointed to Boeing's alleged lack
of transparency in telling pilots what to do if the software malfunctioned. In addition, there
had been at least eight pilot-reported flight control incidents prior to the first Lion Air
crash.
Experienced pilots
Three of the pilots on the two doomed planes each had more than 8,000 hours flying
experience – quite a lot – and the pilots of the Ethiopian airlines had additional
information on the plane's flight characteristics and what to do in an emergency.
While we are still awaiting a final report on last year's Lion Air crash, we do have a quite
informative initial report, although it lacks hard findings. In the Ethiopian case, we only
have flight track information from ground radar and some incomplete reporting on what the
pilots were saying to ground control. More will become available as the flight recorders are
analyzed.
Yet despite this, we can understand some of what happened and clearly it is more than a
single software glitch. This may help explain why Boeing did not meet its proposed deadline of
January for installing updated software. Now in March Boeing says the replacement software will
be available in April. But even if it is, there are more issues involving both hardware and
software.
The software which so far has received virtually all the attention is called MCAS, for
Maneuvering Characteristics Augmentation System. MCAS was added to the Max-8 series because
new, heavier and larger engines replaced the old engines and as a result, the updated Max
planes had a strong tendency to pitch nose up.
The new engine, CFM Leap-1B, was selected by Boeing because it was much more fuel efficient
than the older models, one of the big reasons customers want the 737 Max.
The new engines forced re-engineering of parts of the 737.
Fitting the new engines meant moving them forward and lengthening the front landing gear to
keep the engines from scraping on the ground. In turn, this changed the plane's center of
gravity and also altered the air flow on the wings.
MCAS was a band-aid to fix the pitch up problem caused by the relocated and heavier new
engines. MCAS is designed to push the nose down and prevent the aircraft from going into a
stall. MCAS was intended to deal only with a specific flight risk.
1. MCAS operates by receiving information from a special sensor that measures the flying
angle of the plane and takes over the flight controls if the angle is too great – meaning
the aircraft could stall. A stall happens when a plane has too low an airspeed and not enough
lift and the plane will literally fall out of the air.
There are two sensors that measure the angle of attack or nose-up condition of the Boeing
737 Max, one that provides data to the pilot and another that provides data to the copilot. The
sensors are known as Angle of Attack Sensors, or AoA.
In the Lion Air aircraft, the pilot's AoA sensor had been found to be faulty on an earlier
flight as reported by the pilot. That AoA sensor was replaced and tested by aircraft
maintenance before the fatal flight.
The pilot gets no console or other warnings that his AoA sensor might be faulty. The pilot
can ask his copilot what reading he is getting and see if there is a difference. That is
exactly what happened on the Lion Air flight.
It would appear that the MCAS software is driven by information from the pilot's sensor. If
the sensor itself is not at fault, there could still be wiring and connection problems that
could feed bad information to MCAS. These conditions cannot be determined in flight.
If it is true that MCAS relies on information from only one sensor, that could be a design
error. Modern aircraft are famous for built-in flight system redundancy, but apparently not in
the case of MCAS. In addition, the pilot cannot manually change the MCAS choice of sensor.
2. No one has yet explained why the pilot's stick shaker was running on from the start of
the flight and never stopped. The stick shaker is a motor with an unbalanced flywheel that is
attached to the pilot's control stick, and another is attached to the co-pilot's stick. The
stick shaker is supposed to warn the pilot of a potential stall. But why was it on nearly the
whole time? And why was the co-pilot's stick shaker not on?
3. The pilots are supposed to be able to shut down MCAS, which only operates when the
aircraft is manually operated, by switching the electronic trim control to off. The trim
control is what MCAS uses to change the nose pitch of the 737 Max. But in the Lion Air case, we
know the pilots turned off the electronic trim control. But MCAS kept adjusting the trim nose
down, against the pilots' wishes. Or possibly something else was driving the trim control nose
down, such as a shorted circuit or bad wiring.
4. The pilots also tried turning the aircraft's autopilot on, according to the report. MCAS
is only supposed to work when the autopilot is off, that is only when the plane is operated
under manual pilot control. The autopilot should have disabled MCAS but apparently it did not
– in fact, the Lion Air autopilot would not turn on. There is no explanation for this.
Was the autopilot locked out by MCAS? Or was there some other software or hardware foul up?
5. Pilots also had a very difficult time handling the aircraft stick, meaning that the
flight control stick required a great deal of force to operate, especially when the pilots
were, repeatedly, trying to recover the plane that was headed nose down, gaining speed and
losing altitude. Stick force "feel" in 737s is artificial and is controlled by a couple of
pitot tube sensors at the rear of the aircraft above the horizontal stabilizer.
There have been repeated
problems on older 737s with the planes forward and rear pitot tubes, due partly to icing
conditions and to pitot tube heater problems which are supposed to remove ice. Some pitot tubes
have failed because of fouling. Pitot tubes detect aircraft speed and they do this by comparing
the force of incoming air on the pitot tubes to what are called static ports located elsewhere
on the plane. Accidents have been attributed to faulty or fouled pitot tubes.
It is not clear how the flight speed information from the pitot tubes is integrated into the
MCAS if it is. But speed information is fed into the flight computer and if it is faulty it
could create ambiguities in the MCAS and the flight computer.
6. Would better pilot training have helped pilots avoid disaster? Boeing has been criticized
for not initially providing information about MCAS to Max pilots, and only later issuing a
bulletin on how to deal with some MCAS anomalies. Boeing also apparently did not offer any
additional pilot training, leaving pilots to find their way through a morass of complex
problems made worse by possible hardware and software faults.
As it is, it appears the Lion Air pilots acted in the best way they could but were unable to
overcome the instability of the aircraft as it headed nose down to disintegrate in the ocean.
We don't yet know how the Ethiopian Airline pilots performed, but they had the advantage of
advisories from Boeing and the FAA. Still, the same final result.
What is clear is that there is more than one single cause for the two aircraft crashes. And
we know that other planes experienced control problems but recovered. These disasters suggest
there was a complex of problems that caused the two disasters.
Boeing's engineers need to assess the entire flight control system, the electronics and
mechanics, before a satisfactory solution is at hand.
"... The United States held out to the last. Trump personally requested to ground the flagship aircraft of the American company only late evening yesterday, when Canada joined the interdiction. ..."
Today, Russia, following Europe and America, banned the flights of Boeing 737 MAX. Dozens of
countries have stopped using this aircraft after the Sunday crash in Ethiopia.
The United States held out to the last. Trump personally requested to ground the flagship
aircraft of the American company only late evening yesterday, when Canada joined the
interdiction.
737 is out of date considering the modern bigger fuel efficient engines don't fit
it.They're just applying band aid to fix it's short coming. Airbus A320 has no problems with
these new engines as it sits higher.
40 countries banned these aircraft from their airspace..... Comparable to the vicious,
aggressive, malign, thoughtless, selfish and self aggrandising SANCTIONS the US regime and
its vassals slap on innocent countries in attempts to impoverish or/and change their
governments!!!!!!!!!
But this is self inflicted!!!!!! I hope the US regime can see the irony in this!!!!
Boeing should thank China for being the first to ground it's entire fleet, if one of the
96 planes that China operated, god forbid, had gone down, Boeing is done, 3-strikes you're
out
Something is wrong with these planes and it is a good thing that they're being grounded
world-wide until the problem is fixed. It is prudent both from the side of Rosaviatsiya and
the FAA to not permit these planes to fly in the meanwhile to prevent further potential
tragedies. However this is no reason to simply write off the huge fleet of Boeing 737 MAX
planes in service world-wide. Right now engineers at Boeing are working on the problem and
then those planes will be retrofitted asap. Personally I have no particular concerns flying
in a Boeing 737 MAX once the problem is fixed.
The Boeing Company BA recently won a $250 million contract to offer weapon system
integration for the Long Range Stand-Off (LRSO) Cruise Missile. Work related to the deal is
scheduled to be completed by Dec 31, 2024.
The contract was awarded by the Air Force Nuclear Weapons Center, Eglin Air Force Base,
Florida. Per the terms of the deal, this aerospace giant will provide aircraft and missile
carriage equipment development and modification, engineering, testing, software development,
training, facilities and support necessary to fully integrate the LRSO Cruise Missile on the
B-52H bomber platform.
Attributes of LRSO
The LRSO is a nuclear-armed air-launched cruise missile, under development. It is set to
replace the current AGM-86 air launched cruise missile (ALCM). LRSO, might be up to about 50%
longer than Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER) and still be
suitable for internal carriage by the B-2 and B-52.
Our View
AGM-86 ALCM has been serving the U.S. Air Force quite efficiently. However, with
increasingly sophisticated air defense systems developed by America's nemeses, especially
Russia, demand for a new stealth nuclear-armed cruise missile capable of either destroying
these defenses or penetrating them has been increasing consistently. In this scenario, the LRSO
comes as the most credible stealthy and low-yield option available to the United States
(according to Strategic Studies Quarterly Report).
Boeing's B-52, which has been the U.S. Air Force's one of the most preferred bombers, is
completely dependent on long-range cruise missiles and cannot continue in the nuclear mission
beyond 2030 without LRSO. As B-52 is expected to play a primary role in the U.S. nuclear
mission for at least next decade and ALCM is already well beyond its originally planned end of
life, we may expect more contracts similar to the latest one to usher in from the Pentagon in
the coming days. This, in turn, should prove conducive to Boeing.
Price Performance
In a year's time, shares of Boeing have gained about 16.5% against the industry's 2.2%
decline.
Tom Enders just couldn't resist the swipe at the competition. It was June 2011, and the chief executive officer of
Airbus SE was on a stage at the Paris air show after the planemaker
won in a matter of days an unprecedented 600 orders for its upgraded A320neo airliner, while
Boeing Co. stood on the sidelines.
"If our colleagues in Seattle still maintain we're only catching up with their 737, I must ask myself what these guys are smoking,"
Enders blurted out, to the general amusement of the audience, while Boeing representatives at the back of the room looked on.
Boeing had wavered on its decision whether to follow Airbus's lead and re-engine the 737 or go with an all-new aircraft. Customers
were willing to wait for "something more revolutionary," as Jim Albaugh, at the time Boeing's head of commercial aircraft, said then.
But the European manufacturer's blow-out success with the A320neo, essentially a re-engined version of its popular narrow-body
family, would soon force Boeing's hand.
As the A320neo became the fastest-selling plane in civil aviation history as Airbus picked off loyal Boeing customers like
American Airlines Group Inc. , the U.S. company ditched the
pursuit of an all-new jet and responded in July 2011 with its own redesign, the 737 Max.
"The program was launched in a panic," said Sash Tusa, an analyst at
Agency Partners , an equity research firm in London. "What
frightened Boeing most of all was losing their biggest and most important customer. American Airlines was the catalyst."
It turned out that Chicago-based Boeing wasn't too late to the party in the end: While the Max didn't quite replicate the neo's
order book, it did become the company's fastest seller as airlines scrambled to cut their fuel bills with new engines that promised
savings of 20 percent or more. All told, the Max raked in about 5,000 orders, keeping the playing field fairly level in the global
duopoly between Airbus and Boeing.
Close Scrutiny
Now the 737 Max is grounded globally, after two almost factory-fresh jets crashed in rapid succession. As a result, the repercussions
of Boeing's response to Airbus's incursion are under the microscope. Getting particular scrutiny are the use of more powerful, fuel-saving
engines and automated tools to help pilots control the aircraft.
After the grounding, Boeing said that it "continues to have full confidence in the safety of the 737 Max, and that it was supporting
the decision to idle the jets "out of an abundance of caution." The company declined to comment beyond its public statements.
In late October, a plane operated by Lion Air went down
minutes after taking off in Jakarta, killing all 189 people on board. Then on March 10, another 737 Max crashed, this time in Ethiopia
en route to Kenya. Again, none of the 157 people on board survived the impact.
There are other similarities that alarmed airlines and regulators and stirred public opinion, leading to the grounding of the
737 Max fleet of more than 350 planes. According to the Federal
Aviation Administration , "the track of the Ethiopian Airlines
flight was very close and behaved very similar to the Lion Air flight."
After decades of steadily declining aircraft accidents, the question of how two identical new planes could simply fall out of
the sky minutes after takeoff has led to intense scrutiny of the 737 Max's systems. Adding to the chorus in the wake of the crash
was President Donald Trump, who lamented the complexities of modern aviation, suggesting that people in the cockpit needed to be
more like nuclear physicists than pilots to command a jet packed with automated systems.
"Airplanes are becoming far too complex to fly. Pilots are no longer needed, but rather computer scientists from MIT," the president
said in the first of a pair of tweets on March 12, darkly warning that "complexity creates danger."
Analog Machine
Automation plays a limited role in the 737 Max. That's because the aircraft still has essential analog design and layout features
dating back to the 1960s, when it was conceived. It's a far older concept than the A320, which came to market at the end of the 1980s
and boasted innovations like fly-by-wire controls, which manipulate surfaces such as flaps and horizontal tail stabilizers with electrical
impulses and transducers rather than heavier hydraulic links.
Upgrading the 737 to create the Max came with its own set of issues. For example, the 737 sits considerably lower to the ground,
so fitting the bigger new engines under the wings was a structural challenge (even with the squished underbelly of the engine casing).
In response, Boeing raised the front landing gear by a few inches, but this and the size of the engines can change the plane's center
of gravity and its lift in certain maneuvers.
Boeing's technical wizardry for the 138- to 230-seat Max was a piece of software known as the Maneuvering Characteristics Augmentation
System, or MCAS. It intervenes automatically when a single sensor indicates the aircraft may be approaching a stall. Some pilots
complained, though, that training on the new system wasn't sufficient and properly documented.
"The benefits of automation are great, but it requires a different level of discipline and training,'' said Thomas Anthony, director
of the Aviation Safety and Security Program at the University of Southern California. Pilots must make a conscious effort to monitor
the plane's behavior. And reliance on automation means they will take back control only in the worst situations, he said.
Errant Sensor
With the Lion Air crash, data from the recovered flight recorders points to a battle in the cockpit between the software and the
pilots who struggled in vain to keep control. The data showed that an errant sensor signaled the plane was in danger of stalling
and prompted the MCAS to compensate by repeatedly initiating a dive. The pilots counteracted by flipping a switch several times to
raise the nose manually, which temporarily disabled MCAS. The cycle repeated itself more than two dozen times before the plane entered
its final deadly dive, according to the flight data.
With the flight and cockpit voice recorders of the Ethiopian plane now in France for analysis, the interaction between the MCAS
system and the pilots will again be under close scrutiny, probably rekindling the broader debate about who or what is in control
of the cockpit.
That man-versus-machine conundrum has been central to civil aviation for years. Automation has without doubt made commercial flying
much safer, as planemakers added systems to help pilots set engine thrust, navigate with greater precision and even override human
error in the cockpit.
For example, automation on modern aircraft keeps pilots within a so-called flight envelope to avoid erratic maneuvers that might
destabilize the aircraft. Analyses of flight data show that planes have more stable landings in stormy, low-visibility conditions
when automation is in charge than on clear days when they land by sight.
Sully's Miracle Landing
The most daring descent in recent memory, Chesley "Sully" Sullenberger's landing of US Airways Flight 1549 in the Hudson River
in early 2009, is Exhibit A of how an interconnected cockpit worked hand-in-hand with an experienced pilot. Automatic pitch trim
and rudder coordination assisted manual inputs and kept the Airbus A320 steady on its smooth glide into the icy water. The drama
showed that automation can play a crucial support function, provided a pilot is fully trained and the aircraft properly maintained.
"Some people are saying modern aircraft such as the 737 Max are too complex," said Dave Wallsworth, a
British Airways captain on the Airbus A380 double-decker.
"I disagree. The A380 is a far more complex aircraft and we fly it very safely every day. Pilots are capable of understanding aircraft
systems so long as the manuals contain the information we need."
Airbus traditionally has pushed the envelope on automation and a more modern cockpit layout, with larger screens and steering
by joystick rather than a central yoke, turning pilots into something akin to systems operators. Boeing's philosophy, on the other
hand, has been to leave more authority in the hands of pilots, though newer designs also include some computerized limits. Like Airbus
planes, the latest aircraft from Seattle -- where Boeing makes most of its jetliners -- are equipped with sophisticated autopilots,
fly-by-wire controls or systems to set speed during landings.
"The big automation steps came in the 1980s with the entry into service of the A320 and the whole fly-by-wire ethos," said John
Strickland, an independent aviation analyst. "I don't think automation per se is a problem, we see it in wide-scale use in the industry,
and as long as it is designed to work hand-in-hand with pilots and pilots understand how to use it, it shouldn't be an issue."
Erratic Movements
But the counter-argument is that increasingly complex systems have led computers to take over, and that many pilots may have forgotten
how to manually command a jet -- particularly in a moment of crisis. That criticism was leveled at Airbus, for example, after the
mid-Atlantic crash of Air France Flight 447 in 2009 that killed all 228 people on board. Analysis of the flight recorders showed
the crew was confused by stall warnings and unreliable speed readings, leading to erratic maneuvers that ended in catastrophe.
>
"I grew up on steam gauges and analog, and the modern generation on digital and automation," said Jon Weaks, president of the
Southwest Airlines Pilots Association and a Boeing 737
captain for the Dallas-based airline. "No matter what you grew up on, you have to fly the plane. If the automation is doing something
you don't want it to do or that you don't understand, you have to disconnect it and fly the plane."
A 2013 report by the FAA found more than 60 percent of 26 accidents over a decade involved pilots making errors after automated
systems abruptly shut down or behaved in unexpected ways. And the 2016 inspector general's report at the FAA noted that as the use
of automation increases, "pilots have fewer opportunities to use manual flying skills."
"As a result, the opportunities air carrier pilots have during live operations to maintain proficiency in manual flight are limited
and are likely to diminish," the report found.
The grounding of the 737 Max fleet has left Boeing in crisis. The company couldn't get through with its message that the plane
was safe to fly, as the group of regulators and airlines idling the jet kept expanding. The 737 program is Boeing's cash cow, accounting
for a third of its profit, and Boeing's stock dropped sharply in the days after the disaster.
Get in Line
The Max gave Boeing a relatively cheap path back into the narrow-body game that it was at risk of losing to the Airbus neo. At
the time, Boeing had to make a quick decision, as it was still burdened financially by the 787 Dreamliner wide-body that was over
budget and behind schedule.
Both manufacturers have said they won't come out with an all-new single-aisle model until well into the next decade, preferring
to wait for further technological advancements before committing to massive spending. The success of both the neo and the Max bought
the companies that extra time, with orders books stretching years into the future.
Half a century after it was launched almost as an afterthought, the 737 program has become the lifeblood of Boeing that helps
finance the rest of the corporation -- the biggest U.S. exporter. It's the one aircraft that Boeing cannot afford to give up.
"The Max was the right decision for the time," said Richard Aboulafia, an aviation analyst with the consultancy
Teal Group . "Yes, there may be an issue with MCAS needing
a software patch. Yes, there may need to be some additional training. But these are not issues that cause people to change to the
other guys' jet. The other guys have a waiting line, and when you get to the back of that line, you burn more fuel."
-- With assistance by Alan Levin, Benjamin D Katz, Margaret Newkirk, Michael Sasso, and Mary Schlangenstein
Conventional wisdom is that it is too early to speculate why in the past six months two
Boeing 737 Max 8 planes have gone down shortly after take off, so if all that follows is wrong
you will know it very quickly. Last night I predicted that the first withdrawals of the plane
would happen within two days, and this morning China withdrew it. So far, so good. (Indonesia
followed a few hours ago).
Why should I stick my neck out with further predictions? First, because we must speculate
the moment something goes wrong. It is natural, right and proper to note errors and try to
correct them.(The authorities are always against "wild" speculation, and I would be in
agreement with that if they had an a prior definition of wildness). Second, because putting
forward hypotheses may help others test them (if they are not already doing so). Third, because
if the hypotheses turn out to be wrong, it will indicate an error in reasoning, and will be an
example worth studying in psychology, so often dourly drawn to human fallibility. Charmingly,
an error in my reasoning might even illuminate an error that a pilot might make, if poorly
trained, sleep-deprived and inattentive.
I think the problem is that the Boeing anti-stall patch MCAS is poorly configured for pilot
use: it is not intuitive, and opaque in its consequences.
By the way of full disclosure, I have held my opinion since the first Lion Air crash in
October, and ran it past a test pilot who, while not responsible for a single word here, did
not argue against it. He suggested that MCAS characteristics should have been in a special
directive and drawn to the attention of pilots.
I am normally a fan of Boeing. I have flown Boeing more than any other plane, and that might
make me loyal to the brand. Even more powerfully, I thought they were correct to carry on with
the joystick yoke, and that AirBus was wrong to drop it, simply because the position of the
joystick is something visible to pilot and co-pilot, whereas the Airbus side stick does not
show you at a glance how high the nose of the plane is pointing.
Pilots are bright people, but they must never be set a badly configured test item with tight
time limits and potentially fatal outcomes.
The Air France 447 crash had several ingredients, but one was that the pilots of the Airbus
A330-203 took too long to work out they were in a stall. In fact, that realization only hit
them very shortly before they hit the ocean. Whatever the limitations of the crew (sleep
deprived captain, uncertain co-pilot) they were blinded by a frozen Pitot air speed indicator,
and an inability to set the right angle of attack for their airspeed.
For the industry, the first step was to fit better air speed indicators which were less
likely to ice up. However, it was clear that better stall warning and protection was
required.
Boeing had a problem with fitting larger and heavier engines to their tried and trusted 737
configuration, meaning that the engines had to be higher on the wing and a little forwards, and
that made the 737 Max have different performance characteristics, which in turn led to the need
for an anti-stall patch to be put into the control systems.
It is said that generals always fight the last war. Safety officials correct the last
problem, as they must. However, sometimes a safety system has unintended consequences.
The key of the matter is that pilots fly normal 737s every day, and have internalized a
mental model of how that plane operates. Pilots probably actually read manuals, and safety
directives, and practice for rare events. However, I bet that what they know best is how a
plane actually operates most of the time. (I am adjusting to a new car, same manufacturer and
model as the last one, but the 9 years of habit are still often stronger than the manual-led
actions required by the new configuration). When they fly a 737 Max there is a bit of software
in the system which detects stall conditions and corrects them automatically. The pilots should
know that, they should adjust to that, they should know that they must switch off that system
if it seems to be getting in the way, but all that may be steps too far, when something so
important is so opaque.
What is interesting is that in emergencies people rely on their most validated mental
models: residents fleeing a burning building tend to go out their usual exits, not even the
nearest or safest exit. Pilots are used to pulling the nose up and pushing it down, to adding
power and to easing back on it, and when a system takes over some of those decisions, they need
to know about it.
After Lion Air I believed that pilots had been warned about the system, but had not paid
sufficient attention to its admittedly complicated characteristics, but now it is claimed that
the system was not in the training manual anyway. It was deemed a safety system that pilots did
not need to know about.
This farrago has an unintended consequence, in that it may be a warning about artificial
intelligence. Boeing may have rated the correction factor as too simple to merit human
attention, something required mainly to correct a small difference in pitch characteristics
unlikely to be encountered in most commercial flying, which is kept as smooth as possible for
passenger comfort.
It would be terrible if an apparently small change in automated safety systems designed to
avoid a stall turned out have given us a rogue plane, killing us to make us safe.
Pilots are used to pulling the nose up and pushing it down, to adding power and to
easing back on it, and when a system takes over some of those decisions, they need to know
about it.
I have read that Boeing kept MCAS out of the limelight as otherwise the 737 MAX would need
to be certified as a new plane and airlines would need to do $$$ pilot retraining, making
their product less competitive.
Interesting response from a "by-stander", who compares a sophisticated aircraft with a new
model car !!!
As an experienced captain on 737s (not the MAX) I say, let the investigation begin; and
let us not have by-standers giving their penny worth. A normal 737 . is there also an
abnormal 747 or 777 or 787, or a 737 ??
Pilots carry the can . but, are the most respected profession in the world. What ever
happened, let the investigation decide the outcome, and not the "un-trained" (is there such a
term !!!!).
If one takes a look at the (released to date) information about the Lion Air crash –
"unreliable airspeeds" (the airspeed indicator is providing erroneous information during a
critical phase of flight (like climb out after take-off)) could have been the cause of that
aircraft crash – not AI.
A simple explanation – the airspeed indicator is "unreliable", as one moment the
indication is under-speed, then overspeed, followed by under-speed, and so it goes; like a
yoyo going up and down; the indicated speed is erroneous and the pilots cannot rely on what
is presented on the airspeed indicator. Pilots, according to the Boeing Training Manual, are
trained to handle unreliable airspeeds – the key is to fly the plane based solely on
pitch attitude and thrust (there are memory items for unreliable airspeed occurrences, along
with the reference items in aircraft's Quick Reference Handbook – the QRH (Boeing term)
is the pilots "bible" for any issues and problems when the aircraft is in the air !! ).
The point of the above paragraph is to enlighten the 'un-trained' as to not speculate too
soon with ideas and a "hypothesis" of what may have happened, until the knowledgeable ones
– the aircraft manufacturer (probably being the most knowledgable), the country's
aviation authority, the engine manufacturer, and (dear I say) the FAA (the Yanks just cannot
help themselves delving into other countries' affairs; when for 9/11 not one minutes was
spent by anyone (FAA, Boeing, no one) investigating the so-called crashes of four aircraft
– on one day, within one and a half hours of each other, and in the most protected
airspace in the world (got the hint !!) – I have digressed, though for reason .. have
completed their investigations.
I can assure you that no pilot wants to crash a plane we (pilots) all want to live to 100,
and beyond.
Humans make mistakes, but technology needs humans to correct technology's mistakes. Boeing
build reliable and trustworthy aircraft; pilots undertake their duties in a safe and
controlled manner (according to training and aircraft manufacturer stipulated standards); but
errors happen – and the investigator is there to establish what happened, so that these
do not happen again. Unfortunately, it is just possible that the cause of the first MAX
accident is the same as the second. But, let the knowledgable ones determine that fact
– and let me, and us, not speculate.
AI in the MAX hhmmmmm – let Boeing release that information, before we start
speculating again (on AI – is an auto pilot AI; the B737 I fly has two auto pilots; is
that double AI ??).
To the rest of the travelling public – airline travel remains, and has been, the
safest form of transport for decades. I am confident that the status quo will remain.
Time will reveal the answers to these two accidents, when the time is right – when
the investigators (for both) have concluded their deliberations.
My guess is, the majority of people will have forgotten these two MAX events (but, for
those who have lost loved ones), as some other crisis/event will have occurred in their lives
and/or in the world.
@Captain 737 I respect your analysis especially coming from a seasoned 737 captain. I
have over 5,000 flying hours in single and twin-engine, conventional and jet, all military. I
have not flown since 1974 so the advances in auto-pilot technology are beyond my
comprehension. My question to you is simple–I think. If the aircraft took off in VFR
conditions I assume the pilots knew the pitch attitude all during the takeoff phase. Is there
no way to manually overpower the auto-pilot once the pilots knew the pitch attitude was
dangerously high or low?
If this is a made in china airplane, the empire would mobilize the whole world to ground the
entire fleet. The diatribes, lies, cruel sick jokes, lawsuits, etc, etc, would fly to the
heavens.
But NO, this is an empire plane. Designed, built and (tested?) in the heart of the empire.
And despite the fact that more than 300 people had died, IT IS STILL SAFE to fly!
Quite a short and to-the-point article, although the link to "artificial intelligence" is
tenuous at best.
What is sold as Artificial Intelligence nowadays is massive statistical processing in a
black box (aka as "Neural Network Processing"), it's not intelligent.
The most surprising fact is that it works so well.
Neural Networks won't be in high-assurance software soon. No-one knows what they really do
once configured (although there are efforts underway to
attack that problem ). They are impossible to really test or design to specification.
Will someone underwrite that a system incorporating them does work? Hardly. You may find them
in consumer electronics, research, "self driving cars" that never really self-drive without
surprises and possibly
bleeding edge military gear looking for customers or meant to explode messily anyway.
But not in cockpits. (At least I hope).
Check out this slideshow about the ACAS-X
Next Generation Collision Airborne Collision Avoidance System. It has no neural network in
sight, in fact if I understand correctly it doesn't even have complex decision software
in-cockpit: it's all decision tables precomputed from a high-level, understandable
description (aka. code, apparently in Julia) to assure safe outcome in a fully testable and
simulatable approach.
In this accident, we may have a problem with the system, as opposed to with the software.
While the software may work correctly and to specification (and completely unintelligently)
the system composed of software + human + physical machinery will interact in interesting,
unforeseen, untested ways, leading to disaster. In fact the (unintelligent software + human)
part may disturbingly behave like those Neural Networks that are being sold as AI.
@Anatoly Karlin I'm guessing that it would require a change in the TCDS and possibly a
different type rating, which would be anathema for sales.
I'm a little airplane person, not a big airplane person (and the 737 is a Big Airplane
even in its smallest configuration) but I know there have been several instances where
aircraft had changes that required that pilots of the type have a whole different type
rating, even though the changes seemed minor. I'm guessing airlines are training averse and
don't want to take crews off revenue service beyond what is statutorily required. The margins
in airline flying are apparently much leaner now than in the glory days.
I never approved of allowing fly by wire in commercial airliners, I never even really
liked the idea of FADEC engine control (supervisory DEC was fine) because a classical
advantage of gas turbines (and diesels) was that they could run in an absolutely electrically
dead environment once lit. Indeed, the J-58 (JT11-D in P&W parlance) had no electrical
system to speak of beyond the instrumentation: it started by mechanical shaft drive and
ignited by triethyl borane chemical injection. The Sled could make it home on needle-ball and
alcohol compass, and at least once it did. Total electrical failure in any FBW aircraft means
losing the airplane. Is the slight gain in efficiency worth it? I'm told the cables, pulleys,
fairleads and turnbuckles add 200 pounds to a medium size airliner, the FBW stuff weighs 80
or so.
The jet transports we studied in A&P school had a pitot head and static port on either
side of the flight deck and the captain and F/O had inputs from different ones, though IIRC
the altimeter and airspeed were electrically driven from sensors at the pitot head or inboard
of it. I have a 727 drum-pointer (why are three pointer altimeters even legal anymore??)
altimeter and it has no aneroids, just a couple of PCBs full of TTL logic and op amps and a
DB style connector on the back. Do crews not cross check airspeed and altitude or is there no
indicator to flag them when the two show something different?
Also, not being a jet pilot myself, my understanding is that anyone with T-38 experience
is forever after thinking in terms of AOA and not airspeed per se, because that airplane has
to be flown by AOA in the pattern, and classically a lot of airline pilots had flown Talons.
Is there no AOA indicator in the 737? Flying in the pattern/ILS would make airspeed pretty
dependent on aircraft weight, and on a transport that can change a lot with fuel burn, do
they precisely calculate current weight from a totalizer and notate speeds needed? (I presume
airliners don't vary weight other than fuel burn, not being customarily in the business of
throwing stuff out of the airplane, although they used to fly jumpers out of a chartered 727
at the parachute meet in Quincy)
Many problems in the world arise because many computing people reckon themselves very clever
when they are merely rather clever. And often they combine what cleverness they have with a
blindness about humans and their ways. I shouldn't be at all surprised if programmers at
Boeing decided that they always knew better than pilots and doomed the planes accordingly.
I saw recently an expression that made me grin: "midwits". It describes rather well many
IT types of my acquaintance.
@fish And that's the problem, as Mr. Kief also points out. The individuals at the
decision making level (let's call them "executives") don't or can't think that far ahead, at
least when the corporation they run is concerneed.
@dearieme One corollary is that the Midwits take such joy in their cleverness that they
assume their wit has value in and of itself. This is most evident when they design clever
solutions to invented problems. Billions of dollars of venture capital have been set on fire
in that way, when technical and financial midwittery combine.
@Andrei Martyanov It's almost nitpicking. But – James Thompson says it above: The
MCAS in this Boing model 737 MAX 8 is used to cover up a basic construction flaw. This has
undoubtedly worked for quite some time – but it came with a risk. And this risk might
turn out to have caused numerous deaths. In this case, if it will turn out, that the MACS
system didn't do what it was supposed to do and thus caused numerous deaths – will this
then be looked upon as a problem of the application of artificial intelligence? Yes, but
not only . It was a combination of a poorly built (constructed) airliner and software,
which might not have been able to compensate for this flawed construction under all
conditions.
It's cheaper to compensate via software – and this might (might) turn out to be a
rather irresponsible way to save money. But as I said: Even in this case, the technical
problem would have to be looked upon as twofold: Poor construction plus insufficient
software compensation. I'd even tend to say, that poor construction would then be the main
(=basic) fault. With the zeitgeisty (and cheap!) software-"solution" for this poor
construction a close second.
@Captain 737 Curiously, this is "Captain 737″'s first and only comment here.
It's almost as if Boeing hired a high-priced PR firm whose offerings include pseudonymous
online "messaging" to "shape opposition perceptions" etc. Note the over-obvious handle. (Just
like globalist shills like to pretend to be regular blue-collar guys in small fly-over
towns.)
By their words shalt ye know them.
PREDICTION: In 3-4 years, we will "discover" a long paper trail of engineers warning early
on about the risk of hastily kludging a half-assed anti-stall patch MCAS onto a system that
had undergone years of testing and refinement WITHOUT the patch.
Only somebody PAID not to see the problem could fail to perceive that this means that as
so altered, the ENTIRE SYSTEM goes back to being technically immature.
@Dieter Kief What "basic construction flaw" are we discussing here? The 737 airframe is
pretty well established and has a good record-there have been incidents but most have been
well dealt with.
@Anonymous I've read today, that in the aviation world there is a consensus, that what
James Thompson says in his article is right:
"Boeing had a problem with fitting larger and heavier engines to their tried and trusted 737
configuration, meaning that the engines had to be higher on the wing and a little forwards,
and that made the 737 Max have different performance characteristics, which in turn led to
the need for an anti-stall patch to be put into the control systems."
– A German engineer wrote in a comment in the Berlin daily Die weLT, this
construction flaw makes the 737 MAX 8 something like a flying traktor . He concluded,
that Boing proved, that you can make a tractor fly, alright. But proper engineering would
have looked otherwise – and would for sure had come at a higher cost.
(The different performance charactersitics mentioned by James Thompson is an
extraordinarily nice way to express, that the 737 MAX 8 is a tad more likely to stall, just
because of the very design-changes, the bigger turbines made necessary. And this is a rather
nasty thing to say about an airplane, that a new design made it more likely to stall!
).
The 737 family is the best selling commercial airliner series in history with more than
10,000 units produced. However, this airplane in its various configurations has had many
crashes since it first entered service in 1968.
"... To implement a security relevant automatism that depends on only one sensor is extremely bad design. To have a flight control automatism engaged even when the pilot flies manually is also a bad choice. But the real criminality was that Boeing hid the feature. ..."
"... The Ethiopian Airlines plane that crashed went down in a similar flight profile as the Indonesian plane. It is highly likely that MCAS is the cause of both incidents. While the pilots of the Ethiopian plane were aware of the MCAS system they might have had too little time to turn it off. The flight recorders have been recovered and will tell the full story. ..."
"... The FAA certifies all new planes and their documentation. I was for some time marginally involved in Airbus certification issues. It is an extremely detailed process that has to be followed by the letter. Hundreds of people are full time engaged for years to certify a modern jet. Every tiny screw and even the smallest design details of the hardware and software have to be documented and certified. ..."
"... How or why did the FAA agree to accept the 737 MAX with the badly designed MCAS? How could the FAA allow that MCAS was left out of the documentation? What steps were taken after the Indonesian flight crashed into the sea? ..."
"... That the marketing department has more say than the engineers who design and test the hardware and the software in passenger jets tells us a great deal about the Potemkin-style workplace culture that prevails in Boeing and similar large US corporations. The surface sheen is more important than the substance. The marketing brochures and manuals are no different from mainstream news media in the level of BS they spew. ..."
"... The Indonesian pilots did not have the time to figure out and realise that something else was controlling the plane's flight, much less deactivate what is effectively a second autopiloting system. ..."
"... B is right. This is a criminal act of deception and fraud thats cost hundreds their lives. Boeing executives responsible should be prosecuted and then jailed. ..."
"... while all the technical discussion around how to fly a plane is truly interesting, what's really at issue here is corporate and institutional betrayal of trust. ..."
"... The corporate aspect is Boeing, obviously. The institutional aspect is FAA, which used to lead the world in trust when it came to life and death matters. ..."
"... But now, in what Bloomberg, even while trying to support FAA, has no choice but to report as a "stunning rebuff" to FAA's integrity, countries around the world are grounding this flawed plane. Germany, among others, has closed its airspace to the 737. ..."
"... "Should anyone be flying 737MAXes before the black box data has been evaluated?" ..."
"... Before, the civilian airliners were falling out of the sky because of an immature technology, that is because of the learning curve. Now that the technology involved is fully mature the airliners are falling out of the sky for profit taking. ..."
"... Is it really so hard to connect the secrecy about MCAS and why it was needed in the first place? The lawyers will have a ball of the decade with this: the defendant created a secret software solution to turn a Lego airplane into a real airplane, made the software dependent on a single sensor, and made it difficult to switch the software off. ..."
"... I cannot believe that Boeing shares dropped only 7.5%, this is a statement of how untouchable Boeing is and how protected it will be by the Corrupt. ..."
Boeing, The FAA, And Why Two 737 MAX Planes Crashedpsychohistorian , Mar 12, 2019 4:55:32 PM |
link
On Sunday an Ethiopian Airlines flight crashed, killing all on board. Five month earlier
an Indonesian Lion Air jet crashed near Jakarta. All crew and passengers died. Both airplanes
were Boeing 737-8 MAX. Both incidents happened shortly after take off.
Boeing 737 MAX aircraft are now grounded
about everywhere except in the United States. That this move follows only now is sad.
After the first crash it was already obvious that the plane is not safe to fly.
The Boeing 737 and the Airbus 320 types are single aisle planes with some 150 seats. Both
are bread and butter planes sold by the hundreds with a good profit. In 2010 Airbus decided
to offer its A-320 with a New Engine Option (NEO) which uses less fuel. To counter the Airbus
move Boeing had to follow up. The 737 would also get new engines for a more efficient flight
and longer range. The new engines on the 737 MAX are bigger and needed to be placed a bit
different than on the older version. That again changed the flight characteristics of the
plane by giving it a nose up attitude.
The new flight characteristic of the 737 MAX would have require a retraining of the
pilots. But Boeing's marketing people had told
their customers all along that the 737 MAX would not require extensive new training. Instead
of expensive simulator training for the new type experienced 737 pilots would only have to
read some documentation about the changes between the old and the new versions.
To make that viable Boeing's engineers had to use a little trick. They added a 'maneuver
characteristics augmentation system' (MCAS) that pitches the nose of the plane down if a
sensor detects a too high angle of attack (AoA) that might lead to a stall. That made the
flight characteristic of the new 737 version similar to the old one.
But the engineers screwed up.
The 737 MAX has two flight control computers. Each is connected to only one of the two
angle of attack sensors. During a flight only one of two computer runs the MCAS control. If
it detects a too high angle of attack it trims the horizontal stabilizer down for some 10
seconds. It then waits for 5 seconds and reads the sensor again. If the sensor continues to
show a too high angle of attack it again trims the stabilizer to pitch the plane's nose
done.
MCSA is independent of the autopilot. It is even active in manual flight. There is a
procedure to deactivate it but it takes some time.
One of the angle of attack sensors on the Indonesian flight was faulty. Unfortunately it
was the one connected to the computer that ran the MCAS on that flight. Shortly after take
off the sensor signaled a too high angle of attack even as the plane was flying in a normal
climb. The MCAS engaged and put the planes nose down. The pilots reacted by disabling the
autopilot and pulling the control stick back. The MCAS engaged again pitching the plane
further down. The pilots again pulled the stick. This happened some 12 times in a row before
the plane crashed into the sea.
To implement a security relevant automatism that depends on only one sensor is
extremely bad design. To have a flight control automatism engaged even when the pilot flies
manually is also a bad choice. But the real criminality was that Boeing hid the
feature.
Neither the airlines that bought the planes nor the pilots who flew it were told about
MCAS. They did not know that it exists. They were not aware of an automatic system that
controlled the stabilizer even when the autopilot was off. They had no idea how it could be
deactivated.
Nine days after the Indonesian Lion Air Flight 610 ended in a deadly crash, the Federal
Aviation Administration (FAA)
issued an Emergency Airworthiness Directive.
The 737 MAX pilots were aghast. The APA pilot union
sent a letter to its members:
"This is the first description you, as 737 pilots, have seen. It is not in the AA 737
Flight Manual Part 2, nor is there a description in the Boeing FCOM (flight crew operations
manual)," says the letter from the pilots' union safety committee. "Awareness is the key
with all safety issues."
The Ethiopian Airlines plane that crashed went down in a similar flight profile as the
Indonesian plane. It is highly likely that MCAS is the cause of both incidents. While the
pilots of the Ethiopian plane were aware of the MCAS system they might have had too little
time to turn it off. The flight recorders have been recovered and will tell the full
story.
Boeing has sold nearly 5,000 of the 737 MAX. So far some 380 have been delivered. Most of
these are now grounded. Some family members of people who died on the Indonesian flight are
suing Boeing. Others will follow. But Boeing is not the only one who is at fault.
The FAA certifies all new planes and their documentation. I was for some time
marginally involved in Airbus certification issues. It is an extremely detailed process that
has to be followed by the letter. Hundreds of people are full time engaged for years to
certify a modern jet. Every tiny screw and even the smallest design details of the hardware
and software have to be documented and certified.
How or why did the FAA agree to accept the 737 MAX with the badly designed MCAS? How
could the FAA allow that MCAS was left out of the documentation? What steps were taken after
the Indonesian flight crashed into the sea?
Up to now the FAA was a highly regarded certification agency. Other countries followed its
judgment and accepted the certifications the FAA issued. That most of the world now grounded
the 737 MAX while it still flies in the States is a sign that this view is changing. The
FAA's certifications of Boeing airplanes are now in doubt.
Today Boeing's share price dropped some 7.5%. I doubt that it is enough to reflect the
liability issues at hand. Every airline that now had to ground its planes will ask for
compensation. More than 330 people died and their families deserve redress. Orders for 737
MAX will be canceled as passengers will avoid that type.
Boeing will fix the MCAS problem by using more sensors or by otherwise changing the
procedures. But the bigger issue for the U.S. aircraft industry might be the damage done to
the FAA's reputation. If the FAA is internationally seen as a lobbying agency for the U.S.
airline industry it will no longer be trusted and the industry will suffer from it. It will
have to run future certification processes through a jungle of foreign agencies.
Congress should take up the FAA issue and ask why it failed.
Posted by b on March 12, 2019 at 04:39 PM |
Permalink
Comments
next page " @ b who wrote
"
But the engineers screwed up.
"
I call BS on this pointing of fingers at the wrong folk
Engineers get paid to build things that accountants influence. The West is a world in
which the accountants have more sway than engineers.
It is all about the money b and to lead folks in some other direction is not like what I
think of you.
The elite that own global private finance and everything else killed those people in the
planes because they set the standards that the accountants follow and then force the
engineers to operate within
"Congress should take up the FAA issue and ask why it failed."
If there had been any chance of that happening, the planes would probably still be flying and
dead passengers alive.
This, if you are right and I suspect that you are, is symptomatic of an empire dying of
corruption. It is no accident that both the new secretary of defence and the neo-con cult
itself were born of Boeing. A fact memorialised in the UK where the Blairites rally in the
Henry Jackson society.
Last night I wrote on a previous thread:
Over the space of a few months 2 almost new Boeing 737 MAX aircraft have crashed. Rather than
going to the expense of designing an entirely new fuselage and normal length landing gear for
its larger and much more powerful 737 MAX engines Boeing stuck with the now ancient 737
fuselage design that sits only 17 inches from the ground – necessitating changes to the
positioning of the engines on the wing, which together with the vast increase in power,
created aerodynamic instability in the design that Boeing tried to correct with software,
while not alerting pilots to the changes.
Through the 1980s and early 1990s Boeing executives had largely resisted pressure from Wall
Street to cut staff numbers, move plant to non-union states and outsource. The 777 was the
last real Boeing, though significant outsourcing did take place – but under the strict
control and guidance of Boeing engineers. After the "reverse" takeover of MacDonnell Douglas
in 1997 the MDD neoliberal culture swamped Boeing and its HQ was moved from the firm's home
near Seattle to Chicago so executives could hobnob with speculators. Wall Street had taken
down another giant.
The story I have most interest in, at the moment, is the state of the power blackout in
Venezuela and whether this was a cyber attack by the United States. If it was, it is, in my
opinion, a weapon of mass destruction and a very major war crime. The story seems to be
fading from the news so I'm hoping b. will be able to gather more information about it.
I don't know if this is true by my sister who was an engineer working on military jets said
that she'd heard that because of various design requirements, the 737-MAX was inherently
unstable but stability was provided by the fly-by-wire system. In military jets, this feature
provides greater maneuverability and survivability but has no place on civilian aircraft as
the outcome of a system failure would be catastrophic with the pilots being unable to do
anything about it. Anyone heard anything similar?
b - thanks for addressing this.. subservient canada is also flying them
still..) canada is going the same way as the usa-faa - into a ditch long term... it is
really sad for the people who have died and for the fact that as @1 psychohistorian notes -
the decisions are being put in the hands of the wrong people...
Gotta agree with psychohistorian @1, that the engineers aren't totally responsible.
Deregulation pukes at FAA, bean counters at Boeing and their managers who approved it all are
morally culpable. Airline executives aren't immune either, although many will likely plead
ignorance.
If the US were a sane country, a Congressional investigation would follow, but it's not, and
Congress is going to be more concerned with Boeing's bottom line than in public safety or the
integrity of the FAA. That's probably why the planes haven't been grounded in the US.
Congress is much more likely to impede investigation and accountability.
You omit important facts: the pilots know by heart how to quickly cut off electronic control
of the stabilizers and fly manually. The pilots on the preceding lion air flight had had the
same problem, and immediately solved it. The defective sensor should have been immediately
replaced, and would have in the United States. On the next flight, the pilots (the copilot
being quite unexperienced) spent 10 minutes not doing what they were trained to do in an
emergency where the stabilizers are out of control: disable them.
When some flight crews get it right, but others don't, it's not a design flaw but a
problem with the flight crews.
Through the history of Boeing senior executives lived in modest middle-class houses. They
traveled on Boeing aircraft to get pilot's responses. But when Phil Condit (Wall Street's
man) took over he immediately bought private jets and started living the lifestyle. The
difference between productive capitalism and financial capitalism.
the broken dreams documentary above spells it out very clearly the documentary is from
2014.
it even has undercover folks in the boeing factory saying they would not fly on one.
if you fly you should watch that old al jazeera investigation.
the company does not pay tax and
the head of boeing paid himself 100s of millions of dollars
But the bigger issue for the U.S. aircraft industry might be the damage done to the FAA's
reputation.
I'd counter this by asking "what reputation?"
I've known for years how it took take a "smoking hole" for the FAA to get off the can and
actually do something about a problem with an airplane or airline. But things evolve, and
here we have TWO such smoking holes and the FAA still allows it to fly. I'm not trying to
pick on the current FAA leader, for the man is utterly typical of the people who are allowed
to gain his position. From his wiki:
But the bigger issue for the U.S. aircraft industry might be the damage done to the FAA's
reputation.
Elwell joined Airlines for America (A4A) in 2013[3] where he was the Senior Vice
President for Safety, Security, and Operations. Elwell left this role in 2015.
(Skipping to the A4A wiki:) Airlines for America
Officially, the A4A has announced five "core elements" of a national airline policy include
reducing taxes on the industry, reducing regulation , increased access to foreign
markets, making the industry more attractive for investors , and improving the air
traffic control system.
I suspect that grounding the 737-MAX would contradict the goal of "making the industry
more attractive for investors".
About an hour ago I sent out an all-points email suggesting my family members avoid
boarding a 737 MAX until the facts are better known and solutions are in place. The FAA may
not care about them taking risks, but I sure do.
"Boeing is among the largest global aircraft manufacturers; it is the fifth-largest
defense contractor in the world based on 2017 revenue, and is the largest exporter in the
United States by dollar value".
I agree with Psychohistorian @ 1 in less forthright terms: the engineers did not "screw up".
On the contrary they most likely did what they could with the money and the time deadline
they were given to carry out what essentially was a patch-up job that would make Boeing look
good, save money and maintain its stock in sharemarkets.
Probably the entire process, in which the engineers played a small part - and that part in
which they had no input into whoever was making the decisions - was a disaster from start to
finish. The engineers should have been consulted at an early stage in the re-design of the
aircraft's flight and safety features. Only when the appropriate re-design has been tested,
changed where necessary and given the thumbs-up by relevant pilots' unions and other
organisations with regard to passenger safety can the marketing department go ahead and
advise airlines who buy the redesigned planes what training their pilots need.
That the marketing department has more say than the engineers who design and test the
hardware and the software in passenger jets tells us a great deal about the Potemkin-style
workplace culture that prevails in Boeing and similar large US corporations. The surface
sheen is more important than the substance. The marketing brochures and manuals are no
different from mainstream news media in the level of BS they spew.
One can think of other organisations where the administration has more power in the
corporate decision-making process and eats up more of the corporate budget while the people
who do the actual work are increasingly ignored in boardrooms and their share of the budget
correspondingly decreases. Hospitals and schools come to mind.
Boeing got taken over Wall Street, which means cheapest solution to anything. Engineers
are stuck with what they are given. What part of that do you still not understand.
A mitigating factor to the flightcrew is the take-off to 10,000ft is the busiest time. There
is enough going on without having to deal with runaway stab. This is especially true for new
crew to a new aircraft. Rode in many cockpits before 9.11.01 when company employees were
allowed and the standing rule was no conversations below 10,000 and keep you eyes open for
traffic. I also include my Maintenance brethren in that equation. Spent 30 years as a
Avionics Tech. on both military and commercial aircraft so I am not really fond of giving flightcrew a break but I
might this time.
Why is Boeing suffering from this design problem and not A320neo is that 737's wings are
much lower to the ground than the A320. Unfortunately, more fuel-efficient engines require a
larger air inlet, so the newer generation engines are much larger than the previously
installed V2500 or CFM56 (anyone can verify that - the older engines are much, much smaller
than the newer ones).
When Airbus introduced the Pratt & Whitney GTF on its A320s
(calling it the neo - new engine option), it led to an increase (high single digits %)
increase in fuel efficiency. Boeing had to respond to that. If they wanted to increase the
height of the wings of the 737 from the ground, they would have had to redesign the fuselage
which would have cost billions (and which they should have done, in hindsight). Instead, they
listened to the investors and the bean counters as you have called them here and they jiggled
the position of the wings a bit and introduced the new automatic stabiliser.
The people at Boeing are good or at least the engineers are. Imagine how many times this
problem would have been brought up by someone for him/her to be shut down. It's not like they
were not aware of the issue, but they were unwilling to let their bottom line suffer.
Instead, they were okay with carrying the risk of killing hundreds of people.
Agree with both of your comments. It looks like the 55 year old 737 air-frame design,
which is very low to the ground when compared to more modern designs, is incompatible with
the bigger engines required for fuel efficiency.
Being very low to the ground, Boeing was forced to put the engines out in front, which
upset the airplane's balance, making the plane essentially unstable. To counter the
instability they added the 'MCAS?' control system.
This solution violates a fundamental tenant of design for safety-critical systems. The
tenant of 'fail-safe'. If something goes wrong the system is supposed to fail in a manner
that preserves safety. For the 737 Max, when the this stability control system fails, the
plane is fundamentally unstable. For this system it is not 'fail-safe'. It is
'fail-crash'.
Why would Boeing do this? Because Bombardier was building a clean sheet design, that would
eat the 737's lunch. Boeing (and Airbus) were desperate to do something quick to minimize the
20% fuel burn advantage of the C-series. The more modern Airbus 320 air frame allowed it to
re-engine their plane. Boeing's did not. But Boeing went ahead anyway and built an
fundamentally unstable airplane, because the alternative was to walk away from their most
important market.
To me, this looks like it could be catastrophic for Boeing. It reminds me of G.M.'s
'Corvair' moment (Unsafe at any speed), from the 1960s.
Steven @ 13: The Indonesian Lion Air jet still crashed with all onboard dying, even after the
pilots did as you said. B's post explains why: the MCAS system has to be deactivated
separately as it is still active when autopilot is off and the pilots are flying
manually. The Indonesian pilots did not have the time to figure out and realise that
something else was controlling the plane's flight, much less deactivate what is effectively a
second autopiloting system.
how is this for reassuring? press release from boeing today... this info is from someone
else, and i haven't verified it..
"For the past several months and in the aftermath of Lion Air Flight 610, Boeing has been
developing a flight control software enhancement for the 737 MAX, designed to make an already
safe aircraft even safer."
"Boeing got taken over Wall Street, which means cheapest solution to anything. Engineers are
stuck with what they are given. What part of that do you still not understand."
Why they colluded with and indeed implemented what they knew to be - and now proven to be
- a mass killing system. What do you not understand here?
There is much more behind the covering up of this "design flaw" from the start. The
concept that, in this day and age, sensors used in the aviation field and close to brand new
are defective is a stretch of the imagination. The current effort by Boeing to do a software
upgrade, I suspect, is cover for something more damaging.
How easy is it these days to access the MAX's operation and flight control computers? Can
it be done via WI-fi or Bluetooth from the airfield? We are well aware that in the newer
heavies Seattle can take basic control via satellite.
You clowns don't understand what you're telling me I'm "getting wrong." MCAS ISN'T part of
the autopilot, and I never said it was.
737 pilots have to be able to do about 10 procedures in their sleep. One is when the
electrical control of the horizontal stabilizers doesn't work; Aa few steps but basically
pull a breaker and revert to manual control only, no power assist.
The crew on the previous flight did this and flew on with zero problem.
It's outrageous that lionair didn't find out why emergency procedures had had to be used
and fix them before they let the airplane fly again.
If airlines do not adhere to Minimal safety standards, it's not Boeing's fault if it's
planes crash.
"This is the first description you, as 737 pilots, have seen. It is not in the AA 737
Flight Manual Part 2, nor is there a description in the Boeing FCOM (flight crew operations
manual)," says the letter from the pilots' union safety committee. "Awareness is the key
with all safety issues."
Well it's good to know that Canada is still allowing this death trap to fly, I couldn't bare
the thought that Boeing might lose more stock value merely because of a defective product
that kills! Seriously though, the silence from the Canadian media on this subject is
deafening. CBC news didn't even cover the banning of these planes in the rest of the world
until an hour ago and even then they seemed more concerned about the impact on Boeing then
the you know 300 people killed because of this flawed plane. Eventually (before Friday) I
think Canada will be forced to ground it's fleet of 737-8s. With the current corruption
scandal, Trudeau is too weak right now to stand up in Question period and claim the 737-8s
are safe to fly. Even Trump is getting in on the action and blaming Boeing for the accidents.
FAA may end up being the biggest loser from this situations with a huge hit to its'
trustworthiness, I remember when the FAA would issue emergency maintenance/inspection orders
after any crash suspected to be caused by maintenance issues and ground entire fleets of
aircraft if two planes crashed within 2 years. You know, the FAAs behaviour now reminds me of
the old Soviet joke, "our planes never crash, their just indefinitely delayed"
These people did not die they were murdered. Long ago, I had worked with Boeing on a computer
project and I had the highest respect for the company and engineers. Facts and reality were
paramount for Boeing. Things started a slow downhill slope when that TWA flight that was
accidentally shot down by a missile. I noticed how uncomfortable the engineers were to talk
about it – just a short comment that the fuel tank was not the cause. When politics and
management go away from reality and facts, it is just a matter of time. But for the life of
me I do not understand how Boeing can come to this:
Fault 1: As B says, it should never have been designed like this.
Fault 2: Don't tell the pilots about MCSA.
Fault 3: Real time flight tracking altitude data show wild swings – red light ignored.
No need to wait for a plane to crash.
Fault 4: Lion Air Flight 610 crash showed that this MCSA system is at fault and nothing much
was done. The murder of 189 people.
Fault 5: Ethiopian Airlines Flight 409 murdering an additional 157 people.
Fault 6: FAA says everything is ok.
Especially the Ethiopian Flight 409 crash should never have happened. This issue became
well known to engineers and flight crews world wide after Lion Air. A good question is: was
the disable MCSA switch now a memory item or a check list item for the flight crew? Or did
Boeing want to wait for the final report of Lion Air?
I noticed that the Ethiopian pilot was not western, but looks like from Indian decent. I
would not doubt his abilities, but rather say that he would follow the rules more than a
western pilot. Western pilots would network and study this thing on their own and would not
wait for Boeing. They would have penciled this into their flight deck routine - just to be
safe.
One can always find a benefit in the sanctions, albeit coincidental.
Iran avoided a lot of damage from Boeing. They had ordered 140 of 737's. All got canceled.
Congratulations.
@40 Alpi57
Iran always has the option of buying the Irkut MC-21 which in my opinion is the best
narrowbody plane that anyone can buy now. Fully redesigned body with significantly higher
composite percentage and comes with the best engine in the world for narrowbodies - the
P&W GTF. And Russia will be happy.
Before you guys and gals bash b, hop over to Zerohedge citing Dallas Morning News revealing
FAA database Pilots on Boeing 737Max complained for months...Manual inadequate ...criminally
insufficient .just for starters.
I was a big fan of the 6-part BBC doco series Black Box from the 1990s. The main conclusion
drawn was that the industry is way too fond of blaming as many mishaps as possible on Pilot
Error, and way too slow to react to telltale signs that a particular aircraft model might
have a fatal flaw. There was a tendency to ignore FAA edicts for inspection of a suspected
design weakness. Two cases that come to mind were incorrectly locked DC 9 cargo doors ripping
off with a big chunk of the plane plus half a dozen occupied seats, and a tendency of 727s to
nose-dive into the "surface" at Mach 0.99.
I'll be very surprised if any part of b's analysis, conclusions and predictions turns out
to incorrect.
Lights in Venezuela on.
US Boeing stocks down.
More evidence for the Lockheed f-16 downing. Reports it was a dogfight between an old MiG-21
(with modernised radar and missiles) that brought the modern US Lockheed f-16 down and maybe
not from a launch of MiGs modern bvr missile.
The problem with a "new" airplane is the Western Content. Over a certain percentage, the
US basically controls the situation. Another issue is servicing the things. If an airplane is
sitting in Podunk Airport with a broken widget, the airline wants it fixed right now! Some
planes like the 737 have been around for decades and there are probably parts for it - even
at Podunk. A new plane will probably be grounded until a new part is transported in - a
process which will take many hours even in the best of circumstances. Advantage to the 737
and other 'legacy' airplanes.
Just saw an interesting headline at Reuters - I'd suppose it is some friendly advice from
Wall Street disguised as "news".
Change "watchdog" to "lapdog" and that would be about right. It seems to me a sensible
proposal, for if Boeing must take a beating out of this, the company ought to at least adopt
a pose of "really caring" and "doing the right thing". Try for the brownie points.
@ Zachary Smith who wrote
"
It seems to me a sensible proposal, for if Boeing must take a beating out of this, the
company ought to at least adopt a pose of "really caring" and "doing the right thing".
"
China is coming to teach the West morals which are currently ranked below profit and
ongoing private control of global finance
The Ethiopian airlines flight was an international flight, so the pilots will have been
certified to international standards. I don't know the details of international standards for
type training, but you are basically saying that the fault is not with Boeing, it is with the
type training of international pilot crews. Can you elaborate and does this mean that we are
equally in danger regardless of the aircraft model and that it is just coincidence that both
these crew failures were on 737 Max models?
The evidences and recognizably legitimate information (there is always a lot of
through-the-hat blather-yap from internet-"engineers") suggests thrust angle, not structure
or CG destabilization. "larger" engines are not necessarily significantly heavier, but,
today, and if more efficient, will be larger diameter for more fan, for more thrust (which in
jet and fan engines is more power). Larger diameter nacelles will require modification of
placement, higher, lower, larger weight will require modification of placement, forward,
backward. Clearance restrictions may require modification of engine thrust-line angle,
relative to fuselage, and fuselage-fit control surface lines (which include flight surfaces).
Thrust changes with thrust changes, which means thrust-angle change will change thrust-effect
at differing thrust amounts: Take-off and climb thrusts are near maximums, wherefore angular
component will be near max then (cruise maximums are less, or less effective, or radical, for
altitude air thinning).
What this means is that if larger engines on a 737 MAX, for larger bulk are slightly
angled for clearance,the angling may have little effect except in specific instances and
attitudes, such as take-off and climb. It sounds as if Boeing angled thrust slightly for
engine fitting, and assumed a computer control fix could handle the off-line thrust component
effect during the short duration times it was sufficient to effect flight characteristics,
which, if the thrust-angling was up, would add a nose-up tail-down thrust rotation component,
greater at greater power. to compensate which the software would add nose-down control
surface counteraction, as incident described.
What it sounds like the pilot in the first, non-crash, case most likely did, that saved
the aircraft, was not 'disable' an automatic system he had no information about, for it being
not intended for disablement, but was reduce power, reducing the off-line thrust effect, so
the auto system backed off. In the other incidents, especially if the airports were
get-em-high-fast airports (to 'leave' the noise at the airport) the pilots would incline to
not reduce power, and would be more likely to get into a war with the too automated
auto-system, the way Tesla drivers can do with their over-automated systems.
All auto-control "AI" systems need human-override options built in, so that human-robot
stand-offs to impact cannot occur. The real culprits in stand-off accident situations are the
techie-guppies who think robotic control can always do everything better, and fail to think
of the situation where the "right" response is wrong.
Lion Air's engineers had previously identified and tried to fix issues with the jet that
crashed in October 2018.
The day before the jet took off from Jakarta airport and crashed, killing all 189 onboard,
one of its Angle of Attack sensors had been replaced by engineers in Denpasar. Unfortunately
the source I checked (see link below) doesn't say if this replacement AoA sensor was the one
linked to the computer running the MCAS on the flight.
Delta once initiated a fuel saving measure whereby aircraft were insufficiently topped off
with fuel to prevent pilots from wasting fuel. Once this information began to leak, the
measure was ended.
Thanks for Bean Counters! I so much wanted to use Bean Counters in my rant but thought I
should stick to their standard appellation....
Bean Counters need to be taken seriously because they are not going to go away in any form
of social organization and represent where the rubber meets the road when it comes to social
decision making/risk management
Bean Counters (along with their bosses) need to be required to place morals as a higher
value than profit and forced to operate with maximum public transparency and input; then, all
will be good.
Thank you for the accurate information. The basic problem seems to be that the
low-consumption engines protrude too far. A well-designed, reliable aircraft becomes a faulty
design. To try to solve this using software is a precarious approach. The FAA should have
rejected this in principle. But because to design an aircraft completely from scratch
naturally takes longer and would have given the competitor Airbus time to take over the to
much market share, this 'solution' was accepted. This type of corruption will cost the u.s. a
lot.
But first let's wait for Tronald's tweet, which will certainly be aired by tomorrow at the
latest, in which he states that the 737 Max is a great, great aircraft - if not the best
ever...
There is no doubt that both Boeing and FAA are to blame, but we pay the Government to ensure
safety. Businesses have always chased profit, some more ruthlessly than others. But when
the real corruption sets in then the Government regulator works for the businesses at the
expense of the public . Regarding FAA reputation, there was a time when US was the leader
in aviation, military as well as commercial. This means that the best experts were in US and
thus FAA had the best and the most knowledgeable people. It is similar with FDA, all
countries in the World used to follow the touchstone drug approvals by FDA. Now the
"Federal" in any US acronym has become a synonym for "Corruption" (FBI
anyone?).
The expertise does not matter any more, only greasing of the hands does. In the old times,
anyone from FAA whose signature was on this planes approval to fly would get a life sentence
in jail. But 330 people dead is less than a days worth of US global victims - business as
usual for US. It is just that these victims are getting much more publicity than the silent
victims. We will be lucky if anyone influential from FAA even resigns let alone goes to jail.
There will be many more dead before the World understands this new reality.
Would you fly on any Boeing plane designed or delivered after the company was taken over
by the Wall Street wizards in the 90s?
Re the engineers - they agreed to build an out of balance aircraft (thrust vs weight and
drag) and to try and rectify this with software. What we will do for money. Both the bean
counters and engineers are at fault, perhaps the beancounters and shiney butts more so as
they did not inform buyers and pilots of the faults.
Posted by: fast freddy | Mar 12, 2019 8:26:15 PM | 52
(Fuel 'economy')
QANTAS once decreed that pilots rely on brakes and treat reverse thrust as emergency-only
procedure, until a 747 skidded off the end of a runway with the nose-wheel inside the cabin
and bruised engines = lots of down-time + very large repair bill.
Not just Delta; Ryanair did the same, at least until there was a major storm in Spain
(Valencia, I think) and all flights had to be rerouted to other airports. That was fine, with
dozens of planes flying around waiting for a window to land, until the handful of Ryanair
planes that had been rerouted to Madrid and other places called for emergency landings,
because they didn't have enough fuel to fly for even 30 minutes longer than planned
flights.
I'm still amazed that the EU regulators and EU fucking commission didn't downright dismantle
such a bloody greedy and downright criminal company. That they basically did nothing is proof
enough, imho, of the insane level of capitalism-worship and of corruption going on in
Brussels (of course it's even worse in Washington DC, but that's basically a given).
the toronto star is carrying this story
Headline:
"Ottawa exempts Boeing 737 Max jets from standards meant to minimize passenger injuries"
"Air Canada and WestJet are flying the Boeing 737 Max aircraft exempt from regulatory
standards meant to limit passenger injuries in the event of an accident, the Star has
learned."
B is right. This is a criminal act of deception and fraud thats cost hundreds their lives.
Boeing executives responsible should be prosecuted and then jailed.
Instead the safety agency regulating them will cover it up, backed by the criminal
congress.
We see similar crimes against humanity being committed in many other areas. FDA, CDC, EPA,
FCC , USDA, etc covering up for Big Agra, Big Pharma, Big Telecom with dangerous products
like vaccines, glyphosate,4G/5G, GMO foods, gene edited livestock, etc. Safety standards are
lax and inadequate, safety testing is minimal and in some cases fraudulent or completely
lacking. Defects and adverse effects are covered up. A revolving door between these agencies
and the industry they cover presents significant conflict of interest. These industries
finance congressional members campaigns. Public safety is sacrificed for the greater good
(profits and personal gain). Whistleblowers are muzzled, attacked or ridiculed as the MSM are
their lap dogs.
That said, the airline industry has had a remarkable safety record over the last 30 years if
you can overlook their failure to have adequate locks on cockpit doors in 2001. However, the
lack of competition and increasing corruption and continuing moral decay we see in society ,
government and industry has obviously taken its toll on the industry. This is inexcusable.
Heads should roll (dont hold your breath).
Congress flies on these aircraft to and fro from Washington to their districts. It is to
their interests to have these Boeing 737 permanently grounded.
Re: 59 Bevin, "Ottawa exempts Boeing 737 Max jets from standards meant to minimize passenger
injuries"
- what this means is that Washington called Ottawa and ordered little Justin that he had
to allow the 737 8's to fly and Justin said yes sir! However, someone at the Transportation
Safety Board of Canada, told Justin that the threat these plane pose to travellers was so
obvious that they couldn't just ignore it and that they would instead have to issue a waiver
to show that they have done due diligence - apparently this person or someone else within the
department then called the Star in order to leak the information and embarrass Justin into
reversing his decision. I imagine tomorrow at 4:00pm during the question hour, Justin will
get raked through the coals over his - Justin's whole defense of his actions during the Lavin
scandal has been "I needed to protect Canadian jobs", I imagine the NDP or Conservatives will
then retort something along the lines of "you'll break the law to protect Jobs, why won't you
obey the law to protect Canadian lives!", I should point out that 8 Canadians were killed in
the most recent crash in Ethiopia
Steven is correct. Totally correct. I suspect that he is an airline pilot, as am I. Everybody
else is wrong at least in part and most between 50% and 100%(The description of the cause of
the QANTAS hull loss).
Pilots MUST know all about aircraft systems operation. It is crazy for Boeing to have
functions not in the AFM.
The system in question is not operative with autopilot engaged. In manual flight if at any
time one gets an uncommanded stab trim movement one should immediately disable electrical
trim(One switch, half a second, no "procedure" required. In manual flight if the trim wheel
moves and you hadn't touched the trim switches you have uncommanded trim. Immediately disable
electrical trim.
There is procedure for reestablishment of electrical trim, that does take time. The defeat
of the runaway trim does not take time. B737 has provision for manual trim(but it's very
slow.
I grew up reading Boeing's weekly employee newspaper. Times have changed too much since then.
Moving the headquarters from Seattle to Chicago and a second 787 assembly line in South
Carolina to bust their unions are proof that Boeing is a multinational corporation superior
to national governments. The company is the Empire's armorer for profit. It is criminal to
design an unstable passenger airplane that must be controlled by fly by wire sensors and
computers to stay in the air. The problem is the aircraft industry duopoly and deregulation.
Airbus has lost at least three aircraft to problems with the pilot computer interface. I was
shocked when NBC put this first last night. I though it would be silenced. I blame Trump
Derangement Syndrome. His trade wars and dissing have ticked off the world. When China
grounded the 737 Max 8 everybody followed to show what they really think about the North
American Empire. This could be devastating to the last manufacturing industry left in the
USA.
Boeing in my view took a cynical decision. That is, there would only be a few crashes within
a set period. Thus the insurance companies would pick up the tab for their profits. However
the loss of two planes so close together could destroy the company. The aforesaid insurance
companies will not pay a single dime if they can stick corporate murder charges onto Boeing.
This smells of the Ford Pinto scandal where Ford knew that there was a problem with the
fuel system if the car was rear-ended ( the vehicle burst into flames ) but it was cheaper to
pay the compensation than fix the problem.
B is missing the point that fitting new engines caused airplane to take off close to stalling
horizontal speeds and angles at very low altitude and more steeply ascending to flight
altitude and that has left little time for pilots to react. That is very dangerous as much
weaker tail wind may confuse pilots and sensors. To remedy that without recertification AI
software was installed to react faster and overriding actions of pilot who was assumed not be
aware of situation at the moment he had to immediately react at the latest.
Lack of sensor redundancy is also criminal as determination of sensor malfunction is
critical for pilot. That is AI application correcting "human" physical mental deficiencies and that is deadly
trap.
If it goes to court, interesting case will be, whose error was that as MCAS system acted
correctly against pilot based on faulty sensor causing pilot to make mistake recovering from
correct but suicidal software actions.
People must be warned of cultish trust in technology and AI which is ultimate guilty party
together with greed that killed those people.
There are unlimited dollars for any intervention they choose, publicly allocated or not.
There is a reason 21 trillion in pentagon spending is unaccounted for. This does not count
dark money from illicit means used to fund covert operations.
The fact its public just means Trump wants congress to sanction it, which they will.
Seized Venezuela assets will serve as collateral for future reimbursement.
@65 acementhead - "It is crazy for Boeing to have functions not in the AFM"
No, it's criminal. And while all the technical discussion around how to fly a plane is truly interesting,
what's really at issue here is corporate and institutional betrayal of trust.
The corporate aspect is Boeing, obviously. The institutional aspect is FAA, which used to
lead the world in trust when it came to life and death matters.
But now, in what Bloomberg, even while trying to support FAA, has no choice but to report
as a "stunning rebuff" to FAA's integrity, countries around the world are grounding this
flawed plane. Germany, among others, has closed its airspace to the 737.
This situation has only a little to do with how to fly a plane. It has vastly more to do
with the face of capitalism we see leering at us as our families live their last few moments,
on the way to the ground. It has to do with how the corporate spin departments will attempt
to cover up and evade responsibility for these crimes.
And it has to do with how the global consumer market will start to book its flights based
not on price or time or seat location but on make of plane.
And despite your claim that "Everybody else is wrong at least in part..." , I doubt
very much that most of the commenters here are wrong in their appreciation of the
situation.
I don't think Boeing made a decision, they had little choice (stockholders were first, the
jobs were essential to the politicians, and market share would become competitive if Boeing
dropped out), it was the pressure of the system that charted their course.
Capitalism is
about competition in a just, fairly well managed government regulated environment. In order
for capitalism not to over step the bounds of competitive capitalism; government must remain
present, to prevent foul play and to deny all hints of monopoly power...
Capitalism without
an honest government becomes organized crime or, worse, it degenerates to allow private
enterprise and special interest to dictate how the rule making and military arms of
government should be used, against domestic and foreign competition. . Economic Zionism is
what I call this last degenerative stage.
Defensively EZ teaches the winner to completely and totally destroy the
infrastructure, the resources and the people (including competitive personnel with the brains
to develop competition) of those who refuse to conform or those who insist on competing;
offensively , EZ teaches the winner to take all and to take-over, own and keep the
goodies taken from those destroyed, and in the matter of profit making and wealth
keeping EZ teaches only winners are allowed to produce-and -profit everyone else is to be
made to feed the monopoly that eliminated competition produced. The residual of eliminated,
decimated competitive opposition = monopoly power
It is the king of the mountain monopoly that produces the wealth and power and feeds the
corruption that makes the rich richer.
I think this case makes clear, privatization of government responsibility nearly always
turns sour . The Government should take over and keep the operation of all of the
Airlines strictly in government hands (privatization is proven to be problematic). When I
grew up all of the airlines were so tightly regulated they were part of the government; the
airlines were investors and operators following government rules and regulations. pricing was
based on point to point fixed in price and terms (and the same for all airlines) and that was
a time when aircraft design was not so accurate, meals were served and jets were nearly not
existent but still there were very few accidents. Same for the Trucking Industry and the
railroad.. Why should roads be government obligations, but rail, trucks and planes be
privately owned?
I am not a communist or a socialist, I just know that private influence will always find a
way to wrongly influence public sector employees when private interest wants something from
government.
For a number issues/reasons, I quit flying in 2007, vowing never to set foot in an aircraft
again. Trains or ships, okay.
So far so good; the 737 Max just firms my rsolve...
The aircraft did not undergo piece by piece certification or type certification . It
underwent supplemental type certification that shortens the investigative process.
This is a potential disaster for Boeing. The stock is falling and it'll go into free fall
if decision is made to ground this aircraft. FAA will also face a legal tsunami. If this is
the reason they didn't ground the planes yet; it's going to look really damning when the find
themselves in court later.
This is shaping up to be unnecessarily messy for the industry.
Yesterday's Oz edition of PBS Newshour went over most of the topics touched on in b's posting
but stopped short of finger-pointing although it insinuated that Boeing had blundered.
Today's edition posed a question I was going to pose here...
"Should anyone be flying 737MAXes before the black box data has been evaluated?"
The answer, delivered by a female ex-Inspector General (of precisely what I didn't hear) is
"No. Absolutely not!"
@35 steven... i will take that as a compliment, referring to me as a clown.. i have high
regard for clowns, although i don't think there is anything funny about the topic at hand..
innocent people dying and it being based on a corporation that might be negligent in it's
responsibility to it's passengers, is something we will have to wait and find out about.. i
am definitely not thinking it is pilot error here, as you suggest.. i saw what the canadian
airpilot association said - essentially they don't believe Canada should be flying them
either, as i read it..
@43 karlof1.. as i pointed out in the link @7 - the fact canada allows them to continue to
be flown makes no sense to me..poor judgment call is what it looks like to me.. the canuck
gov't and etc are living in the shadows of what b has described about the FAA.. a lot of
credibility is on the line here as i see it..
i apologize for not reading all the comments, as i was out most of the day and just got
back..
"...fitting new engines caused airplane to take off close to stalling horizontal speeds
and angles at very low altitude and more steeply ascending to flight altitude and that has
left little time for pilots to react. That is very dangerous as much weaker tail wind may
confuse pilots and sensors. ..."
This is absolute garbage. Nothing but a "word salad" it has nothing to do with
reality.
The Ethiopian crash is due to a useless pilot. A different crew, on the same plane, the
day before had the same problem. They handled it correctly, which is EASY, and completed the
day's flying without problem. Third world airlines have HUGE numbers of absolutely
incompetent pilots.
Anyone interested in the operational aspects of this should go to an aviation site. PPRUNE
has some good discussion of this event. There are a few idiots posting but very few. Most
people there are very knowledgeable. I had a look at Airliners.net mostly rubbish.
Kalen 69
Installing the new engines changed the angle of thrust.
In a balanced aircraft, engine thrust is pushing centrally on wight and drag.
If the thrust is below center of weight, it will nose up while accelerating. If thrust is
below center of drag, the aircraft will be trying to nose up while cruising.
The original aircraft was most likely balanced, with thrust centered to weight and drag.
Mounting new engines lower means the aircraft will tend to nose up when accelerating, and
nose up during cruise. Relying on sensors and software to keep an unstable aircraft stable is
not a good thing. To not notify pilots of this problem is worse than not a good thing.
@ acementhead with insistence that the pilot was at error.
Without the black box data you are sticking your **ck out a long way. I find it interesting that in both your comments you are insistent that the pilot was the
problem. You wrote in your first comment
"
Pilots MUST know all about aircraft systems operation. It is crazy for Boeing to have
functions not in the AFM.
"
The 2nd sentence is your only criticism of Boeing but then you spend the rest of the comment
describing what the pilot should have done.....before black box data says what
happened.
When a relative asked me recently why did the new Ethiopian plane crash, I generated a
sound-bite like explanation. Before, the civilian airliners were falling out of the sky
because of an immature technology, that is because of the learning curve. Now that the
technology involved is fully mature the airliners are falling out of the sky for profit
taking.
The scariest thing is that 737MAX model was a botched Boeing reaction to the market change
towards budget flight. If the plane manufacturer and the approval authority were prepared to
cut corners so badly to remain "market competitive", one can only imagine the compromises
that budget airlines are making to sell cheap whilst increasing profits. Some airlines must
be treating planes worst than buses are treated by the bus companies.
US citizens entrust their wallets to the private bank, The Federal=Corrupt Reserve, which
prints money and gives it to the most exceptional among the exceptional (did you think that
there was no hierarchy within the exceptionality?). We entrust our heads to the
Federal=Corrupt Aviation Administration whose bureaucrats work for the porky revolving door
consulting jobs that come after a stint in the Corrupt.
As Aussies would say: using software to solve a hardware problem is like putting lipstick on
a pig. More than 300 people dead are a terrible testament to this wisdom.
Yet, it is fascinating that you are blaming the engineers and some others are asking in
the comments for whistleblowers in Boeing and FAA.
Well, if I were an engineer at Boeing I would probably have resigned if asked to do this
design monstrosity of putting unfitting engines on a differently designed plane - creating a
Lego airplane, but I never had a home mortgage over my head. Regarding whistleblowing, we all
know how suicidal it is, why do supposedly intelligent people expect other to be so dumb to
commit one? Before you expect others to self-sacrifice ask yourself if you would do so in
their shoes.
It seems that the U.S. now wants to manipulate the investigation of the Ethiopian Airlines
crash. WSJ
U.S., Ethiopia Maneuver Over Crashed Plane's Black BoxesWashington wants NTSB to download data from recorders, while African nation's officials
prefer U.K. experts.
U.S. air-safety investigators on Tuesday engaged in intense behind-the-scenes discussions
with their Ethiopian counterparts regarding where the black-box recorders found amid the
wreckage of Ethiopian Airlines Flight 302 will be downloaded, according to people familiar
with the matter.
Kiza 85 "Before you expect others to self-sacrifice ask yourself if you would do so in their
shoes."
"Self sacrifice" ... Most of my life I have been self employed, but for a few years when I
was young and then as I got older and ill health slowed me down, I have worked for
others.
If told to do a job that I believed was destined to fail, I would pull out. What you call
self sacrifice simply comes down to money, and as I put in an earlier comment "what we do for
money" Engineers that put this schumozzel together were simply putting in the hours to
received their pay check at the end of the week with no thought as to the people hurt or
killed when this bodge job failed. The fault is equally with engineers who sell their souls
for money and the bean counters who did not inform purchasers or pilots.
What you wrote is asinine garbage, my friend. Everybody except for bribed FAA dumped B737 Max
8 until notice. It is simply too dangerous to fly.
It is you who are trolling for Boeing, the problem was discovered five months ago never
fixed, blamed pilots despite previous complaints. Now FAA admitted that fact by demanding
software fix in April or they will ground the fleet. PILOT ERROR????? Of course not and they
know it.
Not only worldwide airlines dumped this model so far but also they closed the airspace for
them in EU, China, HK etc.,because the plane is dangerous and may require recertification of
plane and pilots since Boeing lied about it and its flight parameters,p the trust was broken,
they were cheating with deadly consequences was revealed. Expect hundreds of lawsuits, as
American were also onboard.
Interestingly that anti-stalling software cannot be disabled on the ground only in flight
in manual mode only after it was engaged exactly for reasons I mentioned about near-stalling
dangerous flight parameters.
US Boeing are very much competing with France airbus and also the coming Chinese Russian
airliner.
The US is very much batting for the home team (as the mad monk told the Australian
Broadcasting Commission to do so).
Is it really so hard to connect the secrecy about MCAS and why it was needed in the first
place? The lawyers will have a ball of the decade with this: the defendant created a secret
software solution to turn a Lego airplane into a real airplane, made the software dependent
on a single sensor, and made it difficult to switch the software off.
The networked Western pilots learned how to compensate for the faulty design, but
non-networked foreign pilots never got in on the flying tricks needed for this new plane
because it was never been in their training. Also, the critical sensor may not be available
on an airport in Ethiopia or Indonesia or .....
I cannot believe that Boeing shares dropped only 7.5%, this is a statement of how
untouchable Boeing is and how protected it will be by the Corrupt.
"... Face it. Mass production of consumer electronics in the USA is almost non-existent. An entire important industry has been lost forever based on wage arbitrage. But even if there were not a 10:1 wage disparity, the skill level and work ethic of Americans is pathetic compared to the diligent Asian worker bees. Reality is a cruel mistress ..."
"... Russia just passed up the U.S. in grain exports. Their economy in real terms grows year on year. Russia has more natural wealth available to exploit than USA that includes lands rich in minerals, timber, water, etc. ..."
"... With regards to traitorous fifth column atlantacists and oligarchy, Russia's shock therapy (induced by the Harvard Boys) in the 90's helped Russian's figure out who the real enemy is. Putin has marginalized most of these ((Oligarchs)), and they longer are allowed to influence politics. Many have also been stripped of their ill gotten gains, for example the Rothschild gambit to grab Yukos and to own Russia was thwarted. Dollar debts were paid off, etc. ..."
"... The Western European based US economy is fast draining out (along with people of Western European descent) and the days of US world manufacturing leadership (1950's) are a distant memory. ..."
"... Maybe the takeaway from US/Chinese history is that the US needs its own Maoist style Cultural Revolution. Nothing short of US Maoism is needed to root out every aspect of the current rotten system and get a fresh start from zero. ..."
War, in this model, begins when the first shots are fired.
Well, think again in this new era of growing great-power struggle and competition.
It all war, all the time and another point to remember is that there is always a war between
the .001% and the rest of us.
Another thing is that we proles, peasants and peons should give some serious thought to
having the "elite" fight their own battles, on their "own" (though mostly stolen) shekels for
once. Read More Agree: foolisholdman Reply
Agree/Disagree/Etc. More... This Commenter Display All Comments
Feb 15, 2019 Next Phase, Xi & Trump, Coordinate The Transition
US industrial production plunges, this doesn't mean that manufacturing jobs are not coming
back to the US this means the [CB] is deteriorating quickly as Trump brings back
manufacturing.
Feb 16, 2019 Pentagon Warns of Chinese Space Lasers | China News Headlines
A new Pentagon report says #China and Russia have developed #laser weapons to target US
satellites. Need a Space Force?
governing elites have developed other means of warfare -- economic, technological, and
covert -- to achieve such strategic objectives. Viewed this way, the United States is
already in close to full combat mode with respect to China.
Looked at this way, there are countless wars all the time as well as a huge gray area that
is debatable. I think there is merit in defining war as actual kinetic weapons firing in both
directions. Even then, there are gray areas, but at least they are minimized
"The time and investment required to rebuild/replace supply chains in a JIT world means
much of what's left of America's real economy would disappear within weeks.
American trade negotiators are apparently oblivious to this. I find that very weird."
Of course they're not oblivious, as you can see everytime the stock market goes down, some
US official came out to say a deal/talk is on the way. Both the negotiators and the market
know.
They're just betting on enough pressure will force China to surrender, like Japan did in
the 80s.
@Erebus In the distant past
there were at least 1000 PC Board manufacturers in the US .now there are only 2 or 3. Most US
PCB houses are actually a middleman with an iphone fronting for one of the many Chinese PCB
factories. You supply the Gerber Files and the payment, of course, and your finished PC
Boards come back by air the next day.
Now here is the kicker: our US PC Board supplier is
located in Illinois and owned by you guessed it Hindus. Half the staff are also Hindus. In
general, the Chinese PCBs are of higher quality than the Hindu .er US PCBs.
Face it. Mass
production of consumer electronics in the USA is almost non-existent. An entire important
industry has been lost forever based on wage arbitrage. But even if there were not a 10:1
wage disparity, the skill level and work ethic of Americans is pathetic compared to the
diligent Asian worker bees. Reality is a cruel mistress
Russia just passed up the U.S. in grain exports. Their economy in real terms grows year on
year. Russia has more natural wealth available to exploit than USA that includes lands rich
in minerals, timber, water, etc.
With regards to traitorous fifth column atlantacists and oligarchy, Russia's shock therapy
(induced by the Harvard Boys) in the 90's helped Russian's figure out who the real enemy is.
Putin has marginalized most of these ((Oligarchs)), and they longer are allowed to influence
politics. Many have also been stripped of their ill gotten gains, for example the Rothschild
gambit to grab Yukos and to own Russia was thwarted. Dollar debts were paid off, etc.
Russia could go further in their symphony of church and state, and copy Justinian
(Byzyantine empire) and prevent our (((friends))) from teaching in schools,bein control of
money, or in government.
With regards to China, they would be not be anywhere near where they are today if the West
had not actively transferred their patrimony in the form of transplanted industry and
knowledge.
China is only temporarily dependent on export of goods via their Eastern seaboard, but as
soon as belt and road opens up, she will pivot further toward Eurasia. If the U.S. factories
withdrew from China tomorrow, China already has our "knowledge" and will find markets in
Eurasia and raw materials in Africa, etc.
People need to stop whistling past the graveyard.
The atalantacist strategy has run its course, internal development of U.S. and linking up
with belt and road would be in America's best future interests. But, to do that requires
first acknowledging that money's true nature is law, and not private bank credit. Further,
the U.S. is being used as whore of Babylon, where her money is "Federal Reserve Notes" and
are international in character. The U.S is not sovereign. Deep state globalism does not
recognize national boundaries, or sovereignty.
@Alfa158 Alternatively, one
could examine a nations ability to rapidly expand their economy to meet wartime needs. In
this scenario, other factors such as access to raw materials come into play. In this
perspective, the equations would change dramatically.
I think there is merit in defining war as actual kinetic weapons firing
Why limit it to that? I'd say there's plenty of merit in the author's definition especially since it would tend
to shed some lights on the origins of major conflicts.
That US elites that are split on who to go after first compromised by going after both Russia
and China at the same time is a definition of insanity. The US doesn't have a chance in hell
of subduing or defeating the Russia/China alliance. The US is already checkmated. The more it
goes after some big win the worse will be its defeat.
So the question (for me) is not which side will win, the question is the scenario of the
decline of the US Empire. Someone here mentioned the EU turning East. At some point the EU
will decide that staying a US vassal is suicide and it will turn East. When that happens then
the virus of US insanity will turn inwards into itself.
The US has recently focused on South America by installing several fascist regimes and is
now trying to get Venezuela. But the US backed regimes are laying the groundwork for the next
wave of revolution soon to come. Wherever I look the US is its own worst enemy. The big
question is how much suffering before it ends.
@jacques
sheete The author's definition makes the term a purely rhetorical one tantamount to an
angry child saying "this means war!" to another angry child, or "The War on Drugs" or "The
Battle of the Sexes" etc.
Admittedly, this is all semantics, so have it your way if you want, as it is not worth the
time of further debate. As for me, I prefer to have terms as precise as possible.
Klare discovers the US crusade against China – 8 years after the Obama/Hillary "pivot"
to East Asia sending 2/3 of the US Navy there and putting together the TPP to excluded China.
As usual he is right on top of things.
And he begins with this gem: " "The media and many politicians continue to focus on
U.S.-Russian relations, in large part because of revelations of Moscow's meddling in the 2016
American presidential election and the ongoing Mueller investigation." Huh? Does he mean the
$4700 in Google ads or the $50,000 in Facebook ads traced to some alleged Russian sources? A
Russiagater from the start.
I remember some years ago before the shale revolution Klare was warning us about "peak oil."
I think we were supposed to have run out of it by now.
Klare is a hack who cycles things that any conscious person reading the newspapers would have
known long ago.
P.s. He says that Apple is the number one cell phone. No longer. He should improve his
Google search skills or his set of assumptions which have turned him into a Russiagater.
Huawei now sells more cell phones worldwide than Apple ( https://gearburn.com/2018/08/huawei-smartphone-sales-2018/
). And Huawei does this even though it is effectively excluded from the US market (You cannot
find it in stores) whereas Apple has unfettered access to the enormous Chinese market. You
find Huawei everywhere – from Italy to Tanzania. How would Apple fare if China stopped
purchases of its products? Not so well I am afraid.
Usa is at war against everyone , from China to Latinamerica , from Europe to India , from the
islamic world to Africa . Usa is even at war against its own citizens , at least against its
best citizens .
I don't think it's simple "Eastern" vs "Western" Europeans; my take is Protestants vs
Catholics vs Orthodox. In that order. The biggest difference is between Protestant and
Orthodox. Catholics are, sort of, in the middle.
Or, in practical terms, don't see much difference between Austrians and Slovenes.
That's for Europe.
When we speak of the culture war or the war on drugs or the war between the sexes or a trade
war we are misusing the word war.
War with China means exactly shooting and bombing and killing Chinese and American people.
Expanding the meaning of the word only makes it meaningless.
Admittedly, this is all semantics, so have it your way if you want, as it is not worth
the time of further debate. As for me, I prefer to have terms as precise as possible.
I agree on all four points.
However, if you didn't want a debate, or at least a response, then why did you bother
bringing it up? (That's a rhetorical question, since I neither expect nor really care what
the response would be; now I'm asking myself why I bothered !!!)
Russia under Putin is an exporter of non GMO grains where as the U.S. exports GMO grains
thatt the Chinese do not want as these GMO grains are a destuctive to humans and
animals.
I hope that's true. To Hell with that GMO crap!!! Anyone using it for farming ought to be forced to drink
glyphosate straight for breakfast.
As far as the war with China goes, we ain't seen nothing yet. It won't be pretty, especially
considering that the US is starting it with severe self-inflicted wounds.
Yes, and the ads were often absurd – one somehow featuring Yosemite Sam and gun rights
and another for a dildo, I believe. Great for click bait maybe but not real winners for a
campaign.
As the incomparable Jimmy Dore says on his show, which should be required watching for
everyone, if the Russians can swing an election with such modest resources against maybe $1-2
billion spent by the Donald and the Hillary together, then every candidate for offices high
and low should run not walk with $54,700 in hand to secure a cheap and easy victory from the
Russobots.
I don't think China stands the chance. As we all know diversity is strength and China is
mono-cultured rather than the obviously superior multi. So China will continue to decline,
while US goes from strength to strength thanks to its brilliant, brilliant multicultural
philosophy.
China was dumb enough to try real socialism, while obviously the fake one is the way to
go. You convince your domestic population of your humanitarian credentials – via the
phony socialism, plus you don't have to share a cent with them. How clever is that? Phony
socialism is the way to go – it eliminates the need for the real one.
At some point one must consider that this is all a fraud. In Washington Ocasio-Cortez and the
Democrats are proposing to eviscerate the US economy with their Green New Deal. While here we
find Washington launching a long term struggle for economic, political, and military
superiority over China.
As was once said in another context by an individual remembered in history, "What is
truth?" A question which either revealed his own puzzlement or was simply a rhetorical
dismissal of the question altogether. Likely both at the same time. One can be simply bemused
by the turn of events.
Is all this activity simply a song and dance to entertain, terrify, confuse, and amuse the
public while the real ordering of the world takes place behind closed doors? Put
Ocasio-Cortez together with the Pentagon and we have apparently a commitment by the US to
force the entire world to immolate itself. No state shall be superior to the US and the US
shall be a third world hellhole. Cui bono?
@joe
webb Russia and China are certainly not natural allies. However, deranged international
banditry of the US (called foreign policy in the DC bubble) literally forced them to ally
against a common threat: dying demented Empire.
As you call Chinese "Chinks", I suggest you stop using everything made in China, including
your clothes, footwear, tools, the light bulbs in your house, etc. Then, using your likely
made in China computer and certainly made in China mouse, come back and tell us how great
your life has become. Or you can stick to your principles of not using China-made stuff,
write a message on a piece of paper (warning: make sure that neither the paper nor the pen is
made in China), put it into a bottle, and throw it in the ocean. Be patient, and in a few
centuries you might get an answer.
In the halls of the Kremlin these days, it's all about China -- and whether or not
Moscow can convince Beijing to form an alliance against the West.
Russia's obsession with a potential alliance with China was already obvious at the
Valdai Discussion Club, an annual gathering of Russia's biggest foreign policy minds, in
2017.
At their next meeting, late last year, the idea seemed to move from the speculative to
something Russia wants to realize. And soon
Seen from Moscow, there is no resistance left to a new alliance led by China. And now
that Washington has imposed tariffs on Chinese exports, Russia hopes China will finally
understand that its problem is Washington, not Moscow.
In the past, the possibility of an alliance between the two countries had been hampered
by China's reluctance to jeopardize its relations with the U.S. But now that it has already
become a target, perhaps it will grow bolder. Every speaker at Valdai tried to push China
in that direction.
Another hurdle, reported in the journal Nature this week, is that China is cleaning up
its air pollution. That sounds great for pollution-weary Chinese citizens. But
climatologists point out that some of that air pollution had actually been cooling the
atmosphere, by blocking out solar radiation. Ironically, less air pollution from China
could mean more warming for the Earth.
@AnonFromTN Frankly, I
really don't give a damn about what you say. But do not use racial slurs FIRST. I use racial
slurs ONLY in RESPONSE to the comments that contain them, in retaliation. If you don't use
racial slurs, I wouldn't either.
@DB
Cooper DB,
Thanks for the PCB mfg video. Asian roboticized surface mount assembly plants are even more
impressive. At one time supplied specialized instrumentation to the FN factory in South
Carolina where the 50 cal machine guns are made, and received a tour. Crude by Asian
standards, but efficient in its own way. Base price on a 50 LMG at the time was $5k without
any of the extras: tripod, flash suppressor, water cooling, advanced night vision sights,
etc. Base price would be $10k by now. The US Guv does not allow this kind of production to go
offshore .but apparently cares not a jot about the production of consumer electronics, a
massive and growing worldwide market.
Have read the Chinese shops assemble $1000 I-pods for
as little as $5 each including parts sourcing, making domestic production here impractical.
Surprisingly, the Germans manage to produce high end electronics and their manufacturing
labor rates are even higher than North America. Says something about the skill and diligence
level of the US workforce ..where just passing a drug test and not having felonies or bad
credit is a major achievement.
@Anonymous Yes, it is quite
off putting, even though most of the article is quite sound. Possibly Klare was obliged to
add this bit of nonsense in order to get it published in TomDispatch but who knows.
@nsa
A good friend supplies hi-end PCBs to EU & RU electronics mfrs, particularly in DE.
Judging by the numbers I hear, hi-end electronics is still very much alive in Europe while
it's all but dead in NA.
It's a capital intensive business, and raw labour cost is a minor component in the total
cost of doing business. NA has put so many socio-political obstructions & regulatory
costs in the way that even at min wage it makes no business sense to locate there. I doubt it
would make sense even with free labour.
As Steve Jobs told Obama point blank, "Those jobs aren't coming back". NA's manufacturing
ecosystem (rather than mere infrastructure), which includes social-cultural aspects as well
as physical plant has been disappeared, and only dire necessity will build a new one. I
explicitly avoid the word "rebuild", as that train left the station years ago. NA still
"assembles" stuff, but it doesn't manufacture except on a small, niche scale.
Manufacturing is a difficult and very demanding business. 21st C manufacturing is not
simply an extension of the 20th's. It's a radically different hybrid of logistics, design
& production engineering, "smart" plant, and financial mgmt.
Not for the faint of heart. Much easier to flip burgers/houses/stocks/used
cars/derivatives/credit swaps/ until there's nothing left to flip.
Where a war begins – or ends – can be hard to define. Michael Klare is right,
'War' and 'peace' are not 'polar opposites'. We often look at wars in chronological
abstraction: the First World War started on the 28th July 1914. Or did it only become a
global war one week later when Great Britain declared war on Germany? The causes can be of
long duration. The decline of the Ottoman Empire, for which the other Great Powers were
positioning themselves to benefit, might have begun as far back as 1683 when the Turks were
defeated at the Battle of Vienna. It ultimately led to the events of 1914.
Great power rivalry has always led to wars; in the last hundred years world wars. Graham
Allison wrote that the US can 'avoid catastrophic war with China while protecting and
advancing American national interests' if it follows the lessons of the Cold War. History
shows that wars are caused by the clash of interests, that's always at some else's expense.
When core interests collide there is no alternative to war – however destructive. https://www.ghostsofhistory.wordpress.com/
The real conflict is a cultural/ideological war in which liberal democracy tries to apply
its system worldwide under the delusion that egalitarianism, freedom, your definition of
rights, is universal.
China will never accept this. Russia is already fighting back. Nor does any developing
country look like they will ever truly embrace western values. It's gonna be SWPLs + WEIRDs
vs The Rest of Humanity.
The new Cold War will last much longer than any trade issue and conflict over values will
always be the underlying motivation, until the west either ends its universalist crusade, or
abolishes liberal democracy within its own borders.
I would be more sympathetic with Klare's fear of cold war with China if he could just assure
me that Chinese writers are equally able to voice concern with their own government's side of
the equation.
History shows that wars are caused by the clash of interests, that's always at some
else's expense. When core interests collide there is no alternative to war – however
destructive.
Pretty much, BUT, with one little difference re "some else's expense" now. M.A.D.
scenario.
Even limited exchange of thermonuclear M.I.R.V.s could affect everyone (even if somebody
can define that "limited" in the first place).
My take: we haven't developed, as species, along our capability for destruction.
Cheerful thought, I know.
Pepe Escobar says:
'US elites remain incapable of understanding China'
That's B.S., Pepe should've known better .
They dont 'misunderstand', they'r simply lying thru their teeth.
The following are all bald faced lies,
Classic bandits crying robbery.
Lawmaker: Chinese navy seeks to encircle US homeland
[bravo, This one really takes the cake !]
US Accuses China Of Preparing For World War III
US accuses China of trying to militarise and dominates space
USN have to patrol the SCS to protect FON for international shipping..
tip of an iceberg
Those who uttered such nonsense aint insane, stupid or cuz they 'misunderstand'
[sic] China. They know we know they'r telling bald faced lies
but that doesnt stop them lying with straight face .
This is the classic def of psychopaths:
people who'r utterly amoral, no sense of right or wrong, there's no such word as
embarrassment in their vocab.
Is it sheer coincidence that all the 5lies have been ruled by such breeds ?
Ask Ian Fleming's fundamental law of prob .
but why couldnt they produce one decent leader
in all of three hundred years.
5lies have more than their fair share of psychopaths no doubt, but surely not everybody is
like joe web and co., I know this for a fact. ?
Trouble is .
Washington DC is a veritable cesspool that
no decent man would want to dip his foot into it.
They might as well put it in the job requirement, 'Only psychopaths need apply '
Thats why in the DC cesspool, only the society's dregs rise up to the top.
A case of garbage in, garbage out .
A vicious circle that cant be fixed, except to be broken.
1) People from China PRC has as a people on the whole become quite disgusting. But please
exclude ppl from Hong Kong, Taiwan, Tibetans, Uyghurs etc. I confirm that PRC China people by
and large are now locusts of the world. I am one of them by birth. how did it happen? Deep
question for philosophers. It wasn't like this 60 years ago. some poisonous element entered
the veins of the collective, infected at least 70 percent. I worry for Russia due to its
inflated self confidence when dealing with PRC. Lake Baikal deal was almost sealed before it
got shelved. Still, using racial curses don't hurt anyone but yourself. All the big internet
advocates for Russia such as Orlov and Saker and Karlin don'tunderstand The Danger of China
PRC. If you understand then you have a responsibility to keep yourself décent and
respectable.
2) USA aside from its liberals and Zionist Jews etc. Has become a slowly stewing big asylum
for psychologically infantile and demented big babies. How did it happen again is a big
philosophical myth to me. Western Europe is sinking primarily because they came to resemble
the US. especially French and Brits and Spanish.
3) Russia is ruled by a few individuals with brains and maybe a bit of conscience but the
elite ruling class behave in such a way that one would conclude that they share the China PRC
virus, just not as advanced. Your basic Russian people are in a state of abject degradation
dejection, not changed all that much since 1990s. Only slightly ahead of the Ukrainians. If
one cares about Russia then shove aside 19th century naive romanticism and face reality.
4) A sustained and massive war by USA against China maybe the only miniscule chance
Greek/Christian civilization can be saved. Otherwise descend of history into thousand year
dark age. The latter is more likely due to advanced stage of brain dead disease gripping the
entire West.
If you have observed cities like Detroit or Greater Los Angeles than you know that "white
flight" as oppose to sycophancy is the end result of black or Hispanic populations reaching a
certain level. Whites leave and the US then has another internal third world like Detroit or
East LA.
It is a game of musical chairs where the white move into remote hinterlands, which develop
into suburbs or exurbs, then of course as these become population centers the blacks and
Hispanics enter them and the whites flee again.
What you will see is white flight from the US with the wealthiest whites simply moving to
other developed countries. The 1% would move to New Zealand or Tasmania.
The handicap for the USA in the confrontation is twofold its élite are in conflict
(and afraid, and contemptuous of) at least half of their own populace.
Plus, all the resources of all kinds directed to enterprises in the Middle East, subtracted
thusly from other enterprises.
Furthermore, there is the occasional bullying of Europe, and the continuous bullying of
Russia, yet more resource drains.
The USA spreads itself too thin, perhaps.
@peterAUS Chinese are
neither for money nor for ethnic power, Chinese is for 5 principles of peaceful coexistence,
treating all nations large and small as equal with respect.
Chinese believes we are now living in a rapidly changing world Peace, development,
cooperation and mutual benefit have become the trend of our times. To keep up with the times,
we cannot have ourselves physically living in the 21st century, but with a mindset belonging
to the past stalled in the oldays of colonialism, and constrained by the zero-sum Cold War
mentality.
Chinese is determined to help the world to achieve harmony, peace and prosperity thru the
win-win approaches.
@Китайский
дурак 2) The riddle reads simply: democracy,
multiracialism, economic welfare (no-limit printing of currency made possible by uncontested
military "overmatch").
I lived in the Philippines and would chalk that up to fairly typical of a country run by
China since it is effectively controlled by a syndicate of Fujian family cartels.
First, you have a choke-hold on the economy and wages are depressed to near starvation
levels.
Second, Chinese will bring corruption to the nth degree by bribing whichever politician
will serve their own interests at the expense of the public.
Thirdly, those Chinese who cannot succeed in business will get into the drug trade and
China and Taiwan has created the Philippines drug war by making meth.
Fourth, there are fiery pogroms when the local population react with "burnouts" and
innocent Chinese are killed.
This is on the horizon in Africa. Probably.
In the West, Chinese were held in check by Jews and WASPS and to some degree by
Malaysians. I see Africa becoming like the Philippines once Chinese can become citizens
there, however.
@Biff The Romans create a
desert and call it peace; British Empire imitated Roman Empire, USA is born out of British
Empire; so only the White People particular the Anglo-Saxon is not ready for peace or
salvation. But rest of the world has been waiting for peace or salvation for a long long
time.
Chinese are neither for money nor for ethnic power, Chinese is for 5 principles of
peaceful coexistence, treating all nations large and small as equal with respect.
Peace, development, cooperation and mutual benefit have become the trend of our
times.
Chinese is determined to help the world to achieve harmony, peace and prosperity thru
the win-win approaches.
Three options here:
Preferably,you are just pulling our legs. Not bad attempt, actually. Got me for a second.
Most likely, you are simply working. Sloppy and crude but, well, "you get what you pay
for". 50 Cent Army. Retired but needing money. Sucks, a?
Crazy and the least probable, you really believe in all that. Ah, well
@jeff
stryker Obviously you are brain washed by the 'god-fearing' morally defunct evil
'Anglo-Saxon', blaming every of your own failure on the Chinese just like what the Americans
and their Five-Eyes partners are doing right now.
The Filippino, the Malay and all the SE Asia locals have the guns not the Chinese, if the
Chinese do not hand over their hard earned money they will use what their ex-colonial masters
taught them since Vasco da Gama discovered the East Indies, masscared the Chinese and took it
all. The Dutch, Spanish, English, Japanese and the American all have done it before in order
to colonized the East Indies.
Before WWII, the American is just one of the Western imperialists ravaged and wreaked
havoc of Asia with barbaric wars, illicit drugs like Opium, slavery, stealing, robbing,
looting, plundering, murdering, torturing, exploiting, polluting, culture genocide, 'pious'
fanaticism, unmatchable greed and extreme brutality. In fact it is hard to tell the
difference between the American and the unrepentant war criminal Japanese who is more lethal
and barbaric to Asians until the Pearl Harbour incident.
For over seventy years the US has dominated Asia, ravaging the continent with two major
wars in Korea and Indo-China with millions of casualties, and multiple counter-insurgency
interventions in Indonesia, Thailand, Malaysia, the Philippines, Timor, Myanmar, Pakistan and
Afghanistan. The strategic goal has been to expand its military and political power, exploit
the economies and resources and encircle China.
USA is 10,000 miles away on the other side of the Pacific. USA is not an Asian nation, and
American is an alien to Asia. American is a toxin and a plague to Asian, They have done
enough damage to Asian already, they are not wanted, not invited and not loved in Asia, go
home Yankee.
@peterAUS You should know
the White man has some fallacies built into their culture, such as they believe that the
White man's words must be taken as given truth, only the White man can invent and the White
man can succeed, and the Whte man's culture is the final form of civilization.
The West (Europeans and their offshoots like the American, Aussie, etc.) is where is now,
because of those hundreds of millions of people all over the world who were robbed and
murdered, those who become victims of their very madness of colonialism and orientalism, of
the crusades and the slave and Opium trades. Cathedrals and palaces, museums and theatres,
train stations – all had been constructed on horrid foundations of bones and blood, and
amalgamated by tears.
The West squandered all the wealth they obtained thru stealing, looting and murdering
hundreds of millions of people all over the world in the scrabbling of a dog-eat-dog play
rough over the monopoly to plunder the rest of the world through two World Wars, one on the
edge of Armageddon, and on the verge of another Armageddon. It proves the West is incapable
of bringing peace and prosperity to the mankind because of their flawed culture, civilization
and religion. The chaos and suffering of the world in the last few hundreds of years under
the dominance the West proves they are a failure.
Human beings deserve better, we need to depart from the chaotic and harmful world order
and path established by the moronic West. China proposed a new way of life, a win-win
approach for the well-being of mankind like Belt-Road-Initiative to build and trade the world
into peace, harmony and prosperity. The West should not be the obstacle for achieving such
refreshing winner for all initiative. The West should embrace the new approach proposed by
China because the West will benefit from it. I call upon you, let go the old, obsolete,
failed and detrimental believe passed onto you by your colonialist forebears please, welcome
the new era.
As Steve Jobs told Obama point blank, "Those jobs aren't coming back". NA's
manufacturing ecosystem (rather than mere infrastructure), which includes social-cultural
aspects as well as physical plant has been disappeared, and only dire necessity will build
a new one. I explicitly avoid the word "rebuild", as that train left the station years ago.
NA still "assembles" stuff, but it doesn't manufacture except on a small, niche scale.
Manufacturing is a difficult and very demanding business. 21st C manufacturing is not
simply an extension of the 20th's. It's a radically different hybrid of logistics, design
& production engineering, "smart" plant, and financial mgmt.
Not for the faint of heart. Much easier to flip burgers/houses/stocks/used
cars/derivatives/credit swaps/ until there's nothing left to flip.
All true, leaving the question of what happens to North America before it reaches the
African street market economy (low tech, low investment, low trust, basic products, vibrant
and over each morning).
The Western European based US economy is fast draining out (along with people of Western
European descent) and the days of US world manufacturing leadership (1950's) are a distant
memory.
Maybe the takeaway from US/Chinese history is that the US needs its own Maoist style
Cultural Revolution. Nothing short of US Maoism is needed to root out every aspect of the
current rotten system and get a fresh start from zero.
If Chinese took over the world it would look like the Philippines.
Shabu labs everywhere? Corrupt politicians blowing away homeless squatters when some
Chinese guy wanted to build a shopping center or Chinese arsonists setting squats on fire?
Dictators living off wages Chinese don't want to pay exploited peasants?
No thanks, the whites don't want Chinese family cartels running our economies. We can see
the harm you have done in Burma, Philippines etc.
@jeff
stryker This Joe Wong is obviously a WuMao (professional trolls paid by Beijing to parrot
their government's pathological propaganda). Any mainland Chinese who can read will confirm
this fact. It is not worth your time to deal with folks like him.
@jeff
stryker Australians, Philippines, Singaporeans, Vietnamese, Taiwanese, Russians,
Italians, Japanese,Mongolians, Koreans, New Zealanders, a tiny anguished minority of mainland
Chinese themselves, everyone has gotten the mail, everyone has seen them on the streets,
everyone understood -- what a Beijing lorded world shall be like, coffee beans in the
morning. Americans are last in getting the news. Americans can be dim witted. Too many Nobel
winning economists and globalist bankers in America. And China is the gift of these white
people to the world.
@peterAUS thanks and if you
are a young man, congrats for your rationality. I am old, but probably have ten or 20 years
left, if not all those years real fit.
The young guys need to not fuc themselves up with regard to earning a living .keep your
mouth shut , sort of, and your name protected.
I hope a new generation of "White Nationalists" come along sans Hitlerism. Stay rational,
with just the facts M'am if you don't recall that line it was Dragnet and Detective Jack Webb
I think .you are young, Congrats.
Stick to the facts, keep your ego under control, keep a smile on your face .. Buddhist
wisdom to spread a little love around and it is essential for snaring a woman.
The Facts are with us. The Future is with us, including hard times, civil war, and so on.
The Sentimental Lie (Joseph Conrad) of race equality cannot stand for long.
@jeff
stryker Australian people nowadays are far less wrapped up in America than at any time
that I can remember but Australian politicians are just as bought and paid for as are those
in the US.
Australians generally are much more well travelled than most Americans and have been to
various places both in Asia and Europe, especially the UK. Despite having seen the longer
term results of "diversity" with their own eyes they overwhelmingly seem to think that things
will somehow work out differently in Australia. To even suggest that mass immigration from
the third world is a ticking time-bomb is to be branded a racist of the very worst kind.
"The best way for the US to win a war over China is not to outsource their labor
there."
Too bad you don't get to decide what "the best way for the US" is, no matter how many
times you vote America has owners, and the owners aren't the average Americans.
PS. Philippines is just the poor-man version of USA. Does the American capitalist class
have many concerns for their working class? The money class are all the same.
Your rant about Chinese of SE Asia is also quite similar with that of American Whites for
the Jews, or South African Blacks for the Whites, just only on economic side, not
politics.
Filipinos are nothing but semi retarded 85 IQ trying hard Americans, the vast majority who
are too stupid to copy the better parts of US high culture, and so ape and cargo cult the
trashiest and lowest of the low parts of US culture, or maybe low IQ Austronesians are just
prone to overall trashiness unless they are regulated by a somewhat draconian conservative
culture like Muslim Malays are.
@Китайский
дурак Perhaps some Russians like you are willing to live
under the Anglo-Saxon's dominance, submitted to Anglo-Saxon's zero-sum, beggar-thy-neighbour,
negative energy infested cult culture, and try to talk like them and walk like them, but not
everybody is like those feeble Russians. Other people has their long history, culture and
identity to protect. Please do not smear other people's integrity because you are lack of it.
If they turn on their radars we're going to blow up their goddamn SAMs [surface-to- air
missiles]. They know we own their country. We own their airspace We dictate the way they
live and talk. And that's what's great about America right now . It's a good thing,
especially when there's a lot of oil out there we need.
Comments about the bombing of Iraq in the late 1990s, which he directed. Interview
Washington Post (August 30, 1999); quoted in Rogue State, William Blum, Common Courage Press,
2005, p. 159.
William Blum,
RIP
Somebody should do an autopsy on him !
In korea, a UN coaliton force , bristling with bombers, jet fighters, complete air
superiority.no less. Tanks, artilleries, carbines, couldnt subdue the PLA fighting with ww1
vintage rifles.
There is never any UN coalition force in Korea war. Its a illegal US led aggression, known
as Unified/United Command, in violating of UNSC charter. US deceived UN by using 'United
Command' in its letterhead when communicating. And then go ahead to lie shamelessly using UN
name.
By acting before the Security Council could act, the US was in violation of Article 2(7)
of the UN Charter which requires a Security Council action under Chapter VII before there
is any armed intervention into the internal affairs of another nation unless the arms are
used in self-defense. (See Article 51 of the UN Charter. The US armed intervention in Korea
was clearly not an act of self defense for the US.) Also the actions of the UN have come to
be referred to as the actions of the "United Nations Command"(UNC), but this designation is
not to be found in the June and July 1950 Security Council resolutions authorizing
participation in the Korean War. (3) What is the significance of the US using the UN in
these ways?
The current US military command in South Korea claims to wear three hats: Command of US
troops in South Korea, Combined Forces Command (US and South Korean troops), and "United
Nations Command" with responsibilities with respect to the Armistice. The United Nations,
however, has no role in the oversight or decision making processes of the "United Nations
Command". The US Government is in control of the "United Nations Command". The use by the
US of the designation "United Nations Command", however, creates and perpetuates the
misconception that the UN is in control of the actions and decisions taken by the US under
the "United Nations Command".
The Democratic People's Republic of Korea (more commonly referred to as North Korea) has
called for disbanding the "United Nations Command"(UN Command). At a press conference held
at the United Nations on June 21, 2013, the North Korean Ambassador to the UN, Ambassador
Sin Son Ho argued that the actions of the US Government using the designation "United
Nations Command" are not under any form of control by the United Nations. (4) Since the UN
has no role in the decision making process of what the US does under the title of the
"United Nations Command", North Korea contends the US should cease its claim that it is
acting as the "United Nations Command".
Anyway, there is hardly a tree left in China and since 2006, China has been the world's
largest emitter of CO2 annually and though they pay lip service they accept no binding
target for reduction; quite the opposite.
Pls has slight decency to check before spewing nonsense.
According to Nasa, China has planted & expanded forest the size of Amazon,
contributing 1/4 of global greenery effort.
Its now working on massive irrigation projects in Tibet & Xinjiang, including dams
that will overshadow 3Gorges. These will convert arid Xinjiang into another green agriculture
pasture & food basket providing economic to it landlocked natives.
China's effort to roll back desertification is also very impressive, converting thousands
of hectares deserts into green forest using proprietary planting method.
It has built world most hydropower stations & dams in China, and help built in Asia,
Africa with grants & subsidized loan. Forefront in reusable energy, EV, solar.
And China is the staunchest supporter of CO2 emission control with solid actions, when US
write off Kyoto treaty in Paris as hoax.
what's about Spore that have 75% majority Chinese mainly come from Fujian too, HK,
Taiwan!? Do they fare well & very safe, or a shithole filled with drugs & crimes that
you projected to be?
And then compare with Chinese minority countries:
Msia with 25% Chinese contributing 70% economy, Indonesia 3% Chinese contributing 70%
economy.
Thailand, Myanmar, Laos, Cambodia, Philippines, .
It seems that the more Chinese % a country has, the more its prosperous & safe, vice
versa. So Chinese is in fact the main economic & safety contributing factor, instead of
the other way round you painted.
If Chinese are indeed as evil as you make out to be, then China will be worst than India,
dysfunctional like Philippines, completely crimes & drugs infested like Mexico. Yet China
today is biggest growing economy in real ppp, and world safest country well surpassing nearly
all whites countries. No?
Vietnam tried to purge Chinese ethics under Ho Chih Min anti-China policy, ended paralyzed
its entire economy until Chinese were brought back to help. Today its still the Chinese
ethics controlling its majority economy & ruling elites.
Indonesia Prez Suharto slaughtered million of Chinese ethics under Yanks CIA instigation
to coup pro-China Prez Sukarno, and their economy suffered. Suharto later brought back
Chinese to run 70% of economy, while his cronies suck off remaining.
Malaysia Mahatir had forthright admonished his disgruntled Malays complaining about 20%
Chinese controlling 70% economy. He famously said Malays race by inheritance is lazy and bad
in economic, screwing up every gov granted projects & handouts. So let the skillful
Chinese take care of all business, and Malays can tax on them to make Malaysia prosperous.
All subsequent leaders follow that policy, and the result is continuous economy growth.
Myanmar purged Chinese after independent, immediately encountered dysfunction economy.
Today its still relying on Chinese ethic to support the main economy behind.
Thailand, Cambodia, Laos didn't purge Chinese ethics, and Chinese are similarly their main
economy contributors.
There is one common observation in all these countries, where ever Chinese live, they are
mostly law obedient, work diligently and eventually established in businesses contributing to
most prosperity.
Whereas in majority Catholics Philippines, are literally controlled by Vatican appointed
bishops, who forbid contraceptive & divorce, directly causing its explosive population,
leading to grave poverty & crimes. These bishops are also colluding with corrupted
politicians to dictate election outcome using their churh influence.
When pro-China Prez Duerte declared war on drugs with China help is achieving good result,
these West-appointed bishops are leading their followers in full force to oppose, all in syn
with West govs 'human rights'. Dont that smell fishy?
So will Philippines be better off without Chinese? Im not sure, just like whites, some
Chinese are also ruthless crimals. But your sweeping statements & allegation certainly is
fundamentally flawed.
But CIA has been plotting anti-Chinese ethic riots in Asean for a long time as part of
China containment plan. Previously Denk posted one article on this.
@TT
Your description of Malaysians as lazy and stupid is why Indonesians kill ethnic Chinese and
not some CIA plot. That's the thinking right there that motivates Malays to dislike ethnic
Chinese.
China did not help Duterte. China makes the drugs there or in Taiwan. Duterte pleaded with
them to stop sending shabu to the Philippines but China does not care and so Filipinos
continue to stagger around like zombies in their squats.
Philippines has the additional post-colonial curse of Mestizo half-breed Spanish
landowning and political class of "Hacienderos" while Malaysians are unified under Islam.
Since these Spanish-blooded elite are part-white, some of the blame for the problems in the
Philippines can be attributed to whites.
As for CIA containment plans, you'll probably say that the reason Singapore immigration
allowed so many Indians in was because the US government wanted to import a competitive
ethnic group to prevent Chinese in Singapore from controlling all of Southeast Asia.
"An emboldened China could someday match or even exceed U.S. power on a global scale, an
outcome American elites are determined to prevent at any cost."
They will fail. The United States, like Carthage, is doomed to lose its struggle for
dominance; too many things are running against it. Not only does China have the far larger
population, but consider the following factors that run in their favor:
1. Like the US, China has a highly advanced and productive agriculture industry, making
them all but immune to nation-killing food blockades.
2. China has an average IQ that may approach Japan's before it levels out; Japan is
insanely outsized in terms of competitiveness, mainly due to its intelligent, group-oriented
population, so imagine how much stronger China could be.
3. China is geographically situated in the heart of the world's economic engine, Asia.
This puts China in prime position to break out from US dominance and, potentially, even
surround the Americans by making their trading partners their vassals.
4. The US is located far away and in a fairly unimportant region of the world. It will be
difficult for the US to get reinforcements to the Asian theater in the advent of a conflict.
American allies know this, so they will be predisposed to making peace with the Chinese as
the power balance continues to shift in China's favor.
5. Universalist dogma outsourced to American satellites Australia and New Zealand will
eventually make both countries Chinese vassals. Sometime in this century both countries will
have majority Asian populations due to immigration. Polls have repeatedly shown that Asian
immigrants have positive feelings towards the Chinese, despite the propaganda efforts of the
Americans. Take a look at what the Israel Lobby has accomplished and imagine what a future
China Lobby in those countries will do. Also, there is virtually no way to stop this from
eventually happening as this diversity dogma is spouted by the US at the highest level and is
now deeply ingrained in its future Chinese satellites. Before the end of the century, the
Chinese will have naval bases in both countries and the US will have none.
6. China is free from the social-trust killing, national ethos-sapping political
divisiveness seen in the US – no feminism, no attacks on its majority Han population.
America, on the other hand, is beset with hundreds of hate hoaxes targeted at its most
important demographic, white males – the group that disproportionately dies in its
wars, invents its best technology, and exports the best elements of its culture. If there is
a military conflict between China and the United States ten years hence, expect the critical
white male demographic to sit it out.
7. The Chinese are deeply patriotic and nationalistic. The US has experienced an
unprecedented decline in patriotism according to polls; that trend will continue. Therefore,
there is little appetite in the US for confrontation. This as a hungry China chomps at the
bit to show everyone who "the real ruler of the world is", a concept I sometimes see floated
on their social media.
8. The US is rapidly losing cultural influence due to a diminished Hollywood. The last
several American tent poll films, for instance, have crashed in Asia. Meanwhile movies like
Alita: Battle Angel (adapted from a Japanese anime) have done well in that market while doing
not so well in the US (and coming under immense fire from SJW gatekeepers for portraying a
female as something other than a weirdo). This means that tastes are diverging between the
two markets, a trend the Chinese can exploit in the future due to shared tastes across the
region and American inability to make anything other than low-quality superhero movies.
Hollywood is also now pretty much incapable of making the kinds of movies Asians (and
Europeans) used to see – science fiction, fantasy, and action/adventure movies –
due to rampant anti-white male hate and an industry focused on other demographics. Gone are
the movies like Robocop, Aliens, Jurassic Park, Die Hard, The Terminator, The Lord of The
Rings, and the Matrix. Gone because the white guys who made them are aging out of the
industry (or changing genders) and now all Hollywood wants to make are infantile superhero
movies for the Idiocracy demographic.
And did you see the Oscars this year? What an embarrassment. They actually nominated Black
Panther for Best Picture. I can't imagine anyone in Asia cares. They couldn't even get a
host.
9. The Chinese are primed to dominate influential cultural industries like video games in
a way that the Americans cannot due to checklist diversity requirements and the many
anti-male gatekeepers within the industry.
The video game industry is now three times the size of Hollywood and much more influential
than Hollywood for the youth. When technology and budgets are not a limiting factor,
politically-incorrect nations like Japan dominate over large American corporations like
Microsoft. The American video game industry, led by Microsoft, has effectively zero influence
in Asian nations due to American corporate greed, developer laziness, checklist diversity,
feminism, and a short-sighted strategy of broadly targeting low quality material to low
quality people (stupid FPS games).
Microsoft has been crushed so badly by the Japanese that they are now putting their
software on the Nintendo Switch; they simply cannot compete on any level. Meanwhile, Chinese
cultural influencers grow in power. They await only a maturation in Chinese taste and a
forward-thinking export policy but it will come. China's Tencent already owns a significant
stake in Epic Games, a streaming platform that will compete with America's Steam for
dominance of the huge online market.
One day, China will dominate their inferior American competition just as the Japanese and
Koreans have done. This bodes very badly for the US in the future, especially when you stop
to consider that all movies may be CGI in the future. The Chinese market is still immature,
but when it does mature, it will dominate – games, movies, music everything.
10. Divisive rhetoric promoted by the American elite and aimed at white European-Americans
– an effort to suppress white group solidarity – will eventually drive a wedge
between Europe and America that the Chinese, through their Russian ally, can exploit. You
already see a bit of this in Germany's refusal to cancel their gas pipeline (Nordstream 2, if
I recall), and Italy's defiance of the Empire over Venezuela. When racist American
politicians like Kamala Harris begin stealing money from European Americans and handing it to
blacks through reparations schemes, expect the Europeans to start thinking twice about their
relationship with this country.
After Trump loses in 2020, European elites will celebrate but not for long. Over the
following decade, both the far left (for economic reasons) and the far right (for ethnic
reasons) may unite against the United States. That will be made all the easier once the
United States is no longer able to elect a competent European as president. Europe isn't
going to want to be ruled over by someone of a different ethnic group that hates their
own.
11. China is unified in a way the US never can be again. China is 90% Han Chinese. The US
gets more diverse and divided by the day. Therefore, the Chinese public is more resilient to
conflict with rivals.
12. China's political model is far superior to their American counterpart. The Americans,
for instance, elect incompetent leaders through national popularity contests; said leaders
then rule only for favored interests. China, on the other hand, is run by smart people for
the benefit of all Chinese – the nation-state.
13. China's economic model is far superior to the corrupt, inefficient American corporate
model. Whereas China is a meritocracy not beset with crippling diversity requirements and
feminism. Tellingly, whenever the two models have gone head-to-head, such as in Africa, the
Chinese have won by a large margin. I see nothing that will change that in the future as that
would require a wholesale rethinking in the US of their basic philosophies, both on the left
and the right and that is impossible at this point.
The US is a proposition nation, so dogma lies at the heart of civic life. The Chinese, in
contrast, are free to pick and chose from the best of each ideology and apply it where
warranted because they are a blood and soil nation – group interest comes first, not
allegiance to dogma. Everyone in the US is an extremist of some sort – socialist,
corporatist, environmentalist, etc. That's no way to run a government.
14. The US will soon lose the moral high ground. As the US devolves into a police state,
as it continues kicking dissidents off the internet and silencing whistle blowers (and
attacking nations like Iran and Venezuela), nations around the world will cease to see a
difference between the US and China. At that point, they my either go independent (perhaps in
alliance with India or Russia) or openly start to flirt with a Chinese alliance. After all,
what does it matter if both states are authoritarian? At least the Chinese don't have a
history of invading their competition.
15. The divided American public may not support more military spending over social service
spending; this likelihood will only increase in the future due to demographic changes. They
see that China has a competent single-payer medical program and will want the same for
themselves, not pay for missiles and guns for other people.
16. The US cannot pursue relationships with vital nations like Russia due its anti-male
and anti-European dogma, now infused into society at the highest levels. It will take decades
to erase that and by then it will be too late.
"Someone here mentioned the EU turning East. At some point the EU will decide that staying a
US vassal is suicide and it will turn East. When that happens then the virus of US insanity
will turn inwards into itself."
True. One day someone like Kamala Harris or Stacey Abrams will be president. Will Europe
want to be ruled by non-Europeans who hate Europeans, want to tear down their monuments, and
steal their money for reparations payments?
"The USA has lost strategic air superiority, as well as strategic brain power. I wonder
how the USA would look after a week of retaliatory aerospace strikes?"
Like New Orleans after Katrina – a breakdown in the social order as all the diverse
groups start fighting each other and shooting at rescue efforts because they're morons and
thieves.
"Open the USA borders wide open and encourage 1 billion South Aemricans, Africans, SE
Asians and South Asians into the USA is the fastest and easiest way to close the human
resource gap between the USA and China."
How exactly is an efficient democracy supposed to work in that instance? Seems like
dysfunction, low social trust, and corruption would reign. Besides, the Chinese population
will still be far more intelligent overall, so no gap will be closed. The US should have
focused on immigration from Europe and increasing its white birth rate back in the 1970s.
They'd be in a far stronger position now if they had done that then.
@Anon Which West European
nations willing to move to dysfunctional disUnited States filled with crimes &
unemployment en masse?
May be some poor cousins of East European. But they will soon find US is worst than their
country, no good jobs, homeless without affordable accommodation, crime infested, their
whites is actually marginalized by diversification, LGBT conflict with their WASP value. Most
will want go back soon.
So its left with only choice of finest selection of 1.3B poor Indians, Latino, South
Americans, Africans & ME refugees willing to go anywhere just to get out of their
countries shithole.
When they arrived, hundreds of millions whites, Chinese & Asians will flee like been
no tomorrow.
Here it go, United States of Asshole is founded. Pls handover all nukes to UNSC before
implementing lest been exchange for food or use for heating in winter.
@jeff
stryker Its Malaysia PM Mahatir who said Malays are inheritingly lazy. Im just quoting.
Do educate yourself about CIA & Muslim politicians instigated riots against ethnic
Chinese before writing off in ignorant.
Spore was shielded from all these info distorted with West msm propaganda. I had only
learned about these details from Indonesian Chinese friends whose family had suffered these
trauma. After some readings, also Indonesia under current Chinese ethnic President Jokowi,
did all these CIA-Muslims Generals collision genocides been publicized. How about you, where
you got yours?
China did not help Duterte. China makes the drugs there or in Taiwan. Duterte pleaded
with them to stop sending shabu to the Philippines but China does not care and so Filipinos
continue to stagger around like zombies in their squats.
Why did you say China didn't help Prez Duerte in drugs war, your Chinese philippino
mistress told you? Pls cite your evidence.
Its widely publicized in our msm, West msm that China gov working with Philippines police
to track & dry up many drugs supply, even donated rehab centers as part of long term
solution. So you mean all these West msm are lying to help China.
In your word, these shabu are make & sold by China gov? Or they are part of global
drug syndicates that operated in every countries including all West?
As for CIA containment plans, you'll probably say that the reason Singapore immigration
allowed so many Indians in was because the US government wanted to import a competitive
ethnic group to prevent Chinese in Singapore from controlling all of Southeast Asia.
Let these unequal US FTA & India CECA speak itself. These were shoved into our PM LEE
ass to screw SG, allowing unlimited Indians of all kinds & their families to live &
work in SG, with their mostly internationally unrecognized qualifications mandatory to be
accepted.
Also both US & India nationals enjoy tax free in property investment, while Sporeans
& all foreigners subjected to 3% + 7% + 7% tax regimes, literally giving them a 10~17%
profits upfront.
Indians as " competitive " ethnic group to suppress SG Chinese, you are joking or
seriously think Indians IQ80 & its education is superior to Sg Chinese IQ107 that rank
consistently Top in SAT, PISA & Olympiad?
These are the dredge of India, violent drunkard, not those US get. Numerous are caught
with fake certificates when they simply could not even do the most basic task, near
illiterate. A documentary show was make to investigate how widespread & complex is it in
India, even there are someone stationed to pick up call as reference to certify everything.
These including medical MD cert, aka fake Indian Drs that India Health Ministry condemn
openly been so rampant up to 80% of India Drs(that was posted in one of Unz old discussion
2yrs ago)
@Erebus If both US &
China go on full trade war 100% tariff, to the brim of stop trading, who do you think can
last longer?
As you said, in mere wks, US will be paralyzed with every shelves empty & factories
shut down. Emergency declared with imports from other sources with much chaos. Frustrated,
nation wide civil riots may ensue with states like California, Texas, demanding
independent.
Whereas for China its life as usual with some restructuring, since it can live without
yanks useless financial services, msm & few chips easily replaced by EU/Jp or live
without. Airbus will be happy to replace Boeing.
China total export to US is ~$500B, 50% are imported components, so $350B damage is passed
back to US $250B(total US export to China) & global suppliers $100B.
That make China actual impact only $150B, $4T reserved, it can theoretically offset the
trade loss for >20yrs, while continue to expand its domestic consumption, BRI & global
trade to fuel growth.
But the world will be in chaos to get double impact of a totally collapsed US $21T GDP
& China import cut. With all economies stunt, global financial mkt burst, consumption all
dive, US allies turning to China for leadership & trade, a WW3 look imminent as yank is
left with only one product – weapons!
But not to worry, it should be very short one in yelling, as no yanks want to die with
empty belly, nor there are $ to pump vessels & bombers or resources to prepare long war.
Military is quickly paralyzed with desertion, & split between seperated states. There go
51 disUnited states of America.
So China is indeed discussing with yanks from great strength. But with farsight, they
prefer to settle yanks brinkmanship in Chinese humble & peaceful way.
I hope China can drag on until US can no longer conceal its pain with fake data,
screamming out loudly for truce to sign China dictates trade agreement. China need to teach
yank a painful lesson to humble it once & for all, including a WTO style unequal treaty
that yank shoved down china throat.
For all the refugees the US creates in the Mideast, it doesn't except many of them. Most
Iraqi and Afghani refugees have no hope of entering the US; European countries that protested
the war in Iraq end up absorbing the human cost.
As for the CIA cooperating with Muslims in anti-Chinese anything, I am skeptical. My
feeling about Indonesia is that a 3% minority owning everything and displaying contempt for
the natives as lazy savages is enough fuel ethnic hatred and Chinese backing of Suharto
didn't help things.
Indians don't represent job competition for Singapore, they are simply a basic menace to
your society. And it is possible that the US government, not wanting to see Singapore become
a vassal state of China, wanted your country's population to become more well,
diversified.
If both US & China go on full trade war 100% tariff, to the brim of stop trading,
who do you think can last longer?
China would take a hit, but not greater than the whole world could be expected to take.
Probably quite a bit less.
There's little doubt in my mind that China is in a much stronger position to both survive
and to be in a position to take advantage of the world's eventual recovery. As you note
$4T reserved, it can theoretically offset the trade loss for >20yrs
It also has the world's widest and deepest industrial infrastructure.
It's not only the $4T and the infrastructure. China also has a lot of gold within its
domestic system, which it can mobilize to make purchases from the the rest of the world's
staggered economies. Approx 20kT, by some quite carefully done estimates. Mobilizing that
gold, of course, is where things get tricky. The world would be awash with useless dollars
and how all that liability gets unwound would cause a lot of Central Bankers and their govts
a lot of sleepless nights.
"Which West European nations willing to move to dysfunctional disUnited States filled with
crimes & unemployment en masse?"
Quite a number of Europeans would have moved to the US circa 1965 – 1990 with the
countries then demographics, which was the point being made in the comment. The US is a huge
country with lots of space. In 1980, virtually all Eastern Europeans would have been better
off in almost any place in the US over where they were. The US Ruling Class had the chance
but cast it aside for lesser and more divisive groups so they could win elections and stiff
their workers. Even the US now is a mostly a better place to live than virtually any place in
Eastern Europe, and quite a number of places in overcrowded Western Europe – now filled
with Muslim invaders, rising crime, higher unemployment than the US, and yearly riots.
@Erebus One TV celebrity
went on crusade to expose Monsanto GMO toxicity impact in food chain few yrs ago.
He visited US & collected clinical evidences of GMO cancer causing from several US
professors, publicized them online. These force China gov to investigate, and their clinical
test too revealed mice & animals fed with GMO have huge tumors growing all over
shortly.
China agriculture minister was investigated, found to hold lucrative high pay job in
Monsanto taking bribery, and blanket approved all untested Monsanto GMO seeds, grains &
weed killer. Even those used as domestic animals feed but banned for wild animals in US were
introduced into food chain. Some also passed off as non GMO to plant in vast land not
approved for GMO.
About 30% of China food chain & vast agriculture lands contaminated, no longer
productive. That agri minister got arrested. No sure what China gov is doing about it. But
Prez Xi is hailing organic food. Tibets & Xinjiang have mega irrigation projects on going
now, might be to open up new agri lands to offset.
@jeff
stryker Tonnes of evidences on CIA-Muslim generals instigated riots & massacre since
1965. You choose to see otherwise.
A trove of recently released declassified documents confirms that Washington's role in the
country's 1965 massacre was part of a bigger Cold War strategy. https://www.theatlantic.com/amp/article/543534/
I couldn't find one article published in one unz comment by Denk?, where West msm
interviewing Indonesia biggest opposition party. Their chiefs had audacity to brag how they
will instigate another massive anti-Chinese riots to win next election.
The jews are much more vicious & open in controlling US, but you won't see CIA staged
riots & protest against their jewish masters Aipac.
Thailand Chinese ethnic are holding most economy too, but their politicians elites been
Chinese don't instigate riot against own ethnic to meddle election.
US government, not wanting to see Singapore become a vassal state of China, wanted your
country's population to become more well, diversified.
Its not diversification, its complete indianized with Weapon of Mass Migration, by jews
controlled US to push back China influence. As China refused to let jews control them!!! Its
also happening for Sri Lanka, Nepal, Bhutan, Mauritius now.
Its Top to bottom all indians now in SG, 9% Indians with India new migrants controlling
75% Chinese & 15% Malays. Since when Indians have turn so great well surpass all Chinese
capability, over a short span of 10yrs since Obama's new balance in Asia Pacific started. Its
a regime change, silent coup.
Starting from Indian Prez, Indian DPM(a ex-criminal for leaking state secret data, he was
highly touted as best future PM to test voter response, but a Chinese PM candidate was
eventually selected for coming election as voters brainwashing not yet complete), national
DBS bank CEO chairman Indian. Central bank MAS chief Indian. Law, Home Affair, Foreign
Minister all Indians. High court judges flooded Indians. Chief judge Indian. Top senior
counsels(equivalent to Queen Councils) many Indians. MPs also new india migrants. MSM
journalist & writers flooded Indians.
Some are India newly arrived Indians of no credential. Yet no msm reporting on that. Its
near complete regime change in stealth.
@Erebus In addition to the
herbicide and insecticide resistance some plants are modified to withstand prolonged dry
conditions, or to produce more of certain proteins or vitamins, or to increase yields.
The corn or maize we now have started from an indigenous plant in Central and South
America. Twenty plants would produce a tablespoon of grain. The native corn plant can still
be found. Over thousands of years these were bred for increased size and yields but probably
for other reasons as well like drought resistance. That's genetic modification over many
generations.
In this country the Food and Drug Admin. and Dept. of Agriculture have studied the
genetically modified plants extensively. Not that government agencies always get it right but
it would be interesting to see a real life example of these plants actually harming people,
or animals and insects. Sometimes the fear of Frankenfoods is related to a fear of lower cost
imports and a sop for the local farmers.
Having an interest in horticulture I produced greenhouse bedding plants for the most part.
One significant expense was pesticides. We took great pains to carefully watch the crops. If
the aphids, or other creatures, showed up we would strive to isolate the affected plants and
only treat the ones with aphids and some that were nearby. Lots of hours with a bright light
and magnifying glass. We didn't proactively apply these because of the expense. Sometimes an
entire greenhouse required several treatments and there goes much of the profit. On the other
hand refusing to use pesticides leads to total crop failures. Nobody applies pesticides if
there are no pests. Without pesticides the world population would be much smaller and the
remaining living people would know about famines.
In terms of space, most Europeans would immigrate to US cities. Chicago was popular with
Slavs, for instance. And of course Silicone Valley. Very few immigrants move to rural
wide-open areas. There is nothing to do there and Norwegians in 1990 were no longer
homesteading on the North Dakota plains.
By 1990, few Irish wanted to immigrated to Boston or Italians to New Jersey. Europe was
actually safer and more prosperous when I was young than the US.
Europeans prior to 1965 were attracted to the US middle-class standard of living and that
has shrunken precipitously.
The refugee crisis in Europe is relatively recent. As for unemployment, indeed this is
bad. But the social safety net is slightly better and there is less poverty overall in
Western Europe.
"Very few immigrants move to rural wide-open areas."
Sure, if you're talking Nevada or New Mexico desert. But there are areas considered
"rural" in the US that have relatively mid-sized cities nonetheless. Oklahoma City has a
population roughly equal to the population of Latvia's capital, for example. And I'm sure
that Eastern Europeans could have been coaxed to leave Europe for the US had America pursued
a deal with the Soviets – white South Africans, too. Certainly, this could have been
done with success post Soviet breakup. Some Western Europeans could also have been coaxed,
perhaps a few million, with the right financial incentives. Along with substantial efforts to
increase the native European birthrate and targeted, gender-imbalanced ~skills-based
immigration* from emerging market, high IQ countries, US demographics would be in a far
better place today. The country would be less divided and more rational on a global stage
(and probably friends with Russia, too).
*In other words, purposely encourage 2 to 1 female immigration from places like Korea and
China back when they were both poor and filled with people ready to emigrate and compliment
that with an equal but reversed ratio elsewhere (Vietnam, Laos). This forces interbreeding
and prevents formation of divisive ethnic communities, while also having the benefit of
harming your competitor's demographics down the road. Actor Keanu Reeves is something like
1/8th Japanese. But most people just think he's a white guy.
If that kind of policy had been adopted in 1965, along with my plan above (and a few other
things not mentioned), things would be better for the US now. The US would be overwhelmingly
white with a small admixture of smart Asian while leaving descendants who look European; the
kind of internecine racial strife we see now could have been avoided. However, that kind of
plan requires a competent, and rational, near-authoritarian to be in charge. As Fred Reed has
pointed out, that kind of plan is not capable in Western countries that choose their leaders
via popularity contest with a birthright citizenship voting base.
That's genetic modification over many generations.
One wonders how many fish genes made their way into corn over those generations, and how
they got in there.
it would be interesting to see a real life example of these plants actually harming
people, or animals and insects.
Pesticides of increasing toxicity are surely not good for insects. As for harming people,
I doubt we'd see any more harm than the fructose and aspartame etc, or the growth hormones
and rampant anti-biotic use in husbandry that those agencies approved have caused. Of course,
genetics is much more complex, and so who knows what will turn up in humans a few generations
from now.
Without pesticides the world population would be much smaller and the remaining living
people would know about famines.
I'm of the firm opinion that a smaller population would be a very, very good thing, and
we'll be seeing famines soon enough anyway, but on a scale that will dwarf all other
famines.
"Pesticides of increasing toxicity are surely not good for insects. As for harming people, I
doubt we'd see any more harm than the fructose and aspartame etc, or the growth hormones and
rampant anti-biotic use in husbandry that those agencies approved have caused. Of course,
genetics is much more complex, and so who knows what will turn up in humans a few generations
from now.'
The pests who feed on domesticated crops lived in nature before people were around. When
they stumble upon thousands of acres of corn or wheat they rapidly reproduce to exploit the
windfall. The pesticides will hopefully kill or drive off many of these insects but their
total number would probably be higher than in a pre-human environment. There is a balance of
power.
Utilizing the "precautionary principle" one could say any technical advance might have
some unanticipated detrimental effect in the near or distant future. Therefore let's stop all
new technology. For now we have the methods of physical science to guide us. These aren't
perfect but it's the best we have and more sensible than the precautionary principle, also
called the paralysis principle.
"..a smaller population would be a very, very good thing, and we'll be seeing famines soon
enough anyway, but on a scale that will dwarf all other famines.".
I'm hoping my family and I (and you) are not among the culled billions. Death by
starvation is not a pleasant way to go, so I've heard.
their total number would probably be higher than in a pre-human environment. There is a
balance of power.
Probably? Pre-human? Yours is the disingenuity of a pesticide salesman.
The insect world is in a massive die off, losing of ~75% its flying population over 3
decades, as attested by countless studies. The studies tell us what we already know. 40 yrs
ago, a 2 hr drive in the countryside at night meant 30 min spent scraping insects off your
windshield and headlights. Every lonely streetlight in the middle of nowhere had a cloud
around it. Screens to protect the radiator, or even the entire front of the car were sold by
every automotive shop and gas station. Seen one lately?
Utilizing the "precautionary principle" one could say any technical advance might have
some unanticipated detrimental effect in the near or distant future.
One could say it, and one would often be right for doing so. As the complexity of the
technological advance increases, so do its effects. Who considered 50 years ago that
pesticide use would devastate the insect world? Who knows with any level of certainty what
the effect of that will be on the ecosystem we live in? What we know is it ain't gonna likely
to be good, and may be devastating. They're now found in mother's milk with potential effects
we lack the tools and brain power to comprehend, never mind predict.
When it comes to playing with complex, chaotic systems that support our life on the
planet, humans are like a monkey with a hand-grenade. To borrow a phrase "If the planet's
ecosystem was simple enough to understand, we'd be too simple to understand it. " Our
myopia & hubris will kill us, if our stupidity and belligerence doesn't do it first.
The insect "die off" is an interesting occurrence. Puerto Rico lost a large percentage of
insects while at the same time they decreased pesticide use by 80%. This die off is observed
in a limited number of regions of the world. It isn't known exactly what caused the drop in
insect population. Some say pesticides, others say climate change (the theory that explains
all things), are killing the bugs.
Pesticides have been overused in the past but there have been impressive improvements in
the technology which reduces the amounts required. There are herbicides and pesticides
designed with chemical half lives. These kill the weeds or pests then break down into
harmless components and in 10-14 days can no longer be detected in the field. Unfortunately
for some any improvements will require some kind of technology.
We are all going to die eventually, hopefully later rather than sooner.
In his highly acclaimed 2017 book, Destined for
War , Harvard professor Graham Allison assessed the likelihood that the United States
and China would one day find themselves at war. Comparing the U.S.-Chinese relationship to
great-power rivalries all the way back to the Peloponnesian War of the fifth century BC, he
concluded that the future risk of a conflagration was substantial. Like much current analysis
of U.S.-Chinese relations, however, he missed a crucial point: for all intents and purposes,
the United States and China are already at war with one another. Even if their present
slow-burn conflict may not produce the immediate devastation of a conventional hot war, its
long-term consequences could prove no less dire.
To suggest this means reassessing our understanding of what constitutes war. From Allison's
perspective (and that of so many others in Washington and elsewhere), "peace" and "war" stand
as polar opposites. One day, our soldiers are in their garrisons being trained and cleaning
their weapons; the next, they are called into action and sent onto a battlefield. War, in this
model, begins when the first shots are fired.
Well, think again in this new era of growing great-power struggle and competition. Today,
war means so much more than military combat and can take place even as the leaders of the
warring powers meet to negotiate and share
dry-aged steak and whipped potatoes (as Donald Trump and Xi Jinping did at Mar-a-Lago in 2017).
That is exactly where we are when it comes to Sino-American relations. Consider it war by
another name, or perhaps, to bring back a long-retired term, a burning new version of a cold
war.
Even before Donald Trump entered the Oval Office, the U.S. military and other branches of
government were already gearing up for a
long-term quasi-war, involving both growing economic and diplomatic pressure on China and a
buildup of military forces along that country's periphery. Since his arrival, such initiatives
have escalated into Cold War-style combat by another name,
with his administration committed to defeating China in a struggle for global economic,
technological, and military supremacy.
This includes the president's much-publicized "trade war" with China, aimed at hobbling that
country's future growth; a techno-war designed to prevent it from overtaking the U.S. in key
breakthrough areas of technology; a diplomatic war intended to isolate Beijing and frustrate
its grandiose plans for global outreach; a cyber war (largely hidden from public scrutiny); and
a range of military measures as well. This may not be war in the traditional sense of the term,
but for leaders on both sides, it has the feel of one.
Why China?
The media and many politicians continue to focus on U.S.-Russian relations, in large part
because of revelations of Moscow's meddling in the 2016 American presidential election and the
ongoing Mueller investigation. Behind the scenes, however, most senior military and foreign
policy officials in Washington view China, not Russia, as the country's principal adversary. In
eastern Ukraine, the Balkans, Syria, cyberspace, and in the area of nuclear weaponry, Russia
does indeed pose a variety of threats to Washington's goals and desires. Still, as an
economically hobbled petro-state, it lacks the kind of might that would allow it to truly
challenge this country's status as the world's dominant power. China is another story
altogether. With its vast economy, growing technological prowess, intercontinental "Belt and
Road" infrastructure project, and rapidly modernizing military, an emboldened China could
someday match or even exceed U.S. power on a global scale, an outcome American elites are
determined to prevent at any cost.
Washington's fears of a rising China were on full display in January with the release of the
2019 Worldwide Threat Assessment of the U.S. Intelligence Community, a synthesis of the views
of the Central Intelligence Agency and other members of that "community." Its conclusion: "We
assess that China's leaders will try to extend the country's global economic, political, and
military reach while using China's military capabilities and overseas infrastructure and energy
investments under the Belt and Road Initiative to diminish U.S. influence."
To counter such efforts, every branch of government is now expected to mobilize its
capabilities to bolster American -- and diminish Chinese -- power. In Pentagon documents, this
stance is summed up by the term "overmatch," which translates as the eternal preservation of
American global superiority vis-à-vis China (and all other potential rivals). "The
United States must retain overmatch," the administration's National
Security Strategy insists, and preserve a "combination of capabilities in sufficient scale
to prevent enemy success," while continuing to "shape the international environment to protect
our interests."
In other words, there can never be parity between the two countries. The only acceptable
status for China is as a distinctly lesser power. To ensure such an outcome, administration
officials insist, the U.S. must take action on a daily basis to contain or impede its rise.
In previous epochs, as Allison makes clear in his book, this equation -- a prevailing power
seeking to retain its dominant status and a rising power seeking to overcome its subordinate
one -- has almost always resulted in conventional conflict. In today's world, however, where
great-power armed combat could possibly end in a nuclear exchange and mutual annihilation,
direct military conflict is a distinctly unappealing option for all parties. Instead, governing
elites have developed other means of warfare -- economic, technological, and covert -- to
achieve such strategic objectives. Viewed this way, the United States is already in close to
full combat mode with respect to China.
Trade War
When it comes to the economy, the language betrays the reality all too clearly. The Trump
administration's economic struggle with China is regularly described, openly and without
qualification, as a "war." And there's no doubt that senior White House officials, beginning
with the president and his chief trade representative, Robert
Lighthizer , see it just that way: as a means of pulverizing the Chinese economy and so
curtailing that country's ability to compete with the United States in all other measures of
power.
Ostensibly, the aim of President Trump's May 2018 decision to impose $60 billion in tariffs
on Chinese imports ( increased
in September to $200 billion) was to rectify a trade imbalance between the two countries, while
protecting the American economy against what is described as China's malign behavior. Its trade
practices "plainly constitute a grave threat to the long-term health and prosperity of the
United States economy," as the president put it when
announcing the second round of tariffs.
An examination of the demands submitted to Chinese negotiators by the U.S. trade delegation
last May suggests, however, that Washington's primary intent hasn't been to rectify that trade
imbalance but to impede China's economic growth. Among the stipulations Beijing must acquiesce
to before receiving tariff relief, according to leaked documents
from U.S. negotiators that were spread on Chinese social media:
halting all government
subsidies to advanced manufacturing industries in its Made in China 2025 program, an endeavor
that covers 10 key economic sectors, including aircraft manufacturing, electric cars, robotics,
computer microchips, and artificial intelligence; accepting American restrictions on
investments in sensitive technologies without retaliating; opening up its service and
agricultural sectors -- areas where Chinese firms have an inherent advantage -- to full
American competition.
In fact, this should be considered a straightforward declaration of economic war.
Acquiescing to such demands would mean accepting a permanent subordinate status
vis-à-vis the United States in hopes of continuing a profitable trade relationship with
this country. "The list reads like the terms for a surrender rather than a basis for
negotiation," was the way Eswar
Prasad, an economics professor at Cornell University, accurately described these
developments.
Technological Warfare
As suggested by America's trade demands, Washington's intent is not only to hobble China's
economy today and tomorrow but for decades to come. This has led to an intense, far-ranging
campaign to deprive it of access to advanced technologies and to cripple its leading
technology firms.
Chinese leaders have long realized that, for their country to achieve economic and military
parity with the United States, they must master the cutting-edge technologies that will
dominate the twenty-first-century global economy, including artificial intelligence (AI),
fifth-generation (5G) telecommunications, electric vehicles, and nanotechnology. Not
surprisingly then, the government has invested in a major way in science and technology
education, subsidized research in pathbreaking fields, and helped launch promising startups,
among other such endeavors -- all in the very fashion that the Internet and other American
computer and aerospace innovations were originally financed and
encouraged by the Department of Defense.
Chinese companies have also demanded technology transfers when investing in or forging
industrial partnerships with foreign firms, a common practice in international development.
India, to cite a recent example of this phenomenon, expects
that significant technology transfers from American firms will be one outcome of its
agreed-upon purchases of advanced American weaponry.
In addition, Chinese firms have been accused of
stealing American technology through cybertheft, provoking widespread outrage in this country.
Realistically speaking, it's difficult for outside observers to determine to what degree
China's recent technological advances are the product of commonplace and legitimate investments
in science and technology and to what degree they're due to cyberespionage. Given Beijing's
massive investment in science, technology, engineering, and mathematics education at the
graduate and post-graduate level, however, it's safe to assume that most of that country's
advances are the result of domestic efforts.
Certainly, given what's publicly known about Chinese cybertheft activities, it's reasonable
for American officials to apply pressure on Beijing to curb the practice. However, the Trump
administration's drive to blunt that country's technological progress is also aimed at
perfectly legitimate activities. For example, the White House seeks to ban Beijing's government
subsidies for progress on artificial intelligence at the same time that the Department of
Defense is
pouring billions of dollars into AI research at home. The administration is also acting to
block the Chinese acquisition of U.S. technology firms and of
exports of advanced components and know-how.
In an example of this technology war that's made
the headlines lately, Washington has been actively seeking to sabotage the efforts of
Huawei , one of China's most
prominent telecom firms, to gain leadership in the global deployment of 5G wireless
communications. Such wireless
systems are important in part because they will transmit colossal amounts of electronic
data at far faster rates than now conceivable, facilitating the introduction of self-driving
cars, widespread roboticization, and the universal application of AI.
Second only to Apple as the world's supplier of smartphones and a major producer of
telecommunications equipment, Huawei has sought to take the lead in the race for 5G adaptation
around the world. Fearing that this might give China an enormous advantage in the coming
decades, the Trump administration has tried to prevent that. In what is widely described as a "
tech
Cold War ," it has put enormous
pressure on both its Asian and European allies to bar the company from conducting business
in their countries, even as it sought the arrest in Canada of Huawei's chief financial officer,
Meng Wanzhou, and her extradition
to the U.S. on charges of tricking American banks into aiding Iranian firms (in violation of
Washington's sanctions on that country). Other attacks on Huawei are in the works, including a
potential
ban on the sales of its products in this country. Such moves are regularly described as
focused on boosting the security of both the United States and its allies by preventing the
Chinese government from using Huawei's telecom networks to steal military secrets. The real
reason -- barely disguised -- is simply to block China from gaining technological parity with
the United States.
Cyberwarfare
There would be much to write on this subject, if only it weren't still hidden in the shadows
of the growing conflict between the two countries. Not surprisingly, however, little
information is available on U.S.-Chinese cyberwarfare. All that can be said with confidence is
that an intense war is now being waged between the two countries in cyberspace. American
officials accuse
China of engaging in a broad-based cyber-assault on this country, involving both outright
cyberespionage to obtain military as well as corporate secrets and widespread political
meddling. "What the Russians are doing pales in comparison to what China is doing,"
said Vice President Mike Pence last October in a speech at the Hudson Institute, though --
typically on the subject -- he provided not a shred of evidence for his claim.
Not disclosed is what this country is doing to combat China in cyberspace. All that can be
known from available information is that this is a two-sided war in which the U.S. is
conducting
its own assaults. "The United States will impose swift and costly consequences on foreign
governments, criminals, and other actors who undertake significant malicious cyber activities,"
the 2017 National Security Strategy affirmed. What form these "consequences" have taken has yet
to be revealed, but there's little doubt that America's cyber warriors have been active in this
domain.
Diplomatic and Military Coercion
Completing the picture of America's ongoing war with China are the fierce pressures being
exerted on the diplomatic and military fronts to frustrate Beijing's geopolitical ambitions. To
advance those aspirations, China'sleadership is relying heavily on a much-touted
Belt and Road Initiative , a trillion-dollar plan to help fund and encourage the
construction of a vast new network of road, rail, port, and pipeline infrastructure across
Eurasia and into the Middle East and Africa. By financing -- and, in many cases, actually
building -- such infrastructure, Beijing hopes to bind the economies of a host of far-flung
nations ever closer to its own, while increasing its political influence across the Eurasian
mainland and Africa. As Beijing's leadership sees it, at least in terms of orienting the
planet's future economics, its role would be similar to that of the Marshall Plan that cemented
U.S. influence in Europe after World War II.
And given exactly that possibility, Washington has begun to actively seek to undermine the
Belt and Road wherever it can -- discouraging allies from participating, while stirring up
unease in countries like Malaysia and Ugandaover the enormous
debts to China they may end up with and the heavy-handed
manner in which that country's firms often carry out such overseas construction projects.
(For example, they typically bring in Chinese laborers to do most of the work, rather than
hiring and training locals.)
"China uses bribes, opaque agreements, and the strategic use of debt to hold states in
Africa captive to Beijing's wishes and demands," National Security Advisor John Bolton
claimed in a December speech on U.S. policy on that continent. "Its investment ventures are
riddled with corruption," he added, "and do not meet the same environmental or ethical
standards as U.S. developmental programs." Bolton promised that the Trump administration would
provide a superior alternative for African nations seeking development funds, but -- and this
is something of a pattern as well -- no such assistance has yet materialized.
In addition to diplomatic pushback, the administration has undertaken a series of
initiatives intended to isolate China militarily and limit its strategic options. In South
Asia, for example, Washington has abandoned its past position of maintaining rough parity in
its relations with India and Pakistan. In recent years, it's
swung sharply towards a strategic alliance with New Dehli, attempting to enlist it fully in
America's efforts to contain China and, presumably, in the process punishing Pakistan for its
increasingly enthusiastic role in the Belt and Road Initiative.
In the Western Pacific, the U.S. has stepped up its naval patrols and forged new
basing arrangements with local powers -- all with the aim of confining the Chinese military to
areas close to the mainland. In response, Beijing has sought to escape the grip of American
power by establishing miniature bases on Chinese-claimed islands in the South China Sea (or
even
constructing artificial islands to house bases there) -- moves widely condemned by the
hawks in Washington.
To demonstrate its ire at the effrontery of Beijing in the Pacific (
once known as an "American lake"), the White House has ordered an increased pace of
so-called freedom-of-navigation operations (FRONOPs). Navy warships regularly sail within
shooting range
of those very island bases, suggesting a U.S. willingness to employ military force to resist
future Chinese moves in the region (and also creating situations in which a misstep
could lead to a military incident that could lead well, anywhere).
In Washington, the warnings about Chinese military encroachment in the region are already
reaching a fever pitch. For instance, Admiral Philip Davidson, commander of U.S. forces in the
Pacific, described the
situation there in recent congressional testimony this way: "In short, China is now capable of
controlling the South China Sea in all scenarios short of war with the United States."
A Long War of Attrition
As Admiral Davidson suggests, one possible outcome of the ongoing cold war with China could
be armed conflict of the traditional sort. Such an encounter, in turn, could escalate to the
nuclear level, resulting in mutual annihilation. A war involving only "conventional" forces
would itself undoubtedly be devastating and lead to widespread suffering, not to mention the
collapse of the global economy.
Even if a shooting war doesn't erupt, however, a long-term geopolitical war of attrition
between the U.S. and China will, in the end, have debilitating and possibly catastrophic
consequences for both sides. Take the trade war, for example. If that's not resolved soon in a
positive manner, continuing high U.S. tariffs on Chinese imports will severely curb Chinese
economic growth and so
weaken the world economy as a whole, punishing every nation on Earth, including this one.
High tariffs will also increase costs for American consumers and endanger
the prosperity and survival of many firms that rely on Chinese raw materials and
components.
This new brand of war will also ensure that already sky-high defense expenditures will
continue to rise, diverting funds from vital needs like education, health, infrastructure, and
the environment. Meanwhile, preparations for a future war with China have already become the
number one priority at the Pentagon, crowding out all other considerations. "While we're
focused on ongoing operations," acting Secretary of Defense Patrick Shanahan reportedly
told
his senior staff on his first day in office this January, "remember China, China, China."
Perhaps the greatest victim of this ongoing conflict will be planet Earth itself and all the
creatures, humans included, who inhabit it. As the world's top two emitters of climate-altering
greenhouse gases, the U.S. and China must work together to halt global warming or all of us are
doomed to a hellish future. With a war under way, even a non-shooting one, the chance for such
collaboration is essentially zero. The only way to save civilization is for the U.S. and China
to declare peace and focus together on human salvation.
Michael T. Klare, aTomDispatch
regular, is the five-college professor emeritus of peace and world security
studies at Hampshire College and a senior visiting fellow at the Arms Control Association. His
most recent book isThe Race for What's
Left. His next book, All Hell Breaking Loose: Climate Change, Global Chaos, and
American National Security , will be published in 2019.
The genuinely expert panelists could not articulate America's demands beyond the familiar
'level playing field' that America created by shackling China with uniquely humiliating
conditions before admitting it to the WTO.
Today, China generates 20% of global GDP (the US 15%), its imports and exports are in
balance, its currency fairly valued, its economy one third larger and growing three times
faster than America's and it produces essential technology that America needs and cannot
provide.
It is almost impossible to imagine a war scenario that the US could win, short of China
invading America.
Excellent article Mister Klare, but would like to raise a few quibbles.
1) As far as "economic" war, China has been fighting one for decades. It's called competing
and trying to do the best to improve your people's lot. The US is finally starting to fight
back but some of it's measures are inappropriate and/or ineffective.
2) As far as the US trying to confine the Chinese military to its own region, I really
haven't seen that the Chinese military is particularly interested in operation outside their
own region anyway. It seems to be focused on protecting China and its own neighborhood and
interests, and the Chinese aren't stupid enough to bleed away their wealth and blood in
distant misadventures.
3) I'd gotten the impression from the Deep State's rhetoric that they are much hotter on
fighting a shooting war with Russia than with China. In an extended struggle, as long as it
doesn't go nuclear, US chances are much better against a Russia whose economy is only a
fraction of China's.
Keynes says this, "All trade is only barter." The Wall Street/China Gambit is key to
understanding today. Clinton signed MFN trade status with China, screwing over NAFTA. Those
Zenith TV's that were supposed to be made in Mexico became Chinese made electronics.
Balanced trade was also thrown out the window, as Wall Street was in on the gambit. Trade
in goods was unbalanced, and America supplied dollars to China to make up the difference.
China then recycled those mercantile won dollars back to the U.S. to buy Tbills, helping keep
interest rates low, and acting as a prime variable in forming U.S. housing bubble. Returning
dollars then spun out into the American economy, so American's could buy more Chinese goods
from transplanted American factories.
The wall street China gambit turned mainstreet American's into Zeros, while wall street
became heroes.
Any discussion of China current economic status cannot overlook the role of Wall Street
exporting of jobs, to then get wage arbitrage. Immigrating third world people into America is
also a function of this "finance capitalism" as it wants wage arbitrage from third world
labor as well.
Finance Capitalism in turn is part of Zion and Atlantacism. International credit "banking"
will send its finance capital anywhere in the world to get the lowest price. In the case of
China, overhang of communist labor in the mid 90's was available to make things, and then
export Chinese made goods back to U.S. (at the China price.)
China still uses Atlantic doctrine, where raw materials come in by ship, and finished
goods with increment of production value add leave by ship. (Value add is key element to
making any economy thrive. Just extracting raw materials turns a country into Africa, witness
the attempt at turning Russia into an extraction economy in the 90's.)
Note difference in American policy in the 90's: Russia was to become extraction, and China
was to become value add. As Tucker Carlson says, America is run by a ship of fools.
For China, "Eurasia" beckons, and raw materials can be had from China's interior and via
overland routes. This then is a pivot away from London/Zion Atlantacism (finance capital) and
toward industrial capitalism.
In other words, both U.S. and the West have hoisted themselves on their own petard. People
that wax poetic about China's gains overlook this important mechanism of "gifting" of our
patrimony to China. It is very easy to copy or be a fast follower, it is beyond difficult to
invent and create.
Wall Street and greed gave away our patrimony, which was hard won over the ages in order to
make wage arbitrage today, and gave away the future.
China uses state banks, and also forgives debts lodged in their state banks. This is
actually one of the secret methods used to rope-a-dope on the west. The Chinese economy is
not debt laden, and what public debts there are, are lodged in a State Bank, where they can
be jubileed or ignored.
The U.S. and the West had better take a long hard look at finance capital method, which
uses only "price signals" to make economic decisions, as pricing is main vector from which
jobs were exported, and which China cleverly used to climb up its industrial curve. Sovereign
money/Industrial Capitalism IS the American System of Peshine Smith and Henry Clay.
Atlantacism/Zionism/Finance Capital is not American – the parasite jumped to the U.S.
from London.
China is wisely in control of its money power via its state banks and is pivoting away
from Atlantacism now that it has served its purpose. The belt and road routes are mostly
overland, with some coastal sea routes, and there isn't a thing sea power (((atlantacists)))
can do about it.
China has played the game well, but don't overlook the gifting of Western patrimony caused
by a false neo-liberal finance capital economic ideology, which blinds Western adherents.
@joe
webb Yeah, so America can topple China and go after Russia immediately afterwards? I
don't think the Russians are so stupid.
There is only 1 way Russia survives the 21st century without being broken up and ruined,
and that is allying itself with China. The same is true for China.
The only way China can survive intact is to ally itself with Russia.
Pretty simple stuff I am sure each country understands.
China's real economy, of course dwarfs that of the US'.
The author touches on a nuclear trade option China holds over the US that I see little
mention of elsewhere. High tariffs are one thing, but a closure of trade in components and
raw materials would do far more than
endanger the prosperity and survival of many firms that rely on Chinese raw materials
and components.
Should China block exports of everything other than finished goods to the US, almost every
US factory would close due to lack of parts and materials. The time and investment required
to rebuild/replace supply chains in a JIT world means much of what's left of America's real
economy would disappear within weeks.
What then?
Unlike Russia, the US is highly vulnerable to targeted sanctions. American trade
negotiators are apparently oblivious to this. I find that very weird.
author Klare said: "The media and many politicians continue to focus on U.S.-Russian
relations, in large part because of revelations of Moscow's meddling in the 2016 American
presidential election and the ongoing Mueller investigation."
– What "revelations"? "What meddling"?
– He tipped his hand right off the bat. Klare is just another run of the mill
Communist with a case of the Trump Derangement Syndrome, complete with Communism's favorite
scam, 'global warming'.
Klare said: "Ostensibly, the aim of President Trump's May 2018 decision to impose $60
billion in tariffs on Chinese imports (increased in September to $200 billion) was to rectify
a trade imbalance between the two countries "
– No, the aim is to encourage China to removes it vastly more & extreme tariffs
on US goods & services.
Klare said: " continuing high U.S. tariffs on Chinese imports will severely curb Chinese
economic growth and so weaken the world economy as a whole, punishing every nation on Earth,
including this one. High tariffs will also increase costs for American consumers and endanger
the prosperity and survival of many firms that rely on Chinese raw materials and
components."
– Nonsense, all China needs to do is remove it's many times over more severe
tariffs.
– If the US's lesser tariffs on Chinese goods / services 'hurt the US', then why
don't China's massive tariffs on US goods / services hurt China?
And to think some take this fraud, Klare, seriously.
The media and many politicians continue to focus on U.S.-Russian relations, in large
part because of revelations of Moscow's meddling in the 2016 American presidential election
and the ongoing Mueller investigation.
It's not the economy stupid. According to many "experts" on this site, since the US economy
and military expenditures are 10 times bigger than Russia's, it seems "logical" to those
experts that the US army is 10 times better. I would argue that not only is not 10 times
better, it's not even equal to Russia's army. Again, according to the same types of "experts"
Russia's economy is the size of Italy. Why don't then someone break the good news to Italy
and encourage them to go to war with Russia? Since their economies are equal – it seems
that Italy stands a fair chance of beating Russia, thus eliminating the need of the 10 times
superior army to fight them. The moronity on this site, man – it's unbelievable.
China is not suffering from massive degeneration as the US is. Instead of trying to prevent
China from becoming a leading nation of the world, why could the US not accept China's coming
prominence and concentrate on strengthening its own population ? Unlike the US, China is not
interested in "ruling the world", it is only interested in expanding its economy. For the
rest, it is dedicated to stability and cooperation. No threat to the world at all, except for
some compulsive hegemonists in the Pentagon.
This article is pure propaganda and as such is based upon lies, misconceptions and pure
fantasy.
If there already is a war it is all in the minds of Anericans, and they have already lost
that war because America needs allies and can only create enemies amongst people that were
its friends.
Europe will join with Russia as soon as it can get away from the US bully. That means
550million Europeans will join 160 million Russians. 710 million people with Russian
technology and Chinese investment (China already runs Btitain's North Sea gas), will produce
an economic power that will humiliate the USA at every turn.
All of South America wants to break with the US, the entire Orient hates the US. America is
actually doing to Africa what the US accuses Russia and China of doing.
If there really is a war between the US and China then the US has already lost it. The rest
of the world wants only one thing: the absolute collapse of the entire US. Everyone hates the
US. No one will ever support you US dictators and bullies 100%.
You stab everyone in the back sooner or later and your only interest is supporting the
fascist and racist Israel that is genociding the true Semites, the Palestinians.
I'm amazed Fred Unz publishes this sort of trash. It is unadulterated lies, brainless
stupidity and total hog wash. Pure drivel.
It is often said that, had the Western and Eastern Europeans formed a coalition rather
than fight WW I, they would still be dominant.
And if I had wings, I could fly to the moon.
The Eastern Europeans had never accepted the Western Enlightenment (still haven't), and to
have done so would have destabilized their family structure -- the deep structure of their
society -- exactly as it has finally destabilized ours, today. The nature of authority and
organization in Eastern Europe differed considerably from that of Western Europe. Their forms
of organization were different enough to make integration impossible, and perhaps to make
formation of a coalition impossible.
China's organizational forms, family structure, and and social assumptions in general
differ even more from the present day form of the Western Enlightenment than did those of
East Europe c.a. AD 1900.
It's at times like these we get to test the assumption that reason and fear of death can
lead to agreement on a modus vivendi.
I will never believe the Zionist controlled U.S. will go to war with China as long as one
U.S. company remains in China and damn near all the major U.S. companies are in business in
China, this is a ploy for the zionist controlled MIC to loot the America taxpayer!
I didnt read the article but I dont think china needs the US for anything they are well on
their way to be the dominant world power the US and ist zionist occupied government are
losers the zionists want never ending wars which stupid USA has done,,china and all the rest
will eventually dump the rothchild banking system and form its own which will in all likely
hood benefit more than the zionist one does
No mention of an ideological battle, and no wonder, as "the Chinks" et al have apparently
already won that one, as evidenced by the fact that the last US general election was merely
yet another idiotic, meaningless [ yet highly entertaining], cat fight over blue socialism
versus red socialism.
The US vs China trade war is just another power/domination battle scam between two
competing, wholly criminal orgs, both totally against anything ever resembling truly free
trade ..nothing more.
"The US and China must work together to halt global warming or all of us are doomed to a
hellish future." Really? If this doesn't prove this guy is a lefty shill, nothing does. Even
the clowns raking in grants and trying to impoverish everyone with higher taxes have seen the
light and have been saying "climate change" lately. Many scientists are now arguing that we
may be headed into a new cooling period rather than a "hellish" warming period that brought
us so much prosperity. This "global warming" religion with its hockey stick icons and polar
bear mythology is worse than the Heaven's Gate religion.
"The rest of the world wants only one thing: the absolute collapse of the entire US.
Everyone hates the US. No one will ever support you US dictators and bullies
100%. You stab everyone in the back sooner or later and your only interest is supporting
the fascist and racist Israel that is genociding the true Semites, the Palestinians."
Well yes. As history has shown, occupation and rule by Jahweh's Chosen People tends to
bring this fate down upon the host country.
Oh, for Pete's sake:
1. It will always be China+Russia vs. the US. The EU, site of WWIII, will just soil
itself.
2. The Debt Bubble US economy will collapse. At some point. Changes every calculation.
3. The US will devolve into a state of civil war. Of some sort. Paralyze the place.
Momentum is with China and Russia. The US is sliding into history's toilet.
Just give it a few more years. And the whole world sees and knows it. The whole world can
get along very well without the US. And would very much like that to be.
Global warming my azz! But the rest of it rings pretty true. If nukes arn't used, Russia and
China will win this war simply because they have the gold now and the US has spread its fiat
petro dollar all over the world which will come back big time to bite them. That is if China
and Russia are smart enough to go on a gold exchange standard.
since the US economy and military expenditures are 10 times bigger than Russia's, it
seems "logical" to those experts that the US army is 10 times better. I would argue that
not only is not 10 times better, it's not even equal to Russia's army.
I would argue the same.
Russia is a land power. This means using a land army and area denial. Russia does not need
to power project with a blue water Navy and she does not follow Atlantacist doctrine.
Atlantacist doctrine got its start when our (((friends))) evolved the method during the
Levantine Greek City State period, where our tribal friends would be stationed in various
entrepot cities ringing the Mediterranean. They would use their tribal connections to Launder
pirated goods, and to push their "international" usurious money type, which in those days was
silver. Simultaneously they were taking rents on their secret East/West mechanism, whereby
exchange rates between gold and silver were exploited. Gold was plentiful in India and Silver
more plentiful in the West, so the Caravan's took arbitrage on exchange rates as silver
drained east and gold drained west.
The U.S. inherited Atlanticist method after WW2. The U.S. is not an island economy like
England – it does not need to go around the world beating up others to then extract raw
materials. The U.S. is actually more like Russia in that U.S. can afford to have economic
autarky and be independent. The U.S. does not need to power project with a blue water navy,
despite the false narrative (((inheritance))) passed down to us, especially after WW2. Nobody
likes being punked with false narrative.
U.S. military expenditures are so heavy because of this tendency of finance capital to
search the world for gains, and this means posting overseas military bases, which in turn are
expensive to operate. Russia only has a "close in" defensive posture of area denial. This is
far less expensive than power projecting.
Also, GDP figures are misleading. In the U.S. if housing prices go up it reflects in GDP
growth, when in reality – the house didn't improve. GDP figures are lies. If finance
takes 50% cut of the economy, they are only pushing finance paper back and forth at each
other this is not the real economy, but it shows up in GDP because finance paper is an
"asset".
Russia's economy is much larger than their GDP, probably it is closer to Germany's in real
terms. Real terms = real economy = the making of goods and services.
China is not America's natural ally, Russia is. Atlantacist doctrine sold America's
patrimony to China for cheap, and then the ((international)) will just jump to another
host.
America has been parasitized by false doctrine and the output is thus that of an infected
brain – an output that is crazy. Finance plutocracy typically will not let go
willingly, but has to be removed forcefully.
Russia is a country of vodka drunks and Dubai prostitutes run by a syndicate of Israel
oligarchs and ex-KGB who kill their journalists in foreign countries.
China is dependent on outsourcing and if the US factories were to withdraw tomorrow the
Chinese economy would take a huge hit.
@Erebus The US is vulnerable
in so many other ways too, see how fast the store shelves empty just on the news of an
approaching big storm. Panic buying is rife and some people keep minimal food available at
home. I know people who have to stop at an ATM to get $20. All kinds of vital distribution of
food, water, power, fuel and more seems to pass through a myriad of often vulnerable
bottle-necks real or virtual. Easy targets for low cost, low tech sabotage teams I'd think.
I'm inclined to think also that this threatening hysteria possibly is a deep state psy-op
designed to prime Americans prior to the enactment of some sort of "democracy"
modifications.
America is the most powerful country solely because it has the most powerful economy in the
world, and that was in no small measure due to America's abundance of arable land, navigable
waterways, natural resources ect ect. . In a few decades China has rocketed close to US level
and is in a global hegemon trajectory solely on the quality and size of its population .
There is not much doubt about the outcome of any competition between China and the West,
especially as much of the profits of the ruling class in the West has come from offshoring
and investment in China and their economy of scale production suppressing labour's power in
the West. The Chinese and their Western collaborators will just wait Trump out. Trump is a
populist not a creature of the Deap State alarmed at China's rise. The leading strategists of
America's foreign policy establishment still don't realise what they are dealing with in
China.
Perhaps the greatest victim of this ongoing conflict will be planet Earth itself and all
the creatures, humans included, who inhabit it. As the world's top two emitters of
climate-altering greenhouse gases, the U.S. and China must work together to halt global
warming or all of us are doomed to a hellish future.
Better to reign in hell. Anyway, there is hardly a tree left in China and since 2006,
China has been the world's largest emitter of CO2 annually and though they pay lip
service they accept no binding target for reduction; quite the opposite.
Even if their present slow-burn conflict may not produce the immediate devastation of a
conventional hot war, its long-term consequences could prove no less dire.
The manufacturing should be done in the most advanced regions of Earth ie the West,
because that is where the technology and will exists to protect the environment. China is
trying to churn out cheaper goods and does not care what damage they do in cutting
environmental corners.
https://en.wikipedia.org/wiki/Climate_change_in_China
China still supports the "common but differentiated responsibilities" principle, which
holds that since China is still developing, its abilities and capacities to reduce
emissions are comparatively lower than developed countries'. Therefore, its emissions
should not be required to decrease over time, but rather should be encouraged to increase
less over time until industrialization is farther along and reductions are feasible
In other words the global environment is going to continue to be ripped apart like a car
in a wrecking yard by China. "Industrialization is farther along" is obviously Chinese speak
for "when China is able to dominate the world with enormous productive capacity and we do not
even have to pay lip service any more".
In today's world, however, where great-power armed combat could possibly end in a
nuclear exchange and mutual annihilation, direct military conflict is a distinctly
unappealing option for all parties. Instead, governing elites have developed other means of
warfare -- economic, technological, and covert -- to achieve such strategic objectives.
Viewed this way, the United States is already in close to full combat mode with respect to
China.
No, the appeal of a real war will increase precipitously for any clear loser in the
economic competition who has a rapidly declining military advantage (especially in
thermonuclear first strike capacity due to proximity fuses and sub location tech), and we all
know who that is going to be. A shooting war will come, and the sooner it comes the
better for the whole world. Reassuring Russia that it will not be subjected to the same
treatment by the West at some point in the future will be the main problem inhibiting the
coming military take down (and nuking if necessary) of China.
As to bringing in Hindoos and Pakis into to the America-China conflict with a singular
example of the demand for defense related technology transfer by the former
India is a mediocrity but Pakistan is a nightmare for all concerned, given that after
imbibing religious mumbo jumbo from moronic Arabs, with which havocs were created in
Afghanistan via neoconnish America, now they are fellating uncircumcised Chinese for crumbs
the ungodly Chinese will play the idiotic Pakis like a fiddle to the detriment of the
West!
Negotiations with Beijing to address structural economic reforms are taking place on
a track that's separate from the talks about the quantity of American products the Chinese may
agree to buy to reduce the U.S. trade deficit, one of the people briefed on the matter said.
The Chinese have offered to ramp up purchases of American goods by $1.2 trillion over six
years, according to the person. It's still unclear how Beijing would follow through on those
purchases if retaliatory tariffs remained in place and other trading barriers aren't removed, the
person added. China bought $130 billion in U.S. goods in 2017, according to U.S. figures.
After several rounds of face-to-face meetings between U.S. and Chinese officials since last
year, the sides are now in regular contact via phone and video-conference to hammer out the
details of a deal, according to the person.
The U.S. Trade Representative's office said Thursday it will publish a notice in the Federal
Register delaying the increase of tariffs on Chinese imports until further notice. Trump had
previously planned to raise tariffs on March 1, but on Sunday dropped the threat amid progress at
the negotiating table.
"... By Chakravarthi Raghavan, Editor-emeritus of South-North Development Monitor SUNS, is based in Geneva and has been monitoring and reporting on the WTO and its predecessor GATT since 1978; he is author of several books on trade issues; and Jomo Kwame Sundaram, is Senior Adviser with the Khazanah Research Institute, and was . an economics professor and United Nations Assistant Secretary General for Economic Development. Originally published at Inter Press Service ..."
"... Data governance infrastructure ..."
"... Enterprise competition ..."
"... Consumer protection ..."
"... Trade facilitation ..."
"... Describing what these TNCs are trying to push through as "digital colonialism" seems apt. In contrast to traditional colonialism, characterized as it was by massive investments in manpower and other resources required to conquer far-flung overseas territories, the marginal cost of adding one more overseas territory to a digital colonizers empire is miniscule compared to what old-school colonizers had to pony up to expand their list of colonies. ..."
"... Add to this weak regulatory firewalls in developing countries and market saturation in developed nations, it's obvious why these TNCs are determined to push through an international policy framework that advances their drive to uncover new pockets of growth in the developing world. It's also telling that they're aggressively pursuing this end before developing countries can mount a cohesive defense of their digital sovereignty. "Beware Proposed E-commerce Rules" indeed ..."
Beware Proposed
E-Commerce Rules Posted on February 10,
2019 by Jerri-Lynn ScofieldBy
Chakravarthi Raghavan, Editor-emeritus of South-North Development Monitor SUNS, is based in
Geneva and has been monitoring and reporting on the WTO and its predecessor GATT since 1978; he
is author of several books on trade issues; and Jomo Kwame Sundaram, is Senior Adviser with the
Khazanah Research Institute, and was . an economics professor and United Nations Assistant
Secretary General for Economic Development. Originally published at Inter Press
Service
In Davos in late January, several powerful governments and their allies announced their
intention to launch new negotiations on e-commerce. Unusually, the intention is to launch the
plurilateral negotiations in the World Trade Organization (WTO), an ostensibly multilateral
organization, setting problematic precedents for the future of multilateral negotiations.
Any resulting WTO agreement, especially one to make e-commerce tax- and tariff-free, will
require amendments to its existing goods agreements, the General Agreement on Trade in Services
(GATS) and the Trade-Related Intellectual Property Rights (TRIPS) agreements. If it is not an
unconditional agreement in the WTO, it will violate WTO 'most favoured nation' (MFN)
principles.
This will be worse than the old, and ostensibly extinct 'Green Room' processes -- of a few
major powers negotiating among themselves, and then imposing their deal on the rest of the
membership. Thus, the proposed e-commerce rules may be 'WTO illegal' -- unless legitimized by
the amendment processes and procedures in Article X of the WTO treaty.
Any effort to 'smuggle' it into the WTO, e.g., by including it in Annex IV to the WTO treaty
(Plurilateral Trade Agreements), will need, after requisite notice, a consensus decision at
Ministerial Conference (Art X:9 of treaty) . It may still be illegal since the subjects are
already covered by agreements in Annexes 1A, 1B and 1C of the WTO treaty.
Consolidating Power of the Giants
Powerful technology transnational corporations (TNCs) are trying to rewrite international
rules to advance their business interests by: gaining access to new foreign markets, securing
free access to others' data, accelerating deregulation, casualizing labour markets, and
minimizing tax liabilities.
While digital technology and trade, including electronic or e-commerce, can accelerate
development and create jobs, if appropriate policies and arrangements are in place, e-commerce
rhetoric exaggerates opportunities for developing country, especially small and medium
enterprises. Instead, the negotiations are intended to diminish the right of national
authorities to require 'local presence', a prerequisite for the consumer and public to sue a
supplier.
The e-commerce proposals are expected to strengthen the dominant TNCs, enabling them to
further dominate digital trade as the reform proposals are likely to strengthen their
discretionary powers while limiting public oversight over corporate behaviour in the digital
economy.
Developing Countries Must Be Vigilant
If digital commerce grows without developing countries first increasing value captured from
production -- by improving productive capacities in developing countries, closing the digital
divide by improving infrastructure and interconnectivity, and protecting privacy and data --
they will have to open their economies even more to foreign imports.
Further digital liberalization without needed investments to improve productive capacities,
will destroy some jobs, casualize others, squeeze existing enterprises and limit future
development. Such threats, due to accelerated digital liberalization, will increase if the
fast-changing digital economic space is shaped by new regulations influenced by TNCs.
Diverting business through e-commerce platforms will not only reduce domestic market shares,
as existing digital trade is currently dominated by a few TNCs from the United States and
China, but also reduce sales tax revenue which governments increasingly rely upon with the
earlier shift from direct to indirect taxation.
Developing countries must quickly organize themselves to advance their own agenda for
developmental digitization. Meanwhile, concerned civil society organizations and others are
proposing new approaches to issues such as data governance, anti-trust regulation, smaller
enterprises, jobs, taxation, consumer protection, and trade facilitation.
New Approach Needed
A development-focused and jobs-enhancing digitization strategy is needed instead. Effective
national policies require sufficient policy space, stakeholder participation and regional
consultation, but the initiative seeks to limit that space. Developing countries should have
the policy space to drive their developmental digitization agendas. Development partners,
especially donors, should support, not drive this agenda.
Developmental digitization will require investment in countries' technical, legal and
economic infrastructure, and policies to: bridge the digital divide; develop domestic digital
platforms, businesses and capacities to use data in the public interest; strategically promote
national enterprises, e.g., through national data use frameworks; ensure digitization conducive
to full employment policies; advance the public interest, consumer protection, healthy
competition and sustainable development.
Pro-active Measures Needed
Following decades of economic liberalization and growing inequality, and the increasing
clout of digital platforms, international institutions should support developmental
digitization for national progress, rather than digital liberalization. Developing country
governments must be vigilant about such e-commerce negotiations, and instead undertake
pro-active measures such as:
Data governance infrastructure : Developing countries must be vigilant of the
dangers of digital colonialism and the digital divide. Most people do not properly value data,
while governments too easily allow data transfers to big data corporations without adequate
protection for their citizens. TNC rights to free data flows should be challenged.
Enterprise competition : Developing countries still need to promote national
enterprises, including through pro-active policies. International rules have enabled wealth
transfers from the global South to TNCs holding well protected patents. National systems of
innovation can only succeed if intellectual property monopolies are weakened. Strengthening
property rights enhances TNC powers at the expense of developing country enterprises.
Employment : Developmental digitization must create decent jobs and livelihoods.
Labour's share of value created has declining in favour of capital, which has influenced
rule-making to its advantage.
Taxation: The new e-commerce proposals seek to ban not only appropriate taxation,
but also national presence requirements where they operate to avoid taxes at the expense of
competitors paying taxes in compliance with the law. Tax rules allowing digital TNCs to reduce
taxable income or shift profits to low-tax jurisdictions should be addressed.
Consumer protection : Strong policies for consumer protection are needed as the
proposals would put privacy and data protection at risk. Besides citizens' rights to privacy,
consumers must have rights to data protection and against TNC and other abuse of human
rights.
Competition : Digital platforms must be better regulated at both national and
international level. Policies are needed to weaken digital economic monopolies and to support
citizens, consumers and workers in relating to major digital TNCs.
Trade facilitation : Recent trade facilitation in developing countries, largely
funded by donors, has focused on facilitating imports, rather than supply side constraints.
Recent support for digital liberalization similarly encourages developing countries to import
more instead of developing needed new infrastructure to close digital divides.
Urgent Measures Needed
'E-commerce' has become the new front for further economic liberalization and extension of
property rights by removing tariffs (on IT products), liberalizing imports of various services,
stronger IP protection, ending technology transfer requirements, and liberalizing government
procurement.
Developing countries must instead develop their own developmental digitization agendas, let
alone simply copy, or worse, promote e-commerce rules developed by TNCs to open markets, secure
data, as well as constrain regulatory and developmental governments.
Describing what these TNCs are trying to push through as "digital colonialism" seems apt.
In contrast to traditional colonialism, characterized as it was by massive investments in
manpower and other resources required to conquer far-flung overseas territories, the marginal
cost of adding one more overseas territory to a digital colonizers empire is miniscule
compared to what old-school colonizers had to pony up to expand their list of colonies.
Add to this weak regulatory firewalls in developing countries and market saturation in
developed nations, it's obvious why these TNCs are determined to push through an
international policy framework that advances their drive to uncover new pockets of growth in
the developing world. It's also telling that they're aggressively pursuing this end before
developing countries can mount a cohesive defense of their digital sovereignty. "Beware
Proposed E-commerce Rules" indeed
It is still cold in davos, all the more reason to feel carefully, and be very sure
that the P-crats are not slipping you "a mickey" in the butt, because they
always repeat always do it!
The comment, and questions posed aren't clear.
The announcement (widely reported in media) was made to media at Davos after a breakfast
meeting, and almost immediately it appeared on WTO website as a "communication" from the
members at the breakfast meeting.
Beyond "intention" to negotiate, everything else was vague – whether it be issues to be
negotiated, where and how etc.
Why does this make me think of MERS and how the finance industry diverted at least
hundreds of thousands of dollars in transaction recording fees away from local government
real estate offices? If popular government is to remain meaningful it had better have in
place effective means of enforcing its tax entitlements and the will to do it.
Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the
Rich Richer
By Dean Baker
The Old Technology and Inequality Scam: The Story of Patents and Copyrights
One of the amazing lines often repeated by people in policy debates is that, as a result
of technology, we are seeing income redistributed from people who work for a living to the
people who own the technology. While the redistribution part of the story may be mostly true,
the problem is that the technology does not determine who "owns" the technology. The people
who write the laws determine who owns the technology.
Specifically, patents and copyrights give their holders monopolies on technology or
creative work for their duration. If we are concerned that money is going from ordinary
workers to people who hold patents and copyrights, then one policy we may want to consider is
shortening and weakening these monopolies. But policy has gone sharply in the opposite
direction over the last four decades, as a wide variety of measures have been put into law
that make these protections longer and stronger. Thus, the redistribution from people who
work to people who own the technology should not be surprising -- that was the purpose of the
policy.
If stronger rules on patents and copyrights produced economic dividends in the form of
more innovation and more creative output, then this upward redistribution might be justified.
But the evidence doesn't indicate there has been any noticeable growth dividend associated
with this upward redistribution. In fact, stronger patent protection seems to be associated
with slower growth.
Before directly considering the case, it is worth thinking for a minute about what the
world might look like if we had alternative mechanisms to patents and copyrights, so that the
items now subject to these monopolies could be sold in a free market just like paper cups and
shovels.
The biggest impact would be in prescription drugs. The breakthrough drugs for cancer,
hepatitis C, and other diseases, which now sell for tens or hundreds of thousands of dollars
annually, would instead sell for a few hundred dollars. No one would have to struggle to get
their insurer to pay for drugs or scrape together the money from friends and family. Almost
every drug would be well within an affordable price range for a middle-class family, and
covering the cost for poorer families could be easily managed by governments and aid
agencies.
The same would be the case with various medical tests and treatments. Doctors would not
have to struggle with a decision about whether to prescribe an expensive scan, which might be
the best way to detect a cancerous growth or other health issue, or to rely on cheaper but
less reliable technology. In the absence of patent protection even the most cutting edge
scans would be reasonably priced.
Health care is not the only area that would be transformed by a free market in technology
and creative work. Imagine that all the textbooks needed by college students could be
downloaded at no cost over the web and printed out for the price of the paper. Suppose that a
vast amount of new books, recorded music, and movies was freely available on the web.
People or companies who create and innovate deserve to be compensated, but there is little
reason to believe that the current system of patent and copyright monopolies is the best way
to support their work. It's not surprising that the people who benefit from the current
system are reluctant to have the efficiency of patents and copyrights become a topic for
public debate, but those who are serious about inequality have no choice. These forms of
property claims have been important drivers of inequality in the last four decades.
The explicit assumption behind the steps over the last four decades to increase the
strength and duration of patent and copyright protection is that the higher prices resulting
from increased protection will be more than offset by an increased incentive for innovation
and creative work. Patent and copyright protection should be understood as being like very
large tariffs. These protections can often the raise the price of protected items by several
multiples of the free market price, making them comparable to tariffs of several hundred or
even several thousand percent. The resulting economic distortions are comparable to what they
would be if we imposed tariffs of this magnitude.
The justification for granting these monopoly protections is that the increased innovation
and creative work that is produced as a result of these incentives exceeds the economic costs
from patent and copyright monopolies. However, there is remarkably little evidence to support
this assumption. While the cost of patent and copyright protection in higher prices is
apparent, even if not well-measured, there is little evidence of a substantial payoff in the
form of a more rapid pace of innovation or more and better creative work....
Progressive Taxes Only Go So Far. Pre-Tax Income Is the Problem
By Dean Baker
In recent weeks, there have been several bold calls for large increases in progressive
taxation. First we had Representative Alexandria Ocasio-Cortez (D-NY), often referred to as
AOC, proposing a top marginal tax rate on income over $10 million. This sent right-wing
talking heads into a frenzy, leading many to show they don't know the difference between a
marginal tax rate and an average tax rate. (AOC's 70 percent rate would only apply to an
individual's income above $10 million.)
More recently, we had Senator Elizabeth Warren propose a wealth tax that would apply to
people with assets of more than $50 million. This tax could have Jeff Bezos sending more than
$3 billion a year to the Treasury.
Given the enormous increase in inequality over the last four decades, and the reduction in
the progressivity of the tax code, it is reasonable to put forward plans to make the system
more progressive. But, the bigger source of the rise in inequality has been a growth in the
inequality of before-tax income, not the reduction in high–end tax rates. This suggests
that it may be best to look at the factors that have led to the rise in inequality in market
incomes, rather than just using progressive taxes to take back some of the gains of the very
rich.
There have been many changes in rules and institutional structures that have allowed the
rich to get so much richer. (This is the topic of my free book Rigged.) Just to take the most
obvious -- government-granted patent and copyright monopolies have been made longer and
stronger over the last four decades. Many items that were not even patentable 40 years ago,
such as life forms and business methods, now bring in tens or hundreds of billions of dollars
to their owners.
If the importance of these monopolies for inequality is not clear, ask yourself how rich
Bill Gates would be if there were no patents or copyrights on Microsoft software. (Anyone
could copy Windows into a computer and not pay him a penny.) Many other billionaires get
their fortune from copyrights in software and entertainment or patents in pharmaceuticals,
medical equipment and other areas.
The government also has rules for corporate governance that allow CEOs to rip off the
companies for which they work. CEO pay typically runs close to $20 million a year, even as
returns to shareholders lag. It would be hard to argue that today's CEOs, who get 200 to 300
times the pay of ordinary workers, are doing a better job for their companies than CEOs in
the 1960s and 1970s who only got 20 to 30 times the pay of ordinary workers.
Another source of inequality is the financial sector. The government has aided these
fortunes in many ways, most obviously with the bailout of the big banks a decade ago. It also
has deliberately structured the industry in ways that facilitate massive fortunes in
financial engineering.
There is no reason to design an economy in such a way as to ensure that most of the gains
from growth flow upward. Unfortunately, that has largely been the direction of policy over
the last four decades.
We can ignore the inequities built into the way we have structured the economy and just
try to tax the big winners, as is being proposed. However, there are two major problems with
this route, one practical and one political.
The practical problem is that the rich are not stupid. They will look to find ways to
avoid or evade the various progressive taxes being proposed. Both AOC and Warren have relied
on advice from some top economists in describing their tax proposals, but even the
best–designed tax can be gamed. (Is it worth $3 billion a year for Jeff Bezos to remain
a US citizen? As a non-citizen he wouldn't pay the wealth tax.)
Gaming the tax system will mean that we will collect considerably less revenue than a
static projection would imply. It also will lead to the growth of the tax gaming industry.
From an economic standpoint, this is a complete waste. We will have people designing clever
ways to try to hide income and wealth, and in some cases getting very rich themselves in the
process.
The political problem with going the tax route is that people attach a certain legitimacy
to the idea that income gained through the market is somehow rightfully gained, as opposed to
say, income from a government transfer program, like food stamps. The rich will be able to
win support from many non-rich by claiming that the government has taken away what they have
fairly earned.
By contrast, it is much harder for a drug company billionaire to cry foul because a drug
developed with public funds, and selling at generic prices, has destroyed the market for his
$100,000–a–year cancer drug. In the same vein, CEOs might have a hard time
getting sympathy for the complaint that new rules of corporate governance make it easier to
shareholders to bring their pay down to earth.
It is great that the rise in inequality seems likely to be a major topic in the 2020
presidential campaign. However, it is important that we think carefully about how best to
reverse it.
Matthew Daly - Associated Press - February 7, 2019
WASHINGTON -- Democrats including Rep. Alexandria Ocasio-Cortez of New York are calling
for a Green New Deal intended to transform the U.S. economy to combat climate change and
create thousands of jobs in renewable energy.
The freshman lawmaker and veteran Sen. Ed Markey of Massachusetts are teaming up on the
plan, which aims to eliminate the U.S. carbon footprint by 2030.
A joint resolution drafted by Ocasio-Cortez and Markey sets a goal to meet ''100 percent
of the power demand in the United States through clean, renewable and zero-emission energy
sources,'' including dramatic increases in wind and solar power.
A news conference at the Capitol is set for Thursday, the day they introduce the
resolution.
While setting lofty goals, the plan does not explicitly call for eliminating the use of
fossil fuels such as oil and natural gas, a nod to pragmatism that may disappoint some of
Ocasio-Cortez's strongest supporters.
Even so, their Green New Deal goes far beyond the Clean Power Plan proposed by President
Barack Obama. President Donald Trump has scrapped Obama's plan, which imposed emissions
limits on coal-fired power plants, as a job-killer.
The Democrats are likely to meet resistance to their proposal in Congress, especially in
the Republican-controlled Senate. Trump, who has expressed doubts about climate change, also
is likely to oppose it.
The resolution marks the first time Ocasio-Cortez and other lawmakers have attached
legislative language onto the Green New Deal, a concept that until now has been largely
undefined other than as a call for urgent action to head off catastrophic climate change and
create jobs.
Several Democratic presidential hopefuls have embraced the idea of a Green New Deal
without saying exactly what it means.
Ocasio-Cortez said in a statement that the plan will create ''unprecedented levels of
prosperity and wealth for all while ensuring economic and environmental justice and
security.'' She calls for a ''World War II-scale mobilization'' that includes high-quality
education and health care, clean air and water and safe, affordable housing.
Answering critics who call the plan unrealistic, Ocasio-Cortez says that when President
John F. Kennedy wanted to go to the moon by the end of the 1960s, ''people said it was
impossible.'' She also cites Franklin D. Roosevelt's New Deal, Lyndon B. Johnson's Great
Society and the interstate highway system begun under Dwight D. Eisenhower as examples of
American know-how and capability.
While focusing on renewable energy, Ocasio-Cortez said the plan would include existing
nuclear power plants but block new nuclear plants. Nuclear power does not emit greenhouse
gases, which contribute to global warming.
The resolution does not include a price tag, but some Republicans predict it would cost in
the trillions of dollars. They denounced the plan at House hearings on climate change on
Wednesday.
The Green New Deal would be paid for ''the same way we paid for the original New Deal,
World War II, the bank bailouts, tax cuts for the rich and decades of war -- with public
money appropriated by Congress,'' Ocasio-Cortez said.
Government can take an equity stake in Green New Deal projects ''so the public gets a
return on its investment,'' she said.
New Illinois Gov. J.B. Pritzker got a warning of sorts from Moody's ahead of the
governor's first budget address. The rating agency's most recent report* highlighted the
usual crises Pritzker must tackle: ballooning pension debts and chronic budget deficits.
Moody's rates Illinois just one notch above junk largely due to the state's finances and
malgovernance.
Moody's says new revenue likely will be required to achieve stability, as you'd expect,
because rating agencies love higher taxes. But for the first time, the agency has included
outmigration among its top-three credit concerns. That matters because Pritzker's number one
prescription to "fix" Illinois is tax hikes, something that's sure to accelerate Illinois'
out-migration trend and further erode the state's tax base.
---------------
Moody's is politely explaining that they are 180 deg out of cycle, the negotiation has
been finished, in the past.
Is the new gov confused or is he consciously doing the crawl back step? Whatever, the gov
will be confused no longer, he is clearly in crawl back stage, the next chapter in
bankruptcy.
It is now all about deciding which industry stays and which goes; a re-agglomeration, the
second step of the Hicksonian jump, shift expectations operator; you have to move stuff
around according to the agreement.
Technological superiority is a weapon and the USA know how to use it.
Notable quotes:
"... Made in China 2025 is the Chinese government's 10-year plan to update the country's 10 high-tech manufacturing industries, which include information technology, robotics, aerospace, rail transport, and new-energy vehicles, among others. ..."
"... Without U.S. semis, China will not be able to process the technology necessary to push forward the Made in China 2025 program. "American chips in many ways form the backbone of China's tech economy," Shah said. ..."
"... The Trump Administration's tariffs on Chinese goods were intended to severely disrupt the Chinese tech-advancement initiative. But Shah says that making U.S. chips more expensive for China could have consequences for the U.S. as well. ..."
"... "Over 50% of Chinese semiconductor consumption is supplied by U.S. firms In 2017, China consumed $138bn in integrated circuits (ICs), of which it only produced $18.5bn domestically, implying China imported $120bn of semis in 2017, up from $98bn in 2016 and $73bn in 2012." ..."
"... If the two leaders are unable to come to some sort of trade resolution at the meeting, U.S. tariffs on over $200 billion worth of Chinese goods will increase from 10% to 25% on January 1, 2019. ..."
"... While US has the upper hand on semis, a trade embargo on semis will (1) slows down China's move towards achieving Made in China 2025, (2) at the same time give China the impetus to rush ahead will all resources available to achieve the originally omitted goal of being self-sufficient in tech skills and technology, and (3) seriously hurt companies like Intel, AMD, Micron, and Qualcom as a huge percentage of their businesses are with China, and with that portion of their business gone, all these companies will end up in a loss and without the needed financial resources to invest into new technology in the near future. ..."
As trade tensions run hot between the U.S. and China, President Trump might have one key advantage in the trade war, according
to Nomura.
Analyst Romit Shah explained that China's dependence on U.S.-made advanced microchips could give Trump the upper hand.
"We believe that as China-U.S. tensions escalate, U.S. semiconductors give Washington a strong hand because the core components
of Made in China 2025 (AI, smart factories, 5G, bigdata and full self-driving electric vehicles) can't happen without advanced microchips
from the U.S.," Shah said in a note to clients.
BEIJING, CHINA – NOVEMBER 9, 2017: US President Donald Trump (L) and China's President Xi Jinping shake hands at a press conference
following their meeting at the Great Hall of the People in Beijing. Artyom Ivanov/TASS (Photo by Artyom Ivanov\TASS via Getty Images)
Made in China 2025 is the Chinese government's 10-year plan to update the country's 10 high-tech manufacturing industries, which
include information technology, robotics, aerospace, rail transport, and new-energy vehicles, among others.
One of Made in China 2025's main goals is to become semiconductor self sufficient. China hopes that at least 40% of the semiconductors
used in China will be made locally by 2020, and at least 70% by 2025. "Made in China 2025 made abundantly clear China's commitment
to semiconductor self-sufficiency. Made in China 2025 will upgrade multiple facets of the Chinese economy," Shah said.
According to Nomura's estimates, China is currently about 3 to 5 years behind the U.S. in dynamic random-access memory (DRAM)
chip production. However, Shah explained that if the trade war persists, the consequences could set Chinese chip production behind
by 5 to 15 years.
Without U.S. semis, China will not be able to process the technology necessary to push forward the Made in China 2025 program.
"American chips in many ways form the backbone of China's tech economy," Shah said.
Consequences for U.S.
The Trump Administration's tariffs on Chinese goods were intended to severely disrupt the Chinese tech-advancement initiative.
But Shah says that making U.S. chips more expensive for China could have consequences for the U.S. as well.
One concern centers around intellectual property theft. The Department of Justice (DOJ) has been working hard to punish China
for allegedly attempting to commit espionage. For example, the DOJ believes China was attempting to spy on the U.S. through Huawei
and asked U.S. allies to drop
the Chinese tech equipment maker.
However, while many U.S. chipmakers, such as Advanced Micro Devices (
AMD ), Qualcomm (
QCOM ) and Micron (
MU ), expressed gratitude that the DOJ was intervening
to prevent intellectual property theft, the companies are also concerned that it could spark retaliation from their Chinese business
partners and result in loss of access to the Chinese market. "Joint ventures, IP sharing agreements and manufacturing partnerships
are the price of admission into China, and thus far, companies are playing ball," Shah explained.
Shah essentially calls the Chinese tariffs a double-edged sword. While tariffs will hurt the Chinese if they can't have access
to freely source U.S. chips, it could also hurt U.S. chipmakers if they lose their business in China. According to Shah's research,
"Over 50% of Chinese semiconductor consumption is supplied by U.S. firms In 2017, China consumed $138bn in integrated
circuits (ICs), of which it only produced $18.5bn domestically, implying China imported $120bn of semis in 2017, up from $98bn in 2016 and $73bn
in 2012."
Trump
and China's President Xi Jinping are scheduled to meet at the G20 summit in Buenos Aires, Argentina, on Thursday for a two-day
meeting. If the two leaders are unable to come to some sort of trade resolution at the meeting, U.S. tariffs on over $200 billion
worth of Chinese goods will increase from 10% to 25% on January 1, 2019.
"China could source equipment from Europe and Japan; however, we believe there are certain mission-critical tools that can only
be purchased from the U.S. We believe that U.S.-China trade is the biggest theme for U.S. semis and equipment stocks in 2019. Made
in China 2025 can't happen without U.S. semis, and U.S. semis can't grow without China. We hope this backdrop drives resolution,"
Shah said.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter:
@heidi_chung .
R
While US has the upper hand on semis, a trade
embargo on semis will (1) slows down China's move towards achieving Made in China 2025, (2) at the same time give China the impetus
to rush ahead will all resources available to achieve the originally omitted goal of being self-sufficient in tech skills and
technology, and (3) seriously hurt companies like Intel, AMD, Micron, and Qualcom as a huge percentage of their businesses are
with China, and with that portion of their business gone, all these companies will end up in a loss and without the needed financial
resources to invest into new technology in the near future.
Apart from semis, China holds the throat of the US in the supply of
rare earth (used in semis, military weaponry, ans astronomical), as well as antibiotics..
"... The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems, and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market growth. ..."
From Encyclical Letter Laudato Si' of the Holy Father Francis, On Care For Our Common Home:
The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated
and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively
approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental
method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find
itself in the presence of something formless, completely open to manipulation. Men and women have constantly intervened in nature,
but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a
matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on
things, attempting to extract everything possible from them while frequently ignoring or forgetting the reality in front of us.
Human beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational.
This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers
and experts in technology. It is based on the lie that there is an infinite supply of the earth's goods, and this leads to the
planet being squeezed dry beyond every limit. It is the false notion that "an infinite quantity of energy and resources are available,
that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily
absorbed"
"The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance
in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the
real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons
of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems,
and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market
growth.
They are less concerned with certain economic theories which today scarcely anybody dares defend, than with their actual
operation in the functioning of the economy. They may not affirm such theories with words, but nonetheless support them with their
deeds by showing no interest in more balanced levels of production, a better distribution of wealth, concern for the environment
and the rights of future generations. Their behavior shows that for them maximizing profits is enough. Yet by itself the market
cannot guarantee integral human development and social inclusion. At the same time, we have "a sort of 'superdevelopment' of a
wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation", while
we are all too slow in developing economic institutions and social initiatives which can give the poor regular access to basic
resources. We fail to see the deepest roots of our present failures, which have to do with the direction, goals, meaning and social
implications of technological and economic growth."
Dominance in technology still represent pretty powerful lever used to damage and possibly subdue Russia. King of
technological imperialism.
Notable quotes:
"... As a result, the Soviet and post-Soviet elites adopted the rules established by Washington: they became intermediaries between Western corporations and the wealth of their countries. Russia paid for this deal with the destruction of its industry and the emergence of oligarchs, enriched by mediation. But there were wins. The country has developed large national corporations that have become prominent players on the global map. The same "Gazprom". Over time, Russia has its own ambitions to expand the volume and list of exported goods. ..."
"... In response, 5 years ago, the US led an attack on it, declaring sanctions. ..."
"... - Full and unconditional surrender of Russia in the economy. The West wants through its representatives to manage Russian companies, without intermediaries to enter the Russian domestic market and get the fattest pieces. ..."
"... In addition, in the eighties the USSR lost to the West ideologically. Our society has accumulated a great fatigue from ascetic "socialism" and international expansion with ideological background. The Western model of life and economy began to seem more attractive. ..."
"... -- In the late eighties the Soviet Union accumulated external debts, in full working printing press in order to Supplement the budget and ensure the salary of the people. The planned economy was unable to provide the country with basic goods. And today, private business is able to buy anything and anywhere. Agriculture not only feeds the country on its own, but also has become a major exporter of grain, poultry and pork. The financial system is arranged very rationally: the state debt is minimized and plays a purely technical role, budget revenues exceed expenditures. ..."
"... And from this point of view, the country is again at a crossroads. In 2019, we can see a new wave of the global economic crisis. The first signs of this were already evident at the end of last year, when commodity prices fell sharply and the shares of American companies fell in price. If these trends continue, Russia will not receive easing of sanctions. So, we need to act and strongly non-trivial. ..."
"... It is already clear with whom we can develop further: with the leading Asian countries. At the same time, expanding commodity expansion in foreign markets, it is important to move to a new mercantilism: sell excess, buy only the most necessary, and produce everything else within the country. ..."
Article from the newspaper: weekly "Arguments and Facts" № 1-2 09/01/2019
Is the scenario of suffocation of the USSR, carried out by the US 30 years ago, similar to
the events that are happening now, and what Russia needs to fear most? "AiF" asked these
questions to the Director of the Institute of new society, economist Vasily Koltashov.
How the world has changed
Alexey Makurin," AIF": Looking at the events taking place in recent years, you catch
yourself thinking that all this has already happened. The current strategy of suffocation of
Russia by America one in one copies the same strategy of times of Reagan. In the eighties, the
United States also hampered the construction of a gas pipeline from Siberia to Europe. The fall
in oil prices also drained our budget, and defense spending grew. And the army was involved in
the conflict in the southern country: Afghanistan. The West deliberately repeats the plan that
brought him victory in the cold war?
Vasily Koltashov: it's more of a coincidence. But even if there is some scenario, the game
this time is some stupid. In the days of Reagan and Bush senior Americans were more rational,
thinner. And now, in everything they do, there is an element of hysteria caused by the need to
respond to the complex state of their own Affairs. Compared with the eighties in the us huge
public debt and huge bubbles in the stock market, threatening investors ruin. The imbalances
that have accumulated in the economy are blocking the development of industrial production.
Much other than agriculture and raw material extraction is often expensive and uncompetitive.
These problems provoke a conflict not only with Russia, but also with China, with other
Eurasian centers of capitalism, which took shape in recent decades.
30 years ago, Western countries revived and developed after the crisis of the seventies. The
orbit of influence of the USA included Pakistan, Turkey, China. Now Trump has stopped financing
Pakistan. In Turkey, there was an attempt of a coup d'état in which Ankara accused
Washington. The Americans are waging a trade war against the Chinese. These and other countries
that do not find a common language with the United States, are increasingly trading among
themselves. The American press writes about the" Eastern Entente", implying the Eurasian
powers.
Increasingly, there are disputes and conflicts between Americans and their European allies,
which was unthinkable before. In such a situation, a plan to weaken Russia, similar to the
scenario of Reagan advisors, can no longer work.
-- What did the West want, putting pressure on the USSR in the eighties?
- I think the West did not seek to destroy the Soviet Union, but just tried to solved a more utilitarian
problem: acquiring new markets for their products. At that time, neoliberal globalization became the
main mechanism of economic growth, it was important for the West to draw countries into its
orbit, which were previously somehow isolated from the world market. They bought the Russian nomenklatura like they buy local
elites in Latin America and tried to concert Russia into Latin American country. They almost succeeded.
How did Ronald Reagan scare the USSR by joking on August 11, 1984?
-- What about Reagan's "evil Empire"statement?
-- It was preparation for the beginning of negotiations from a position of strength. Behind
this ideological rhetoric was another meaning: if you continue to maintain its planned economy,
closed to free trade, we will begin to destroy it, and if you agree to our terms, we will offer
you a deal.
As a result, the Soviet and post-Soviet elites adopted the rules established by Washington:
they became intermediaries between Western corporations and the wealth of their countries.
Russia paid for this deal with the destruction of its industry and the emergence of oligarchs,
enriched by mediation. But there were wins. The country has developed large national
corporations that have become prominent players on the global map. The same "Gazprom". Over
time, Russia has its own ambitions to expand the volume and list of exported goods.
In
response, 5 years ago, the US led an attack on it, declaring sanctions.
- What is their purpose in the current situation?
- Full and unconditional surrender of Russia in the economy. The West wants through its
representatives to manage Russian companies, without intermediaries to enter the Russian
domestic market and get the fattest pieces.
How Russia has changed
- This time Russia does not give up and attacks itself, as is happening in the same Syria.
What changed?
- The country and enterprises are now run by people with a market view of the world who know
the value of the wealth they dispose of. It was for Gorbachev that Soviet factories were an
abstraction, he did not understand their true value. His concessions to the US and Europe were
completely irrational from a commercial point of view. It's impossible now.
In addition, in the eighties the USSR lost to the West ideologically. Our society has
accumulated a great fatigue from ascetic "socialism" and international expansion with
ideological background. The Western model of life and economy began to seem more
attractive. The war in Afghanistan was declared meaningless. And now the Syrian conflict,
Russia does not solve a particular ideological goals. The military plays the role of guards of
its economic interests. Without any doubt, it would be more difficult for our government to
agree with OPEC on limiting oil production, if not for the successes in Syria. This agreement
in 2017-2018 allowed to raise oil prices and helped to resume economic growth in Russia.
-- Was it possible for the Soviet leadership to influence world oil prices?
- The USSR, too, nothing prevented to sit down at the negotiating table with OPEC. But that
wouldn't change the situation. Saudi Arabia and other oil exporters were then loyal allies of
the United States. The West then concentrated all the world's capital, he put the OPEC
countries conditions: create comfortable prices for us, and we will invest in your economy.
And today, Saudi capital seeks to play an independent role, Riyadh's relations with
Washington have become cooler, and with Moscow, on the contrary, warmer. And the US itself is
increasingly supplying hydrocarbons for export: it is predicted that in 2019 they will come out
on top in the world for oil production. But this leadership is provided to Americans by
expensive shale oil, the extraction of which becomes unprofitable at prices below $ 40 per
barrel. So, for the US, very low oil prices are now also unprofitable.
On the other hand, the dependence of the Russian budget on oil and gas today is also higher
than 30-35 years ago, when the country had a more powerful industry. This is an additional
risk.
-- What new qualities acquired by the Russian economy allow it to successfully withstand
Western pressure?
-- In the late eighties the Soviet Union accumulated external debts, in full working
printing press in order to Supplement the budget and ensure the salary of the people. The
planned economy was unable to provide the country with basic goods. And today, private business
is able to buy anything and anywhere. Agriculture not only feeds the country on its own, but
also has become a major exporter of grain, poultry and pork. The financial system is arranged
very rationally: the state debt is minimized and plays a purely technical role, budget revenues
exceed expenditures.
Where the main threats
-- But aren't the military expenditures, which have to be made in the conditions of
confrontation with the United States, too high? Will it not be possible that the new arms race
will be too much for the country?
- Financing of the defense industry to the detriment of consumer and other civil industries
usually occurs in the planned mobilization system, where all the resources of the country are
concentrated by the state. And in a market economy, such imbalances appear only during the war,
when budget distortions arise and private companies begin to focus more on military orders than
on grass-roots demand. There is no such thing in Russia now, although the government's
attention to defense capability is growing along with the pressure of the US and its
allies.
- Where does the main danger come from in such a situation?
-- Not exactly from the USA. The main threat to Russia is low effective demand within the
country. The weakness of the ruble, the low rate of economic growth -- all this is a
consequence of the poverty of the mass buyer.
And from this point of view, the country is again at a crossroads. In 2019, we can see a
new wave of the global economic crisis. The first signs of this were already evident at the end
of last year, when commodity prices fell sharply and the shares of American companies fell in
price. If these trends continue, Russia will not receive easing of sanctions. So, we need to
act and strongly non-trivial.
With whom will trade? Expert on how Russia can live under sanctions
It is already clear with whom we can develop further: with the leading Asian countries. At
the same time, expanding commodity expansion in foreign markets, it is important to move to a
new mercantilism: sell excess, buy only the most necessary, and produce everything else within
the country. This is a traditional trade on the "method of cat Matroskin", which existed for
thousands of years: "To buy something you need, you must first sell something unnecessary." All
need to produce themselves.
And it is important to support the Russian buyer. This may be a preferential mortgage loan
at 3-5% per annum, which will stimulate demand for housing and the sectors of the economy that
are associated with construction. This may be an increase in the number of school teachers,
doctors and kindergarten workers. We need an hourly wage to let people know what their time is
worth. It is extremely important to have a tax-free minimum income (at least 50 thousand rubles
per month). It is necessary to interest migrant workers to live in Russia and leave money in
our country, which will help to create new jobs. We need to directly give people money and
encourage all kinds of entrepreneurship, release the economic energy of society.
"... Big tech companies have bullied competitors and outrun ethical standards in an effort to "own the world," Jean Case, the CEO of the Case Foundation and a former senior executive at AOL, told Yahoo Finance this week. "Many of those big companies are crowding out new innovations of young upstarts. That's not healthy," she said, in response to a question about Google and Facebook. ..."
Big tech companies have bullied competitors and outrun ethical standards in an
effort to "own the world," Jean Case, the CEO of the Case Foundation and a former
senior executive at AOL, told Yahoo Finance this week.
"Many of those big companies are crowding out new innovations of young upstarts.
That's not healthy," she said, in response to a question about Google and
Facebook.
"On the technology side, look, things have changed so fast," Case said. "I think
we just haven't kept pace with some of the ethics policies and frameworks that we
need to put around this stuff...used by millions of millions before thought is
given to implications."
Case made the comments in a conversation that aired on Yahoo Finance on Thursday
at 5 p.m. EST in an episode of "
Influencers
with Andy Serwer
," a weekly interview series with leaders in business,
politics, and entertainment. In addition to her comments on big tech, Case
explained why a woman can be elected president, what National Geographic has done
to thrive amid media industry tumult, and how it felt at AOL in the heady early
days of the internet.
"... Sections of the Chinese regime responded belligerently to the accusations. An editorial in the state-owned Global Times ..."
"... The editorial asked: "Assuming China is so powerful that it has stolen technological information for over a decade that is supposedly worth over a trillion in intellectual property, as the US has indicated, then how is it that China still lags behind the US in so many fields, from chips to electric vehicles, and even aviation engines?" ..."
Further escalating its economic and strategic offensive to block China from ever
challenging its post-World War II hegemony, the US government yesterday unveiled its fifth
set of economic espionage charges against Chinese individuals since September.
As part of an internationally-coordinated operation, the US Justice Department on Thursday
published indictments of two Chinese men who had allegedly accessed confidential commercial
data from US government agencies and corporate computers in 12 countries for more than a
decade.
The announcement represents a major intensification of the US ruling class's confrontation
against China, amid a constant build-up of unsubstantiated allegations against Beijing by
both the Republican and Democrat wings of Washington's political establishment.
Via salacious allegations of "hacking" on a "vast scale," every effort is being made by
the ruling elite and its media mouthpieces to whip up anti-China hysteria.
The indictment's release was clearly politically timed. It was accompanied by a global
campaign by the US and its allies, accusing the Chinese government of an illegal cyber theft
operation to damage their economies and supplant the US as the world's "leading
superpower."
US Secretary of State Mike Pompeo and Homeland Security Secretary Kirstjen Nielsen
immediately issued a statement accusing China of directing "a very real threat to the
economic competitiveness of companies in the United States and around the globe."
Within hours, US allies around the world put out matching statements, joined by
declarations of confected alarm by their own cyber-warfare and hacking agencies.
The Washington Post called it "an unprecedented mass effort to call out China for
its alleged malign acts." The coordination "represents a growing consensus that Beijing is
flouting international norms in its bid to become the world's predominant economic and
technological power."
The Australian government, the closest ally of the US in the Indo-Pacific region, was in
the forefront. Foreign Affairs Minister Marise Payne and Home Affairs Minister Peter Dutton
explicitly accused the Chinese government and its Ministry of State Security (MSS) of being
responsible for "a global campaign of cyber-enabled commercial intellectual property
theft."
Geoffrey Berman, the US attorney for the Southern District of New York, called the Chinese
cyber campaign "shocking and outrageous." Such pronouncements, quickly emblazoned in media
headlines around the world, destroy any possibility of anything resembling a fair trial if
the two men, named as Zhu Hua and Zhang Shilong, are ever detained by US agencies and brought
before a court.
The charges themselves are vaguely defined. Federal prosecutors in Manhattan accused the
men of conspiracy to commit computer intrusions, wire fraud and aggravated identity theft.
Zhu and Zhang acted "in association with" the MSS, as part of a hacking squad supposedly
named "APT1o" or "Stone Panda," the indictment said.
FBI Director Christopher Wray called a news conference to issue another inflammatory
statement against China. Pointing to the real motivations behind the indictments, he
declared: "China's goal, simply put, is to replace the US as the world's leading superpower,
and they're using illegal methods to get there."
Coming from the head of the US internal intelligence agency, this further indicates the
kinds of discussions and planning underway within the highest echelons of the US political
and military-intelligence apparatus to prepare the country, ideologically and militarily, for
war against China.
Washington is determined to block President Xi Jinping's "Made in China 2025" program that
aims to ensure China is globally competitive in hi-tech sectors such as robotics and chip
manufacture, as well as Beijing's massive infrastructure plans, known as the Belt and Road
Initiative, to link China with Europe across Eurasia.
The US ruling class regards these Chinese ambitions as existential threats because, if
successful, they would undermine the strategic position of US imperialism globally, and the
economic dominance of key American corporations.
Yesterday's announcement seemed timed to fuel tensions between Washington and Beijing,
after the unprecedented December 1 arrest of Meng Wanzhou, the chief financial officer of
Chinese telecommunications giant Huawei, in Canada at the request of the US.
Last weekend, US Vice President Mike Pence again accused China of "intellectual property
theft." These provocations came just weeks after the US and Chinese administrations agreed to
talks aimed at resolving the tariff and trade war launched by US President Donald Trump.
The Trump administration is demanding structural changes to China's state-led economic
model, greater Chinese purchases of American farm and industrial products and a halt to
"coercive" joint-venture licensing terms. These demands would severely undermine the "Made in
China 2025" program.
Since September, US authorities have brought forward five sets of espionage allegations.
In late October, the Justice Department unsealed charges against 10 alleged Chinese spies
accused of conspiring to steal sensitive commercial secrets from US and European
companies.
Earlier in October, the US government disclosed another unprecedented operation, designed
to produce a show trial in America. It revealed that a Chinese citizen, accused of being an
intelligence official, had been arrested in Belgium and extradited on charges of
conspiring to commit "economic espionage" and steal trade secrets.
The extradition was announced days after the Pentagon released a 146-page document, titled
"Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain
Resiliency of the United States," which made clear Washington is preparing for a total war
effort against both China and Russia.
Trump, Pence and Wray then all declared China to be the greatest threat to America's
economic and military security. Trump accused China of interfering in the US mid-term
elections in a bid to remove him from office. In a speech, Pence said Beijing was directing
"its bureaucrats and businesses to obtain American intellectual property -- the foundation of
our economic leadership -- by any means necessary."
Whatever the truth of the spying allegations against Chinese citizens -- and that cannot
be assumed -- any such operations would hardly compare with the massive global intrigue,
hacking, regime-change and military operations directed by the US agencies, including the
National Security Agency (NSA) and its "Five Eyes" partners.
These have been exposed thoroughly by NSA whistleblower Edward Snowden and WikiLeaks
founder Julian Assange. Leaked documents published by
WikiLeaks revealed that the CIA has developed "more than a thousand hacking systems, trojans,
viruses and other 'weaponized' malware," allowing it to seize control of devices, including
Apple iPhones, Google's Android operating system, devices running Microsoft Windows, smart
TVs and possibly the control of cars and trucks.
In an attempt to broaden its offensive against China, the US government said that along
with the US and its Five Eyes partners, such as Britain, Canada and Australia, the countries
targeted by the alleged Chinese plot included France, Germany, Japan, Sweden and
Switzerland.
Chinese hackers allegedly penetrated managed services providers (MSPs) that provide
cybersecurity and information technology services to government agencies and major firms.
Finance, telecommunications, consumer electronics and medical companies were among those said
to be targeted, along with military and US National Aeronautics and Space Administration
laboratories.
Sections of the Chinese regime responded belligerently to the accusations. An editorial in
the state-owned Global Times branded them "hysterical" and a warning sign of a
"comprehensive" US attack on China.
The editorial asked: "Assuming China is so powerful that it has stolen technological
information for over a decade that is supposedly worth over a trillion in intellectual
property, as the US has indicated, then how is it that China still lags behind the US in so
many fields, from chips to electric vehicles, and even aviation engines?"
The Global Times declared that "instead of adhering to a low-profile strategy,
China must face these provocations and do more to safeguard national interests."
The promotion of Chinese economic and militarist nationalism by a mouthpiece of the
Beijing regime is just as reactionary as the nationalist xenophobia being stoked by the
ruling elite of American imperialism and its allies. The answer to the evermore open danger
of war is a unified struggle by the international working class to end the outmoded
capitalist profit system and nation-state divisions and establish a socialist society.
ANY rational person would think : a nation like USA TODAY which can name a different ENEMY
every other week is clearly SICK, led by sociopaths. China ? Russia, Iran, North Korea ?
Venezuela ? ( all fail to live up to the high moral standards of " OUR democracy " ?)
How are any of these countries a greater threat to YOU than the local Democratic or
Republican party hacks ?
If YOU think that so many people hate you , would it not make sense to ask if there is
perhaps something wrong with YOU ?
In his recent article "Averting
World Conflict with China" Ron Unz has come up with an intriguing suggestion for the Chinese
government to turn the tables on the December 1 st arrest of Meng Wanzhou in Canada.
Canada detained Mrs. Meng, CFO of the world's largest telecoms equipment manufacturer Huawei,
at the request of the United States so she could be extradited to New York to face charges that
she and her company had violated U.S. sanctions on Iran. The sanctions in question had been
imposed unilaterally by Washington and it is widely believed that the Trump Administration is
sending a signal that when the ban on purchasing oil from Iran comes into full effect in May
there will be no excuses accepted from any country that is unwilling to comply with the U.S.
government's demands. Washington will exercise universal jurisdiction over those who violate
its sanctions, meaning that foreign officials and heads of corporations that continue to deal
with Iran can be arrested when traveling internationally and will be extradited to be tried in
American courts.
There is, of course, a considerable downside to arresting a top executive of a leading
foreign corporation from a country that is a major U.S. trading partner and which also, inter
alia, holds a considerable portion of the U.S. national debt. Ron Unz has correctly noted the "
extraordinary gravity of this international incident and its potential for altering the course
of world history." One might add that Washington's demands that other nations adhere to its
sanctions on third countries opens up a Pandora's box whereby no traveling executives will be
considered safe from legal consequences when they do not adhere to policies being promoted by
the United States. Unz cites Columbia's Jeffrey Sachs as
describing it as "almost a U.S. declaration of war on China's business community." If
seizing and extraditing businessmen becomes the new normal those countries most affected will
inevitably retaliate in kind. China has already detained two traveling Canadians to pressure
Ottawa to release Mrs. Meng. Beijing is also contemplating some immediate retaliatory steps
against Washington to include American companies operating in China if she is extradited to the
U.S.
Ron Unz has suggested that Beijing might just want to execute a quid pro quo by pulling the
licenses of Sheldon Adelson's casinos operating in Macau, China and shutting them down, thereby
eliminating a major source of his revenue. Why go after an Israeli-American casino operator
rather than taking steps directly against the U.S. government? The answer is simple. Pressuring
Washington is complicated as there are many players involved and unlikely to produce any
positive results while Adelson
is the prime mover on much of the Trump foreign policy, though one hesitates to refer to it
as a policy at all.
Adelson is the world's leading diaspora Israel-firster and he has the ear of the president
of the United States, who reportedly speaks and meets with him regularly. And Adelson uses his
considerable financial resources to back up his words of wisdom. He is the fifteenth wealthiest man in America
with a reported fortune of $33 billion. He is the number one contributor to the GOP having
given $81 million in the last cycle. Admittedly that is chump change to him, but it is more
than enough to buy the money hungry and easily corruptible Republicans.
In a certain sense, Adelson has obtained control of the foreign policy of the political
party that now controls both the White House and the Senate, and his mission in life is to
advance Israeli interests. Among those interests is the continuous punishment of Iran, which
does not threaten the United States in any way, through employment of increasingly savage
sanctions and threats of violence, which brings us around to the arrest of Meng and the
complicity of Adelson in that process. Adelson's wholly owned talking head National Security
Adviser John Bolton reportedly had prior knowledge of the Canadian plans and may have actually
been complicit in their formulation. Adelson has also been the major force behind moving the
U.S. Embassy to Jerusalem, has also convinced the Administration to stop its criticism of the
illegal Israeli settlements on Arab land and has been instrumental in cutting off all
humanitarian aid to the Palestinians. He prefers tough love when dealing with the Iranians,
advocating dropping
a nuclear bomb on Iran as a warning to the Mullahs of what more might be coming if they don't
comply with all the American and Israeli demands.
Looks like the USA now playing into Chinese hands...
Notable quotes:
"... The USA is accustomed to ignoring the law and pressing ahead when it suits it to do that, but the deciding factor was that sanctions and cutting Iran out of SWIFT were ineffective at achieving US aims. Iran suffered, but it was not stopped, and the whole exercise mobilized feeling against the USA. ..."
They can create alternative for payments with each other but it not alternative because they need
swift for interbank exchange with banks in swift system anyway.
Domestically it can be replaced with whatever homebrew solution and not issue, but it needed
for interneational tranasactions, this is the point.
And If you declared to be "cut" out of swift, it will not stop you for using it domestically
but swift system international banks will just stop any transactions with you by whatewer means.
All this talk is overhyped, will Germany pay for gas by trucks with cash or what. When we at
this point – cards is last of your problem. So swift will stay in any case. mir is old news
The idea was floated to cut Russia out of SWIFT, but it was quickly stepped on by the Americans
themselves. Cutting Iran out of SWIFT was a transparently self-interested move by the United States
to discourage an oil brokerage which avoided use of the US dollar as a benchmark – don't want
people getting ideas. Western states which got on board were sharply rebuked when the EU's General
Court ruled that
sanctioning two Iranian banks was illegal and that they must be compensated for their losses,
as no proof was offered that they were doing business on behalf of 'the regime'.
The USA is accustomed to ignoring the law and pressing ahead when it suits it to do that,
but the deciding factor was that sanctions and cutting Iran out of SWIFT were ineffective at achieving
US aims. Iran suffered, but it was not stopped, and the whole exercise mobilized feeling against
the USA.
You could times that by ten in Russia's case. So they won't do it. But Russia becoming fiscally
more self-reliant and the international business community becoming more suspicious of American
manipulating are overall good things.
And two large countries agreeing to remove the US dollar from their bi-national trades is a
blow to dollar dominance.
Presumably a BRICS SWIFT could be developed to facilitate transactions among the members. It could
be part of the effort to reduce the dominance of the US dollar in international trade. Presumably,
other countries can be added resulting in more of a global payment system.
As a total novice in
such matters, I can state with complete confidence it will be a likely next step in the growing
financial power of Russia, China and like-mined nations.
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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