Author Topic: US-China (& Japan, South China Sea-- Vietnam, Philippines, etc)  (Read 187418 times)

DougMacG

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US: Breaking the China dependency
« Reply #850 on: August 09, 2019, 06:24:15 AM »
"Chinese manufacturing, much of which migrated to it from Japan via South Korea, is already moving on to Vietnam, India, and Mexico (now America’s biggest trading partner)."
------------------------------------------

I have been watching for the great conclusion of the tariff trade war with China and anticipating how that will help our economy, Trump's reelection and the advancement and winning of free market ideas and policies that I see as in the best interests of the country and the globe. 

I've been watching for problems and chokepoints in China and the Chinese economy wondering when they will finally give in, drop their trade barriers and stop stealing our technology. 

Maybe I have this wrong.  Maybe a fabulous trade deal with an oppressive totalitarian regime that enriches and empowers both sides forever is a) not going to happen and b) not the ideal outcome anyway.

Without a doubt, the trade war is disruptive to the otherwise healthy US economy. This has political, not just economic consequences, at home. 

On the other side, the trade war has thrown the leaders of China on their ear.  They have lost market share, lost economic growth, lost manufacturing and export jobs.  People are losing confidence in their leaders and the leaders risk losing control.  I have opined and quantified that China is 5 times more dependent on exports to us than we are on exports to them.  The disruption is taking its toll.

China has responded by devaluing their currency (devaluing their country) and dropping their prices, and profits.  Add to Xi and the politburo concerns, the Hong Kong protests that risk spilling over into the mainland. 

Meanwhile the adversarial policies and rhetoric on both sides escalate.

My reaction to each new chapter in this deteriorating drama is that now we must now be close to a deal.  But maybe we aren't.  Maybe the outcome of this is the endless struggle we see now.  It occurs to me now that maybe more good comes out of it without a settlement. 

Instead of legitimizing this regime and pretending to approve of them as we rely on them to supply our consumer economy, under this more adversarial relationship, we can more freely call them out and oppose their egregious acts.

New suppliers in other countries are replacing our economic dependencies on Communist China.  Vietnam, Mexico and India are mentioned above.  Maybe we can start pulling rare earth elements out of the ground elsewhere.  Also, Chinese military oversteps in the South China Sea are causing us to form new alliances in the region. 

Back to US politics which is what the Chinese are watching in negotiations, maybe President Trump would rather have the issue of China in reelection than have the win over China.

ccp

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Re: US-China (& Japan, South China Sea-- Vietnam, Philippines, etc)
« Reply #851 on: August 09, 2019, 07:42:33 AM »
"Back to US politics which is what the Chinese are watching in negotiations, maybe President Trump would rather have the issue of China in reelection than have the win over China."

Trump should start looking being able to hold an all out war against the crats

if he loses the election claiming he lost due to outside foreign power interference - the Chinese!

no doubt they will do whatever they can to get him to lose.
 :wink:


Crafty_Dog

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Re: US-China (& Japan, South China Sea-- Vietnam, Philippines, etc)
« Reply #852 on: August 09, 2019, 10:32:46 AM »
They already have Goolag hard at work for them.



Crafty_Dog

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Stratfor: China messing with Philippines
« Reply #855 on: August 09, 2019, 07:08:23 PM »
second post

Highlights

    Washington is hesitant to react to Philippine President Rodrigo Duterte's informal call for the U.S. Navy to act against China in line with the country's Mutual Defense Treaty.
    But in the wake of Chinese aggression against Philippine interests in the South China Sea, Manila is likely to continue questioning the utility of the pact unless Washington provides more forceful backing.
    Ultimately, a lack of action to oppose China will allow Beijing to fortify its position in the South China Sea.

Floating in the South China Sea near Recto Bank, or Reed Bank as it is also known, the crew of the Philippine vessel F/B Gimver 1 braced for impact as the Chinese-flagged Yuemaobinyu 42212 steamed directly toward their craft. Ignoring the Philippine crew's entreaties to rapidly change course, the Chinese captain plowed his ship into the smaller vessel, seemingly oblivious to his responsibilities under international collision regulations to avoid the crash. Crippled and sinking, the Gimver 1's crew abandoned ship, confident their Chinese counterparts would pick them up. That, however, was not what happened: Ignoring his responsibilities for a second time, the Yuemaobinyu's captain abandoned the Filipinos to their fate. Though the 22 mariners were eventually rescued by a Vietnamese ship, the incident early on the morning on June 9 increased tensions between Beijing, on one side, and Manila and its allies on the other.

The reaction from the United States was as forceful as it was expected. Without mentioning the incident directly, the U.S. ambassador to the Philippines, Sung Kim, made reference to a militarized fishing fleet, or maritime militia, when suggesting an attack by "government-sanctioned militias" could trigger the U.S.-Philippines Mutual Defense Treaty (MDT). His comments served as a warning to China — going further than those made by U.S. Secretary of State Mike Pompeo, who tried to reassure a skeptical Philippine President Rodrigo Duterte in February that the 1951 treaty remained in Manila's best interests. Though Duterte is more vocal than his predecessors about his concerns surrounding the deal, his skepticism toward the treaty is not new among the country's leaders. Both sides in the long and occasionally troubled U.S.-Philippine alliance have used the MDT to shape each other's behavior, most recently with regard to its applicability to the South China Sea. But as foreign policy experts around the world mull the content of Kim's statements about Recto Bank, some key wording suggests the intended audience may be Manila — rather than Beijing — and that Washington isn't all too eager to dive into a battle with China.

What's in an 'Armed Attack'?

Pompeo and Kim were both very careful with the terms they used to describe the incident. The phrase "if an armed attack occurs" refers to Article 51 of the U.N. Charter, which codifies states' inherent rights to self-defense in the event of an armed attack. But understanding the U.S. response to the Recto Bank incident and how it affects the MDT requires an understanding of what the Chinese maritime militia is and what it is not.

The Recto Bank incident amounts to a deliberate attempt to avoid classification as an "armed attack," making it a classic indicator of hybrid warfare.

According to U.S. Naval War College professor Andrew Erickson, the People's Armed Forces Maritime Militia is a "state-organized, -developed, and -controlled force operating under a direct military chain of command to conduct Chinese state-sponsored activities" — which makes it anything but a group of zealously patriotic fishermen. The militia is trained, manned and equipped with vessels purpose-built for ramming other craft and armed with non-lethal munitions that allow the organization to avoid designation as a naval unit. According to Erickson, the militia is a component of the Chinese military that responds through the chain of command to President Xi Jinping himself. Despite this, the militia falls through the cracks of Article 51 of the U.N. Charter and other international agreements — including the MDT — that govern the use of force between states because it is not, officially, a naval unit. In this respect, the militia resembles other emerging and poorly regulated tools of state power such as teams that engage in cyberattacks and information warfare on behalf of a country. The Recto Bank incident amounts to a deliberate attempt to avoid classification as an "armed attack," making it a classic indicator of "hybrid warfare." When packaged into a coherent hybrid warfare campaign, these tools can present a significant threat to international peace and stability as occurred in Crimea in 2014.

Friendly Deterrence

Following the Recto Bank incident, Washington intimated that Chinese provocations in the South China Sea could result in the application of the MDT. In time, however, the United States has somewhat muddied the waters on the MDT: While the United States certainly wishes to maintain access to the Philippine bases identified in the treaty, it is less eager to invoke the pact's Article IV — which spells out the defense relations between Washington and Manila — over a wrecked Philippine fishing vessel. Perhaps the United States' hedging is what prompted Philippine Defense Secretary Delfin Lorenzana to demand clarity about the MDT's applicability to these types of incidents. Without clarity, he argued, Manila ought to review the treaty to determine its relevance to the country's defense.

Lorenzana's point is a valid one. Reading between the lines of the U.S. ambassador's statements revealed that Washington is more interested in deterring the Philippines from questioning the utility of the MDT than in preventing China from employing hybrid warfare in the South China Sea. The American tactic, however, appears to have worked a bit too well: During the periodic U.S.-Philippine Bilateral Strategic Dialogue, held July 15-16 in Manila, the Philippine ambassador to the United States, Babe Romualdez, announced the two countries were in talks to "strengthen" the decades-old treaty. Duterte took it a step further the next day, informally invoking the MDT and inviting the United States to send its 7th Fleet to protect the Philippines from China.

Having called America's bluff, the skeptical Duterte may decide the Mutual Defense Treaty is actually as hollow as he has previously suggested it is.

The request presents a dilemma for the United States. Duterte made his surprise demand without following a formal consultative process (he made it abruptly during a TV interview), while his call also lacked any of the coordinating details necessary to invoke the constitutional requirements stipulated in the treaty. Still, Washington is under pressure to demonstrate the pact's credibility after previously communicating verbal guarantees regarding its viability. But almost two months since the Recto Bank incident, there does not appear to be any appetite to commit U.S. naval forces in response to an incident that China presented as an accident between two fishing vessels.

At a certain point, however, China's repeated coercion in the region cannot go unanswered. Manila's perception that Washington is dragging its feet gets to the heart of the MDT. Having called America's bluff, the skeptical Duterte may decide the MDT is actually as hollow as he has previously suggested it is. At stake is a strategic effort to maintain American access to the South China Sea amid an ongoing Chinese consolidation of its position there. And unless the United States and the Philippines reconcile their views of mutual defense in the face of such "unarmed attacks," they will soon find themselves faced with an unbreakable chain of heavily fortified Chinese islands immune to any pressure short of war.


Crafty_Dog

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Michael Yon
« Reply #859 on: August 15, 2019, 10:32:56 PM »



"Satellite Photo Shows China's Military Buildup in Response to Hong Kong Protests"

If you live in Hong Kong, wise to prepare for invasion. Nobody knows what is coming next, including China.

Possible that the airport will be stuffed again but this time with people scrambling for flights out.

Nobody knows. I do know that if Hong Kong had a second amendment, 12,000 troops would sustain massive casualties if there were serious resistance. Stuff like this is what the second amendment is all about. It's not about deer hunting.

China is not in a position of ultimate power over Hong Kong. These things do not happen in a vacuum.

One massive advantage that Hong Kongers have is that they generally are very likable and intelligent, while ChiComs tend to be the opposite and savage.

Watch the comments from ChiCom trolls on my page. They will talk about "white dogs," "jap dogs," and on and on. Very crass people, and extremely savage. The absolute last people you would want to see armed while you are disarmed.

A lot of Japanese have not woken up to this yet, but Hong Kong and Taiwan's futures are barometers for Japanese future. The unrest today between Korea and Japan is caused by China exploiting Korean psychological vulnerabilities. Chinese information experts hacked the collective-Korean mind and installed a virus.

The general plan in bare, bare bones:

1) Split Korea-USA-Japan. (Korea has no passwords on their brains. They are easy.)

2) Control vast swaths of land and sea such as the South China Sea

3) Extend reach to Africa, etc, (including around Thailand -- knock knock)

4) Take complete control of Hong Kong, Taiwan, etc.

5) Extend influence in Europe/USA -- through places like Hollywood (Jackie Chan, one example of many)

6) Attack Japan economically/politically, and eventually militarily. (Most Japanese seem to be in denial, and those who see the monster are labeled in the normal ways.)

7) Contain India -- which is not difficult. India can barely contain itself and the IAF aircraft fall out of the sky practically monthly, and the Indian navy is not ready for much. Many Indians seem in denial and besieged with false pride about their ability to stand up to China. My bet: within 30 years, China will mostly control Nepal and Bhutan, as examples. (Unless we take out CCP, and then all this likely is moot.) India is being constricted on all sides.

8) Exercise control/influence in places like Cambodia, Laos, Myanmar. Thailand is sleeping or in denial about where Thailand stands with China.

9) Much more, such as influence in Philippines, Australia, NZ, Central America.

10 ) Mitigate and heavily influence USA through economic, military, political containment including using our own democracy to elect influencers.
===

The penultimate goal is to take USA out of the equation. Ultimate goal is China as the lone superpower.

Hong Kong is a D-Day to Taiwan and a lot more.

Hong Kong is a major battlefield. That's how I ended up in this cheap hotel waiting for invasion.

G M

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Re: Michael Yon
« Reply #860 on: August 15, 2019, 10:47:07 PM »
Damn. I love Hong Kong. I really dread what is coming.





"Satellite Photo Shows China's Military Buildup in Response to Hong Kong Protests"

If you live in Hong Kong, wise to prepare for invasion. Nobody knows what is coming next, including China.

Possible that the airport will be stuffed again but this time with people scrambling for flights out.

Nobody knows. I do know that if Hong Kong had a second amendment, 12,000 troops would sustain massive casualties if there were serious resistance. Stuff like this is what the second amendment is all about. It's not about deer hunting.

China is not in a position of ultimate power over Hong Kong. These things do not happen in a vacuum.

One massive advantage that Hong Kongers have is that they generally are very likable and intelligent, while ChiComs tend to be the opposite and savage.

Watch the comments from ChiCom trolls on my page. They will talk about "white dogs," "jap dogs," and on and on. Very crass people, and extremely savage. The absolute last people you would want to see armed while you are disarmed.

A lot of Japanese have not woken up to this yet, but Hong Kong and Taiwan's futures are barometers for Japanese future. The unrest today between Korea and Japan is caused by China exploiting Korean psychological vulnerabilities. Chinese information experts hacked the collective-Korean mind and installed a virus.

The general plan in bare, bare bones:

1) Split Korea-USA-Japan. (Korea has no passwords on their brains. They are easy.)

2) Control vast swaths of land and sea such as the South China Sea

3) Extend reach to Africa, etc, (including around Thailand -- knock knock)

4) Take complete control of Hong Kong, Taiwan, etc.

5) Extend influence in Europe/USA -- through places like Hollywood (Jackie Chan, one example of many)

6) Attack Japan economically/politically, and eventually militarily. (Most Japanese seem to be in denial, and those who see the monster are labeled in the normal ways.)

7) Contain India -- which is not difficult. India can barely contain itself and the IAF aircraft fall out of the sky practically monthly, and the Indian navy is not ready for much. Many Indians seem in denial and besieged with false pride about their ability to stand up to China. My bet: within 30 years, China will mostly control Nepal and Bhutan, as examples. (Unless we take out CCP, and then all this likely is moot.) India is being constricted on all sides.

8) Exercise control/influence in places like Cambodia, Laos, Myanmar. Thailand is sleeping or in denial about where Thailand stands with China.

9) Much more, such as influence in Philippines, Australia, NZ, Central America.

10 ) Mitigate and heavily influence USA through economic, military, political containment including using our own democracy to elect influencers.
===

The penultimate goal is to take USA out of the equation. Ultimate goal is China as the lone superpower.

Hong Kong is a D-Day to Taiwan and a lot more.

Hong Kong is a major battlefield. That's how I ended up in this cheap hotel waiting for invasion.

Crafty_Dog

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GPF: George Friedman: China and a Global Economic Contraction
« Reply #861 on: August 17, 2019, 01:47:16 PM »
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Aug. 15, 2019



By George Friedman


George Friedman’s Thoughts: China and a Global Economic Contraction


The protests in Hong Kong must be understood in the context of a global economic slowdown.


There has been much talk recently about economic problems in key economies around the world. Early Wednesday morning, for example, I spoke on Bloomberg Surveillance about the situation in China. Before I went on air, Bloomberg News was covering multiple stories on the decline in bond yields and its effect on the U.S. economy, weakness in the German economy, and so on. I then realized how closely this issue is linked to the protests in Hong Kong.

It has been about 10 years since the last U.S. recession, and we would expect to see another one soon. Since the United States is the world’s leading importer, an American recession always leads to a weakening of the global economy. Massive exporters like Germany and China are particularly vulnerable to such downturns. China’s economy was significantly weakened by the 2008 financial crisis. It has, until recently, managed to stave off U.S. attempts to try to level the imbalance between Chinese exports to the U.S. and U.S. exports to China. But it has now lost the ability to manage the United States. And at the same time, Hong Kong is rising.


 

(click to enlarge)


The uprising occurred because China was increasing its control over Hong Kong, including taking much greater control of the criminal justice system. In 1997, when the United Kingdom relinquished control of Hong Kong to China, Beijing was willing to allow Hong Kong to have a high degree of independence because Hong Kong was the financial interface between China and the world. China could not afford to undermine Hong Kong’s dynamism.

But China is in a very different position today, and it can no longer accept a strong and independent Hong Kong. Even before the U.S. trade actions, the Chinese economy was in serious trouble, and its banking system was nearly in shambles. The introduction of new tariffs by its largest customer has created deeper problems in the economy, which are seen in industrial production data and other sector statistics. The accuracy of these statistics is always uncertain to me, but that China is publicly revealing its economic weakness is significant. When it admits that it has problems, it likely means the problems are serious indeed.

Today’s China was built on economic growth and the promise of prosperity. Maoism still exists, but it is on the margins. Chinese elites, like elites everywhere, expect greater wealth and, at minimum, that the wealth they have already accumulated will be protected. And the public expects a better life for themselves and especially their children. The Communist Party of China, therefore, now derives its legitimacy not from communist ideology but rather from the promise to deliver prosperity to the people, coupled with national pride. But as the economy weakened, China engaged in major international initiatives to try to encourage pride in its global standing, from exaggerating its military power, to lending money to other countries, to building a route to Europe. The more concerned China was about delivering prosperity, the more it leaned on pride in Chinese power and the idea that the U.S. would be bypassed by the Chinese in every way possible.

But the Chinese realize that their relationship with the United States has gotten out of control. On one hand, they depend on the U.S. to buy their goods. On the other hand, they want to show that they are pushing back against the United States. In the end, national pride goes only so far in a country that is divided into many social classes, with millions left out of the economic boom and others having benefited but remaining resentful of the avariciousness of the elite. The foundation of China is prosperity; national pride is just a substitute.

Right now, that prosperity is threatened not only by U.S. demands to redefine economic relations between the two countries, but also by the last thing China needs: a global economic slowdown. It is always the exporters who are hurt the most by such downturns.

China tried to dramatically increase its control of Hong Kong, not out of confidence but out of fear. If the Chinese economy contracts, Hong Kong doesn’t want to be taken down with it. But the people of Hong Kong couldn’t predict how far they would be able to separate the island from China’s problems, so they wanted to ensure their security apparatus had control of Hong Kong. The Chinese resistance to these steps was what really led to the uprising. From my point of view, it also points to a critical Chinese weakness. China relies on its internal intelligence system to maintain order, but it failed to anticipate the uprising in Hong Kong. That raises the question of whether a pillar of the Chinese system, its internal controls, is weakening.
Another major concern for Beijing is that the unrest in Hong Kong may spread to the rest of the country. People in other Chinese cities might sense Beijing’s weakness and, facing tough economic conditions, take their concerns and resentments into the streets. This is why Beijing cannot appear to have lost control of Hong Kong. If it does, China’s global image as a confident, leading power would be transformed into one of a brutal and repressive regime, fighting its own people.

Hong Kong has not triggered a reaction on the mainland, but Chinese President Xi Jinping has been wrong on several fronts, so the Central Committee may not be in the mood to let him handle this problem. But it is caught between its need to suppress the protests in Hong Kong and its fear of the consequences if it does. When decisive action becomes a threat, it’s a sign that a regime is in trouble. China has tried to appear patient, but it is increasingly appearing impotent to its own people. And that is the one thing it can’t tolerate.

Economic downturns have a tendency to trigger political responses. Consider 2008 and how the political landscape changed in many countries in the following years. While 2019 may not be as intense as 2008, many countries’ economies are struggling, having never fully recovered from the global financial crisis. It is in this context that I am beginning to think of China. It’s easy for an exporter to prosper in a robust global economy. It’s much harder to sell to a world facing an economic downturn. Such exporters are battening down the hatches – China’s approach to Hong Kong is one example. Having encountered resistance, it fears the consequences of decisive action. And it fears not acting. China doesn’t know quite what to do, and that is not the behavior of a formidable rising power.






DougMacG

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US China trade War, China's currency devaluation
« Reply #864 on: August 21, 2019, 06:19:09 AM »
One thing missing in China's prosperity through devaluation strategy is the phenomenon of capital flight. If you know your wealth will be devalued, out it goes. Before they announce devaluation they need to lock the exits.

https://www.ft.com/content/28c9bd82-c27a-11e9-a8e9-296ca66511c9
« Last Edit: August 21, 2019, 06:22:19 AM by DougMacG »

DougMacG

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Re: US-China, Hong Kong Protests
« Reply #865 on: August 22, 2019, 07:26:01 AM »


scmp.com  South China Morning Post

This is the defining issue of our time.  Not transsexual bathrooms.

DougMacG

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China universities deploy facial recognition for student registration
« Reply #866 on: August 22, 2019, 07:34:54 AM »
China’s elite Tsinghua University is among the first batch of large academic institutions that have implemented face scans to expedite the enrollment process this month
https://www.techinasia.com/day-university-china-means-face-scan-enrol
----------------------------

Yes, it's to "expedite the enrollment process", wink, wink.

We could merge our liberal fascism, Communist China and Goolag threads any day now.  What's the difference, location?

G M

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Re: China universities deploy facial recognition for student registration
« Reply #867 on: August 22, 2019, 08:55:47 AM »
China’s elite Tsinghua University is among the first batch of large academic institutions that have implemented face scans to expedite the enrollment process this month
https://www.techinasia.com/day-university-china-means-face-scan-enrol
----------------------------

Yes, it's to "expedite the enrollment process", wink, wink.

We could merge our liberal fascism, Communist China and Goolag threads any day now.  What's the difference, location?

What? No DNA swabs and forensic scans of cell phones as part of the enrollment process?

Slackers.

Crafty_Dog

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Stratfor: A decisive moment draws nigh
« Reply #868 on: August 22, 2019, 09:47:25 PM »
A Decisive Moment for China Draws Nigh
The 2019 Beidaihe meeting of Chinese officials was thought to have started on Aug. 3.
(SIMON SONG/South China Morning Post via Getty Images)

Highlights

    Following this year's annual gathering of political elites in Beidaihe, China’s response to the ongoing protests in Hong Kong, as well as the next phase of its trade war with the United States, could soon take shape.
    China's tougher stance in trade negotiations is likely an attempt by its leaders to appear strong against Washington — the country's most formidable external threat for the foreseeable future.
    That approach risks drawing even more U.S. trade salvos, which could further damage China's already slowing economy and increase the likelihood of social instability in the country's wealthier coastal and urban areas.
    Domestic economic and political unease will compel China to further solidify control over its buffer regions, a driver that could tempt Beijing to directly intervene in Hong Kong's political crisis.

Nearly 70 years after its founding, China has once again found itself at a historic crux. As Beijing's rivalry with the United States grows increasingly hostile, its future relations with Hong Kong hang in the balance — all while the country grapples with an economic slowdown that risks blunting 30 years of unrestrained expansion. Suffice it to say, China's political leaders had their plates full when they gathered in Beidaihe this year for their annual meeting, which reportedly just wrapped up.

But while China has faced similar internal threats over the decades, its leaders are unlikely to find answers in precedent this time around. And that's because the economic and political challenges the country faces today are occurring in a vastly different domestic context. Any speculation or leaks from this year's summit won't cover all the solutions to the complex challenges Beijing's leaders now face both at home and abroad. But any decision made behind closed doors during the summer retreat could very well dictate not only China's trajectory in the coming decade but also the rest of the world's.

The Big Picture

For decades, the summer resort of Beidaihe, about 300 kilometers (186 miles) east of Beijing, has served as the site of numerous historical decisions — as well as a microcosm of factional struggles among China's ruling elite. Amid Hong Kong protests and a trade war with the United States, coupled with a 30-year ebb in economic growth, this year's meeting took place at a particularly crucial moment for the world's second-largest economy. 

A Perfect Storm

The U.S.-China trade war — punctuated by a cycle of negotiation, truce and retaliation — recently entered its 18th month. Since the last round of talks broke down in late April, Beijing has notably hardened its negotiating position. China, for example, has frozen its purchases of U.S. agricultural goods until Washington extends export licenses or reduces controls on the Chinese tech giant Huawei Technologies. But such a stringent position risks further escalating the trade war — the effects of which have already taken a sizable toll on China's domestic economy. This raises the question of whether Chinese leaders will be able to maintain their tough stance without exacerbating the country's economic slowdown.

Even with the trade war bubbling in the background, the unfolding situation in Hong Kong undoubtedly garnered its share of attention in Beidaihe. Protests — drawing anti-government demonstrators and members of radical and more violent cells to Hong Kong's streets — have entered their third month with no immediate end in sight. The demonstrations, sparked by the city's now-tabled extradition bill, have evolved into a symbol of Hong Kong's anxiety over deepening economic and cultural integration with China, mixed with antagonism over Beijing's tightening political influence there.

That said, the prospects of seeing an independent Hong Kong in the near future remain unlikely. But the ongoing protests nonetheless risk undermining the city's 50-year transition under China's one country, two systems policy. At the bare minimum, Chinese leaders will have to figure out some sort of short-term solution to quickly de-escalate the volatile issue — ideally before the People's Republic of China celebrates its 70th anniversary on Oct. 1. But the high-profile and unrelenting unrest will also continue to pose critical questions about what red line must be crossed before Beijing ultimately takes matters into its own hands and directly intervenes.

More Money, More Problems

Compared with other eras, China's current economy is in much better shape. After all, both the massive push to reform state-owned sectors in the late 1990s and the global financial crisis in 2008 put tens of millions of Chinese citizens out of work. And even the most pessimistic estimates project that the costs of the current trade war will pale in comparison to those inflicted by post-1989 international sanctions, which virtually isolated China from Western economies for more than a year.

There's only so much more that China's cooling economy can absorb before U.S. tariffs begin to generate greater domestic pressure.

Unlike past economic crises, though, the issue this time around won't be the scope of the damage itself, but rather how that damage is perceived by the country's now wealthier population — and whether that perception leads to a significant backlash against the government. China's economic transformation over the past 30 years has made its citizens more affluent, on the whole, than they've ever been. But that also means they'll be much less tolerant of any disruptions of the lifestyles to which they've grown accustomed. Thus, should China's economic slowdown start to directly affect jobs and pocketbooks, it could increase the likelihood of social instability — particularly in the country's urban and coastal economic hubs — by bringing brewing political grievances to the surface.

Keeping Up Appearances

Beijing's tougher stance in trade talks could risk making that a reality by drawing further retaliation from the United States — something Chinese leaders surely want to avoid. But at the same time, with their global rivalry only set to grow, Beijing's current position against Washington could very well set the tone for how the country will be perceived — and positioned — as international power shifts in the coming decades. And thus, the Chinese leadership will hesitate to let down its guard for fear of appearing weak against the United States.

China's political leaders have always been highly sensitive to perceived external threats, even when internal challenges linger. This mindset likely stems from an astute understanding of the difficulties that come with ruling such a geographically massive and socially diverse country whose position also makes it uniquely vulnerable to outside influence.

There's a chance, then, that Beijing will bet on its authoritarian strength and still-intact nationalist support to give it room to maintain its hard line against the United States. But with more U.S. tariffs set to take effect Sept. 1., and more trade pressures likely to follow, there's also only so much more that the country's already cooling economy can absorb before the repercussions start to generate greater domestic problems.

Peripheral Power Grabs

Meanwhile, China's economic slowdown is propelling its leaders to diversify trade routes and develop new financial footholds in more remote regions of the world. Combined with the subsequent risk of domestic social instability, this outreach will compel Beijing to grasp its buffer regions even tighter.

This could increase the likelihood of Beijing intervening in Hong Kong's political crisis, should the situation continue to escalate before the national day in October. But in the longer term, it also means that Beijing will likely further tighten its already heavy security and surveillance regimes along its Western periphery. For decades, China had pursued a much more hands-off approach to Tibet and Xinjiang's incremental assimilation. But the need to develop its peripheral states amid economic restructuring has worn Beijing's patience thin — hence its decision to pursue a more ruthless and discriminatory approach in recent years, including the establishment of re-education camps. And as external and internal threats continue to rise, ensuring that these two historically restive buffers remain firmly under control will become all the more important to Beijing.

With Bated Breath

The measures Beijing takes in response to these challenges will undoubtedly have significant implications for China and elsewhere. And as a result, the importance of this year's Beidaihe summit has been elevated. For decades, the rumored policy and personnel decisions made at the private gathering have closely intertwined with the country's political path. Many of its key national strategies — including the Great Leap Forward, the hallmark economic and social campaigns of the Mao era — had their genesis at Beidaihe.

Over the intervening years, the annual meeting had become more of an informal forum. But at a time when so much affecting China's future remains in flux, the world will be waiting with bated breath to see what decisions the elite leaders made to respond to the myriad challenges that lie at their feet.


DougMacG

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