Luca

"The problem with the list of charges, however, is that they either plainly pose no threat to the United States or are actions we ourselves claim the right to engage in. For instance, the evidence of China’s hideous mistreatment of the Uyghurs is compelling. But it is difficult to see how the Uyghur repression makes China a threat. By the same reasoning, Saudi Arabia’s war crimes in Yemen make it a threat to the U.S.. Furthermore, the United States plainly has no problem with the violation of human rights. It all depends on the perpetrator. While Biden has signed a bill punishing China for its repression of Uyghurs, he is happy to fist-bump a dictator and sell hundreds of millions of dollars worth of weapons to Israel to continue penning Gazans in an open-air prison and murdering Palestinian children. The U.S. could easily put a stop to the cruelty against Palestinians, but Biden saves his criticism for those who would point out the existence of apartheid (such as, for instance, leading Israeli human rights group B’Tselem)" Some charges against China are exaggerated, like the idea of its neo-colonial “debt trap.” (Some international debt traps are quite real, however.) Others might as well be lists of events in American history. As the AP notes, to charge China with intellectual property theft is to condemn “the very sort of illicit practices that helped America leapfrog European rivals two centuries ago and emerge as an industrial giant.” Alexander Hamilton, whose life is celebrated in a popular patriotic musical, advocated “a federal program to engage in industrial theft from other countries on a grand scale.” Peter Andreas, author of Smuggler Nation: How Illicit Trade Made America, notes that “only after becoming the leading industrial power did [the U.S.] become a champion of intellectual-property protections.” Similarly, our condemnations of economic warfare and influence campaigns ring hollow, given that the United States exercises its economic power through possession of the global reserve currency and the CIA is quite open about conducting influence operations abroad. China is simply rejecting the principle that we are allowed to “kick away the ladder,” by which countries climb the ladder of development through whatever unscrupulous means they please—including violence, deceit, and the theft of higher technology—and then impose a “rules-based order” to prohibit others from doing the same. It is worth asking: If China is a threat to us because it is establishing military installations in the South China Sea, then what are we to China? When China established its first overseas military base—in Djibouti—it was treated as part of a plan to “shift global power dynamics, eroding US dominance, and relegating Europe to the sidelines of international affairs.” What, then, should China make of our own 750 overseas bases across 80 nations? Are they innocuous and defensive, or an insidious effort to shape the world to serve our interests? When China reached a security agreement with the tiny Solomon Islands, raising the possibility of its opening a second overseas base, the United States immediately began to “turn the screws” on the Solomon Islands, in what Chinese officials (accurately) called an “attempt to revive the Monroe Doctrine in the South Pacific.” China scholar Lyle Goldstein, having reviewed a series of official articles called China’s Atlantic Strategy, says that “one of the things they said very clearly was ‘The Atlantic is absolutely critical to the United States, and the United States is coming to our backyard and poking around in the South China Sea, so we have to go to their backyard.’” Is turnabout fair play, or do the rules only apply to our competitors? For instance, China has indeed violated the UN Convention on the Law of the Sea. But the United States hasn’t even signed the convention. China’s actions toward Taiwan are menacing. But the United States has claimed the right to depose governments around the world. To talk of our deep concern for human rights as we starve the people of Afghanistan is perverse.

Good comments from Current Affairs regarding geopolitics: “China is our enemy,” Donald Trump declared repeatedly. “These are our enemies. These are not people who understand niceness.” Accordingly, when Trump was in office, his administration “took a sledgehammer” to U.S.-China relations, which “reached their lowest point in decades.” Trump officials spoke of China using the most hysterical imaginable McCarthyite language. Secretary of State Mike Pompeo said the “threat from the CCP” was “inside the gates” and could be found in “Des Moines and Phoenix and Tallahassee… [The CCP] will stop at nothing to undermine the very way of life we have here in America and in the West.” Steve Bannon wrote, “China has emerged as the greatest economic and national security threat the United States has ever faced.” FBI director Christopher Wray warned in July 2020 that “the Chinese threat” endangered “our health, our livelihoods, and our security.” What, precisely, is China attempting to do that endangers the “way of life we have here”? Wray explained that “the scope of the Chinese government’s ambition” is nothing less than “to surpass our country in economic and technological leadership.” William Barr warned China was engaged in an “economic blitzkrieg,” which would see it ascend to the “commanding heights of the global economy and to surpass the United States as the world’s preeminent technological superpower.” Here we have a hint as to the true nature of the “China threat”: it is the threat that the United States will no longer rule the world. A basic premise of our foreign policy is that we are fully entitled to do so indefinitely. This becomes explicit in the Trump administration’s strategy documents. The 2017 National Security Strategy (NSS) warns that “China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor.” One might ask how the United States—which is not located in the Indo-Pacific region—could be “displaced” there, but the NSS does not touch on the question of why the United States, rather than the much more populous country of China, is entitled to dominance in Asia. China and Russia, says the NSS, are “contesting our geopolitical advantages” and we are locked into a “great power competition.” This also means we must “restore the readiness of our forces for major war” by drastically increasing the capacity of our military to annihilate large numbers of human beings quickly. The NSS recommends we “overmatch” the “lethality” of all the world’s other armed forces in order to “ensure that America’s sons and daughters will never be in a fair fight.” The Trump administration’s “Strategic Framework for the Indo-Pacific” explains that one of the U.S.’s top interests in the Indo-Pacific is to “maintain U.S. primacy” and sustain “diplomatic, economic, and military preeminence in the fastest-growing region of the world,” so that China does not develop a new “sphere of influence.” In other words, we have to make sure that the largest Asian country does not have more power and influence in Asia than the much smaller United States. “The policies are converging,” according to Stephen E. Biegun, who served as deputy secretary of state in the Trump administration. In fact, the present course was initiated by Barack Obama’s “pivot to Asia,” which promised among other things to “prioritize[] Asia for our most advanced military capabilities.” Obama declared “the United States is a Pacific power, and we are here to stay.” After the Chinese Revolution in 1949, American politicians began debating the “loss of China,” with accusations flying back and forth as to who “lost” it. The terminology contains a tacit assumption that the U.S. owned China and it was ours to lose. The idea of China being out of our control was horrifying. Today, the United States is attempting to prove that China has no hopes of becoming a regional hegemon in its own backyard, using a “military-first” approach. The U.S., U.K., and Australia have announced they “will co-operate on the development of hypersonic weapons, expanding a trilateral security pact designed to help Washington and its allies counter China’s rapid military expansion.” And as Michael Klare observes, the 2022 National Defense Authorization Act “provides a detailed blueprint for surrounding China with a potentially suffocating network of US bases, military forces, and increasingly militarized partner states… to enable Washington to barricade that country’s military inside its own territory and potentially cripple its economy in any future crisis.” The Department of Defense tells us that “Beijing views the United States as increasingly determined to contain the PRC.” Since our Indo-Pacific policy is built explicitly around containing the PRC, it should not be surprising that Beijing feels that way. Those who characterize China as a threat can immediately produce a substantial list of its misdeeds to justify the charge. There are of course serious human rights abuses in China, including its suppression of dissent and the repression of the Uyghur population. It has unquestionably violated international law in the South China Sea. Trump’s National Intelligence Director (NID) John Ratcliffe said China “robs U.S. companies of their intellectual property, replicates the technology and then replaces the U.S. firms in the global marketplace.” A July 2022 NID report warns of sinister Chinese influence efforts “to expand support for PRC interests among state and local leaders [in the United States] and to use these relationships to pressure Washington for policies friendlier to Beijing.” The Trump administration, at the urging of Chuck Schumer, formally labeled China a “currency manipulator.” William Barr said China practices “modern-day colonialism” in its “foreign aid” infrastructure initiatives by “loading poor countries up with debt, refusing to renegotiate terms, and then taking control of the infrastructure itself.” The problem with the list of charges, however, is that they either plainly pose no threat to the United States or are actions we ourselves claim the right to engage in."

Agree on that :)!

In China a minority population receives control, imprisonment, reeducation and are suspects without having done anything. In the US, you have neighborhoods filled with poverty (that frankly nobody in the government cares about), racism and institutional violence against blacks etc. They get put into torturous isolation cells in breach of international law for which many politicians vote for. https://www.amnesty.org/en/latest/news/2014/07/usa-prisoners-held-extreme-solitary-confinement-breach-international-law/ “You cannot overestimate the devastating impact long periods of solitary confinement can have on the mental and physical well-being of a prisoner. Such harsh treatment is happening as a daily practice in the US, and it is in breach of international law,” said Erika Guevara-Rosas, Amnesty International’s Americas Director. Those are very similar things and we still invest in the US. "Another technique is needed for those that you don’t have any use for, whose jobs you can more easily send out to Mexico. That gives you a superfluous class, and they have to be controlled in another way, sometimes by social cleansing, sometimes by incarceration. So the attention on crime certainly serves a purpose. It’s striking that the U.S. is perhaps the only society in which crime is considered a political issue. Politicians have to take a stand on who’s tougher on crime. In most parts of the world it’s a social problem. It’s not something you fight about at elections." "It’s one thing to read the figures about poverty in India and another thing to walk through the slums in Bombay and see people living in hideous, indescribable poverty. If you walk through downtown Boston you also see appalling poverty. I’ve seen things in New York which are as horrifying as anything I’ve seen in the Third World. But I’d say that there are parts of New York or Boston which are not unlike what you find in the Third World. Black males in Harlem, it was discovered a couple of years ago, have roughly the mortality rate of Bangladesh." Long Story short: Does this matter to me as an investor in the US? ABSOLUTELY NOT You will find horror on both sides, you will find bad things on both sides in history too.

Exactly, you have corruption and abuse on both sides, in the US some black communities are so disregarded and poor, the insane isolation sentences, prisons filled to the max, worker abuse etc. I don't think Chinas Government is great per se, the party developed their country on a speed that is insane and they lifted a lot of people out of poverty, nice! Many regulations I also do approve of. Now what about investing? The CCP and Xi wants China to grow, they want those poor people in the countryside and underdeveloped regions to climb the ladder and get wealthy, they want to be respected worldwide, make up for the century of humiliation. On a per capita basis they are still very much behind of the west, LOTS of development left. Huge and attractive market despite short term problems and also very cheap valuations.

I have posted comparisons to the DAX as an example, it doesn't look that bad and consider that the Hang Seng index is very cheap right now. There have also been many 100x baggers and many investors outperformed hard in china (David Webb).

Well, they think that it somehow strengthens their society at least there are reports about such a motive, but I also don't have any insider information on these camps, information also is limited. People who fled obviously report torture rape etc, it's hugely problematic indeed. I said many times that they do mistakes, some severe ones too.

David Tepper having big positions in China has the same level of significance on an investing level as a guy you know who invests in typewriters? I have to disagree.

Because they can harm societal development, food companies in Mexico as an example, huge obesity problems etc. A movement by doctors pressured the government to install warning labels etc on Coke and Soda. There are many examples and currency is just another one, living in a society together requires individuals to cooperate. I think investing in asia generally requires the knowledge of mentality difference compared to the west, individuals dont matter as much as the collective does. Thats the Jack Ma vs CCP story. This comment was quite nice from VIC and highlights the massive bias some investors have:

To me that makes a lot of sense, economy and state are always intertwined, people and business can't just do whatever they want.

David Tepper doesnt seem to think there is a lot of risk with China, Nvidia with 400m, 400m in Baba, 200m in TSMC, 200m in Baidu, 70m in JD.com, 60m in ASML, KWEB and China Largecap etc...

Great Thread, love bitching about analysts and sleezy investors haha!

https://www.scmp.com/news/china/diplomacy/article/3233143/long-overdue-chinas-new-foreign-state-immunity-law-will-align-it-western-practices?module=lead_hero_story&pgtype=homepage

You can not get money out for 6 years? For which reason? What did they tell you?

Excuse me, China has been at the forefront of civilization for thousands of years before they missed the industrial revolution which they amazingly climbed back from, shooting through the roof now.

The USSR was highly inefficient and administration corrupt and useless, Xi/CCP did and still tries to clean a lot of this up which is good IMO. We shall not forget the degree of corruption in the EU/Brussels or in the US. It's a problem also in western democracies. I don't see how they will "outdo" China, what do you mean by that? India has 20% of their population unable to read, a much poorer country but arguably with more growth potential. They can all do well, China has very high university rankings in tons of subjects etc. Yep, that's true, they were always good at attracting talent. And still they are very much dependent and unable to decouple from China. Mutual destruction if they go against china. Yeah, China will continue to make mistakes but they will and can readjust. Don't forget the countless mistakes that also happened in the EU, the corruption with Pfizer and prices paid for the vaccines etc

China is an outlier that made it work wonderfully, so this made me and still makes me think quite much

Hahaha, gladly not! But I see you are left with no arguments and now refer to personal insults

Love him too!!

And also to add, it's an interesting thought experiment to think about how many advantages or disadvantages a democracy has vs a "benevolent" ruler (in this case the CCP) that has long term full control. In Germany there is so little progress because of the blocking of some party that has their own agenda, projects do not get done fast, regulation is lacking, very inefficient government etc.

I dont remember the name of that specific sinologist who covered Xi Jinping but i read that Xi thinks ONLY the CCP can govern china and otherwise they would collapse. Its interesting to think about, the whole structure of the country is setup under CCP rule and trying to install a different system would come with unpredictable instability. I have come more and more to peace with the CCP, the "communist" name is really a left behind of CCP history, I have heard from Frank Sieren that many older chinese people are used to it and it became some sort of heritage. Reality is so far away from communism as it can get.

Can we even talk about "friends" in geopolitics? I only see it as common or uncommon interests, i dont even see Russia and China as Friends, China is just playing their cards that should lead to the result of benefits to China (cheap energy for economy, exports, wanting "stability" in ukraine and russia due to food exports, they wouldnt mind russia taking over ukraine as a whole). I dont think he is playing a "poor" chess game, if you read a bit through what he has done during his time in political positions there are massive amounts of positive evidence incl pushing for privatization for the benefit of the economy. Yes he makes mistakes but its too simple and maybe almost naive to place China or Xi or the CCP in one black and white position. (newspapers like it though because it grabs attention). They are already leading in citations worldwide in science research (massive) and I have quoted the incredibly bad results of US kids in schools, China is leading in math etc and work ethic is hard! (true for most Asian countries, SK, Taiwan etc). Putting off chinas progress in semiconductor production would be way to quick, I am quite convinced they will be competitive in that sector over time. If the western worker pool would be so superior, they wouldnt have come so far ahead in the automobile sector. They really have plenty enough people to do that already.

I could give you many examples in the past where we have seen aggressive attacks by the US during that time frame.

Why would it be a problem for China to build up their army and not for the US? Why does the US have the global single right to have all those bases and rockets stationed everywhere and other countries cant have it?

Hahahaha spek!