China

[Parsad]

4 hours ago, RichardGibbons said:

 

I don't scoff at it at all.  I think it's atrocious. The government has effectively said, "Because you publicly disagree with our policies, we're going to take away your ability to feed your family."  This is a huge overreach by the government. So, I think my opinion matches yours on that issue (or maybe I'm actually more extreme than you on the Emergency Act invocation. I'm against it to an extreme degree.)

 

On the vaccine mandates, I'm on the fence. I think there shouldn't be mandates outside healthcare, but I'm on the fence whether a healthcare worker should have the option of not using proven prophylactic measures.  (Like, should they have the option of not washing their hands or not wearing masks during a surgery?) I think I probably settle on exactly how proven the "proven" measures are.

 

I believe in liberal values, but there's no doubt that the Trudeau government is authoritarian and very far away from liberal values. I think there's a reasonable chance that because of this government, I'll never again vote for the Liberal Party of Canada.

 

(I really didn't like Harper because of his anti-science stance. But now I wish I could vote for him today.)

 

The irony...I voted for Harper's 2nd term and didn't vote for Trudeau's 2nd term.  Not that I think the Trudeau administration is authoritarian, but the leader is a hypocrite.  Frickin' blackface while he was a teacher pissed me off!  If Harper did that, he would have been considered to be Trump!    I'm inclined to vote Conservative in the next election, but the candidates suck just as much as Trudeau! 

 

Frankly, I was very pleased with the NDP Horgan government at the provincial level and even David Eby has done a great job so far as Premier (and he was considered extremely left-wing, but has proven to be more of a centrist).  Unfortunately, the Federal NDP is far left...so can't vote for them!  Cheers!

[Luke]

8 hours ago, RichardGibbons said:

Yeah. But, the corruption and abuse on the Chinese side is at least an order of magnitude (and maybe two) worse that the that in the "free" world.  You might want to "both sides" it, but the CCP is obviously much more evil, just like the Nazis, Khymer Rouge, and Soviets were evil.

 

The kid who shoplifted the chocolate bar from the store was a criminal, and so was Jeffrey Dahmer.  Really, both of those two were criminal.  Just like poverty in the US and running people over with tanks are basically the same thing.

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.

Edited September 4, 2023 by Luca

[Luke]

4 hours ago, Parsad said:

My point is that there is absolutely zero need for an investor to accept political or property risk by investing in China.  You can do perfectly fine in North America by just being patient and waiting for fat pitches. 

 

Especially if you are managing less than $150B!  I'm guessing most people are.  Cheers! 

Agree on that :)!

[Luke]

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."

Edited September 4, 2023 by Luca

[Luke]

"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.

[Luke]

Its all right in front of our eyes but you wont find those kind of news on CNBC.

 

So I am here, loading up with shares of one of the biggest and technologically advanced businesses in one of the biggest and most important markets on this planet and let geopolitics play itself. 

Edited September 4, 2023 by Luca

[Luke]

"China, of course, sees this plainly. “The attacks on China mirror exactly what the United States has been doing,” said Zhao Lijian, a spokesman for the country’s foreign ministry. Zhao argued that the U.S. “has no respect for the international order underpinned by the UN Charter and international law” and is a “saboteur of the international order” because it “wantonly withdraws from treaties and organizations,” placing “its domestic law above international law and international rules.” In pointing out that the U.S., with its long history of illegal violence, is almost always at war, Zhao concluded:"

“In the eyes of the United States, international rules must be subordinate to and serve its interests. When international rules happen to be consistent with U.S. interests, they are cited as authority. Otherwise they are simply ignored.”

 

"Is the Chinese position here incorrect? Is it unjust? In fact, it is difficult to see how anyone could argue with it. George W. Bush, when warned that some of his planned retaliation for the 9/11 attacks could be illegal, replied “I don’t care what the international lawyers say, we are going to kick some ass.” The United States freely violates treaties when it pleases, and when the International Court of Justice ruled that the United States had acted unlawfully in supporting the Nicaraguan contras, the U.S. simply refused to recognize the Court’s jurisdiction and blocked enforcement of the judgment. The United States has indicated that if the International Criminal Court should ever try to put an American on trial for the kinds of crimes that we now demand Vladimir Putin be indicted for, we would be willing to invade the Hague if necessary to halt the prosecution. Anything to ensure that we are not subject to the same rules as everybody else."

[Luke]

 

Regarding Taiwan: 

 

 

"But what about Taiwan? Surely here is an instance in which China is posing a serious threat—not to us directly, but to the principle of self-determination. In recent years, China’s rhetoric about reunifying Taiwan with China has become increasingly bellicose, and there are ominous signs that as China’s military capacity grows, so does the risk that it will go to war to subsume Taiwan. Lyle Goldstein notes the increasing prevalence of rhetoric out of China that “The PLA [People’s Liberation Army, the Chinese military] has the will and capability to ensure national unification.” A PLA video quotes a Chinese navy captain saying: “We have the determination and ability to mount a painful direct attack against any invaders who would wreck unification of the motherland, and would show no mercy.” (Goldstein says that not taking these threats seriously is “reckless beyond belief.”)

 

The situation is a serious one. But to understand it and try to respond sensibly, we have first to refresh ourselves on some basic history. Taiwan was part of China for hundreds of years, before being ceded to Japan in 1911. Before and during World War II, Japan used Taiwan as a military base, its “unsinkable aircraft carrier.” In 1945, Japan surrendered Taiwan to the Republic of China (ROC), although there was controversy over its sovereignty for some years afterwards. When the People’s Republic of China (PRC) defeated the ROC in the Chinese civil war in 1949, Chiang Kai-shek’s ROC forces retreated to Taiwan and set up a government in exile. For the next decades, both the PRC and the ROC claimed to be the legitimate government of all of China, both the mainland and Taiwan, and during the ‘60s and ‘70s, Chiang’s government in Taiwan was still planning to reinvade the mainland. The United States long endorsed the position that Taiwan was part of China, and only ceased to recognize Taiwan as the legitimate government of all China when it became clear that the PRC was not going away. In recent decades, Taiwan itself has seen a diminution in residents who identify as Chinese rather than Taiwanese, and an increased sense of the island as its own nation rather than the Republic of China. (In fact, Taiwanese officials used to dislike the country being referred to as Taiwan, because it implied it was a separate nation rather than the legitimate Chinese government. Taiwan has long competed in the Olympics under the name “Chinese Taipei,” in part because the Republic of China government argued that its sovereignty was not confined to Taiwan.)

 

It is easy to portray the conflict over Taiwan today simply as the story of a large aggressor wanting to dominate a small neighbor. But the history makes the story more complicated. In the aftermath of a civil war, if the defeated party retreats to a small part of the country, it is predictable that a complicated sovereignty dispute will arise. There is no obvious U.S. analogy to help us understand. We would have to imagine that the losing side in our own civil war had retreated to Galveston or Key West and claimed to be the legitimate government for the whole country, before eventually shifting to a more realistic position of desiring autonomy. It is not only easy to see how a generations-long conflict over sovereignty could arise in such a situation, but also easy to see how, if a large foreign power armed and supported the government-in-exile, and threatened to go to war to preserve independence of the smaller state, the prospects for an amicable resolution of the sovereignty dispute could be diminished.

 

Over time, Taiwan has clearly gone from being a disputed part of China to a nation of its own that deserves the right of self-determination. But when we look at the situation from the PRC’s perspective, we can see why certain U.S. actions in support of Taiwan may actually be counterproductive. First, we can understand why the PRC views Taiwan as part of China, and might consider reunification important—Taiwan has been a part of China before, and Taiwan has been used by both Japan and the ROC to wage or plot war against the mainland. The United States, then, should tread lightly, because the more the PRC associates the cause of Taiwanese independence with the U.S. strategy to encircle China with hostile countries to maintain U.S. power in the region, the more determined the PRC may be to crush any prospect of Taiwanese independence. To give another analogy: if Puerto Rico sought independence, we can ponder whether a favorable U.S. response to the cause of independence would be made more or less likely if China declared its intention to defend Puerto Rico militarily and indicated its intention to use Puerto Rico as a core ally in combating U.S. hegemony in the Caribbean."

 

If our end goal is to ensure the self-determination of Taiwan, and prevent it from being obliterated in a war, what is the correct approach? First, we should obviously avoid taking steps that would make it more likely that Beijing would decide to try to pursue unification through force. We should do our best to preserve the peaceful status quo, because if China were to seize Taiwan, it is not clear the United States could successfully defend the island, and any U.S.-China war would be a humanitarian and economic catastrophe of unprecedented magnitude, especially for the people of Taiwan.

 

In fact, there is good reason to believe a war over Taiwan can be avoided. The Taiwanese themselves, when polled, are far more likely to say that they do not think the situation will end in war, and “some Taiwan politicians think that the US’s increasingly bitter competition with China is adding to the risk.” The Financial Times quoted a Taiwanese expert who said that “Washington needed to better explain its growing alarm over the perceived risk of a Chinese attack.” And a researcher at the Taiwanese Institute for National Defense and Security Research assessed the risk of a Chinese attack as “very low.” The Taiwanese and Chinese governments have actually met on cordial terms in fairly recent memory and millions of Chinese tourists visit Taiwan each year. There is even a conceivable peaceful path to eventual independence by which the status quo is maintained until Taiwanese autonomy is essentially a fact rather than an aspiration, and in which, in future generations to come, the Chinese desire for reunification becomes an anachronistic piece of rhetoric no longer taken seriously. (Outright independence is controversial even in Taiwan and the shape of the ideal long-term outcome is unclear. Whatever it is, it should certainly not be determined by the United States’ aspirations for Taiwan.)

 

Following the path to a lasting peaceful and just settlement will require the United States to refrain from actions that make China feel it needs to assert its might, or that make it see a failure to pursue reunification through force as a humiliating capitulation to the United States. We must avoid creating the impression that we consider China an enemy and Taiwan a crucial ally against that enemy. We should certainly avoid entering into an arms race with China that turns the region into a “powder keg.”

 

Unfortunately, there is good reason to believe that U.S. support for Taiwanese self-determination has little to do with a principled belief in democracy and everything to do with preserving our power in Asia. (After all, if we believed on principle in self-determination for all the peoples of faraway lands, we would not be pouring weapons into Israel to keep Palestinian self-determination from breaking out.) Instead, Chris Horton of The Atlantic explains why the United States is so invested in the cause of Taiwan:

 

“[It] is difficult to overstate Taiwan’s strategic importance to both the United States and an increasingly assertive China. The island’s location, economy, and security are all essential to American interests, and if Taiwan were to become part of China, as Beijing has insisted it must, China would instantly become a Pacific power, control some of the world’s most cutting-edge technologies, and have the ability to choke off oil shipments to Japan and South Korea—leverage it could use to demand the closure of U.S. military bases in both countries. In effect, Beijing would likely be able to achieve its goal of forcing the U.S. out of Asia. It is no surprise, then, that Taiwan is one of the rare issues on Capitol Hill today with bipartisan agreement—Congress has been regularly passing pro-Taiwan legislation with unanimous support throughout the Donald Trump era.”

[Luke]

Are we really committed to Taiwan out of a belief in self-determination, then? One might answer that it does not matter: Taiwanese self-determination is a right worth defending even if the United States has ulterior motives. But if the interest of the United States is in a U.S.-aligned Taiwan rather than a free Taiwan—indeed, we supported Taiwan even when it was an authoritarian state—this may lead the U.S. to forgo actions that would be in the interest of Taiwanese self-determination but bring Taiwan and China closer together. For instance: Lyle Goldstein says that, as was the case with Ukraine, there are opportunities for diplomacy, but they involve fostering warmer relations between China and Taiwan:

 

So many opportunities were missed to avert the war in Ukraine. To state the obvious, if they had simply declared that Ukraine would be a neutral state, how hard would that have been? … That was a completely feasible option, but it just didn’t fit with our ideology. The idea that we might climb down, that we might compromise—that’s showing weakness, so we can never do that. Taiwan has all kinds of diplomatic positions. We should be encouraging those. … There are all kinds of compromises to be made, people-to-people exchanges, military confidence-building measures. All of that should’ve happened with Ukraine and Russia, but no, we insisted on a confrontational approach, and now we have a ghastly war.

 

Instead of trying to facilitate amicable cross-strait relations, we have instead opted for the course of encouraging Taiwan to become a missile-covered “porcupine” that can resist a Chinese invasion. U.S. officials have been deliberately taking steps that they know will anger China—such as Biden promising he would go to war with China over the island, and Nancy Pelosi’s self-aggrandizing visit. In doing so, we may flatter ourselves that we are supporting Taiwanese self-determination, but what we are actually doing is increasing the likelihood that the country will be destroyed. (The situation was similar in Ukraine: the (empty) promise to admit Ukraine to NATO was justified in the name of Ukraine’s security. But it did nothing to dissuade Vladimir Putin from his belief that without his deployment of force, Ukraine would end up as part of a hostile Western military alliance.) For 50 years, the U.S. has accepted the “One China” policy, with neither side making moves to undermine it. It could continue, in the absence of reckless and provocative moves by the U.S.

 

In fact, China’s sensible long-term strategy regarding Taiwan is not to invade, which would severely harm itself and its prospects, and perhaps spark a suicidal war. (It also hasn’t shown signs of planning to invade.) Without invading, China can make clear that if it chose to, it could strangle the island, which survives on trade. China can continue to pursue its long-term strategy of becoming the center of Eurasia, with vast development and investment projects (now incorporating parts of Africa and even U.S. domains in Latin America) expanding to the Middle East. Europe will look on and try to figure out how to get into this enormous China-based economic system, and over time, Taiwan will increasingly want to join as well, improving commercial relations. China is certainly a threat to U.S. economic power: this is what’s likely to produce violent conflict with the United States, not the threat of invading Taiwan.

[Luke]

"U.S. tension with China is sometimes characterized as the classic “security dilemma” of international relations, “whereby military programs and national strategies deemed defensive by their planners are viewed as threatening by the other side,” in the words of Paul Godwin of the Foreign Policy Research Institute. Stephen M. Walt warns “remarkably, plenty of smart, well-educated Westerners—including some prominent former diplomats—cannot seem to grasp that their benevolent intentions are not transparently obvious to others.” In other words, China does not see that we are (supposedly) only trying to deter Chinese aggression when we take such steps as: building a hostile regional military alliance, flooding the surrounding territory with high-precision weaponry aimed at China, labeling China an “enemy,” sending increasing numbers of warships to patrol its coast (ostensibly to enforce the Law of the Sea Convention—which we have not signed—and given the euphemism “freedom of navigation operations”), sending Australia a fleet of nuclear submarines to counter China, and conducting military exercises near China’s shores. China is not supposed to act the way we would act if Chinese warships were steadily accumulating in the Gulf of Mexico and conducting military exercises. Chinese military drills are interpreted by us as hostile, but the U.S. organizing the largest maritime warfare exercise in the world as a warning to China should not be interpreted by China as hostile. The Chinese are supposed to accept that we only ever engage in “defense,” while it is other countries that engage in “aggression.”

 

But let us consider the possibility that our actions are not, in fact, best characterized as “defensive” at all. Americans might not pay close attention to American actions, but the Chinese do, and perhaps China is not tragically misinterpreting our policy, but has simply read our publicly available strategy documents. They see that U.S. planners wish to maintain control of the Indo-Pacific and deny China the right to do in the Eastern Hemisphere what we have done in the Western Hemisphere. They might open the Wall Street Journal and read the “Henry Kissinger Distinguished Professor of Global Affairs” arguing that to protect the “world America built,” we must undertake a new “urgent, enduring effort to contain an advancing rival,” even if this means new “Cold War-style tensions and crises” (i.e., the constant threat of human civilization coming to an abrupt and violent end). The Chinese government may also read in our new National Defense Authorization Act that the secretary of defense is tasked with “strengthen[ing] United States defense alliances and partnerships in the Indo-Pacific region so as to further the comparative advantage of the United States in strategic competition with the People’s Republic of China.” They might hear our talk of the “rules-based order” and then remember that Barack Obama, speaking of the Trans-Pacific Partnership, said “the rule book is up for grabs. And if we don’t pass this agreement—if America doesn’t write those rules—then countries like China will.” In 2012, they saw leading “moderate” Republican Mitt Romney pledge to “ensure that this is an American, not a Chinese century,” arguing that “security in the Pacific means a world in which our economic and military power is second to none,” i.e., we have an inherent right to be more powerful than China and point city-destroying weapons at it that we could deploy at a moment’s notice.

 

The United States may be incapable of seeing its own actions as anything other than idealistic and benevolent, but our own government has clearly stated our intention to prevent a “fair fight” and maintain the ability to annihilate anyone who challenges our power. As John Mearsheimer explained in 2005, the increasing tension as China grows more powerful comes about because:

 

The US does not tolerate peer competitors. As it demonstrated in the 20th century, it is determined to remain the world’s only regional hegemon. Therefore, the U.S. can be expected to go to great lengths to contain China and ultimately weaken it to the point where it is no longer capable of ruling the roost in Asia. In essence, the U.S. is likely to behave towards China much the way it behaved towards the Soviet Union during the Cold War.

 

The United States intends to rule the world, even if that requires escalating the threat of a war that will be possibly terminal to human civilization, and of course eschewing diplomacy, (which would be appeasement).

 

The starting point for reducing tensions with China, then, is to take a look in the mirror and ask whether each demand we make of it is fair, and whether we are willing to do unto others as we ask them to do unto us. We might consider whether a good relationship is ever likely if we continue trying to ring China with hostile sentinel states in an attempt to contain its power. We might also consider whether China has certain legitimate grievances against the demands made by the United States. On climate change, for instance, we are depending on China not to behave nearly as destructively as we have. The average American is a far worse carbon polluter than the average Chinese person, and the U.S. and Europe are responsible for the bulk of historical emissions, meaning that China must be far less irresponsible as it develops if it hopes to avoid accelerating the catastrophe. When we ask China not to expand the reach of its military across the globe, or not to contemplate the overthrow of governments it feels threatens its interests, or to treat U.S. intellectual property claims as universal, we are asking for it to show more restraint than we have, and not to seek the kind of power we have sought. These requests may make sense—if all countries acted like the U.S., the world would quickly be destroyed—but they should be made from a position of humility.

 

The situation we face now is unbelievably dangerous. An insane arms race is underway. For many years, China kept a relatively low level of nuclear weapons, and proudly so. Now it is accelerating production of weapons that can only ever either be (1) a massive waste of resources (if unused) or (2) a genocidal horror (if ever used). Even Henry Kissinger—hardly a man of peace—has warned that the United States and China are stumbling toward a World War I-like calamity. Of course, in the age of thermonuclear weapons, the potential for destruction is far, far greater than it was in 1914.

 

It does not have to be this way.

 

First, we should recognize that the idea that China poses a military threat to the United States itself is so absurd that Lyle Goldstein says it is “almost a joke in national security circles,” citing the example of “11 U.S. nuclear aircraft carriers versus a single Chinese conventional ‘test’ aircraft carrier.” China does, however, pose a threat to the United States’ ability to maintain its desired level of economic dominance in Asia. If we are unwilling to share the Earth, conflict is assured.

 

There are undoubtedly deep areas of contention between the United States and China that will take long, laborious negotiations to resolve to the satisfaction of both parties. Perhaps there will be compromises that please nobody. But we should begin from the position that war is simply not a thinkable option in the 21st century. Martin Luther King, Jr., was correct when he said that the choice we face is: “We must learn to live together as brothers or perish together as fools.” A Third World War must not happen under any circumstances.

 

China, for its part, has implored the United States (and the U.K.) not to adopt a “Cold War mentality,” arguing that it is “irresponsible” to hype up the threat and saying we must “cast away imagined demons.” China has accused the U.S. of trying to “reignite a sense of national purpose by establishing China as an imaginary enemy.” Indeed, the “igniting a sense of national purpose by establishing an imaginary enemy” is precisely what we have a history of doing in this country, and it wouldn’t be the first time that the Chinese have been blamed for America’s domestic problems. (Those hyping the “China threat” will of course see China’s warnings about a “Cold War mentality” as sneaky attempts to trick us into letting our guard down so the CCP can infiltrate Des Moines.) The editors of Yellow Peril!: An Archive of Anti-Asian Fear helpfully review the history of U.S. politicians whipping up fear of Asiatic enemies to argue that “that horrid, pestilent other is causing all our problems.” When “the political culture can’t quite deliver its promises, it will appease the white working class by creating an external enemy and blaming the victim.” The “they” threatening our way of life is ever-changing, but in every case resolvable conflicts of interest become “epic civilizational contests between imagined diametrically opposed foes.”

 

And now as Charlie Munger said on BRK AGM 2023:

 

We should be cooperating with China. It is necessary for China and the United States, two major economies, to sort out crucial issues together, like global warming, pandemics, and nuclear weapons. Our fates are tied together. There is no choice but to get along. Yet relations have been falling apart. After Nancy Pelosi’s visit to Taiwan, in addition to launching new military exercises that could lead to deadly errors and escalation, China broke off talks with the U.S. about climate change, among other matters. The climate crisis is the perhaps most important issue facing the world, a major emergency, and now the two leading powers in the world can’t even discuss how to solve it. This is the road to disaster. The U.S. needs to stop needlessly stoking conflict, think about how things look from the Chinese perspective, and work sincerely to understand and collaborate with a country of 1.4 billion people we have to share a planet with. This does not mean one must be an apologist for China’s wrongdoing, or that its human rights abuses should not be taken seriously. It means that the U.S. must cease to consider global control a “vital interest” and must accommodate and respect the interests of others. It means that the pursuit of long-term survival of the species means abandoning the desire to permanently preserve our hegemony.

Edited September 4, 2023 by Luca

[Spekulatius]

8 hours ago, Parsad said:

 

You're right.  The guy investing in typewriters is not exposed to political or property rights risk.  

 

My point is that there is absolutely zero need for an investor to accept political or property risk by investing in China.  You can do perfectly fine in North America by just being patient and waiting for fat pitches. 

 

Especially if you are managing less than $150B!  I'm guessing most people are.  Cheers! 

Tepper move seems more like a giant swing at a big tech which includes some Chinese securities as well. He used to be a distressed security investor - has he become a swingtrader now? I don’t think he was ever buy and hold.

[james22]

U.S. Commerce Secretary Gina Raimondo said U.S. companies have complained to her that China has become "uninvestible," pointing to fines, raids and other actions that have made it risky to do business in the world's second-largest economy. . . .

 

"Increasingly I hear from American business that China is uninvestible because it's become too risky," she said. Raimondo said American firms are facing new challenges, among them "exorbitant fines without any explanation, revisions to the counterespionage law, which are unclear and sending shockwaves through the U.S. community; raids on businesses – a whole new level of challenge and we need that to be addressed." . . .

 

"All of that creates uncertainty and unpredictability," Raimondo said of recent Chinese actions. "So businesses look for other opportunities, they look for other countries, they look for other places to go." Referring to both old and new business restrictions, Raimondo said, "The sum total of which is making China feel too risky for them invest."

 

https://www.reuters.com/markets/us-commerce-chief-set-meet-chinese-vice-premier-beijing-2023-08-29/

 

[Luke]

https://www.bloomberg.com/news/features/2023-09-04/look-inside-huawei-mate-60-pro-phone-powered-by-made-in-china-chip

 

Huawei Teardown Shows Chip Breakthrough in Blow to US Sanctions

[SharperDingaan]

Like it or not, China is about as investable as a Russia; you are not getting your money out unless you take it in goods, and even then - at cents on the dollar.

 

Everybody needs an enemy to support their military-industrial complex, and the outcome is an apartheid like detente. When one enemy collapses (Russia), a new one gets created (China). Entirely rational, & just the way of the world.

 

As in the colonial era, the world is in another land grab; separating into American, Chinese, BRIC, & other. The powers do their thing, we eventually get balance again, then it's business again as normal.

 

The reality is that it is a lot less risky,  & a lot more reliable, to simply invest domestically vs in china. The only people bitching are those trying to exit china, & discovering there is no market to sell into.

 

Pick your tribe & just get on with it.

 

SD

 

Edited September 4, 2023 by SharperDingaan

[SharperDingaan]

On 9/3/2023 at 1:52 PM, james22 said:

 

Why not?

 

Troublesome businesses are routinely seized, & founders 're-educated' in the new reality. Whether anyone ever sees the founder again, depends upon how rational he/she chooses to be. Your brains or your signature on the contract; either works for us.

 

SD

 

Edited September 4, 2023 by SharperDingaan

[backtothebeach]

On 9/1/2023 at 11:13 PM, Parsad said:

 

The Chinese bank won't release the funds.  We attempted numerous ways with advice from Chinese and HK experts after several attempts to just withdraw the funds and transfer to our HK bank account were declined.

 

A couple of examples:

• We've tried to produce invoices from here to indicate there are expenses paid in Canada that are owed by the Chinese subidiary...the bank declined saying that the Chinese government was restricting the withdrawal.  
• We tried to sell the subsidiary to our general manager, in turn he would transfer ownership of his HK company to us with equivalent cash...wouldn't let the Chinese transfer occur.
• Tried to sell to another Chinese company...they demanded audited financial statements...which we produced.  Still declined the transaction.

Six bloody years and still no way to get at the funds!  And people want to invest in China!  Cheers!

 

Maybe you can open a Yuan account in Argentina and transfer it there.

Just kiddin'...

https://www.bloomberg.com/news/articles/2023-06-29/argentina-s-central-bank-allows-banks-to-open-accounts-in-yuan

[james22]

2 hours ago, SharperDingaan said:

 

Troublesome businesses are routinely seized, & founders 're-educated' in the new reality. Whether anyone ever sees the founder again, depends upon how rational he/she chooses to be.

 

Your brains or your signature on the contract; either works for us.

 

SD

 

 

That's why they can't just do whatever they want, sure.

 

I was curious why Luca believed they shouldn't.

 

Innate rights (secured and protected by law) wasn't his answer.

[tnp20]

This is like religion. No one is going to convince the other side. There are fair points on both sides...you place your money on various global chips on the table and reap what comes as a result.

[Parsad]

15 hours ago, SharperDingaan said:

Like it or not, China is about as investable as a Russia; you are not getting your money out unless you take it in goods, and even then - at cents on the dollar.

 

Everybody needs an enemy to support their military-industrial complex, and the outcome is an apartheid like detente. When one enemy collapses (Russia), a new one gets created (China). Entirely rational, & just the way of the world.

 

As in the colonial era, the world is in another land grab; separating into American, Chinese, BRIC, & other. The powers do their thing, we eventually get balance again, then it's business again as normal.

 

The reality is that it is a lot less risky,  & a lot more reliable, to simply invest domestically vs in china. The only people bitching are those trying to exit china, & discovering there is no market to sell into.

 

Pick your tribe & just get on with it.

 

SD

 

 

LOL!  +1!  Cheers!

[UK]

15 hours ago, SharperDingaan said:

The reality is that it is a lot less risky,  & a lot more reliable, to simply invest domestically vs in china. The only people bitching are those trying to exit china, & discovering there is no market to sell into.

 

Pick your tribe & just get on with it.

 

SD

 

 

 

Edited September 5, 2023 by UK

[Spekulatius]

Even if something is "un-investible" it can be an intelligent speculation.

[sleepydragon]

https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-Xi-reprimanded-by-elders-at-Beidaihe-over-direction-of-nation

[John Hjorth]

Youtube : Leonard Cohen - First We Take Manhattan (Live in London),

 

However we may need an updated version : "First we take Russia, then we take China".

[sleepydragon]

https://twitter.com/thisischaniece/status/1699029265042506041?s=46&t=Z-gsu-O6_LALehjknzotyA

 

[tnp20]

2 hours ago, sleepydragon said:

https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-Xi-reprimanded-by-elders-at-Beidaihe-over-direction-of-nation

 

Thanks for posting that article.  Yeah "Xi" is screwing up badly and elders are worried about future stability and support for CCP ....there are 4 scenrarios I see....

 

(i) XI gets removed. This is low odds.

                  (a) New guy worse - disaster for China and possibly the global economy - this is a super low odds here.

                  (b) New guy slightly or materially better - some confidence is regained with respect to China initially and further as more confirming and positive data comes in

 

(ii) Xi doesn't get removed - most likely

                   (a) He maintains his destructive course and even double downs - economy worsens and stability is threatened - this would result in (i) above sooner or later.

                    (b) He pulls back like he did with his Covid policy and presses his sub-ordinates to go all out on the economy - economy recovers in the near and medium term and stocks get a relief rally/sugar rush at minimum.

 

(ii)(b) is most likely from a logical point of view otherwise pressure on Xi will be tremendous.

 

And then the second striking factor is that the central government has essentially no debt. Central government debt has different definitions, but including the railway ministry, it’s 25 percent of GDP, which is a fraction of the debt of the U.S. federal government. It’s a fraction of the debt of France. It’s well below the debt of Germany, which is by far the most frugal of the major advanced economies.

 

https://nymag.com/intelligencer/2023/09/will-chinas-economic-slump-hit-the-u-s.html

 

 

 

If this is true, they have plenty of fiscal space to juice economy IF THEY WANT TO. And having the capacity is the hard part, the will to do it is just a soft decision part that can be switched on or off easily. If they didnt have the capacity, it would be a different story.

 

This means local government debt can be soft transferred to the central government alleviating local government debt burdens....