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The current financial regulation in China

Giancarlo Elia Valori

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The power of a newly established Chinese public organization, namely the Financial Stability and Development Committee, is growing. Said organization was created precisely on November 8, 2017.

It is an important organization under the State Council’s direct control. Indeed, it is an office of the Council itself which will deal mainly with China’s financial stability and with all matters concerning economic development and monetary and capital stability.

More specifically, the Committee will be tasked with deliberating major national programs for regulating the financial system, for organizing monetary policy with the Central Bank and for defining tax policies and the related fiscal and industrial actions.

This Committee will also be responsible for analysing  international and domestic financial situations, identifying the greatest global financial systemic risks, as well as studying the related conditions and finally defining the ways for reaching  financial stability.

The important choice made in relation to this Committee is that it will be chaired by the Chinese Vice Premier, Ma Kai.

The idea of ​​creating this organization had been suggested directly by President Xi Jinping during the National Financial Work Conference held on July 14-15, 2017.

The Committee will also strengthen the macro-systemic policies of China’s Central Bank. In fact, it is a matter of regulating and stabilizing the Chinese financial market, which is worth 40trillion US dollars and is one of the largest in the world.

The Chairman of the Committee and Vice Premier, Ma Kai,was born in Jinshan, a district of Shanghai, in 1946.

In the mid-1990s he was elected Vice-President of the National Planning Commission.

He was Deputy-Head of the State Council from 1998 to 2003 and also Minister for National Development from 2003 to 2008. He was appointed President of the National School of Administration and later Head of the Office for the development of small and medium-sized enterprises.

In fact, the Committee will also be tasked with coordinating tax and financial policies and tuning them with the long time schedules of the industrial system, while the collaboration between the Committee and the People’s Bank of China will allow the regulation of the 15 trillions currently invested in financial products throughout China.

With the creation of this Committee, high-risk investment or massive bank loans to buy securities will no longer be allowed, while it will be mandatory to set 10% of managers’ profits aside.

China is currently turning its old role as “world factory” into that of a modern consumer-driven economy.

Hence the need to regulate corporate and retail finance.

There are three issues underlying the new Chinese financial regulation: a) booming loans, the majority of which are requested by businesses and local governments; b) complexity, considering that risky creditors have moved away from banks, due to the complexity of rules, towards less structured products, while Chinese banks currently offer mainly financial products for the long-term management of household and business savings.

The third issue is c) guarantees. With a view to preserving their reputation, Chinese banks often offer even compensation to their clients who have lost money as a result of certain investment,  which leads them to miscalculate their risk share.

Hence an extremely fragmented banking system which is hard to control.

The Chinese systemic risk must be kept well under control:  financial assets have grown four foldover the last decade, from 310% up to 510% of the GDP, which, however, has grown by 2.5 times over the same period.

The expansion of credit has been led by the public sector and by its very poor regulation, with the expansion of shadow banks, non-orthodox credit and particularly risky – but attractive – financial products for private investors.

Credit growth has already declined, while corporate access to capital has also decreased considerably.

For the Party, however, the fragility of the financial system arises from the excess of leverage and debt investment and from the excessive debt in many sectors of the real economy, while credit has expanded too rapidly in the financial sector.

In late 2016 the average national leverage amounted to 247%,   while companies’ leverage was 165% in the same period.

Definitely too much debt for companies and individuals, far beyond the international standard.

As President Xi Jinping has pointed out, the control of aggregate money supply has been severely lacking.

President Xi Jinping has also noted that the financial institutions’ general control has been missing and the State has focused only on the individual links of the chain of financial audits.

President Xi Jinping has also maintained that the State has been unable to control major financial companies.

Moreover, the Chinese government’s interest in financial matters has never been negligible.

The National Financial Work Conference had been created as early as 1997.

Later, based on the analysis of that select group, the first Chinese sovereign fund, namely China Investment Corporation, was created in 2007.

A structure that can currently boast to have capital to the tune of 813.5 billion US dollars.

The fifth National Financial Work Conference was held in July 2017, simultaneously with the creation of the Committee.

As the CPC noted, all this was designed to reach “national financial security”, mainly with a view to backing the aims of the  13th Five-Year Plan.

President Xi Jinping also thinks that the new Committee shall a) deal with the real economy and b) combine and harmonize social development with economic development.

According to President Xi Jinping, finance is never disconnected from the social context in which it operates; c) financial regulation is always aimed at eliminating the systemic risk and d) reaching national financial stability.

Stability first and then development – this is President Xi Jinping’s belief.

Furthermore, local governments shall follow the central government’s rules. Any failure to report the financial risk will be regarded as an administrative irregularity.

This will be very useful, considering the ongoing trade war between the United States and China.

In fact, China has resorted to the WTO dispute settlement mechanism against the duties levied by President Trump.

It is worth recalling that the United States has levied duties equal to 25% on imported Chinese goods, for a total value of 50 billion US dollars.

So far these duties have been levied only in the aluminium and steel sectors.

China has responded immediately by levying equal duties on US products such as soy, pork and vegetables.

The immediate US countermove has been the doubling of duties on aluminium and steel up to 100 billion dollars.

One of the reasons for the current clash is certainly the forthcoming mid-term elections for which President Trump wants to keep on winning the support of the Rust Belt protectionist voters who enabled him to rise to the White House.

Moreover, according to the universal supply chain system, many of the Chinese products taxed by the United States come from South Korea, Taiwan and even from the European Union.

Hence the Chinese pressure could harm US farmers and the whole US middle class, as well as some of US best allies.

Therefore, while China’s recourse to the WTO has not slowed  down the aggressive posture of the Chinese economy towards the United States and the European Union, the aim of the current duties is to force China to revalue its currency, so as to rebalance the deficit between China and the United States, with the latter already recording a trade deficit with China to the tune of over 375 billion dollars.

Reading between the lines, President Trump wants a decrease of Chinese duties on US cars, so that there is an increase in China’s purchase of US semiconductors and, in any case, a greater share of the huge Chinese market for US companies.

Furthermore, China undermines intellectual property in the advanced sectors of computer science and Artificial Intelligence.

Finally, for the United States, the issue lies in hitting Chinese innovation and the “Made in China 2025” project, which is supposed to ensure China’s global strategic superiority in cutting-edge products, robotics and advanced infrastructure.

If everything goes well, at the end of this trade war, China will impose on the United States a network of joint ventures and selective openings for US products on the Chinese market.

That is what the new Chinese financial authority is for: to raise capital for the State’s primary projects and to protect China’s finance from the turmoil that could be caused by the monetary and economic imbalances resulting from the entry of foreign liquidity into the Chinese market.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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China is not alone in fighting against the Coronavirus epidemic

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Authors: Yang Yizhong & Paul Wang

Since the coronavirus outbreak was officially announced several weeks ago, it has stirred many concerns and uncertainties within China and around the world. For example, there are quite a few criticisms and discrimination about human rights violation, political inefficiency and economic policy of China due to this virus crisis throughout the country. However, it is self-evident that China is not alone in the fight against the coronavirus epidemic, also called “The COVID-19”. As Sivanka Dhanapala, United Nations High Commissioner for Refugees (UNHCR) Representative in China, put it “Let me say straight away, this is a time for solidarity, for international solidarity. Now it’s important, really important, that we need international solidarity and cooperation to share and to pool resources where they are most needed and to make sure vulnerable people get the help that they need. It needs to come together, as an international community, in fighting the virus.”

Under such circumstances, Chinese Foreign Minister Wang Yi spoke at the 56th Munich Security Conference on 15 February, reiterating the Chinese resolve, confidence and goal which could be put into the official line: “Under the strong leadership of China, the 1.4 billion people are united as one in fighting the sudden outbreak of a novel virus; and the final goal is only: to win this non-conventional war.” In light of so dangerous uncertainties ahead, it is necessary to understand China’s strategy, capability and approaches as well.

Obviously, the leading elite and the people of China have demonstrated firm resolve in dealing with the epidemic. The high speed and massive scale of China’s response are rarely seen in the world. More accurately, Chinese President Xi Jinping has urged medical staff from the Chinese armed forces to move towards Wuhan and the other virus-hit cities to protect the locals and called for enhanced coordination between local authorities and the military. Until this point, a total of over 4,000 medical staff from the Chinese armed forces have been dispatched to this area. As a result, all relevant parties have taken effective measures to stop the spread of the virus, including requiring the Chinese military to bear the responsibility to make sure of the prevention and control of the outbreak of pneumonia caused by the novel coronavirus. For sure, their efforts are consistently supported by medical and pharmaceutical researchers who have been working day and night, isolated the first virus strain and developed the test reagent in less than seven days. Hailed as heroes in harm’s way, over 20,000 healthcare workers in 100 plus medical teams converged in Hubei, the hardest hit province, from across the nation to support epidemic control. Exemplifying professional dedication, all medical workers are saving and protecting lives around the clock despite the risk of infection and exhaustion from overwork. Here overseas Chinese around the globe have continued rushing to make donations in cash and all kinds to help combat the virus outbreak.

Meanwhile, China has timely released the latest information about situation of the disease and called for deepened international cooperation, such as working closely with WHO, inviting international experts to join our ranks, and providing assistance and facilitation to foreign nationals in China. To date, confirmed cases outside China account for less than one percent of the world’s total. It means China has effectively curbed the spread of the outbreak beyond our borders. For that, China has made extraordinary efforts and a heavy sacrifice as well. That said, China is not fighting alone. The international community has given China valuable moral and material support. For example, Russia, Belarus and the ROK swiftly delivered badly needed medical supplies to Wuhan through chartered flights. Pakistan sent its Chinese brothers virtually all the masks in its stock. At the peak of the outbreak, Prime Minister Hun Sen of Cambodia paid a special visit to Beijing to offer his staunch support for China. The leaders of some countries, such as Thailand, Sri Lanka, and Italy, also conveyed their warm messages in support of China’s epidemic response.

Here is self-evident to mention that Japan, as the most wealthy neighbour of China and also having the long-time historical and territorial disputes with China, has sent huge assistance supplies to China, attached with ancient Chinese poetic lines: “Fear not the want of armour, for mine is also yours to wear”, conveying a touching message of empathy from an ancient Chinese poem. In other parts of the world, Americans from all walks of life donated medical items and supplies; not to mention the emergency aid supplies to China from EU countries. Individually speaking, Philippe Klein, a French doctor working in Wuhan, did not hesitate to stay and fought alongside the Chinese colleagues. He revealed that he kept a bottle of champagne to be popped open for celebrating the end of the epidemic. It was also reported that a Zimbabwean student who lived in Wuhan for three years, chose to stay and signed up to be a volunteer. As the Chinese are a grateful nation, they will remember and hold dear every act of support. What are discussed here aim to remind all that we live in a time when traditional and non-traditional security issues are entwined, and when local issues easily become global and vice versa. No country can prosper in isolation or meet all challenges on its own, as our interests are closely inter-connected in the age of globalization. Now for virus respects no borders, it requires a collective response from the international community.

In sum, it is true that now in China Xi wields near-absolute political power over the ruling party and the Marxist-directed state. Arguably, only an socialist regime could have pursued the draconian methods that China has in trying to control the virus since January. Yet, time will tell how effective these measures ultimately prove to be. What is certain, however, is that the crisis, once resolved, will not change the goal that China is going to achieve in the near future.

As China holds that as human society has entered the age of globalization, it is necessary to transcend the old concept of East-West divergence and the North-South divide, to see our shared planet as a community for all. In so doing, China argues for all nations go beyond the ideological gap and accommodate historical and cultural differences. During the crisis moment, it is sensible to see that repeated relationships can nurture co-operative restraint and reciprocity. Yet, the COVID-19 epidemic has inspired cover stories across the world. Some focused on the virus, others described the life changed by the quarantine measures, but among them, Time magazine predicted that disease could “Derail the China Dream,” and Bloomberg Businessweek warned that there is a “Fragile China” that we need to “Handle with care.” However, the China collapse theory is doomed to fail as China and its people have showed much of the strength and creativity in the epidemic time and again.

In this contest, IMF chief Georgieva said recently, it was “too early” to assess the full impact of the epidemic but acknowledged that it had already affected sectors such as tourism and transportation. If the disease is “contained rapidly, there can be a sharp drop and a very rapid rebound”, in what is known as the V-shaped impact, she said. To be fair, China has done a good job so far in responding to the epidemic. Obviously, President Xi’s management of the coronavirus crisis at home, and of politically totemic projects such as 5G expansion abroad, assumes a critical new significance.

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The current relations between the United States and the Democratic People’s Republic of Korea

Giancarlo Elia Valori

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As is well known, Kim Jong-Un imposed precise time and political limits on negotiations with the USA by the end of 2019.

 Moreover, at that stage, the US intelligence community was discussing North Korea’s adoption of a new short-range missile, which would make its appearance at Christmas 2019.

 For the leadership of the Democratic People’s Republic of Korea, it is important to finalise – as soon as possible – the strategic and above all economic negotiations with the United States or at least put them on a stable track.

Some substantiated Western sources also believe that the North Korean leadership is putting pressure on Kim Jong-Un himself to harden relations with Donald J. Trump’s Presidency.

 Time is ripe and there have been negotiations, but the US indeciveness on Korean issues risks putting the whole US strategic and economic system in the Pacific in crisis.

 Indeed, the US stance on the North Korean issue and the related economic sanctions, the lawfulness of which is to be debated and called into question, has been swinging – just to say the least.

 Kim Jong-Un had created – or at least this is what he believed – the conditions for full, fast and complete negotiations with the United States, especially at the meeting held in Hanoi in February 2019, where reference was made to the complete denuclearisation of the Korean peninsula, the first of the items on the agenda, even in Kim Jong-Un’s daily schedule.

President Trump also noted that “the idea of denuclearisation they have in North Korea is not the same as we have”, which is also true. Hence negotiations ended without reaching any particular results.

 On January 11 last, however, in a press report an important adviser to the Foreign Minister, Kim Kye Gwan, pointed out that reopening negotiations between the Democratic People’s Republic of Korea and the United States will be possible only if the latter adheres to the previous Singapore and Hanoi agreements, as it has already shown to do.

 Hence to the denuclearisation of the entire Korean peninsula and to the immediate lifting of sanctions.

 In short, North Korea does not want to fall by the wayside and wants, above all, to resume negotiations with the United States both on nuclear issues and on economic sanctions.

As already noted, the lawfulness of sanctions sounds dubious to us.

 After the Singapore meeting, however, President Trump felt that Kim Jong-Un “would return back home to start a process that would make his people very rich and very happy”.

 Psychologism, besides being a severe philosophical mistake – at least on the basis of what Husserl and his Phenomenology taught us – is also the terrible flaw of US diplomacy and intelligence.

 Just at that time, however, President Trump had also declared that “there was no nuclear threat from North Korea”, obviously for the United States.

 Of the two, one. Either we want the end of the Democratic People’s Republic of Korea – an absolutely improbable goal – or serious negotiations are held, which presupposes a reasonable lifting of sanctions.

 In the meeting held in Singapore in 2018, President Trump told us that Kim Jong-Un had adhered to the project of “complete denuclearisation” of the Korean peninsula.

 In the US or North Korean version, which are very different from each other? We will never know.

 However, there are no data regarding other strategic or economic concessions between the two parties.

This makes it hard for us to believe in Kim Jong-Un’s conversion to strategic masochism.

Therefore, we are still at the terms of Kim Jong-Un’s last “New Year’s speech”, the one in which the North Korean leader stated that he would not denuclearize North Korea if the USA did not stop its “hostile policies”.

Hence either the United States explicitly accepts a linkage between the denuclearisation of the Korean peninsula and the end of sanctions, or North Korea will slowly, but surely, return to its nuclear strategy, which, at that point, will cost him nothing.

 But is President Trump’s willingness to cease hostilities with North Korea and thus rebuild the stability of the entire Korean peninsula serious?

 We donot know yet. For somebody, like the old British Prime Minister Tony Blair, the US President is now completely uninterested in Korean affairs.

 And he is wrong, we might add.

 In fact, if Kim Jong-Un were to quickly rebuild his nuclear arsenal, which seems currently possible, the possibility of attacks on U.S. territory would still be remote, certainly, but the US establishment would interpret a North Korean attack on the U.S. military positions in the Pacific as a kind of suicide for North Korea. Are we sure that China and Russia would not put very credible pressure on the United States? Are we sure that a North Korean attack in the Pacific would not, technically, be a success?

 But, in fact, it is not: a possible attack by North Korea on the US and its allies’ bases in the Pacific would be highly destructive, politically very dangerous, but finally capable of unleashing the Russian and Chinese reactions in the region.

 In January 2020, Kim Jong-Un asked his ruling class to follow and take unspecified “offensive measures” to break the deadlock in negotiations with the USA.

 If the United States currently believes that North Korea is a quantité négligeable in the Asian equilibria, it is sorely mistaken.

 China will never accept an unarmed Democratic People’s Republic of Korea, which would bring China into a close border contact with the USA and South Korea, given that the maritime area that North Korea is securing is also essential for the security of the Belt and Road Initiative.

 Neither will Russia ever accept an unstabilized and reduced US presence on the Korean peninsula, which is also a strategic life insurance policy for the Russian operations between the Indian Ocean and the Greater Middle East.

Probably Kim Jong-Un will currently accept, with difficulty, a stable progression of the agreements with the USA on its nuclear power, both to revive the North Korean economy and to stabilize equilibria in the Far East.

It will, however, be a negotiation that will see – in place of the unruly Americans – many and more willing South Koreans, Japanese, Chinese, Indians, Russians, and even the pale and weak foreign policy of some surviving European countries.

 If President Trump believes he can wait for the global economic crisis to reach North Korea, he has not well analysed all the terms of Kim Jong-Un’s strategic equation.

 The possible crisis in the Democratic People’s Republic of Korea will be supported to a large extent by Russia and China but, in all likelihood, there will be other new supporters.

 Therefore, without pretences, President Donald J. Trump’s attempt to denuclearize the Korean peninsula in words has currently failed.

 On the other hand, Kim Jong-Un’s speech of December 31, 2019, in which he spoke of a “new path” and assumed new and more advanced strategic weapons, in addition to a long confrontation with the USA, shows that the U.S. policy vis-à-vis North Korea has, once again, failed.

By now we know that the concept of “denuclearization” between the two sides has never been a common criterion.

Hence, if the North Korean concept is accepted, the military alliance between the USA and South Korea shall be broken. However, if denuclearization does not concern only South Korea – as the US diplomacy sometimes seems to suggest – there is no other way for North Korea if not to continue its nuclear program and, indeed, even to expand it.

 If we proceed with the old logical and diplomatic mechanism – i.e.  the simple freezing sine conditione of North Korea’s nuclear program, no concrete objective will be achieved, since North Korea uses its strategic nuclear system precisely to overcome sanctions, and vice versa.

Hence either the denuclearisation of the entire Korean peninsula, or the North Korean nuclear program will go ahead smoothly – a program capable, however, of stopping or weakening the U.S. Japanese, Vietnamese and Indian operations in the Pacific. Does this make sense?

 Moreover, the moratorium on strategic weapons, formally still in place, imposed by the North Korean government itself, still enables Kim Jong-Un to have an excellent relationship with China and Russia, which certainly do not want too much noise in the East.

Make a sound in the East, then strike in the West, as stated in the fifth Stratagem of Sun Tzu’s Art of War.

Hence now Kim Jong-Un does not want to put aside the South Korean leader, he never mentions in his last speeches, but also keeps a door open even with the USA. The North Korean leaderdoes not say, in fact, he will automatically resume his actions with short-range and intermediate-range missiles, but makes it clear that the Democratic People’s Republic of Korea will soon rebuild its nuclear system and even expand it.

 In other words, currently North Korea capitalizes on its possible medium-long term threat, while pointing outit can deal with a tactical, rather than strategic, short or medium range threat.

 That is the best we can currently expect. Kim Jong-Un has not closed all doors, but he is careful not to open the door of divine fear, as in the I Ching’s hexagram “discard the revolt, grab the yield and surrender”. 

 Meanwhile, the North Korean leader Kim Jong-Un has not ordered any special launches or operations in recent months. This is also an important sign.

From a strictly economic viewpoint, which is only one of the criteria with which to study a State like North Korea, the recession – both stimulated by sanctions and imported from the global market -accounts for about 4.7% per year of the North Korean economy.

 Neither China, especially today with the coronavirus epidemic, nor certainly the Russian Federation can replace the share of North Korea’s economy integrating with the world market.

Nevertheless, it is also hard to think – for a rational strategic player – of a country, the USA, which creates basic economic difficulties in North Korea, and then discounts them downwards at the negotiating table on nuclear power.

 This is, however, a negotiation that neither Russia nor China would allow in any way.

President Trump, in fact, has to do with a significant part of the State Department, as well as CIA, which are pressing for an immediate, complete and fully verifiable nuclear decommissioning of North Korea. Then comes what may of North Korea’s economy, for the better or for the worse.

 Only at the end of this dismantling process, which should reasonably last at least eight years – if all goes well, but we doubt it – could the sanctions be unilaterally lifted. With what guarantees?

 Are we sure?

 What other option would inevitably be put forward by the USA to further weaken the lifting of sanctions? As Kim Jong-Un thinks, what could be the mechanism forcing the USA to lift sanctions and further end the pressure on North Korea’s foreign policy?

 Trump Administration’s more possibilist factions, vis-à-vis the North Korean politics, now have vague and unreliable plans.

We also need to consider the Iranian issue, in which, once again, the USA proposes an improbable and impossible total and radical denuclearization, if not with a local war. However, the same project applied to North Korea simply means the destabilization of the North Korean regime and its implosion, without knowing – as will also happen in Iran – when, how and where the trade sanctions will be lifted.

 No state commits suicide so easily.

What could be a reasonable solution? The immediate temporary and conditional suspension of the primary economic and trade sanctions against North Korea.

 There could also be an agreement between the EU, the USA, Japan and South Korea to phase out the North Korean nuclear system.

 But inevitably North Korea must be reassured of its permanence as a State, as well as of its controlled and, probably, partial denuclearisation, and of a complete and rapid integration into the world market. It must also be reassured of the cessation of the clear and conventional nuclear threat coming from the South, the Pacific and the US bases in South Korea and in the region.

 If the negotiation does not evaluate these options, it will be completely useless.

Russia and China will continue to make it clear they do not want the US Armed Forces at their borders. Hence North Korea will have to rely on its nuclear weapons to make up for its strategic weakness, which Kim Jong-Un knows very well it would not be fully offset by Russia or China. Finally, the strange US and EU sanctions will indefinitely stop the development of a decisive area for the whole of South-East Asia, which could also guarantee shared security in an area which, in a short time, will become central to global economic development.

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The Uyghur issue in early 2020

Giancarlo Elia Valori

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The Uyghur issue is now a very important asset for global anti-Chinese propaganda, both by the United States and by other European or Asian countries.

 If we do not understand the strategic importance of the Belt and Road Initiative, which inevitably passes through Xinjiang, we do not even understand the central role currently played by the Western propaganda in favour of the Uyghurs in Xinjiang.

 The basic criterion – certainly originally coming from the U.S. State organizations themselves – is that of comparing the Nazi concentration camps to the Uyghur re-education camps in China.

 This is a criterion of “grey propaganda” which is by now very widespread: relatively scarcely widespread news, regardless of its factual truth, is associated with tragically true news, but very widespread throughout the world.

Hence the “truth effect” passes from the “major premise”, which is certainly true, i.e. the Jewish Shoah during the Third Reich, to the minor premise, not fully verifiable, as happens in Aristotelian syllogisms – hence, in this case, the supposed truth of the “repression” (another key propaganda term) of the ethnic group of Turkish origin living in Xinjiang.

By now all open sources – whether journalistic or para-analytical ones – have revised figures significantly: until about a year ago, everywhere there was talk about three million Uyghurs detained in camps, but now all U.S. journalistic sources refer only to one million prisoners, but with the other two million ones of Turkish ethnic origin who are, in fact, “under the Chinese iron heel”- just to use  Jack London’s old metaphor.

However, the matter of the documents coming from “Chinese sources”, translated and published by the main U.S. newspapers in November 2019, makes us revise also this figure: allegedly, in fact, there were about 500,000 Uyghurs in the Xinjiang camps from 2017 until November 2019.

Nevertheless, even this figure should probably be revised, although there are certainly camps in which the unruliest Uyghurs are temporarily interned, and certainly in very different ways from the tragic ones typical of the Jewish Shoah.

 Furthermore, the Uyghur jihad- strengthened with the new displacement of Turkish jihadists, led by the Turkish MIT, towards Libya – has always been a very serious and very dangerous problem.

According to some Russian sources, in late 2016 the World Uyghur Congress (WUC), still based in Munich, directly organized para-military operations against the Chinese territory and positions.

At least since 2015 the WUC has had direct relations with the Turkish government.

Until August 2019 over 18,000 Uyghur Islamists were in fact sent for training in Syria, with the support of the Turkish intelligence Services alone.

 Now a part of these militants is being relocated to al-Sarraj’s Tripolitania, with a view to defending al-Sarraj’s pro-Western and UN-recognized government, which has always been supported by the Muslim Brotherhood.

 The partial and very weak support to al-Sarraj is a perfect fig leaf for the operations of the Muslim Brotherhood and of its reference State, which is currently Turkey.

 Qatar, another State linked to the Islamist Ikhwan, funds operations and arms purchases.

Nevertheless many of these 18,000 “Turkmen” jihadists or, however, from Xinjiang are still in Al-Zanbaki, Governorate of Idlib, supported by German and French non-governmental organizations.

 On December 7-9, 2019 a closed-door meeting was held in Brussels on Uyghur issues, while the following day, on December 10, there was a conference at the European Parliament organized  by the French MP, Raphaël Glucksmann, attended by Dolkun Isa, the current President of the World Uyghur Congress based in Munich.

As can easily be predicted, the EU as a screen for the expansion of a “good” or”moderate” Islamism – as the United States maintains – which the EU believes will serve the interests of a weak, ineffective and misinformed Europe.

 This is very unlikely to happen.

Currently the primary variable to be kept under control is Tunisia.

  On December 25, 2019, in fact, Turkish President Erdogan – who fell in love with the Uyghurs when he was mayor of Istanbul -paid a visit to the Tunisian President, Kais Saied, an “independent” jurist elected also with the votes of the Muslim Brotherhood in Tunis and of its political arm, Ennahda.

Turkish President Erdogan was accompanied by the Head of Turkish intelligence Services, Hakan Fidan, and by the Foreign and Defence Ministers.

 The bone of contention was the possibility for the Turkish intelligence Services to use the airport and the port of Djerba for the mass transfer of jihadists, organized by the Turkish MIT, from Syria to Libya and, probably, also to other areas of the Maghreb region, besides Tunisia itself.

 The new phase of Uyghur jihadism will therefore affect the whole Middle East and the Maghreb region, in addition to an increasing share of jihadists of Turkish origin who will be operating in South-East Asia.

At first the Maghreb region will be affected, with a sequence of attacks by the new jihad on the economic, oil and tourist resources of the most modernized countries of the Maghreb region, irrespective of these resources belonging to the West or not. Later there will be a wave of “sword jihad” actions between the Maghreb region and sub-Saharan Africa, with direct effects on the migration routes from “black” Africa, and then sequences of attacks will reach Southern Europe.

The attacks will initially be organized by groups particularly  specialized in “hybrid” warfare and terrorist operations. Later  there will be a resurgence of massive and very low intensity actions so as to cover other types of actions.

These attacks, however, will be different from the old Qaedist logic: the jihadists will target the production, transport and logistics systems, with the least possible impact on civilians.

We cannot even rule out the possibility of an action against the local and foreign Armed Forces, i.e. French, British and U.S. Forces (which have certainly not left Africa) and other countries’ ones.

In this future scenario, there will probably be a new military role for Saudi Arabia which will possibly reactivate its “ad hoc” jihadist networks to counter the “Allah’s warriors ” supported by its strategic competitors: Iran which, however, will not play all its cards here; Egypt, which will protect its Nile Sources and the two Suez canals, the area of Djibouti and the Horn of Africa, where the local jihad will mobilize against Somalia and Eritrea.

 Moreover, as we noted above, the data on Xinjiang’s economy is not at all consistent with what has been propagandized  as “mass detention” of Uyghurs by the Chinese authorities.

 The latest reliable statistics, dating back to 2018,points to an annual GDP of the Xinjiang Autonomous Region equal to 1.22 trillion yuan, with a 0.11 trillion increase compared to  2017.

It is unlikely if we consider the data released by Western media on the Uyghurs detained in various “re-education camps”.

 Moreover, very significant investment has always been made in the Xinjiang region, in three Chinese five-year programmes: the 2006-2010 one and the 12thplan of 2011-2015, as well as the  current one.

 At the beginning of China’s planning policy, about 97% of the population lived in a territory covering only 8% of the  Autonomous Region’ surface.

 The 12thplan focused on 12 Chinese areas and regions, obviously including Xinjiang, with a view to enhancing economic growth, infrastructure and public services, as well as to implementing a  vast environmental protection of the region: since 2015 forests have been covering over 20% of the Uyghur territory.

As we saw during the last years of the Shah’s government in Iran, the fast modernization of the economy often leads to cultural and identity imbalances which may probably explain much of the ideological background of Islamism in Xinjiang.

 An Islam which is, however, a vast operation of some countries against China – obviously not only Western ones.

 Furthermore, it has been demonstrated that the Turkish majority areas in the Chinese Autonomous Region are much less radicalized or even less tied to ancestral religious traditions, precisely in Xinjiang, where the oil and gas fields are located.

However, there is no close and consequential link between the  public security operations in Xinjiang and the progress in oil and gas extraction.

Hence, currently the only possibility to destabilize Xinjiang against China is to put pressure on the Uyghur minorities living in the neighbouring countries, mainly in Kazakhstan.

We also need to carefully consider the cultural, symbolic and historical problems emerging in China with regard to the Uyghur issue.

 China is a powerful culture State: you can certainly be Chinese  from an ethnic viewpoint – han or the other over fifty-five minorities accepted – but obviously what really matters is the sharing of a great cultural, identity and historical heritage.

 From Mao Zedong to date, there has been no political program, nor leaders’ speech, nor CPC messages not referring to facts and people of China’s very long history.

Twenty-two centuries cannot certainly be wiped out.

  The White Paper published in August 2019 by the State Council’s Information Office, regarding Uyghur culture and traditions, also states that, at the beginning, Islam was “imposed by force” on those populations.

 The Turkish minority in Xinjiang has been living there since well before its Islamization. It is also true that currently the customs of the non-han populations in the region are certainly linked to Islam.

 It is equally true, however – and here the White Paper realistically identifies the problem – that the symbolic radicalization of the Uyghur population has come after the often clumsy attempts of forced and violent Sinicization of this Turkish ethnic group.

All those attempts were made before the founding of the People’s Republic of China. The two Uyghur republics, the pro-Soviet and pro-Chinese factions, as well as the divisions between tribes and cities, are all traditions that the Uyghur Islam has had since before the establishment of the han-Chinese Communism.

 Islam has been living in the Uyghur population of Xinjiang for about 900 years.

In other areas, Islam is certainly much older: just think of the Maghreb region, the frontline of the “sword jihad” of the Rashidun Caliphs, the so-called “rightly-guided” ones after Prophet Muhammad.

 Furthermore – and here we find, once again, the Marxist roots of the Chinese regime – the White Paper also maintains that Islam was imposed on the Uyghurs with violence and “by their ruling classes”.

 It is partly true, but not even Muhammad did peacefully impose Islam on his first converted populations.

In the Islamic tradition there are as many as 43 murderers of Prophet’s enemies – all assassinations explicitly ordered by Muhammad himself.

We do not want to focus on the long-standing issue of the violent nature of Islam, in which we are not interested at all.

 The real problem is that the White Paper makes it clear that Communist China is liberating Uyghurs from their Islam and therefore from their old ruling classes.

 It should also be recalled that – even after its Communist revolution – China is still linked to an imperial theory of sovereignty, which emphasizes how power is a “Mandate of  Heaven”. The Emperor is the Party, the Party is the Leader and the  Leader represents – almost mystically – all the people, thus protecting them precisely with his Mandate of Heaven.

 It is evident that such a theory, although secularized by Marxism-Leninism and by Mao Zedong, cannot absorb but only contain  Xinjiang’s Islam.

In the traditional Chinese political culture, the Mandate of Heaven, also in its “materialistic” version, is what saves from civil war, from inter-State and ethnic clashes, as well as from the “period of warring kingdoms”.

 A phase that, in pre-Communist Chinese history, has occurred cyclically every 200-300 years.

Hence the concept of harmony has precise historical and anthropological foundations.

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