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Ecology and productivity in today’s China

Giancarlo Elia Valori

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As a political decision maker, the Chinese Minister of Natural Resources, Lu Hao, is at the centre of a great transformation of today’s China.

 Former Governor of Heilongjiang from 2013 to 2018, he was also First secretary of the Communist Youth League and later vice-mayor of Beijing.

 He is also a full member of the Central Committee of the Communist Party of China (CPC), although he was born only in 1967, in Shanghai or probably in Xi’an.

  The effective political systems favour and foster the careers of the best young people.

 As President Xi Jinping has often pointed out, this is the right time for a comprehensive and in-depth ecological analysis of Chinese development.

 Once the economic development of a country that initially hosted the “second processing activities” of global economy was over, China is now getting ready to be a large global economy, an advanced economy having no obligations towards “old” technologies and markets – hence also fully ecological.

 Since the 18thCPC Congress, President Xi Jinping has been vigorously supporting the idea of a fully Chinese “ecological civilization” and certainly the choice of Lu Hao as Minister of Natural Resources goes in this direction.

 As both President Xi and Minister Lu Hao underline, now also soil erosion has become a very severe phenomenon in China.

 Currently the annual soil erosion of both agricultural and non-agricultural land totals approximately 5 billion tons.

 The area currently down to agriculture in China is worth about a third of the available land.

 The desertification area is now equal to 2,622,000 square kilometres, i.e. 27.3% of all the land surface available.

 Despite the many efforts made to reverse this trend – and not only recently -currently China is the country with the lowest per capita share of forests in the world.

 Pollution is still heavy, especially in the case of water, but President Xi (and Minister Lu Hao) have quickly got to work.

 President Xi Jinping stated: “Clean waters and green mountains are as valuable as mountains of gold and silver”.

 The President not only wants a high GDP, but above all a strong and stable “green” GDP.

 The First World markets pollute the Second but, above all, the Third World – and today China is not Third World for anyone.

 Being subject to pollution is like being subject to foreign powers.

 Hence President Hi Jinping’s fundamental idea is that protecting the environment and increasing productivity are mutually reinforcing goals.

 Just like Minister Lu Hao, President Xi Jinping believes that there is a scientific and rational connection between environmental protection and economic development and that the purpose of the CPC action is to enhance the people’s quality of life and their happiness index.

 Hence President Xi Jinping’s fundamental idea is to strictly follow the scientific and technological criteria, by increasing the use of natural resources and – precisely for this reason – also developing the blue economy, while respecting the objective laws of nature and, hence, also the laws of socialist and rational economic development.

 At the 18th CPC Congress, President Xi Jinping – and certainly also Minister Lu Hao – spoke of building a “beautiful China”.

 As written in the documents of the 18th CPC Congress, “To meet the people’s desire for a better life is our mission” – hence President Xi Jinping (and Minister Lu Hao) maintain that “building an ecological society and civilization, which is connected to the people’s well-being, is our goal and the true future for the Chinese nation”.

President Xi Jinping’s policy line is – first and foremost – to “first protect, then scientifically demarcate the use and protection of nature, and later adhere to the red line of environmental and ecological protection”.

 Here the primary concept is “protection first”.

 The old industrialist and productivist criterion, whereby “merely keeping pollution under control” is enough, is now meaningless.

 Therefore, whoever is in charge of the area where pollution has occurred must be considered – to all intents and purposes – liable both legally and practically.

 We know that every year at least eight million tons of plastic are thrown into the oceans, and over half of this quantity comes from five Asian countries: China, Indonesia, the Philippines, Thailand and Vietnam.

 This problem can be slowly solved with better collection, wider information and what President Xi Jinping precisely calls “ecological civilization”.

 Furthermore, as early as 2017 China has begun its “action against air pollution, with the closure of over 150 coal-fired steel factories to reduce particulate matter in the air by at least 15% a year.

 Again as from 2017, China has already achieved the 2020 target for the use of solar energy, with the even more ambitious goal of soon reaching the production level of 213 GW, five times higher than the current US annual production.

 Considering the current technology data, it is like covering – only with solar panels – a surface larger than the Greater London area, namely 1,500 square kilometres.

 Furthermore, also thanks to Minister Lu Hao’s action, in 2019 China rose from the 41stto the 33rd place in the world list of nations that are actively involved in climate change.

 A great leap forward, although the greenhouse gas emissions increased in China both in 2017 and in 2019.

 China, however, can currently meet the Paris Agreement criteria by stopping its greenhouse gas emissions within 2030, but only by increasing its renewable energy production by 20% and by using greater nuclear energy sources – a policy of which little is still said in the silly West.

 Hence tripling the share of non-fossil fuels by the end of 2030 and establish a full market for Chinese emission trading.

 If – as is very likely thanks to President Xi Jinping and Minister Lu Hao – China manages to do so, the global project to reduce the global temperature increase to “much less” than two degrees Celsius will be successful.

 China is therefore fundamental for the ecology of the whole planet.

 Moreover, China plans to increase the area of forests absorbing carbon dioxide by 45,000 square kilometres and it is slowly succeeding in reaching this goal, also thanks to the organization of natural parks, considering that China currently has over 12,000 perfectly organized natural parks and reserves.

 There is a public health problem adding to the challenges outlined so far.

 In China about 2.8 million children -mainly newborn babies – die due to pollution-related problems.

 If we do not want to change the balance between generations – and certainly President Xi Jinping and Minsiter Lu Hao are very careful not to do so – the pollution issue becomes pivotal.

 Just think about the retirement, employment and demographic transition between generations, with a burden of newborns’ deaths equal to 2.8 million a year.

The Chinese Climate and Ecological Policy System introduced in 2017, which Minister Lu Hao is greatly expanding, also provides for the careful monitoring of over 1,700 energy-producing companies and for the further final control of over three billion tons of greenhouse gases.

 The size of China is still an outstanding issue and has led the country to have – in spite of everything – as many as 10 billion tons of CO2 released into the environment – about a quarter of the world total amount.

 In any case, however, they are less than 23% compared to the Chinese CO2 production in the previous year.

 As to water pollution, the State will spend as much as 30 billion for “cleaning” and purifying springs and water flows.

 China will also improve its basic price system, with a view to fostering environmental protection and rural areas –  a policy for the total cleaning of urban water and major springs, organized by Minister Lu Hao and supported by President Xi Jinping.

 The first goal is to purify urban waste water, the major source of stable pollution of springs. Then China plans to “ecologizing” the Yangtze River and Lake Bohai, two other water flows that affect China’s whole rural and urban water system.

 The project, however, will be completed and the cleaning of the big rivers and major water basins and reservoirs will go ahead.

 There is a project to reduce the use of industrial water by 23% within 2020, when the first large national share of renewable energy will be massively used in China.

 The law on the “prevention of soil and water pollution” entered into force on January 1, 2019, but it also provides for the census-taking of all Chinese land – to be carried out every ten years – as well as the establishment of monitoring stations everywhere – with data that can be spread at every level – and also the checking of toxic and noxious substances in soils and waters, with data that must become public – at least partially. It finally provides for the creation of funds for cleaning land and water, which every local and regional authority must envisage in the budget.

  “Rehabilitation systems” for polluting agricultural or industrial companies are planned.

 With specific reference to the desalination of sea water for industrial and human use, it should immediately be noted that China is one of the 13 countries with the lowest water availability in the world.

 Moreover, most water resources are concentrated in the South, while Northern and Western regions tend to suffer from drought.

 As President Xi Jinping and Minister Lu Hao point out, population growth, mass urbanization, climate change and gradual reduction of water reserves are all conditions that make the water issue crucial for continuing China’s economic development.

 In addition to reorganizing national water reserves – as can be seen in projects such as the Diversion of Northern Waters – water is never really sufficient and, hence, the other fundamental issue of President Xi Jinping’s and Minister Lu Hao’s water scheme is desalination and the recycling-purification of waste water.

 Here the real problem is desalination, considering that 43% of the Chinese population lives in the 11 coastal provinces, which anyway account for 13.7% of the Chinese territory.

 In coastal areas, however, the water supply is even lower than the national average.

 Nevertheless, coastal areas account for over 65% of China’s national GDP.

However, the water resources of China’s coastal areas are only about 28% of the total national ones.

 Hence desalination is a solution.

 Currently over 150 countries use this system.

 Moreover, China’s desalination project has lasted for at least 60 years.

 Currently, however, after a series of regional and sectoral attempts, a real desalination industry has developed in the Hebei Province, as early as the first project in Datang Wangtang in 2005.

 The specific membrane technology is already well- developed, but also microfiltration is available – with a national production exceeding 10,000 square metres per day for each of the approximately 150 plants, but with additional 71 sea desalination plants, operating at a reduced pace, and with 35% of the total water resources used for people’s personal use.

 Only 35% of water resources, however, is used for energy production and for other industrial uses, including paper and metal production.

 The desalination plants are mainly located in four regions, namely Zhejiang, Shandong, Liaoning and Hainan.

 The main technologies are Reverse Osmosis (RO) with UF (Ultra Filtration) membranes and Multi-Effect Distillation (MED), which is thermal desalination.

 In China, 120 are RO plants and 7 are the largest ones with MED technology.

 With regard to soil protection, it has been ascertained that 402 industrial sites and 1,401 agricultural areas record a high concentration of heavy metals.

 36% of agricultural areas and 28% of industrial sites are contaminated.

 China defined the regulations carefully and made them even stricter in 2016, but the final regulatory framework was designed in August 2018.

 As already seen, the criterion used is prevention.

 The relevant authorities must therefore evaluate each project ecologically, before its implementation.

 The law lays down each party’s responsibility, with a sequence of obligations no one can escape.

 However, the real problem in China is the relationship between arable land and urban areas.

 New buildings have reduced the area down to agriculture by almost 60% compared to 1990.

 2.47 million hectares – equivalent to the surface of the US State of Vermont – were reclaimed on the basis of the new legislation on the rebalancing between agricultural land and housing areas.

 Nevertheless, only 37% of the land reclaimed on the basis of this legislation is reused for agricultural purposes, while 44% remains merely unploughed land and 19% becomes forests.

 Moreover, the climate and bio-chemical change of soils is often at the basis of China’s great internal migrations, which are a further structural distortion of an already anomalous – and now stable-concentration of people from internal towards coastal areas.

 According to the 2016 data, the Four Modernizations and the subsequent reforms pushed over 200 million migrants to the Chinese coasts.

 In the future, however, the real core of the issue for China will be harvesting electric power from the dynamics of ocean wave movements.

 Many energy market analysts believe that the market for this type of electricity will increase by 10.25% a year until 2023.

 The market is expanding especially in Europe, which was the first continent to develop this technology, but now the idea has spread to the United States, Australia and, above all,China.

Currently there is a device available for harnessing the power of ocean waves known as “Penguin”, which is moored to the seabed at 50 metres depth. Only 2 meters are visible above the sea water surface.

 This 1,600 ton device is around 30 m long.

 It is manufactured by a Finnish company.

 Devices for producing wave-based energy -with an average capacity of 40 MW – are already available in the Caribbean, Antigua, Bermuda and Curaçao, through a mechanism that will be operational in late 2019.

 Nowadays also the microgrid technology is available, i.e. a mix of energy sources, users and storage systems that, in this case, combines solar sources with those from the ocean wave cycle, as currently happens off the Australian coast.

 Today the energy available from waves, and hence from tides, is 8.2 GW for the whole China.

 It is a huge amount.

 China’s research for this type of technology is currently based on a vertical turbine, developed by the Harbin University, as well as on a horizontal axis turbine, studied by the University of Zhejiang, and on other prototypes.

 Hence the potential energy available from the Chinese wave cycle is probably much greater than expected – by over 25% – and this does not regard the technologies currently applied, but the physical potential of wave movements, which can be easily calculated.

 As early as the 1970s China has developed this sector, starting from Jangxia (3900 Kw), and later in the regions of Bachimen, Shandong and Maluan Bay, which are already active only partly.

 There have also been attempts – far from useless – to produce energy from the sea heat exchanges.

 But what are the structural limits of the Chinese marine renewable energy project?

 In general terms, a certain and stable lack of investment in the sector, which enables Western technologies to evolve more rapidly and, above all, more suitably for the future massive consumption of “sea wave-based” energy.

 We also need to consider the nature of places on the Chinese coast, with the spreading of typhoons and dangerous situations, and finally the use of oceans for security, desalination or fishing operations.

 Still today, a massive spreading of these wave-based energy technologies is needed, as well as a common base between universities, government, local authorities, Party and users to create a strong and stable market for this type of energy.

 The Inertial Sea Wave Energy Converter (ISWEC) could be the solution.

  It is a device placed inside a float, with an operating criterion based on an inertial system to exploit the sea wave movements to produce energy.

 The stability of the float and of the device is ensured by a gyroscopic inertial system, which works when the hull oscillations caused by the movement of waves induce the rotation of the gyroscope platform that is then converted into electricity by the power generator.

The additional aspect is that this system can be fine-tuned and adapted to the changes in sea conditions, which allows to relate the frequency of maximum productivity to the frequency of the incident wave.

 Everything is regulated by the spin engine of the gyroscope flywheel and by the real-time dataon the area’s weather conditions.

 You can also easily secure the system, if special sea conditions or other phenomena occur.

 The hull of the float has dimensions of 8 m width, 15 m length and 4.5 m height, as well as a draft of 4 metres.

 The two gyroscopes inside the “buoy”, i.e. the floating positioning system, have an installed electric power of 130 kW, as well as a sensor platform capable of immediately collecting data from the local sensors, to be related to the remote sensor data and the updated weather forecasts.

 They can also predict the wave characteristics and finally generate the short-term control signal for all the device operations and drives.

 The average annual productivity per each floating position system is 250 MWh, which allows to save 68 tons of CO2 emissions each year, and the structure will obviously occupy a sea area of approximately 150 square metres where fishing will be forbidden.

 The device is the result of research carried out by the Polytechnic of Turin, developed by a spin off and put into operation thanks to an agreement between ENI, CDP, Cassa Depositi e Prestiti, Fincantieri and Terna.

 As Arthur Rimbaud wrote in one of his poems, “Eternity.

It is the sea mingled with the sun.”

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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East Asia

Will China bubble burst owing to authoritarianism?

Amjed Jaaved

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In his book The Age of the Economist, Daniel R. Fusfeld tells how economics governs our life today. In today’s market or quasi-market economies, no country can live in economic isolation (sakoku). India, USA and their `satellites’ are trying to isolate China in economic field. Already, they have hung isolationist Financial-Action-Task-Force Sword of Damocles over China’s all-weather ally Pakistan’s head. Through its economic relations and defence purchases, India scuttled Pakistan’s effort to draw world’s attention to Kashmiris in prison. India’s defence ministry approved purchase proposals amounting to an estimated Rs 38,900 crore. Heretofore is a bird’s-eye view of her shopping itinerary. Procurement of 36 Rafales and 12 Su-30 MKI aircraft and 21 MiG-29.  Upgrading Indian Air Force’s existing MiG-29 aircraft. The MiG-29 procurement and upgradation from Russia will cost Rs. 7,418 crore. Producing the Su-30 MKI at the Hindustan Aeronautics Limited will cost Rs. 10,730 crores.

In Sri Lanka, india, through its underhand machinations, managed to remove Mahinda Rajapaksa from office 2015. Rajapakse had leased out strategic Hambantota port to China and allowed docking Chinese submarines in in Sri Lanka.   Now Sri Lanka has handed over control of Humbantota to India. India gave Sri Lanka $45.27 million aid to develop KKS harbour (Jan 12, 2018).

India extended 2.1-billion Nepalese Rupee (NR) aid to Nepal as reimbursement of the first tranche of housing support to 42,086 governments of India- supported beneficiaries in Nuwakot and Gorkha districts. It pledged Nepal US $1 billion aid and soft loan (25%) for Nepal’s post-earthquake. India bears pension liability of Gorkhas equivalent to Nepal’s annual budge. But, offended at occupation of Kala Pani territory by India, Nepal enacted law to affirm its territorial sovereignty. Nepalese prime minister Oli  is tottering because of India’s underhand effort to topple him.

India has no border at Doklam with China.yet it, like a super power jumped in `at Bhutan’s request’ to stop China from constructing a road there. It  pledged to contribute Rs 4,500 crore to Bhutan’s twelfth five-year plan (2018 to 2023). It completed Mangdhechu Hydroelectric project and Ground Earth Station for South Asia Satellite and launch of RuPay card in Bhutan. Besides, it committed assistance of Rs 4,500 crore for implementation of development projects and Rs 400 crore for transitional Trade Support Facility during Bhutan’s 12th Five Year Plan (2018 – 2023). Under the 12th 5-Year Plan, 51 large and intermediate projects and 359 Small Development Projects (SDPs)/High Impact Community Development Projects (HICPDs) are being carried out. India’s commitment to the 12th Plan constitutes about 14.5 per cent of the Plan outlay which is around 38.75 per cent of the capital outlay and 71 per cent of the total external assistance.

To Bangladesh, India extended three $8 billion loans. A total of 1.16 Gigawatts of power is now being supplied by India to Bangladesh. The increase, in the reckoning of the Prime Minister, signifies a “quantum jump from megawatts to Gigawatts and is symbolic of a golden era” in bilateral ties. Markedly, Mamata Banerjee has pledged to raise the power supply to Bangladesh to 1,000 MW. Though electricity will not be a substitute for Teesta water, the plan to boost power supply is on anvil.Bangladesh is however annoyed at dillydallying at Teesta Accord, and India’s inability to brief her about Glawan situation (rebutted by India).

Launching the ‘Act Far East’ policy, India’s Prime Minister Narendra Modi announced (September 5, 2019) that India will give a line of credit worth US$ 1 billion to Russia for the development of the Far East.India provided Lines of Credit worth $ 96.54 million to Niger for projects in transport, electrification, solar energy and potable drinking water. It granted $15 million to Niger for organising African Union Summit.

India and Japan have launched their own joint initiative in the shape of Asia-Africa Growth Corridor (AAGC) vis-a-vis China’s Belt-Road Initiative for undertaking development and cooperation projects in the African continent.

India’s knee jerks to Malaysia and Turkey: Malaysian prime minister Mahathir Mohammad had said in September last that India had “invaded and occupied” Kashmir. He was joined by Turkey’s President Recep Tayyip Erdogan, who said that India had virtually imposed “a blockade” on Kashmiris.Their views on Kashmir and the Citizenship (Amendment) Act (CAA) irked India.India punished

Turkey by not allowing it to bid for construction contracts. Import of palm oil from Malaysia was truncated.

Will China’s economic bubble burst for lack of institutions and authoritarianism: The spectacular economic growth in China in the past four decades has inspired a large strand of research to understand China’s unconventional growth path.  China is expected to suffer a sudden economic collapse because of lack of inclusive institutions, debt policies, and authoritarianism.  Daron Acemoglu and James A. Robinson in their book Why Nations Fail argue that without economic institutions particularly private property , and competition, nations fail to promote economic growth and alleviate poverty. Powerful people should not seek to grab complete  control over government  undermining broader social progress. It is freedom that makes people rich. Without political change, even sensible economic ideas and policies are doomed to fail.

To strengthen his rule, Xi Jinping has allegedly assumed an absolute control over all the institutions of country in guise of national rejuvenation and reforms.

Norwegian political scientist stein Ringen in his book “The perfect dictatorship: China in the 21st Century calls XI’s rule as “Controlocracy”.  Xi chairs, roughly, eight of the leading small groups including national security commission. He also handles internal security directly, thereby reducing any possible chance of mutiny.Tai Ming Cheung a professor at the school of global policy and strategy at UC San Diego alleges “No other Chinese Communist Party leader, not even Mao Zedong, has controlled the military to the same extent as Xi does today. Mao had to share power with powerful revolutionary-era marshals.” To show how “hands-on” he is, Xi has taken the new post of commander-in-chief of the PLA Joint Battle Command.

This view is debatable. Discussion papers are included in in Allen, Franklin & Qian, Jun & Qian, Meijun, 2018. “A Review of China’s Institutions,” CEPR Discussion Papers 13269. Their paper focuses on the recent development of China’s institutions, financial markets, innovations and government-business relations in the context of their roles in supporting China’s growth. Alternative financing channels and governance mechanisms, rather than the markets and banks, continue to promote growth in the most dynamic sectors of the Chinesed economy.

Pro-China view: Tom Orlik, chief economist – Bloomberg Economics and David Dollar, senior Fellow, Foreign Policy, Global Economy and Development, John L. Thornton China Center, do not agree. They trust China would tide over economic crises through out-of-box thinking and ingenuity of mind. Klaus  Muhlhahn in aking China Modern: From the Great Qing to Xi jinping highlight role of institutions in China’s rise. During the nineteenth century, China suffered humiliation of defeats in the Opium Wars at the hands of Western imperialists. Like a sphinx, China rose from ashes to baffle the world, we live in, through its flabbergasting if not unprecedented economic growth and participation on the geo-political state as a powerful player.

Charismatic leaders (Sun Yat Sen, Mao to Xi Jinping) did contribute their effort in transforming China. China’s rise, per official line began with Deng Xiaoping’s rule in 1978. But a dispassionate look at history reveals that China’s recovery was in the making for about a century. Historical legacy, cumulative experience a desire to see a better tomorrow and resilience in overcoming adversity contributed to China’s emergence as a conundrum or a miracle during twentieth or twentieth century.

China’s rise is not an overnight exploit or legerdemain of some leaders. Its present status is cumulative product of its institutions in early modernity or late imperial period (mid-seventeenth through eighteenth century). Beginning in 1644 during the Qing dynasty reign, many core institutions were developed and the empire achieved its zenith. The social and cultural institutions of this period account for China’s brilliant trajectory into nineteenth and twentieth century. The institutions of yesteryears, about three centuries , relate to key areas of government economy sovereignty, border security and exploitation of natural resources.

Inference: In cahoots with USA, India wants to get China declared a pariah state. The aim is to impose economic sanctions, or aid or trade embargo on China. The USA uses a flexible format to dub or delete a country as axis of evil, money-laundering conduit, sponsor of terrorism or pariah (Tamil paraiyar, outcastes), or rogue (Iran, Sudan, North Korea, Cuba, Venezuela). Ottoman Empire was persecuted as an outcast by European States since the Treaty of Westphalia in 1648 until the nineteenth century on a religious basis’.

Deon Geldenhuys. points out multifaceted criteria for declaring a state pariah_ having ‘artificial borders’ (Iraq), siege mentality, anti-West sentiments and desire to subvert the international status quo, or not being a considerable `world power’(“Pariah States in the Post-Cold War World: A Conceptual Exploration,  March 5, 1997).  So far, China has eluded pariah label proving it to be a `world power’.

Why India is hostile to China? Indian prime minister Modi himself told an all-party conference, “Neither have they [Chinese] intruded into our border, nor has any post been taken over by them (China)”. Even former defence minister AK Antony and former foreign secretary Shyam Saran denied China had taken over 640 sq km of Ladakh territory. Even, “The Indian army denied that Ladakh had shrunk. Change in the river course was cited as a reason for the loss of 500-1,500 meters of land annually”. Then, why the storm in a teacup.

Talk of Chinese bubble bursting appears to be a propaganda tip.

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East Asia

China’s new strategic positioning

Giancarlo Elia Valori

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 While China is “narrowing” its production lines at national or international levels, a very important signal is the new relationship established between Turkey and the United States to replace China as a supply chain.

 Obviously the new “cold war” between China and the United States cannot but create good opportunities for countries such as Turkey which aspire to establish their hegemony over Central Asia and hence to reduce China’s weight both in global and regional trade.

 This is the price that Turkey pays happily and without particular problems to the United States for affording its autonomous policy in the Maghreb region, in the Eastern Mediterranean, in the Balkans and in Central Asia, up to supporting the Xinjiang Muslims in China above all to nip the Chinese Belt & Road Initiative in the bud.

 Meanwhile Botas, the state-owned distributor of Turkish natural gas, has proposed the construction of a pipeline from its Northern Turkish coast to Nakhicevan, Armenia, so as to reduce Armenia’s imports from Iran and thus slowly distancing from Iran. This is music to American ears.

 Therefore, Erdogan’s Turkey also bets on the new “cold war” between the United States and China, thus proposing itself as a third wheel and hence as the basis for the technical and commercial replacement of the production networks from China itself to the area controlled by Turkey.

There is a “but”, however: Turkey has a public deficit of 5.6 billion U.S. dollars (according to April 2020 data), but so far only Chinese capital and funds have arrived to support a 400 million swap between the renmimbi and the Turkish Lira.

 A Chinese company bought the Kumport Terminal, on the Sea of Marmara, for 940 million, and in November 2019 Turkey saw the first train arriving from Xi’an, through the Maramay tunnel built and funded by China, which allows to have a non-stop line from China to Europe. An asset not to be overlooked.

 The Turkish e-commerce platform, Trendyol, was later acquired by Alibaba but, as all Turkish finance experts say, it would require a further and probably strong devaluation of the Turkish lira which, however, needs substantial “fresh” investment from abroad.

Therefore, it is unlikely for an economy such as Turkey’s to take harsh and definitive action against Chinese interests.

Nevertheless, what does Donald J. Trump’s America really want from China?

 The US Presidency’ Strategic Approach to China, published on May 26, 2020, maintains that the threat posed by the CPC to U.S. economic, military and strategic interests, as well as to its “values” is a primary danger.

 If we look at the history of such statements, only in the days of the harshest “Cold War” with the USSR were such terms used.

As to economic competition, the United States accuses not the State, but directly the CPC, of overtly “protectionist State policies that have harmed American workers and businesses”.

 With damage caused also to global markets, the environment and global trade law. Nevertheless,the sanctions imposed by China on U.S. goods in 2019 were anyway adopted by the WTO, whose negotiation system has been called into question by the United States itself.

 In fact, Trump’s America accuses particularly the CPC of “taking advantage of its WTO membership to become the world’s largest exporter, but systematically and harshly protecting its domestic market”.

What is the United States doing? The U.S. real and deep accusation is against the Belt & Road Initiative: the United States interprets this great commercial-strategic operation as an attempt to reshape the world market according to the internal needs of the Communist regime in China.

 Moreover, as the United States always maintains, China wants to use not the international networks, but its own courts, as arbitration courts. Is it true or false? Obviously there is the ICC, but other courts of reference are also formally possible, based on UN-type commercial law.

As to the Chinese challenge to American values, the U.S. document states that “China is engaged in an ideological competition with the West”.

The U.S. current idea is based on President Xi Jinping’s old statement (dating back to 2013) whereby China must prepare for a “long phase of cooperation and conflict” with the capitalist West, and it is always stated that “capitalism is dying and Socialism will triumph”. It could not be otherwise considering his Marxist background and ideas.

 Obviously so, since President Xi does not certainly come from a salon in Manhattan.

Moreover, the United States never wants China to project itself as a world leader and a country of great global influence. Here again it wants the fight against corruption to stop, since for the United States it was only and exclusively a way to eliminate president Xi’s opponents.

Is it true? Yes, but obviously not only so. One and a half million corrupt people punished by the State, but many of them are real, while others are certainly “enemies” of President Xi’s policy line.

The U.S. Presidency, however, is mainly afraid of the Chinese Military-Civil Fusion and hence of the commercial-security blockade that, in the very long run, could put an end to the traditional U.S. hegemony in the Pacific.

 Moreover, the two military games made by the RAND Corporation, about a year ago, concerning a clash in the South Pacific between U.S. and Chinese-Russian forces, demonstrated that the United States would soon be defeated.

Hence, as usual, for the United States once again it is primarily a matter of “protecting the People, the Homeland, the American way of life”. There is great fear for Chinese “propaganda” in the United States, as if it could not be opposed at all. A sweeping analysis was made for Chinese students, the largest foreign community in the United States, and a regulation called Foreign Investment Risk Review Modernization Act was enacted. In January 2020 the United States and China signed also the “Phase One” of a major trade agreement that, according to the United States, is expected to change Chinese business practices significantly. In fact, the agreement provides that the CPC cannot force or orient foreign companies to transfer their technology to keep on producing or selling in China. It also strengthens the rules on the protection of intellectual data in China and finally opens up Chinese markets to U.S. agricultural products, on which it has much relied for its foreign policy.

 On the military level, the U.S. Administration (and it would be anyway the same if there were another President) wants a new relationship with “similar” and “friendly” countries so as to counter the Chinese military build-up and develop the Indo-Pacific Strategy Report. In other words, obviously the U.S. block of every “One China Policy”, but hence implicit support to internal factionalism, in Hong Kong and Taiwan, as well as proposing a stop to the Chinese expansion between Xinjiang and Pakistan’s maritime network.

Furthermore, as to the ideological struggle, support for Religious Freedom, the usual fight for “human rights”, the U.S. protections for “minorities’ liberties”. That is all. But we do not think it will be enough.

 Certainly, Chinese infrastructural investment is currently designed to competing with the United States and better controlling civil society.

 The 55-kilometre bridge going from Hong Kong to Macao, with two artificial islands that allow the road to sink 7 kilometres into a very long underwater tunnel is an eminently political and strategic project.

 Obviously, it is in fact a matter of building a Unified Commercial Zone, like the one in New York or Tokyo.

 But it is also a matter of creating a strategic control zone to currently protect those coasts, which are currently more economically important than China. However, it is precisely in this area that as much as 4% of the regional and national GDP is dedicated to the construction of quantum computer networks and encryption. The classic civil-military dual objective.

 Currently China is already a leading country in quantum communications between Space and Earth. It has already built a Quantum Computing Laboratory in Hefei, Anhui Province, with 10 billion U.S. dollars, while the China-U.S. Economic and Security Commission has established that, as early as 2000, China had bridged the technological gap with the United States with regard to quantum computing.

Is it true? We do not know for sure, but this is certainly where the real economic and intelligence war between China and the United States is developing.

As Krugman maintained in an old article for Foreign Affairs, nations are not corporationsand they do not compete one another as companies always do. Nations, however, certainly compete for market outlets, for financial resources, for technologies and for cultural or influence operations.

 There is nothing else. Nevertheless, we must never forget that the major countries’ strategic “policy line”, to which Italy adapts in a sheep like way, envisages variables – also for the small and medium countries – which are not at all negligible.

Also at military level, China’s operations in Ladakh and Tibet are an example of the interest – dating back to Mao Zedong’s times – in using Tibet as “the palm of the Chinese hand” to expand China’s influence throughout South Asia, which is a primary strategic axis.

 It is a matter of encircling India and later stable geo-economic blocs are built, just against India, with the Chinese expansion in Myanmar, Sri Lanka and Pakistan.

 There must always be a spatial logic – we would classically define as geopolitics – which follows the definition of a country’s primary interest. When it knows how to evaluate it,however, which certainly does not happen currently in Italy.

In any case Tibet would have been India’s first natural defence line, if China had not already taken itas early as 1950.

Hence Tibet, with its strategic “five fingers”, i.e. Ladakh, Sikkim, Nepal, Bhutan and Arunachal Pradesh, will be China’s checkpoint from the South, and we do not believe it will be easily opened by India’s collaboration with other countries, such as the United States.

Without Tibet available, economic, military and intelligence operations against the Belt&Road Initiative will be largely blocked.

Furthermore, President Xi Jinping – who knows the Party and State apparatus very well – has recently launched a campaign of “Security Apparatus Clean-up”. Since November 2012, President Xi Jinping has also marginalised the old leader of the Chinese security apparatus, Zhou Yongkang, directly acquiring an assignment from Politburo and not from Politburo Standing Committee.

Nowadays, China’s security apparatus budget is officially estimated at 183,272 million yuan, equivalent to 26.6 billion U.S. dollars.

While Zhou Yongkang, a man of Hua Guofeng and later of Deng Xiaoping, was arrested in 2012, Hu Jintao himself sent as many as 3,000 Intelligence Service executives to re-education camps.

 3,000 executives in a total of 1.97 million officials and operatives.

Nevertheless, this year the turning point has been the establishment of the Safe China Construction Coordinating Small Group, now led by Guo Shengkun.

Later Lin Rui came. President Xi Jinping still trusts him and, however, he is a computer engineer.

Nevertheless, the “clean-up of the security apparatus”in Xi Jinping’s hands will most likely be completed next year.

 A new “Yan’an Rectification Movement”, like the one that Mao Zedong promoted.

Rectification campaigns, collection of Xi Jinping’s sayings to “set the policy line”, with the collection of the “four consciences” (ideology, the whole country, principles and policies) and the four trusts (Socialism with Chinese characteristics; trust in a system that proposes the nature of Chinese Socialism; trust in its own culture and values).

Hence this will be the intellectual and operative scenario with which Xi Jinping will fight against the United States. A fight which will not be easy, but not even with a predictable result.

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East Asia

Here is How China Responds to US in Indo-Pacific

Jannus TH. Siahaan

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Trump administration recognizes the Chinese style of war with the term of  “Unrestricted Warfare,” unlimited war on all fronts, not merely a matter of arms war. Therefore, Trump continues to try to bulldoze China from various sides, the economy, corporation, media, education, the military, etc. How China sees war is not a new things. James Burnham in his book “The War  We Are In“, half a century ago, has very clearly been explained. I argue, in addition to continuing to enjoy the “Thucydides trap” theory, the way how China has been looking at war is also crucial in determining the Chinese style of facing America in the South China Sea. China clearly hopes to play with a long-term strategy, given its very long leadership period. Unlike the American President, who will always be threatened by his position once every four years.

So China most likely will not fight America openly in the South China Sea, but continue to increase its power. While on the other hand, China begin to undermine America’s strategic partners one by one. Such as, South Korea, Japan, India and Australia. That’s why, China certainly needs North Korea to disrupt. Why? Based on the American “island line” strategy, South Korea is the center of the first “island line”. There are approximately 28,000 more American troops in South Korea. Moreover, North Korea’s nuclear warhead can reach Japan, even reaching the center of America’s second “island line” on Guam. Providing dangerous threats in America’s first and second “island line” circles will make Taiwan easier to seize and then disrupting the coordination lines of American power in South China Sea with its closest partners

While in the East, China continues to press and is ready to have a military dispute with India on the Line of Actual Control. Without much public attention, China has surrounded India for the past several years. China already has military bases in Djibouti and possibly in Gwadar Pakistan, both thanks to the cooperation of the Road and Belt Initiative, where Djibouti was finally unable to pay debts, then its port was diverted to China and made a military base. The same thing happened with Gwadar. And most likely, China will be very able to convince Russia not to get involved by offering economic benefits from the war between India and Russia, because both countries –China and India — are consumers of Russian weapons.

On the other hand, China will continue to wreak revenge on trade war with America to Australia, to the maximum extent that losses can be received by the land of Kangoroos. Especially after the involvement of the Australian Frigate in the American international navigation convoy on South China Sea and after Australia reacted on China about covering up Covid 19. China is Australia’s biggest trading partner. China seems to be quite sure, with the application of high tariffs for many Australia’s export commodities will weaken the country’s economic capabilities. And all the shock therapy will give a bad signal to the countries around the South China Sea.

The same way will be played with Canada that has imprisond Meng Wanzhou, CFO Hua Wei, at the request of American extradition law. And don’t forget, slowly but surely, the Belt and Road Initiative has also divided Europe, Africa, and slowly in the Middle East. Now, when it comes to Chinese matters, the European Union does not all agree that China is a threat (just competitor even after Covid 19 and Hong Kong Case), since the fast train line and any infrastructure projects have split the blue continent.

Then at the American domestic level itself, China will probably continue to intervene and infiltrate elections, ride various issues that have the potential to weaken Trump’s position. Although China said, it is very happy if Trump was re-elected because Trump has the potential to damage the American alliance with many countries. But, it’s pretty sure to translate that China really  want Joe Biden to win. It’s easier for China if democrats are enthroned.

Is America likely to lose? I still believe, the Chinese war is not for today. Today, militarily and economically, America still has the upper hand. However, Xi is a marathon runner, Xi may be the president for life. But the signals of the threat of Unrestricted War are already visible. Today, on the other hand, geostrategically America has long made an alliance to surround China. In South China Sea, America still has Taiwan, Vietnam, the Philippines, Malaysia, Singapore (maybe Indonesia) even though South Korea and Japan are intimidated  by North Korea. Also in economic side, for example, though China stay growing 6 percent stably and America is only 1-2 percent stably, China still needs decades to catch up to America’s GDP per capita.

Therefore, China will play long and pay in instalments one by one the target. China will probably not focus on South China Sea with hard power, but on Taiwan first, after Hong Kong was successfully acquired without war, by continuing to spread threats in the South China Sea to divide American concentration. After Tse Ing Wen came to the power, peace unification with China had failed. The offer of “one country two systems” was rejected by Tse Ing Wen and the people of Taiwan. As a result, China will boast more power around Taiwan, while preoccupying South Korea and Japan with North Korea’s actions, and still looks aggressive at South China Sea.

This is one form of “Omni-dimensional war” of China, as Burnham wrote. But China will really need a lot of energies and patience to play long, more over after pandemic which has been throwing them to the corner of international order. Meanwhile, in short, US will be more aggressive in South China Sea to get more attention from Trump’s domestic supporter till the next election day. So, the more successful Trump in making Americans angry (hate) at China is one of the keys to Trump getting a majority of votes in the elections later. I’m pretty sure, Trump will continue to play this Chinese card in the next few months ahead, until the election comes. And the medium term result is that South China Sea will just be provocative theater for both.

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