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Crisis in Hong Kong: Can China Sustain?

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By attempting to put on a brave front, China cannot mask the problems that it is currently mired with. Over the past year, the country has faced protests from various regions that it claims as its own territories. After the outbreak of the COVID-19 pandemic, China has also been experiencing a certain degree of indignation from the international community. In addition to that, nations like the United States and India have either had an economic fallout with the country or are steadily withdrawing their financial investments from China. Also considering that every move that China makes is being viewed with suspicion if not critically evaluated, sheds light on how the nation is struggling to keep its allies close.

However, in the midst of so many issues, one major concern for China should be its economy. And given the ways in which it is attempting to shelter its financial status from the world, just raises some questions about the wellbeing of the economic giant. China’s recent crackdowns on Hong Kong in the name of national security law, might have backfired. Even though the international financial hub, experienced a certain degree of autonomy, under the newly introduced law, its status will be no different from its mainland counterparts. This shift in the power balance might have some damaging implications on the Chinese economy.

Hong Kong’s previously enjoyed autonomy was what made it an able economic arm of China. Due to its low tax rates and favorable legal and financial systems, it was able to attract sufficient investments from various institutions. As per the Ministry of Commerce of China, over 58%  (USD 70 billion) of China’s nonfinancial Outbound Direct Investment (ODI) went to Hong Kong as of 2018. By the end of the same year, this volume plummeted and reached USD 622 billion. Over 60% of the Chinese Foreign Direct Investment (FDI) is channeled via Hong Kong. Not to mention, the USD 1.1 trillion worth of Chinese bank assets that the territory holds. As of 2019, Chinese companies raised $64 billion globally, out of which $35 billion came from Hong Kong alone. Apart from that, the territory also plays an important role in bolstering the Chinese currency. Even though Hong Kong has its own currency, the Hong Kong dollar, it is also the biggest market for foreign exchange including the Chinese Yuan or the Renminbi. This serves as one of the primary reasons why investors are attracted to Hong Kong. From 2016 to 2019, alone, the rate of such foreign exchange transactions has increased by 3.9%, which is $77.1 billion in April2016, to $107.6 billion by April of 2019. However, in light of the pro-democracy movements in Hong Kong, these numbers have significantly decreased, as investors no longer feel safe to carry out their transactions there.

The national security law imposed on Hong Kong, mainly criminalizes four types of offences- sedition, subversion, terrorism and collusion with foreign forces. Even though these laws pertain to aspects of security, they do have some impacts on the Chinese economy as well. The new national security law is not just limited to Hong Kongers, but also extends to every cooperation that has investments or business in the region. The requirement would need them to be wary of not toeing the line. This has naturally dissuaded investors, especially foreign investors who do not wish to be caught up in the political and legal crossfires. Considering that Chinese political advisor, Leung Chun-ying, has publicly called for the boycott of HSBC, on social media platforms and China has been pressurizing accounting firms like PwC, Deloitte, KPMG, and Ernst & Young to investigate and fire employees who were associated with Hong Kong’s pro-democracy protests. According to a survey carried out by the Hong Kong’s American Chamber of Commerce, over 60% of its members believed that the national security law would harm their business and 29% of them considered relocating. This clearly shows the fear among enterprises and investors operating in Hong Kong.

Taking into account that China’s new law diverges from its earlier policy of “one country, two systems”, there is a high probability that the tax rates in Hong Kong might mirror those of the mainland. In such a case, Hong Kong which was previously known as the tax haven, would experience a serious downfall in its number of investors.

The repercussions due to the national security law were soon felt after it was imposed. On May 22nd of this year, Hong Kong’s stock market plunged by 5%. This was considered to be one of the biggest falls since 2015. The property sector sub-index too fell by 7.7%, worse than the 2008 crisis. Companies like Sun Hung Kai Properties lost 7.1 percent and New World Development dropped 8.1 percent, while Wharf Real Estate Investment shed 8.7 percent. Hong Kong has also experienced a contraction of 8.9% , as a result of the combined effects of the COVID-19 pandemic, protests and U.S tensions. In response to the stock market plunge in May, the Hong Kong market saw an inflow of money from the mainland, as many Chinese state owned firms bought up the Hong Kong stocks. But this does not change the fact that ever since last year, the city has been experiencing major dips in its finances. One of the best indicators of its economic distress, is the fall in the Hong Kong’s FDI. FDI for 2019, was $53.17 billion which is a decline by 45.2% since 2018. Additionally, Hong Kong’s GDP in the second half of 2019, also fell by 1.2%. As per UNCTAD’s officials, the city was met with disinvestments worth  $48 billion. 

But China is not unaware of Hong Kong’s troubling finances, and is desperately  yet subtly trying to grapple with the issue. To understand how China is dealing with a possible economic and legal recoil, one needs to take a look at its recent policies and actions. Soon after the declaration of the national security law, China launched the “Wealth Management Connect” on June 29, 2020, as a response to the flailing economy of Hong Kong. This was done with the intention of creating a better integration among all of China’s territories together and also to turn the Greater Bay Area including Hong Kong, Macau and nine cities in Southern Guangdong province into a financial hub by 2030. According to this initiative, residents in the area will be allowed to buy wealth management products that are available in each other’s markets. This will allow for better investments with the regions, under the PRC’s supervision. However, the success rate of this initiative is highly debatable as a global recession might be in order due to the pandemic.

The Wealth Management Concept was just one aspect of the deal, Beijing now seeks to tax its diaspora to make up for its tax revenues. The income tax regulations were amended in January 2019, however, expatriates are feeling the burden of its enforcement  since the past two months. The ones that are severely affected due to this change are the Chinese mainlanders who reside in Hong Kong. Many SOE’s are informing their employees to declare their 2019 income, so that they can start paying taxes that contribute to their homeland. The tax rate that was previously 15% has been significantly increased to 45%. While the Chinese diaspora cope with this higher tax rate and the living expenses of Hong Kong, many analysts speculate that the city might experience a brain drain. As of 2019, around 29,200 people have been reported to leave the territory. Even though Hong Kong does not publish high frequency immigration reports, there has been a 50% increase in the applications for good citizenship cards, which are averaged to be around 2,935 as of June, 2019. The increasing taxes clubbed with the fear of protests, might lead to a wave of emigration from the region, thereby reducing the lucrativeness of Hong Kong and negatively affecting China’s economy.

Despite the actions and regulations that China seems to have posed in the past year over its so- called territories, its actions in the international domain do not seem to fit in their own narratives. Trump and Xi Jinping have been engaged in a trade war for the most part of their presidencies. However, in light of the pandemic and the upcoming US presidential elections, this war seems to have been heated more than ever. As of February 2020, the US debt was estimated to be around $22 trillion. Out of which China owned $1.1 trillion, this amounted up to 21% of the US debt held overseas and 7.2% of the US’s total debt load. These figures, however, have changed in the past three months alone, as China has increased its holdings of US treasury securities by USD 10.9 billion. This sudden spike in buying US debt amidst a trade war, appears to be suspicious to say the least. Buying of treasury bonds is a common practice in the global market among nations, as it enables a country to anchor their currency at a certain amount. China’s sudden purchase of treasury bonds, could possibly mean that it is attempting to peg its currency to that of the US dollars. Another possible outcome could be that China might sell off these bonds at a higher rate in the future, so as to significantly damage the US economy. However, as per some Chinese sources, this shall be a “nuclear move”  on the part of the Chinese. As per another Chinese source, China Power, the nation bought these treasury bonds in order to manage the exchange rate of the ChineseYuan, and such a trade does not give the nation an edge over the US. Despite whatever narrative that China wishes to bring to the table, it cannot be denied that its sudden interest in purchasing its rival’s treasury bonds and taxing its own diaspora might be an indication of a bigger issue.

As of today, China is running out of economic allies. The US- China trade war had significant repercussions for the global market as is. But its recent conflict with India might affect China to a certain degree as well. In light of the recent border dispute between India and China, the notion of boycotting Chinese products in India has been increasingly popularized. India shares a trade deficit of $57 billion as of last year. If India, one of the largest consumers of the Chinese market were to boycott its products, this could have serious ramifications for the Chinese economy.

It is no secret that China has been met with criticisms on various fronts by the international community. But considering the recent events and the consequences of the coronavirus pandemic, China could be attempting to cover up a major economic breakdown within its system. Earlier this year, a Chinese company was accused of depositing a “ghost collateral”. A private owned Chinese company, Wuhan Kingold Jewelry Inc., which owed many Chinese financial institutions and trust companies a loan of 20 billion Yuan ($2.8 billion) in the form of pure gold as a collateral, turned out to be fake. This company’s Chairman is Jia Zhihong, an ex- military man who defaulted on paying his investors. When 83 tonnes of Chinese gold turns out to be gilded copper, it does not paint a very good picture for the Chinese economy. Many could pass this incident off as the default of Kingold, but there is more than what meets the eye. China’s hasty enforcement of policies over its own territories and its apparently stable economy after suffering a major pandemic; whilst battling over issues of commerce with multiple nations, simply does not add up. In all probability, China could be heading towards an economic downfall and is still choosing to keep a tightlipped approach about it.

Research Analyst at Centre for Security Studies at O.P Jindal Global University, India.

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East Asia

What China Does Not Know about India

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Indian authorities said on April 30 that they discovered Chinese smartphone maker Xiaomi Group had made illegal remittances to foreign entities by passing them off as royalty payments. As a result, they seized USD 725 million from Xiaomi’s local bank account in India. I deemed that the Chinese smartphone company has a misunderstanding of India and how the Indians do business.

China still does not comprehend India. While the Chinese often consider their own country as an ancient and great civilization, Indians consider India as an even more ancient and greater civilization.

India established diplomatic relations with China in the second year of the establishment of the People’s Republic of China. Following this, New Delhi issued a statement supporting China’s entry as a permanent member of the United Nations’ Security Council. Many Chinese, therefore, often perceive that China-India relations were rather good at that time. If not completely incorrect, this is at least a subjective misunderstanding of India on China’s part.

In reality, India prided itself as a great country in the world, vis-à-vis with Soviet Union and the United States during the Cold War. By recognizing China, India showed the two great powers that it has the authority to self-determination.

For a long time, China has created an impression within the country that it is the founder of the Non-Aligned Movement (NAM). Back in 1955, Indian leader Jawaharlal Nehru had already issued a call for the creation of the movement to the world, which gained support from many developing countries, including China. The rest of the world, including India, sees China as merely a responder to NAM. The world, not least India, perceive China to be a mere member of the NAM, not a founder. As the initiator of NAM, Prime Minister Nehru naturally became its spokesperson and leader of the organization. He was especially responsible for delivering speeches in many developing countries on international affairs.

From the points of India’s view, the well-known Bandung Conference held in Indonesia in 1955 has its origin as India’s idea as early as 1947. It was only because of India’s help that China was allowed to attend the NAM conference, which introduced the People’s Republic to the world. These perceptions of India are indeed, largely true. The relationship between India and China at that time was far closer than that between Pakistan and China today.

On the international front, India would even be chosen as a mediator in the disputes between the United States and the Soviet Union. President Dwight Eisenhower also complimented India at the Indian Parliament, saying, “India speaks to the other nations of the world with the greatness of conviction and is heard with greatness of respect”. It is rare for any U.S. President to heap this kind of praise on a country. Much later, President Donald Trump also inherited this momentum and arranged for Indian Prime Minister Narendra Modi to jointly hold a session in the United States, where they were well-received by both Indians and Americans alike. This certainly added to India’s national pride.

The Soviet Union at that time also recognized India’s status in the world, and it actively wooed India. Being able to make friends with India was synonymous with having several NAM countries as partners, which was anything but trivial. Indeed, from the past to the present, from India-Soviet friendship to today’s India-Russia relations, the two countries’ friendly relationship has a history of more than 70 years, and it has not changed despite numerous trials. The Chinese would make a blunder if they believe that such relationships could be challenged solely through the use of money.

“India was, I guess, the most positive example of USSR’s connections with non-socialist states,” states Sergei Lounev, professor of Oriental Studies at the Moscow State Institute of International Relations. The professor was certainly not exaggerating. As early as 1971, the Soviet Union and India signed a Friendship Treaty, pledging to act against any military alliance or aggression directed against either of the two nations. For the Soviet Union, it was the first such treaty signed with a country that did not formally embrace socialism.

All of this is history. However, the Chinese appear to understand India poorly, and the same is true in India’s understanding of China, resulting in frequent misperceptions. With its strong nationalist sentiment, India believes it is stronger, wiser, and better than China, and its actions would naturally reflect this belief.

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Holding on to Uncle Sam: US-Taiwan Relations

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The bilateral ties between the United States of America and Taiwan or the Republic of China (ROC) have developed through a peculiar and complex course. The relationship, however ambiguous, continues to form a crucial aspect of security relations in East Asia.

Recognition, De-recognition

When the Communist forces led by Mao Zedong expelled Chiang Kai shek’s Nationalist regime, who fled to the isle of Taiwan in 1949,  US President Harry Truman decided to accept the inevitability of the Communist victory in China and even planned to work out a bilateral relationship with the newly established People’s Republic of China without heeding much to the plight of his former ally Chiang. It was the eruption of the Korean War (1950-1953), which displayed the strength and danger of a Communist alliance between the Soviet Union, China and North Korea, that made President Truman realise the importance of supporting the staunchly anti-Communist regime of Chiang’s Kuomintang (KMT)  as a bulwark against what became apparently the rising tide of Communism in the third world nations of Asia. The raison d’être of Chiang’s regime was to overthrow the Communist Party rule in Beijing and “reunify” Taiwan and Mainland China, an act that both the KMT and CCP believed would restore China’s historical rights over the island snatched away by the Japanese  and would redeem the historical injustices it faced at the hands of the colonial powers. Chiang constantly insisted for the United States to help him in waging a war against Mao to achieve this objective. However, Washington was not ready to support another war in the region.

Chiang finally succeeded in framing Mao’s maritime offensive acts during the early 1950s as a growing threat and pursued the Eisenhower administration to sign with him the 1954 Mutual Defense Treaty which promised military protection for his regime. The United States abdided by Chiang’s One China policy under which it recognised that Chiang’s Republic of China was the sole legitimate representative government of the one China that exists on the face of the earth.

It was by utilising Washington’s vast diplomatic clout that Chiang did not just earn non-socialist allies but also found place in the United Nations Security Council as a Permanent Member.

However, the golden days couldn’t last long. The growing differences between China and the Soviet Union became more apparent by the 1970s and gave way to clear enmity as border clashes and ideological tensions ensued. The United States saw this development as an opportunity to crack the socialist international alliance and decided to turn the dynamics of the security triangle between itself, Moscow and Beijing in its favour by recognising the People’s Republic of China. US President Richard Nixon’s visit to Beijing in 1972 and the Shanghai Communiqué that followed stated that ‘Chinese on both sides of the border believe that there is but one China’ and that ‘Taiwan is a part of China’. Washington left it to the CCP and KMT to decide which one represented the “One China” and promised not to intervene. In 1979, came a decisive shift as the United States established official ties with the PRC. Following Beijing’s non-negotiable One China Policy, Washington broke away all official ties with the ROC and officially recognised the PRC as the sole legitimate representative of the one China.

This came as a major setback for Chiang not just as a great betrayal but also as following Washington, several non-socialist allies like Canada shifted to recognise Beijing. Chiang refused to budge on his One China policy and broke away all ties with any country who recognised Beijing which costed him much of his diplomatic standing.

A major shock came when the issue of the permanent seat at the UNSC was raised. Washington asked Chiang to accept simultaneous representation of both ROC and PRC but the latter refused it and as UNSC Resolution 2758 was raised at the 26th United Nations General Assembly to oust ROC, Chiang staged a walkout thus leaving the space for the PRC to gain. What followed was a period of diplomatic  isolation as by 1980s, the ROC was ousted from most major international organisations like the International Monetary Fund and the World Bank as space was created for the PRC to be accomodated.

The only positive development for the Republic of China was the enactment of the Taiwan Relations Act of 1979 by the US Congress as a response to the government’s decision to establish official ties with Beijing. Thanks to an active Taiwan lobby, many Senators opposed the government’s decision and claimed that Washington must retain unofficial ties with Taiwan. Under the TRA, Washington not only maintains robust socioeconomic and cultural relations with Taiwan which function through the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the US which function in more or less the same way as the embassy but also maintains that any resolution to the Taiwan issue in a way other than a peaceful measure would be considered by Washington as a threat on the Western Pacific, implying its security perceptions of an expanse covering the concerns of the United States of America.

Democracy hues: Reunification to  Independence

While the TRA brought some respite, Chiang Kai shek’s son Chiang Ching kuo, who took over the reins of governance after his father,  realised the importance of democratisation in order to not just enhance Taiwan’s soft power among the liberal West but to also make it appeal to the Mainland Chinese who had presented the demand for civil freedom and  democratic rights in the Tiananmen Square Movement of 1984. Hence, in 1987, the martial law was removed. Chiang’s successor, Lee Teng hui declared a unilateral end to the Chinese Civil war in 1991 thus, establishing socioeconomic and cultural ties with the Mainland and breaking away from the old KMT tradition of No Contact, No Negotiation and No Compromise with Communist China.

While the rhetoric of abiding by the  “One China Policy” was maintained, Taiwan inched closer to an independent status, thanks to the democratisation process which made it important for the regime to reflect on the popular opinion which turned heavily anti-unification. With a proliferation of governmental and indigenous  non-governmental organisations such as civil societies and political parties; deregulation of media and educational reforms among other changes led to the emergence of a new islander Taiwanese identity as distinct from Chinese ethnicity. For instance, in the 1994 White Paper Relations Across the Taiwan Strait, Taiwan dissociated Republic of China from One China for the first time while maintaining the rhetoric of abiding by the policy. Such sentiments further developed as the leader of the Democratic People’s Party (DPP) (which calls for Taiwan’s independence from the Mainland), Chen Shui bian, became the first non-KMT President in Taiwanese history. The growing strength of such sentiments is reflected in the eruption of the Sunflower Movement in Taiwan against President Ma Ying-jeou’s “viable diplomacy” with Mainland China which the protestors saw as making Taiwan increasingly economically dependent on Beijing which hampered the prospects for its  independence as well as in the election victory of DPP’s Presidential candidate Tsai Ing wen who remains a major pro-Independence figure.

Thus, during the Cold War itself, Taiwan’s Foreign policy has changed from pressing the United States to recognise it as the One China to the one of being recognised as an independent sovereign nation which historically developed distinctly from that of China. Ever since the fall of the USSR in 1991 and the end of the Cold War which made Washington the undisputed hegemon in the international order, the United States has shifted its focus away from Taiwan to other regions such as Afghanistan where it finds its national interests served best. Taiwanese foreign policy in such a scenario has been to hold onto the United States as much as it can so as to ensure regime survival.

Is Taiwan still important to the United States?

While the dilution of ideological politics and increased communication with China since its Reform and Opening up (改革开放) in 1978 and the fall of the USSR has decreased Taiwan’s relevance for the United States, it still remains important.

First and foremost is the strategic reason as access to Taiwan presents a wide maritime defense depth for launching both offensive and counteroffensive measures.

Second, Taiwan is a region rich in natural resources particularly coal, oil and gas.

Third, as a democracy which has remained favourable to it since the very beginning, the United States does not just feel obligated to protect Taiwan for ideological reasons  but also Taiwan’s presence as a flourishing democracy poses a major domestic political challenge to the CCP led PRC where the regime has taught its people that Western style democracy is unfit to Chinese culture and civilisational history.

Fourth and most importantly, the United States’ hegemony rests on its control of the Asia-Pacific region and though it might seem to be reducing its expanse, leaving China to take over Taiwan and the vast strategic importance it holds would be the last nail in the coffin of the era of US hegemony. The US hence, would fight till the last to maintain its relevance in the region by keeping Taiwan independent.

Is it important enough to go to war?

Though Taiwan is important to Washington, it puzzles many analysts if it would go to war with China in case Beijing tries to take over the island.

While the nuclear nature of both the nations is a huge deterrent which would, if at all, lead to a pyrrhic victory; the vastly enmeshed Sino-American economic relations is also a major reason where any hard blow on the Chinese economy would also hit Washington’s. If the United States loses the war, it would not just be immensely destroyed but would exit the world stage with a bang rather than a whimper making it harder to stand back as a world leader. Moreover, even if the United States wins, there would be no guarantee that China would not recuperate its forces and try another time to occupy the territory leading to more hostility and instability.

At the turn of the century, the United States realised China’s rise as an indisputable fact which meant that whether Washington liked it or not, it would constantly find Beijing on its way at every juncture. While such a development does not always mean confrontation or ensure cooperation, it shows the importance of dialogue and compromise in order to maintain stability which is mutually beneficial. Hence, while the United States would not sit back and watch Beijing take over Taiwan, it is also true that it would not rush to wage a war. Even though Beijing has stepped up its rhetoric of absorbing Taiwan with force if necessary, it realises that such a move would not be a cakewalk and hence is likely to consider other options before using force. The hard part of such developments is that it has reduced the central focus of Taiwan’s Foreign policy to holding onto the United States and by putting all its eggs in the American basket, Taiwan can hardly do anything substantial rather than wait for the two superpowers to decide on its future.

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U.S. Violates Its Promises to China; Asserts Authority Over Taiwan

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USA China Trade War

As Werner Rügemer headlined on 28 November 2021 and truthfully summarized the relevant history, “Taiwan: US deployment area against mainland China — since 1945”. However, despite that fact, America did officially issue a “Joint Communique” with China recognizing and acknowledging not only that Taiwan is a province of China but that for America or its allies or any other nation to challenge that historical fact would be unethical.

The U.S. regime hides this crucial historical fact, in order to hoodwink its masses of suckers into assuming to the exact contrary — that Taiwan isn’t a Chinese province. Here is how they do this:

The CIA-edited and written Wikipedia, which blacklists (blocks from linking to) sites that aren’t CIA-approved, is the first source for most people who become interested in what is officially known as the Shanghai Communique of 1972, or the 27 February 1972 “JOINT COMMUNIQUE BETWEEN THE UNITED STATES AND CHINA”. That article, avoids presenting the Communique’s 1,921-word text, but instead provides, in its “Document” section, a mere 428-word very selective, and sometimes misleading, summary of some of the document’s less-important statements, and also fails to provide any link to the document itself, which they are hiding from readers.

The U.S. regime’s Wilson Center does have an article “JOINT COMMUNIQUE BETWEEN THE UNITED STATES AND CHINA”, at which only the document’s opening 286 words are shown, while the rest is veiled and the reader must then do additional clicks in order to get to it.

The U.S. State Department’s history site, does provide the entire 1,921-word document, but under a different title, one that plays down the document’s actual importance, “Joint Statement Following Discussions With Leaders of the People’s Republic of China”.  (If it’s a “Joint Statement,” then whom are the “Leaders of the People’s Republic of China” “jointly” issuing it with — that title for it is not only false, it is plain stupid, not even referring to the U.S, at all.) Consequently, anyone who seeks to find the document under its official and correct title won’t get to see it at the U.S. State Department’s site.

Here are some of the important statements in this document (as shown below that stupid title for it at the State Department’s site):

With these principles of international relations in mind the two sides stated that:

               —progress toward the normalization of relations between China and the United States is in the interests of all countries;

               —both wish to reduce the danger of international military conflict;

               —neither should seek hegemony in the Asia–Pacific region and each is opposed to efforts by any other country or group of countries to establish such hegemony; and

               —neither is prepared to negotiate on behalf of any third party or to enter into agreements or understandings with the other directed at other states.

Both sides are of the view that it would be against the interests of the peoples of the world for any major country to collude with another against other countries, or for major countries to divide up the world into spheres of interest. …

The U.S. side declared: The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind, it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations from Taiwan. In the meantime, it will progressively reduce its forces and military installations on Taiwan as the tension in the area diminishes.

The Wikipedia article’s 428-word summary of the “Document” did include parts of the paragraph which started “The U.S. side declared,” but the summary closed by alleging that the document “did not explicitly endorse the People’s Republic of China as the whole of China. Kissinger described the move as ‘constructive ambiguity,’ which would continue to hinder efforts for complete normalization.” How that passage — or especially the entire document — could have been stated with less “ambiguity” regarding “the People’s Republic of China as the whole of China” wasn’t addressed. In fact, the statement that “all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China” includes asserting that the Taiwanese people “maintain there is but one China and that Taiwan is a part of China.” So: the U.S. did agree with that, even signed to it in 1972. If the U.S. refuses to agree with it now, then what was the U.S. agreeing to in that Communique, and under what circumstances does the Communique become null and void for either of the two agreeing Parties to it? When does it stop being binding? Perhaps the document should have added something like “The U.S. Government will never try to break off pieces of China.” But maybe if that were to have been added to it, then the U.S. regime wouldn’t have signed to anything with China. Is the U.S. regime really that Hitlerian? Is this what is ‘ambiguous’ about the document?

In fact, the affirmation that, “The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind, it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations from Taiwan.” is now routinely being violated by the U.S. regime. Here’s an example:

One of the leading U.S. billionaires-funded think tanks, the Center for a New American Security (CNAS), was co-founded by Kurt Campbell, who is Joe Biden’s “Asia co-ordinator” or “Asia Tsar” with the official title of “National Security Council Coordinator for the Indo-Pacific.” The other co-founder is Michèle Flournoy, who also co-founded with the current Secretary of State Antony Blinken, WestExec Advisors, which firm’s client-list is secret but generally assumed to be top investors in firms such as Lockheed Martin. That advisory firm’s activities are also secret. 

Perhaps nothing is more profitable than trading on inside information regarding corporations whose main, if not only, sales are to the U.S. Government and its allied governments. Trading on inside information needs to be secret in order to be non-prosecutable. The clients of WestExec Advisors might be extraordinarily successful investors, because they’ve hired people who have ‘the right’ contacts in the federal bureaucracy and so know where your ‘national security’ tax-dollars are likeliest to be spent next.

CNAS issued, in October 2021, “The Poison Frog Strategy: Preventing a Chinese Fait Accompli Against Taiwanese Islands”. It was written as-if the Shanghai Communique hadn’t prohibited this. The presumption there was instead that America and Taiwan would have so much raised the heat against China’s not being picked apart, so as for China to have militarily responded in order to hold itself together; and, then, a stage, “MOVE 2,” would be reached, in which:

The Taiwan and U.S. teams engaged in more direct communication, which aided the U.S. team in framing the crisis. By Move 2, the U.S. team had accepted that using military force to retake Dongsha would be too escalatory and might disrupt the formation of any counter-China coalition. Accordingly, the team reframed the takeover of Dongsha as an opportunity to expose Chinese belligerence and to encourage states to join together to balance against China’s aggressive behavior. The U.S. team’s decision to place U.S. military forces on Taiwan during Move 1 became a key driver for the rest of the game.

Then, 

By Move 3, both the U.S. and Taiwan teams were in difficult positions. The U.S. team did not want to let Chinese aggression go unpunished, both for the sake of Taiwan and within the context of the broader regional competition. At the same time, the U.S. team wanted to show its partners and allies that it was a responsible power capable of negotiating and avoiding all-out war. The Taiwan team was caught in an escalating great-power crisis that threatened to pull Taiwan into a war that it was trying to avoid. The Taiwan team had to balance its relationships and policies with the United States and China while simultaneously spearheading de-escalation. And in the early part of the game, before communication between the United States and Taiwan teams improved, the Taiwan team had, unbeknownst to the U.S. team, set up a back channel with the China team. At the same time the back-channel negotiations were ongoing, the U.S. team was still, in fact, considering additional escalatory action against the China team. …

Toward the end of the game, the U.S. and Taiwan teams’ main strategy was to isolate China diplomatically and economically and garner enough international backing among allies and partners to make that isolation painful. To this end, the Taiwan team focused on pulling in some of its regional partners, such as Japan, while the U.S. team reached out to its NATO allies.9 To avoid unwanted escalation or permanent effects, the U.S. and Taiwan teams limited their offensive military operations to non-kinetic and reversible actions such as cyberattacks and electronic warfare.

Under “Key Takeaways and Policy Recommendations” is:

Given the inherent difficulty of defending small, distant offshore islands like Dongsha, Taiwan and the United States should strive to turn them into what the players called “poison frogs.” This approach would make Chinese attempts to seize these islands so militarily, economically, and politically painful from the outset that the costs of coercion or aggression would be greater than the benefits.

The U.S. regime’s having in 1972 committed itself to there being only “a peaceful settlement of the Taiwan question by the Chinese themselves” has somehow now become a license for the U.S. regime to provoke “Chinese attempts to seize these islands” and yet to cause — by America’s constant further provocations and lying — this to be “so militarily, economically, and politically painful from the outset that the costs of coercion or aggression would be greater than the benefits.”

In other words: the U.S. regime expects to portray China as being the aggressor, and the U.S. regime as being the defender — but, actually, of what? It would be the defender of breaking off a piece of China to add it to the U.S. regime’s allies, against an ‘aggressive’ China that opposes America’s violating its own, and China’s, 1972 Joint Shanghai Communique — which prohibits that.

On May 19th, The Hill, one of the U.S. regime’s many propaganda-mouthpieces, headlined “China warns of dangerous situation developing ahead of Biden Asia trip”, and opened: 

China warned the U.S. that President Biden’s visit to East Asia this week could put their relations in “serious jeopardy” if officials play the “Taiwan card” during the trip.

In a phone call with national security adviser Jake Sullivan, China’s top diplomat Yang Jiechi warned the U.S. against speaking out on the independent sovereignty of Taiwan, a self-ruling democratic island in the Indo-Pacific that China claims is historically part of the mainland and should be under Beijing’s control.

China doesn’t claim that Taiwan “is historically part of the mainland and should be under Beijing’s control,” but that, just like Hawaii is NOT a part of “the mainland” but IS “under U.S. control,” and NOT “a self-ruling” nation, Taiwan is NOT a part of “the mainland” but IS (not ‘should be’, but IS) under China’s control, and NOT “a self-ruling” nation. Just as there is no “independent sovereignty of Hawaii,” there also is no “independent sovereignty of Taiwan.” How many lies were in that opening? (And this doesn’t even bring in the fact that whereas Hawaii is way offshore of America’s mainland, Taiwan is very close to China’s mainland.)

And how long will the U.S. regime’s constant lying continue to be treated as if that’s acceptable to anything other than yet another dangerously tyrannical regime — a U.S. ally, perhaps?

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