Cadence of Conflict: Asia, August 27, 2018

The Pacific is heating up bigtime. Just after Kim Jong Un meets with Chinese President Xi Jinping, Trump calls off a cabinet member’s visit to Pyongyang the day after the new North Korean envoy was announced. What was that all about? Consider China.

China has been moving in on Taiwan aggressively, both through marketing and through international relations. The TOEFL test given in Taiwan lists Taiwan as a province of China, using the controversial, “Taiwan, China” nomenclature. Taiwanese were furious because the US government requires tests such as the TOEFL, which is administered by ETS, a nonprofit organization based in New Jersey. How does a US government recognized US-based English testing organization come to list a testing market contrary to how the US State Department does? The answer is: pressure from China.

Companies around the world have been strong-armed by China into listing Taiwan as a province of China. In the past weeks and months, airlines were required to comply in order to continue flying to China, many waiting until the last possible moment. This week, a PhD candidate at the University of Salamanca in Spain Tweeted a letter from China last October essentially demanding that the university shut down “Taiwan Cultural Days”.

Now, Taiwan ended ties with El Salvador for recognizing China instead of Taiwan. This came after Taiwan declined for a year to make a sizable investment in the Port of La Union. Taiwan was concerned about debt for both countries. Senator Marco Rubio wasn’t happy and a bill has already been amended to cut US funding to El Salvador.

While North Korea doesn’t seem to be making as big of strides as expected in denuclearization, China is cozying up to North Korea while soon-to-be-former US allies cozy up to China and while China and Taiwan exchange lobbing spit wads. The overall situation doesn’t look good for the pro-US side. But, there’s always more than meets the eye.

Read More

Cadence of Conflict: Asia, June 18, 2018

Trump has stopped military exercises near North Korea, but he has not initiated any plans to withdraw troops. His reason for stopping the exercises is that they are provocative and expensive. He has a point: If the heads of state are talking then we are less in need of fighting practice in a scenario where heads of state are not talking.

The military exercises with South Korea are expensive and provocative, as Trump explains. Frankly, they should stop. With healthy conversations and progress toward peace already behind us, there won’t be a need for those drills any longer. Rehearsal for conflict that might never exist can often provoke the very conflicts we otherwise would not need to prepare for. As for the “expense” defense, few accountants will argue in favor of nickeling and diming away money as fiscally responsible and no one believes that taxpayers’ pockets are infinitely deep except pundits with portfolios in public funding.

The Western news is that Trump is wrong, specifically with regard to China that China wins. According to this week’s Western news narrative, China wins because of troop withdrawals that haven’t happened, because a friend of China will de-nuke, and because over 30k US troops will be free to go home—or go to Taiwan, Mischief Reef, Vietnam, the Philippines, Japan, or any number of other Pacific island-nations China doesn’t get along with.

Economically, China “wins” because manufacturing is leaving China—which must therefore mean that China’s innovation and science is the new source of manufacturing elsewhere. Perhaps that includes innovation and science like the Chinese government now trying to track every car with a chip as of 2019. The “Mad Scientist” theorem of the experimental police state research moving from North Korea to China continues to play out.

Just remember with everything: There’s more going on than anyone can see. Deals between governments are never fully explained to the public. They shouldn’t be. But, as peace develops in one part of the western Pacific, hostilities move around and every pundit seizes opportunity to say, “I was right.” No conflict is without news profiteering.

Read More

Cadence of Conflict: Asia, June 4, 2018

North Korea inches further and further toward talks with the US. China fears this. If Kim Jong-Un get in the same room as the man who wrote The Art of the Deal, North Korea could become a stronger ally to the US than even South Korea overnight. That would likely lead to a quick reunification of the Korean Peninsula, as well as other shifts in power, even before any alliance might be formalized. But, Trump’s deal-making reputation should bring no shocks to what is about to transpire in the Singapore Summit.

Then, there’s China, about to be left behind. The hardline crackdown on free speech throughout China won’t be without consequence. Symphony has been saying so for years; Albert Ho effectively said the same, quoted in a Bloomberg article dated June 4. Party power is getting brittle. But, the consequences of brutal brittality are rarely explored. So, here goes.

Hong Kong won’t shut up anytime soon. The whining, whimpering bratty students of Hong Kong may be wrong to demand rights when freedom was largely handed to them by the British. But, those bratty students sure are drawing a press load of attention to China. That alone should be a heavy factor in logistics calculation. Hong Kong is a megaphone for any anti-China sentiment because the world reads about Hong Kong every day. After all, Hong Kong is “Asia’s World City”.

But, then there’s the problem of cracking down within “China proper”, the Mainland governed directly by Beijing, not a SAR like Hong Kong or Macau. If China considers friendly sarcasm to be a threat within China—that means tech companies and hardware manufacturers won’t have candid conversations about quality control and competitive design. Once free speech becomes a minefield, people will divert mental resources away from fee and open brainstorming toward making sure that they don’t say anything offensive. The key to good brainstorm sessions and innovation is that nothing is off the table and no one is allowed to take offense at anything whatsoever. That’s can’t happen in China anymore. Bye-bye Western manufacturing paradise. It’s only a matter of time before Western outsourcing brands figure it out. One little story, like an innovator being locked up for a tech suggestion because it was interpreted as “opposing to the Party”, might plunge Chinese factory stocks into the void below.

“Single-Party Rule” is the key topic now, at least according to Western papers. That’s the protest mantra in Hong Kong. It’s the talking point of headlines and marches. It is the so-called “problem” as is being presented to the world. The Western press is on a path for reporting a narrative that stirs sentiment for two-party rule in China. Whether it’s a typhoon, an earthquake, a solar flare, or some other “act of God”, if China suddenly adopts a two-party system, Western newspaper readers will have already been prepped to think it is a good thing.

Then, there’s Vietnam, exploring foreign investment “zones”. Deserved or unfair, distrust is stirring against China as a place of investment. This will have a double-edged effect in Vietnam. Firstly, Western manufacturing will flock to Vietnam as a way of fleeing the newspaper villain, China. But, with a Communist Party having total rule in Vietnam, Western investors will demand certain assurances before dumping too much money into yet another single-party market. Sooner or later, we could be looking at Vietnam adopting a friendly two-party system as a stronger strategy of competing with China. That will only add to the momentum of change in East Asia.

Read More

Cadence of Conflict: Asia, May 28, 2018

The US “disinvited” two countries this week, not only North Korea, but also China from the biannual naval exercises in Hawaii. Both “disinvitations” were a rescinding of a previous invitation after less than friendly saber rattling from the former invitee. Kim Jong Un’s loud mouth is widely known, so the North Korean “disinvitation” came as no surprise.

China, specifically, has been pressuring African countries to “dis-recognize” Taiwan in favor of Beijing policy. Additionally, China has been pressuring US companies to follow otherwise unrecognized Chinese maps placing Taiwan under China’s political sovereignty, as well as companies from other countries—which Taiwan is not currently under the control of. China sees the request as part of a grand goal of “reunification” and a nostalgic return to the rhapsodic geographical past as the keystone of a socioeconomic strengthening strategy.

The problem from the Western corporate perspective is with the dictionary, not with ideology. China’s government does not decide the laws on Taiwan’s island currently, not in any way. So, listing Taiwan “under” China would create confusion for Western tourists. But, China is run by Communists who believe that logistics are to be dictated, not recognized. In the land of Communist-Chinese, if tourists would be confused, the solution is to simply make a new law this afternoon outlawing tourists who are confused. So, Beijing doesn’t believe the West has any legitimate problem with the policy, but that Western companies are only trying to spite Beijing.

Washington, however, does view the problem as ideological. It would be wrong for Washington to dictate the organizational nomenclature of the Bank of China or Sky News or Spotify. So would be any reciprocal resemblance. Under Trump, Washington is enforcing that ideology globally.

Then, there was yet another snafu among China’s man-made islands. The US can’t stop making news in Taiwan. A Senator makes an “unexpected” visit. US weapons developers are planning to set up shop in Taiwan. The US and Taiwan have decided that they can’t build Taiwanese submarines fast enough. And, the US has decided that Taiwan needs the absolutely best defense to respond to Chinese “saber rattling”, not only asymmetric defense. All of this is remarkably irritating and “disrespectful” to China.

China hates few things more than being disrespected.

Read More

Cadence of Conflict: Asia, May 21, 2018

Talk only went so far this week. I looks as if North Korea might not be dismantling its nukes, but hiding them, then threatening to close talks when exposed for this, then threatening to cancel the summit for some other list of excuses.

The big question on Kim Jong-Un backing out on the talks relates to his recent visits to China. Not that China has made any wild promises, but he feels somewhat confident in getting lippy with the US.

The big lesson was about Moon’s emphasis on diplomacy vs Trump’s emphasis on teeth. Diplomacy made progress in terms of leading to more diplomacy. But, actual action is a measurement of its own. So far, Trump’s action has led to China losing interest in any kind of trade war and Moon’s favored diplomacy seems to be leading to an undiplomatic end to diplomacy.

Things aren’t over nor have we seen the last surprise. The big news of the week is that China’s on the bench. Moon and Trump will meet to discuss Kim having a discussion with them in Singapore. Where’s China?—announcing its surrender on trade, reflecting on past meetings with Kim, another player that doesn’t really matter.

If Kim doesn’t show up, Moon’s populist diplomacy will prove to have failed and Trump will have the “political currency” for action against North Korea. Maybe that’s what China hopes for in allowing Kim to gain false hopes in something or other—to rationalize a little retaliatory action of its own. But, if military action was China’s first preference, Beijing would have already taken it.

Read More