Taiwan has received a license from the United States to build its own submarines. Wang, a legislature who sits on the Foreign Affairs and National Defense Committee said that friendliness from the US is the highest it has ever been. Japan just commissioned its first marine force since WWII. 1,500 troops are ready, specifically to repel invasion of Japan’s islands. Thanks to China’s inspiration and initiative, many nations in the region are also making their contribution to peace and stability in Pacific Asia.
The US is re-evaluating trade with China. While much is just talk, Trump maintains friendly rhetoric. The shakeup with trade will force countries to reinvent and reevaluate trade policy. While a looming “trade war” remains the talk of many so-called “experts”, the long-term benefit will be the overall rebirth of trade throughout the world. Everyone will need to rethink trade. Any kind of thinking is good, especially in these times.
China and the US have fixed their rudders on a ramming course. The only remaining question will be over whose hull is stronger.
The “yuge” US trade deficit with China is purported to be $375B USD. Bloomberg was sure to point out that the figure is inflated, some way or another. Xinhua news reports that a more accurate figure is a mere $298B USD deficit. Trump sent a “Section 301” notice of unfair trade tactics to China along with $50–60B USD in tariffs, depending on which news source you read. Trump also asked China to reduce the deficit by a whopping $100B USD and China says that the US is being unfair, placing tariffs on US food.
Asian markets are up, but a Caixin market index—something like a DOW Jones average in China—isn’t up as much as hoped. Everyone has an opinion on what all that means.
Companies in America believe that tariffs harm the consumer. Some voices argue that the US has a “service” trade surplus with China, but still a deficit overall. Trump argues that trade deficits harm the worker and the overall economy. Basic macro-economic theory would say that workers would afford higher prices with much higher pay.
Trade deficits initiated the Opium Wars with China when China welcomed a one-way flow of silver from Britain for tea, but would not allow the eager Chinese population to import British goods. The Opium Wars ended with surrender of several lands to Britain, including Hong Kong. China’s current and main land dispute is over Taiwan. The stage is set for history to repeat and so far it has.
Taiwan is certainly chumming up to the US as China attempts to endear the Taiwanese. Most recently, Taiwan is buying more advanced missiles from the US while two Senators advocate selling F-35s to Taiwan—a sale more likely since Taiwan’s current administration is unlikely to set up secret talks with China as the rival party attempted nearly four years ago. China banned Taiwanese movies casting a purportedly pro-independence Taiwanese actor, Lawrence Ko.
As talks between Kim and Trump march forward, China is resigned to the new situation at its eastern border and is focusing on other areas, specifically trade. In truth, China’s main trade opponent is not the US, but Vietnam.
Vietnam’s main edge in trade will be that it is less expensive. Vietnam is, in many ways, less developed, yet more free to be expressive. Hanoi doesn’t sanction the same censorship as Beijing does. Many hard-working Vietnamese are hungry, even desperate for income. A hard-working, uncensored, hungry, less-expensive people will be difficult for China to compete with on many fronts. This is entirely beside any point about political tension between China and Vietnam.
The meeting between Kim and Trump is less-than-satisfactorily explained. Suddenly they want to talk? Some “teamwork” consultant trying to sell a book will likely attribute it all to diplomacy, along with the preemptive speculation that Kim would give up the nukes because he got them. More is going on behind the scenes and if the true story is ever told it may not be told for ten or twenty years.
As for the Western spin about China’s constitutional changes, it is all about the party, not about Xi. The humble pig farm worker, Xi Jinping, did not rise to power by publicly trying to serve himself. He has followed Robert Greene’s 48 Laws of Power to a tee and will continue to do so—that means putting the party first in his public agenda.
China is taking a turn for the better over North Korea’s “Rocket Man”. Stronger sanctions, limits on trade, cutting off oil, halting banking—it was all a wise move on China’s part.
At the United Nations, North Korea made no new friends. They made no indications of any change of heart. North Korea shares the same view of President Trump as the American Left: that he is crazy and irrational and should be called the types of names expected on an elementary school playground.
Even China’s new best buddy, Russia, is concerned for stability in the region. It’s not a threat. It doesn’t sound like a threat. Russia is genuinely concerned. Conflict with North Korea is, indeed, a nosedive and it does affect all Koreans, both North and South, as well as Japan, Russia, and, of course, China. Ending trade is the best bet.
Keeping North Korea alive and kicking as a China-Russia buddy is no longer a reasonable “hopeful”. Now, it’s about damage control. China is being urged to consider cleaning up the dismembered parts of a soon-to-be-former North Korea to avoid other problems.
Japan’s Prime Minister, Shinzo Abe, is expected to call an election. There’s no better time to get re-elected than when the backyard “Rocket Man” is firing missiles over your country and Russia and China won’t do anything about anything except cut off trade with “Rocket Man”. So, from this week’s ongoing drama with North Korea, Japanese Prime Minister Abe is likely to remain in office and China got more involved.
Korea’s situation is amplifying. We know this. North Korea is making more threats than ever with it’s “boy king” on the iron clad throne. We know that military options are 1. relevant and 2. undesirable. The Pentagon consistently barks about “military options”, while “economic options” stay on the table—don’t overlook how talk of military bolsters economic action. Rather than reviewing the obvious, consider North Korea through the eyes of the White House—viewing both economics and security—and from the rest of the world.
As the Pentagon, economists, and surrounding nations sees things, not China, but specifically the Communist Party seated in Beijing, is viewed as the “menace of Asia”, venturing into increased trouble with Vietnam, India, the Philippines, Japan, South Korea, Taiwan, Myanmar, Malaysia, Mongolia, Africa, Europe, and others. North Korea has six months of oil remaining, and China does 90% of North Korea’s trade. No Beijing Communist Party feeding the Kim Dynasty equals no Kim Dynasty nukes. That’s how the Pentagon, the US Treasury, and many surrounding nations view China and North Korea.
It will never be said, just as much as it will always be considered: North Korea is a stepping stone to facing the Beijing Communist Party. For the Pentagon, it’s practice and demonstration. For economics, North Korea is an excuse to cut off trade with China who manufactures technology, but does not develop their own, and uses copied technology with trade money to make it more difficult for their neighbors to sleep at night. Right or wrong, justified or not, that’s how others view China these days.
Now, Xi Jinping addresses an assembly over the BRICS bank group, while still not having dealt with the menace in its own back yard. Without a word being mentioned, Brazil, Russia, India, and South Africa—and the nations who trade with them—will view China as being the “maker of promises that won’t be kept”.
China had so much going for it, as did the Communist Party in Beijing. They had trade, they had marked-off territory that no one encroached. But, it wasn’t “what they deserved by rite”, thereby provoking them into too much venture and not enough housecleaning. Make no mistake, North Korea is only the tip of the iceberg marking regional vendettas that loom beneath the surface, both militarily and economically. The US is not as friendly as it seems, “considering either” economics “or” military; it has already been implementing both as part of a greater regional ambition.