EU Dilemma: How To Deal With China’s Rising Influence

Authored by Pepe Escobar via The Asia Times,

Beijing is, little by little, extending its influence not only inside the EU but inside the NATO space…

Facing China’s irresistible rise all across the chessboard, and under relentless US pressure, the not-exactly-democratic EU leadership is on a backbreaking exercise to position itself between a geopolitical/geoeconomic rock and a hard place.

The 28-member EU holds a crucial meeting next week in Brussels where it may adopt a 10-point action plan detailing, in a thesis, the terms of an equitable economic relationship with China going forward.

This will happen as Chinese President Xi Jinping visits Italy and then France – ahead of the very important, annual China-EU summit in Brussels on April 9, to be co-chaired by Chinese Premier Li Keqiang.

That’s the crucial context under which the European Commission (EC) has recommended what it describes as 10 concrete “actions” to the EU Heads of State for their debate at the European Council in March 21 and 22.

The full report, EU-China – A Strategic Outlook, is here.

The EC shows how in 2017 – the latest available figures – the EU was “China’s largest partner with a share of 13% of imports of goods in China and a share of 16% of exports of goods from China.” At the same time, the EC stresses that China is an “economic competitor” and “a systemic rival promoting alternative models of governance.”

Yet the EC’s “contribution” to the European Council debate next week is far from confrontational. It is a balancing act couched in Eurocratic terminology attempting to shape common “resolve” among the 28 member-states.

Predictable real problem

Coming from the EC/EU, support for “effective multilateralism with the United Nations at its core” is the norm – with China fully integrated.

Beijing is praised for its support for the Iran nuclear deal, its role in the denuclearization of North Korea, its upcoming role in the peace process in Afghanistan and tackling the Rohingya crisis in Myanmar. The real problem, predictably, is China’s maritime claims in the South China Sea.

Virtually no one apart from Brussels Eurocrats knows about the existence of an “EU Strategy on Connecting Europe and Asia.”  That’s one of those joint communiqués that no one reads, issued late last year, “enabling the Union to seek synergies between the EU and third countries, including China, in transport, energy and digital connectivity, on the basis of international norms and standards.”

Curiously, in the EC report, there’s no mention whatsoever of the New Silk Road, or Belt and Road Initiative (BRI) – which happens to be China’s synergy masterplan for the whole of Eurasia. We could define it as Globalization 3.0.

On the other hand, Made in China 2025 is duly referenced – and not demonized, Trump administration-style.

From the EU perspective, the key problem remains “lack of reciprocal market access.” The EU wants greater access for European companies, less Chinese subsidies for Chinese companies and curtailment of technology transfer from European firms to their state-owned joint venture partners in China.

All this should be part of a deal on investment rules to be clinched by 2020.

Action 9 in the EC report is quite revealing: “To safeguard against potential serious security implications for critical digital infrastructure, a common EU approach to the security of 5G networks is needed.” To deal with it, the EC will issue – what else – another “recommendation.”

A hefty degree of Eurocratic puzzlement seems to be in the cards; one cannot disassociate BRI from Made in China, 5G and Huawei technology; it’s all part of the same package. Yet the EU is under heavy pressure from Washington to ban Huawei and forget about joining BRI, even as nearly 20 EU member-states are already linked or interested in linking to BRI, and a majority are also interested in Chinese 5G technology.

Brussels diplomats confirmed to Asia Times that the EC report was basically authored by Berlin and Paris. And yes, they had to deal with heavy Washington pressure.

The report harbors a subtle, inbuilt element of “Chinese threat” – perhaps not as overtly as in a Pentagon report. This stance is how the Franco-German alliance believes it may influence “recalcitrants” such as the 16+1 group of Central and Eastern European nations doing business with China, as well as soon to be BRI-linked Italy.

Yet that’s already a done deal – as I detailed in the case of Italy.

‘Existential threat’

Beijing is accomplishing, little by little, something that is unbearable for the Beltway; extending its influence not only inside the EU but inside the NATO space.

The US Deep State may have lumped BRI – along with Made in China 2025 and Huawei’s 5G – as part of an “existential threat”; but that’s not the case for most EU latitudes, from Greece and Portugal to German industrialists and the new Lega/Five Stars administration in Rome.

Brussels very well knows that Washington will punish any “ally” who gets too close to Beijing. It’s never enough to be reminded that the list of economic “threats” to the US features, in that order, China, Russia and Germany. And Italy is now caught in the crossfire – because it is committed to good economic relations with both China and Russia.

Rome has already sent a clear message to Brussels; beyond any EU common “resolve” facing China, what matters is the Italian national economic interest in, for instance, linking the ports of Venice, Trieste and Genoa to the New Silk Road. Alarmed Atlanticists are essentially warning that Italians cannot cross a red line; they need to ask permission to act independently. That’s not going to happen – whatever the EC decides to “recommend.”

via ZeroHedge News Tyler Durden

Brickbat: Some Rights Don’t Matter

CensorshipAlaska Gov. Mike Dunleavy has asked for an investigation after Marti Buscaglia, the executive director of the state Commission for Human Rights, posted a photo on Facebook of a bumper sticker on the back of a truck that read “Black Rifles Matter” and called the slogan racist. Buscaglia also left a note with her business card telling the owner of the truck not to park in the commission’s parking lot again. The truck belonged to Brent Linegar, who owns a heating and plumbing business and was working in the building. After getting pushback in the comments thread, Buscaglia took down her post. “I think the line between being protected by the First Amendment and hate speech is very fine,” she said. “And frankly I wasn’t sure which one this was.”

from Hit & Run

Brexit, Yellow Vest Chaos Chilled French Champagne Sales

The economic toll of Britain’s Brexit and France’s “yellow vest” movement cooled French champagne sales in 2018 to its lowest level since 2004, private trade data revealed.

According to the figures published Sunday, March 17, by the Comité Interprofessionnel du Vin de Champagne (CIVC) at the Prowein show in Düsseldorf, Germany, champagne bottles sold globally declined by 1.8% to 302 million in 2018, though revenue moved higher by .3% to a record $5.6 billion as per bottle prices were inflated.

“The fall in volume is becoming a bit worrying, with the slowdown in France and Britain not compensated by higher sales outside the European Union,” CIVC co-president Jean-Marie Barillere told Reuters.

France and Britain are about 60% of total sales by volume. French sales dropped 4.2% to 147 million bottles, with more bottles exported than consumed in France for the first time in a century. In Britain, sales dropped to $460 million, compared with $470 million a year earlier. 

Barillere said yellow vest protests had crushed tourism in Paris, and an economic slowdown in the country is hurting demand.

“In view of Brexit’s uncertainties, houses have exported more than the needs of the market generating stocks. In France, the effect ‘yellow vests’ end of the year has occurred in a more global climate of uncertainties,” Barillere explained.

Total French Champagne export sales moved up .6% to 155 million bottles, while total export revenue increased by 1.8% to $3.3 billion as big-name champagne companies, such as LVMH’s Moët & Chandon and Pernod Ricard’s Mumm, were hot sellers in Asia and the United States.

In Britain, sales declined for the third consecutive year, mainly due to uncertainties surrounding the country’s planned exit from the European Union. Volumes fell 3.6% to 26.8 million bottles with a total revenue of $460 million. Volumes had already collapsed by 11% in 2017 and 9% in 2016.

Sales to the United States increased by 2.7% to 23.7 million bottles with revenues of $654 million. Sales to Japan were up 5.5% to 13.6 million bottles, while sales to Hong Kong and China, each accounting for 2 million bottles, were up 12% and 10.1% respectively. The most significant sales increase was seen in South Africa, where volume was up more than 38% to 1.1 million bottles.

CIVC warned that Italian prosecco, which is three to four times cheaper, has been a strong competitor to champagne.

While Brexit and yellow vest protestors have caused many economic uncertainties across the Eurozone, the champagne crisis in France and Britain is just another example of how the regional economy is headed for disaster.


via ZeroHedge News Tyler Durden

Was UK Paying White Helmets To Produce Syria “Chemical Weapon” PR As Cover For Jaish Al Islam?

Authored by Vanessa Beeley,

As controversy rages over the alleged April 2018 Douma “chemical weapon attacks” that signaled the end of Jaish Al Islam’s occupation, life in the Syrian city gradually returns to peace and stability.

The Organization for the Prohibition of Chemical Weapons’ (OPCW) interim report and final report have thrown the Western media community into disarray. Already scrambling to salvage their loss of face after the “no sarin” conclusions were drawn by the OPCW in July 2018, they are now trying to convert an inconclusive OPCW report into a definitive claim regarding chlorine use, in order to reassert their declining narrative supremacy.

A “chemical weapon” narrative that has effectively sustained the criminalization of the Syrian government and thus the continued unlawful aggression, direct and through Takfiri proxies, by the US coalition against Syria.

Reasonable grounds that the use of a toxic chemical as a weapon took place” is transformed into “OPCW confirms chlorine gas used in attack on Douma by Syrian government” by the state media revisionists across the Western media echo chambers.

A retraction for the Western media’s earlier certainty that Sarin was used is above their pay grade, presumably. An apology to the Syrian people for enabling the unlawful bombing of Syrian territory by a rapacious FUKUS alliance is clearly not within their moral remit.

Putting aside the almost unassailable evidence that the NATO-member-state-financed White Helmets staged the now notorious hospital scenes that were universally distributed by NATO-aligned media outlets and incredulity that a yellow cylinder could be dropped from a helicopter through the roof of an apartment and then bounce from the floor and onto an undamaged bed, what is largely being ignored by the West and the OPCW is the context of the attack.

Who was in charge in Douma? How had they treated civilians leading up to the attack? To what degree should we rely upon the dubious testimony of organizations collaborating with the extremist regime ruling Douma with a rod of iron?

When we start to examine these and other questions, we can begin to comprehend the extent to which the OPCW report has failed to take into account the conditions on the ground and the relevance of these for understanding the alleged attack on April 7, 2018.

I returned to Douma on the March 9, 2019. I had previously visited a week after the alleged “chemical attack” in April 2018 and interviewed hospital staff who had already informed me that the White Helmet hospital scenes had been staged.

I revisited a Douma brimming with life, and markets overflowing with fruit, vegetables, meat and even fish – something that had not been available for ordinary civilians when Douma was occupied by one of the most extremist, sectarian armed groups in Syria, Jaish Al Islam (JAI).

One stall-holder described life under JAI. The most important thing was hunger, people were starving, there was no food, no drink, no medicine, no medical care, people were starving.”

Douma market overflowing with fruits, vegetables, meat and even fish. March 2019. ©  Vanessa Beeley

Another vegetable seller told me: “Now things became better thanks to God, as you can see, everything is functioning and we are happy, everything is very good, thank God. The situation was very bad, we wouldn’t feel safe to sit here the way we are sitting now. Now, thank God, it’s safe and secure, we go to Damascus, purchase our goods from there and come back here

Children in one of the now-flourishing markets in Douma. ©  Vanessa Beeley

A thorough examination of what happened in Douma during April 2018 requires history and context including the Adra massacre of December 2013. At this time, Adra Al Balad (Adra City) and Adra Al-Ummaliyyeh (Adra’s industrial zone) were attacked by Jaish Al Islam and Nusra Front.

According to witness testimony, a bloodbath ensued that was barely reported by Western media. An official at the Syrian Information Ministry told me recently that only one mainstream media report on this heinous massacre was published at the time.

Workers in a bakery were executed and their bodies incinerated in the bread furnaces. Many of the predominantly Alawite civilians were executed and their severed heads suspended from trees according to reports from survivors. Many were kidnapped and transported to Tawba Jail in Douma (Repentance prison) where they were incarcerated for the next five years.

These civilians were subjected to terrible torture and humiliation during this time. Children were forced to dig the labyrinthine tunnels that snaked underground, connecting buildings of the prison complex.

In January 2019 I had the opportunity to interview three survivors from Tawba Jail. Their testimony has a particular bearing upon the April 2018 alleged chemical attack. I have focused on two of the interviews in this article:

Hassan Al-Othman was kidnapped from Adra Al-Ummaliyyeh on December 11, 2013 and he was held in a prison cell in the area by JAI and Nusra Front. He was systematically tortured for one month before being transferred to work in a building where JAI would bring civilians for execution.

Al-Othman told me:

They (JAI) used to take me into the building at 11pm and say to me: ‘you have to take the bodies out.’ I used to keep taking bodies out until 5am and put them in the bulldozer bucket. We used to take them out, and start burying them at 9 or 10 in the morning, I kept doing this job for two and a half or three months, burying bodies.”

Al-Othman told me that JAI took control of the police station in the area. One day they brought civilians to the station and executed them with a sword. Al-Othman was ordered to dispose of the decapitated bodies.

Standing at one of the entrances to the underground jails in Tawba, Douma. ©  Vanessa Beeley

After five months of enduring the inhumane treatment of the JAI and Nusra Front gangs, Al-Othman was taken to Tawba Jail in Douma. There, he was detained in solitary confinement for three years, beaten every day and hung by his wrists from the wall for long periods of time.

After three years, Al Othman was allowed access to a “communal cell” where he was joined by one other prisoner. The campaign of torture continued if JAI decided that Al-Othman had violated their “rules”. When Al-Othman refused to persuade his own brother, former president of Adra City Council, to “repent” and join the armed groups, the torture intensified.

One of the solitary confinement cells in Tawba Jail in Douma. ©  Vanessa Beeley

Al-Othman described the last moments before liberation by the Syrian Arab Army as terrifying. He had overheard JAI fighters discussing a plan to blow up the prison and blame it on the SAA. The Tawba Jail complex comprised roughly twelve buildings all housing hundreds if not thousands of kidnapped victims.

The massacre that began in Adra in December 2013 would have ended with the deaths of all survivors in Tawba Jail had the SAA not put enough pressure on JAI to flee the area and leave many prisoners alive or to take others with them to Idlib as part of the Russian brokered reconciliation deal.

Al-Othman told me: “If the Syrian Army hadn’t tightened the noose on them, they wouldn’t have released us […] They wanted to send us to Idlib. When we arrived to the Syrian Arab Army checkpoint in al-Mukhayyam, I turned myself in to the Army.”

Al-Othman explained that the SAA took him in and treated him well. He also told me that many of the JAI fighters were foreigners from Jordan, Somalia and Saudi Arabia among other countries.

He apologised frequently for “babbling”, for talking so much, but for many years he had endured terrible torture and abuse, he never expected to return home and now he needed to talk about his experiences.

One of the many underground tunnels dug by the prisoners in Tawba Jail. ©  Vanessa Beeley

Al-Othman also described the other prisons established by JAI. Al Batoun Prison (the concrete prison), also called Al-Khandaq (trench prison), was another site where prisoners were tortured and interrogated. Women were imprisoned separately to the men – their prisons were known as the 16th and 28th prison. 

When I asked Al-Othman about the role played by the White Helmets in Douma, he became even more animated. He told me that he often saw them receive large amounts of dollars – “new notes in sealed packages” – and, according to Al-Othman, cash was their sole motivation.

He said:

Regarding the White Helmets, they are part of the terrorists, and they are the ones who are responsible for the misleading about the crimes that the terrorists are committing […] the West is very deluded by them, they are terrorists and Takfiris […] when they used to see an injured civilian, the White helmets would finish him […] for example, he would be still alive, and then they would slaughter him, or he would be choking and they would finish him, those were the White Helmets.”

One of the main tunnel entrances to the underground Tawba prison cells. ©  Vanessa Beeley

Another of the Tawba Jail survivors spoke to me in Adra Al Balad. Kidnapped on December 14, 2013, Yasser Ali Al-Hweish was held for one year inside Al Batoun where he was interrogated and tortured on a daily basis before being transferred to Tawba Jail.

Al-Hweish told me that the prisoners were regularly used to stage alleged attacks by the SAA. The White Helmets would bring them outside and make them act out an attack, they would be filmed and then taken back inside the prison.

Hweish also claimed they would be taken out and told to rescue dead bodies from under the rubble, the White Helmets would film them and then film themselves taking credit for the rescue.

He said: For example if someone was dead under the rubble, we would dig and take him out, and after we finish, they (White Helmets) would film themselves as if it was them who have done the work, but in the end, we were doing it, not them.

Al-Hweish believes that the White Helmets were “subordinate” to JAI and were responsible for the PR and media campaigns to secure further financial support for the terrorist group. This claim is made more plausible by the fact that the UK Foreign Office was reported to be funding the PR for JAI via an international communications consultancy called Incostrat.

The UK FCO and intelligence agencies were also involved in the creation of the White Helmets in 2013 and their continued funding via the same Conflict Stability and Security Fund that siphoned money to Incostrat. Therefore it is no great leap of logic to make the connection between the UK FCO, the White Helmets and the PR campaign for JAI to whitewash their murderous, extremist reputation in Syria.

It is worth noting that these testimonies were not isolated. I interviewed many civilians from Eastern Ghouta after liberation both in Ghouta and outside in the camps for the internally displaced in the Damascus suburbs. Most of them echoed much of what Hweish and Al-Othman told me regarding the White Helmets and their collaboration with the armed extremist groups.

JAI had a reputation as one of the most savage and barbaric armed groups in the region. They had a history of suspected chemical attacks carried out against the Kurdish community in Sheikh Maqsoud, Aleppo in April 2016.

JAI had imprisoned Alawite kidnap victims in metal cages and used them as human shields to deter SAA military campaigns or aerial bombardments. Of the thousands of kidnap victims taken from Adra or from other areas of Eastern Ghouta, only an estimated 200 emerged alive when JAI finally evacuated their fighters to Idlib on the green buses.

One of the outdoor caged areas where prisoners were allowed to see the sky and get some air. ©  Vanessa Beeley

I explored the Tawba Jail complex, it was a harrowing experience. I was accompanied by SAA soldiers for my own security as there is still a high risk of terrorist sleeper cells in Douma. One young soldier was entering the prison for the first time. He was shocked when we stumbled upon the heartbreaking graffiti on the walls of the cells and the caged outdoor spaces where prisoners were allowed short periods of sky and fresh air, seen through the bars of an iron cage.

He was photographing the scrawled messages, muttering “haram, haram” under his breath “shame, shame.

Often we saw that prisoners were recording the number of days they had spent in prison but most of the messages were personal cries for respite and relief, sorrow at being parted from loved ones. Despair and hope expressed in poetry and verse.

One message was translated for me: “Please God help Maya and heal her. God we have nobody but you to help us. My daughter is very sick and I can’t bear to see her suffering. Please help us.

BBC producer, Riam Dalati, who recently tweeted that the Douma “chemical attack” hospital scenes had been faked also alluded to the “brute and shifty” JAI-affiliated doctor, Dr Abu Bakr Hanan, who had been filming the media scenes.

Dalati further confirmed that JAI ruled the district with an “iron fist.” Dalati had also previously accused JAI-partisan “activists” of rearranging the bodies of children into a more appealing hug scenario when the alleged attack actually occurred. All of these elements must surely lead to questions over the role JAI played in the possible staging of the Douma “chemical attack” and indeed to what extent previous such attacks were staged or manipulated.

This article is by no means intended to be an in depth analysis of the OPCW report or of the events on the April 7, 2018. I hope it raises questions about the FFM (Fact Finding Mission) methodology which evaluates evidence only for one conclusion – a chemical attack. The possibility of staging or the possible use of civilian prisoners as props in the production is not taken into consideration even though, as I have shown here, there is ample reason to believe JAI to have been capable of such actions.

Professor Piers Robinson of the Working Group on Syria, Media and Propaganda told me:

The FFM final report for the OPCW fails to clearly establish the cause of death for the deceased civilians filmed and photographed by ‘media activists’ on the ground; it fails to account for the release of chlorine from yellow cylinders found at the two sites, and it presents a highly unlikely if not impossible scenario regarding the cylinder found at location 4. The report is anonymous, cites anonymous ‘experts’ and provides little clarity with respect to the information sources it relies upon. It also appears to downgrade and ignore Hassan Diab who was filmed having water poured over him in a hospital scene and famously testified that these scenes were staged. This FFM report, even more than previous ones, discredits OPCW as a source of impartial investigation and undermines it as an international institution.

In fact the FFM final report arguably raises more questions than it has answered. The missing kidnap victims who were not released during the final stages of negotiation before the liberation of Douma are still unaccounted for. The bodies of alleged victims of the “chemical attacks”  have not been exhumed or identified as far as we know.

JAI were a tyrannical organisation that routinely executed, abused, tortured and murdered civilians in the areas they occupied in Syria. It is well within the realms of possibility that JAI used prisoners to stage a “chemical attack” to delay the inevitable SAA victory in Douma.

It is also feasible that the White Helmets were fulfilling their media and PR role for JAI when staging the hospital scenes as part of an attempt to buy JAI time and international sympathy. Until all these alternative theories are fully explored, the Douma “chemical attack” case must remain open and the Western media rush to judgement and desire to circle their wagons around an increasingly shaky narrative must be condemned.

via ZeroHedge News Tyler Durden

Trump’s Beijing Blockade Backfires: Not A Single European Country Has Banned Huawei

For the past year, as part of Trump’s escalating trade war against China, the Trump administration has been waging a parallel campaign to convince America’s European “allies” (at least until the White House unleashes auto tariffs against Brussles in retaliation for China annexing Italy to the Belt and Road initiative) to bar China’s Huawei Technologies from their telecom networks, a process which so far has culminated with the arrest of the Chinese telecom giant’s CFO in Canada. Bolstered by the success of similar efforts in Australia and New Zealand, the White House sent envoys to European capitals with warnings that Huawei’s gear would open a backdoor for Chinese spies. Last week, the U.S. even threatened to cut off intelligence sharing if Germany ignored its advice.

So far, the gamble to pressure Europe has backfired: not a single European country has banned Huawei.

Confirming that Europe and the US are now allies only on paper, was the scathing commentary by Angela Merkel at a Berlin conference on Tuesday: “There are two things I don’t believe in,” Merkel said: “First, to discuss these very sensitive security questions publicly, and second, to exclude a company simply because it’s from a certain country.”

And just like that, Europe took its place in the grand superpower race: right next to China (and Russia) against the US.

As Bloomberg notes, Europe, and especially Germany, both of which are extremely reliant on continued open trade with, Beijing has been caught in the middle of the U.S.-China trade war. Trying to remain impartial, Europe has been seeking to balance concerns about growing Chinese influence with a desire to increase business with Trump’s trade nemesis. And in a grand quid pro quo, with no ban in the works so far, Huawei is a budget frontrunner for contracts to build Europe’s 5G phone networks, the ultra-fast wireless technology the continent’s leaders hope will fuel the growth of a data-based economy, while building goodwill and hopefully receiving a few billion in Chinese investments in the process.

The first salvo against Trump’s diplomatic effort took place last month when the U.K.’s spy agency indicated that a ban on Huawei is unlikely, citing a lack of viable alternatives to upgrade British telecom networks. Next, Italy’s government also dismissed U.S. warnings as it seeks to boost trade with China. In Germany, authorities have proposed tighter security rules for data networks rather than outlawing Huawei. France is doing the same after initially flirting with the idea of restrictions on Huawei.

“The 5G rollout is one of the most complex and expensive technology projects ever undertaken,” said Paul Triolo, an analyst at Eurasia Group, a political risk consultancy. “The challenge for Europe is to find a way that minimizes the security risks linked to Chinese suppliers but not delay 5G, which is so important to the region.”

Governments have also listened to domestic phone companies such as Vodafone, Deutsche Telekom, and Orange, all of whom have warned that sidelining Huawei would delay the implementation of 5G by years and add billions of euros in cost.

“We’ve not seen any evidence of backdoors into the network,” said Helen Lamprell, Vodafone’s top lawyer and chief lobbyist in the U.K. “If the Americans have evidence, please put it out on the table.”

Predictably, the US did not take the rebuke sitting down.

In February, the White House dispatched representatives to MWC Barcelona, the industry’s top annual trade show, who urged executives and politicians to avoid Huawei and its Chinese peers. At the same time, the U.S. ambassador in Berlin wrote a letter to the German government saying it should drop Huawei or risk throttling U.S. intelligence sharing (Germany’s response was not  exactly calm, cool and collected).

Then there is the matter of value, and here China beats everyone hands down.

As Bloomberg notes, while “carriers can also buy equipment from the likes of Ericsson AB, Nokia Oyj, and Samsung Electronics Co., industry consultants say Huawei’s quality is high, and the company last year filed 5,405 global patents, more than double the filings by Ericsson and Nokia combined.”

The biggest irony: while the US accuses China of back door spying, the world already knows that the US is guilty of just that, thanks to Edward Snowden’s revelation. As a result, European lawmakers have been wary of Cisco, Huawei’s American rival, ever since it was revealed that the National Security Agency’s used U.S.-made telecom equipment for spying on, well, everyone. This is one of the reasons why between 2013 and 2018, Huawei increased its telecom market share by 8 percentage points:

Still, neither China, nor Huawei are safe yet. Since China has indeed been walking in the US’ footsteps and has been using its own backdoors to spy on both foes and friends, German hard-liners in the intelligence community realize that the push-pull against Huawei is only there to score political points again Washington. They also admit the company isn’t trustworthy, and updated security rules the government is drafting will make it harder for Huawei to win contracts. Denmark’s biggest phone company, TDC A/S, declined to renew a contract with Huawei and instead picked Ericsson as strategic partner to develop its 5G network. Even as Europe refuses to block Huawei, the Chinese telecom giant has been under increasing pressure to allow greater scrutiny of its technology and increase assurances its equipment can’t be accessed by Chinese spies.

In response, Huawei told Bloomberg it has “placed cyber security and user privacy protection at the very top of its priorities” adding that safeguarding networks is the joint responsibility of vendors, telecom companies, and regulators.

But most importantly, despite US insistence, so far there’s little evidence to suggest Europe will shun Huawei. In fact, as Bloomberg adds, the national railway companies in Germany and Austria have bought the company’s equipment, and carriers such as Deutsche Telekom and Telefonica are running 5G test projects with its products.

As a result of Europe’s rebellion against the US, Huawei’s global revenue growth accelerated in the first two months of the year, climbing by more than a third, founder Ren Zhengfei said last week. And the company says sales of its smartphones doubled in Germany during the same period.

“We don’t know what the U.S.’s next move is, so it’s not over yet,” said Bengt Nordstrom, CEO of telecom consultancy Northstream. “But whatever market share Huawei may lose in Europe, they’ll win back in China.”

Meanwhile, the question of how Trump takes defeat in diplomatic pressure with Europe remains open, not to mention how this would translate from mere diplomacy to global economics and capital markets: one thing is certain, should Europe’s rebuke of Washington be overly publicized, tariffs on Europe’s exports – such as automobiles – to the US would appear inevitable, as would the next global recession as globalization takes it next big step backward.

via ZeroHedge News Tyler Durden

Turkey: Putin’s Ally In NATO?

Authored by Burak Bekdil via The Gatestone Institute,

  • On March 7, Turkish President Recep Tayyip Erdoğan said Turkey would never turn back from the S-400 missile deal with Russia. He even added that Ankara may subsequently look into buying the more advanced S-500 systems now under construction in Russia.

  • With the S-400 deal, Turkey is simply telling its theoretical Western allies that it views “them,” and “not Russia,” as a security threat. Given that Russia is widely considered a security threat to NATO, Turkey’s odd-one-out position inevitably calls for questioning its official NATO identity.

  • Turkey has NATO’s second biggest army, and its military love affair with Russia may be in its infancy now, but it undermines NATO’s military deterrence against Russia.

Turkey has NATO’s second biggest army, and its military love affair with Russia may be in its infancy now, but it undermines NATO’s military deterrence against Russia. Pictured: Turkish President Recep Tayyip Erdoğan meets with Russian President Vladimir Putin in Moscow, on March 10, 2017. (Image source:

On September 17, 1950, more than 68 years ago, the first Turkish brigade left the port of Mersin on the Mediterranean coast, arriving, 26 days later, at Busan in Korea. Turkey was the first country, after the United States, to answer the United Nations’ call for military aid to South Korea after the North attacked that year. Turkey sent four brigades (a total of 21,212 soldiers) to a country that is 7,785 km away. By the end of the Korean War, Turkey had lost 741 soldiers killed in action. The U.N. Memorial Cemetery in Busan embraces 462 Turkish soldiers.

All that Turkish effort was aimed at membership in NATO, a seat that Turkey eventually won in February 18, 1952. During the Cold War, Turkey remained a staunch U.S. and NATO ally, defending the alliance’s southeastern flank. Nevertheless, events have changed dramatically since the Islamist government of Prime Minister (now President) Recep Tayyip Erdoğan first came to power in November 2002. The “Turkish retreat” did not happen overnight.

In April 2009, military teams from Turkey and its neighbor, President Bashar al-Assad’s Syria, crossed the border and visited outposts during joint military drills. That was the first time a NATO army had exercised with Syria’s military.

In September 2010, Turkish and Chinese air force jets conducted joint exercises in Turkish airspace. That, too, was the first time a NATO air force had military exercises with China’s.

In 2011, a Transatlantic Trends survey revealed that Turkey was the NATO member with the lowest support for the alliance: just 37% (down from 53% in 2004).

In 2012, Turkey joined the Shanghai Cooperation Organization (SCO, whose members are Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) as a dialogue partner.

In 2017, a senior Chinese diplomat said that Beijing was ready to discuss Turkey’s membership in the SCO.

In September 2013, Turkey announced that it had selected a Chinese company (CPMIEC) for the construction of its first long-range air and anti-missile defense system under the then $3.5 billion T-LORAMIDS program. That contract was later scrapped, but Erdoğan then turned to Russian President Vladimir Putin for a replacement: the S-400 long-range air and anti-missile defense system.

Despite increasing U.S., Western and NATO pressure, Erdoğan since that time has refused to give up the Russian air defense architecture and instead has boldly defended “Turkey’s sovereign decision.” Most recently, on March 7, Erdoğan saidTurkey would never turn back from the S-400 missile deal. He even added that Ankara may subsequently look into buying the more advanced S-500 systems now under construction in Russia.

Washington is still warning its part-time NATO ally that the Russian deal would have its “grave consequences.” According to CNN:

“If Turkey takes the S-400s there will be grave consequences,” acting chief Pentagon spokesperson Charles Summers told reporters Friday [March 8], saying it would undermine America’s military relationship with Ankara.

Summers said those consequences would include the US not allowing Turkey to acquire the F-35 jet and the Patriot missile defense system.

Turkey, a member of the U.S.-led, multinational consortium that builds the new generation fighter, the F-35 Lightening II, had committed to buy more than 100 of the aircraft.

Turkey’s choice in favor of Russia (and against NATO) will surely have repercussions on several wavelengths. The U.S. may or may not fully retaliate by expelling Turkey from the Joint Strike Fighter group that builds the F-35. That will be a decision carrying with it economic considerations in addition to military and political ones. Turkey, if expelled, may turn further to Russia for a next-generation fighter solution, which Putin would only be too happy to offer — and create further cracks within the NATO bloc, a move Erdoğan probably believes the U.S. administration (and NATO) cannot afford to risk. Erdoğan’s gambit, however, has a more important message to NATO than just procuring military gear: Turkey’s geo-strategic identity.

The S-400 is an advanced air defense architecture, especially if it is utilized against Western (NATO) aerial assets and firepower. It is an elementary military software fact that Turkey cannot use this system against Russian aggression or Russian-made weapons. With the S-400 deal, Turkey is simply telling its theoretical Western allies that it views “them,” and “not Russia,” as a security threat. Given that Russia is widely considered a security threat to NATO, Turkey’s odd-one-out position inevitably calls for questioning its official NATO identity.

Turkey has NATO’s second biggest army, and its military love affair with Russia may be in its infancy now, but it undermines NATO’s military deterrence against Russia. Russia, however, would doubtless like nothing better than to see the break-up of a military alliance which ensures that an “armed attack against one” NATO member “shall be considered an attack against them all”.

via ZeroHedge News Tyler Durden

Empire Of Absurdity: Recycled Neocons, Recycled Enemies

Authored by Major Danny Sjursen (ret.) via,

There are times when I wish that the United States would just drop the charade and declare itself a global empire.

As a veteran of two imperial wars, a witness to the dark underside of America’s empire-denial, I’ve grown tired of the equivocation and denials from senior policymakers. The U.S. can’t be an empire, we’re told, because – unlike the Brits and Romans – America doesn’t annex territories outright, and our school children don’t color its colonies in red-white-and-blue on cute educational maps.

But this distinction, at root, is rather superficial. Conquest, colonization, and annexation are so 19th century – Washington has moved beyond the overt and engages in the (not-so) subtle modern form of imperialism. America’s empire over the last two decades – under Democrats and Republicans – has used a range of tools: economic, military, political, to topple regimes, instigate coups, and starve “enemy” civilians. Heck, it didn’t even start with 9/11 – bullying foreigners and overturning uncooperative regimes is as American as apple pie.

Still, observing post-9/11, post-Iraq/Afghanistan defeat, Washington play imperialism these days is tragicomically absurd. The emperor has no clothes, folks. Sure, America (for a few more fleeting years) boasts the world’s dominant economy, sure its dotted the globe with a few hundred military bases, and sure it’s military still outspends the next seven competitors combined. Nonetheless, what’s remarkable, what constitutes the real story of 2019, is this: the US empire can’t seem to accomplish anything anymore, can’t seem to bend anybody to its will. It’s almost sad to watch. America, the big-hulking has-been on the block, still struts its stuff, but most of the world simply ignores it.

Make no mistake, Washington isn’t done trying; it’s happy to keep throwing good money (and blood) at bad: to the tune of a cool $6 trillion, 7,000 troop deaths, and 500,000 foreign deaths – including maybe 240,000 civilians. But what’s it all been for? The world is no safer, global terror attacks have only increased, and Uncle Sam just can’t seem to achieve any of its preferred policy goals.

Think on it for a second: Russia and Iran “won” in Syria; the Taliban and Pakistan are about ready to “win” in Afghanistan; Iran is more influential than ever in Iraq; the Houthis won’t quit in Yemen; Moscow is keeping Crimea; Libya remains unstable; North Korea ain’t giving up its nukes; and China’s power continues to grow in its version of the Caribbean – the South China Sea. No amount of American cash, no volume of our soldiers’ blood, no escalation in drone strikes or the conventional bombing of brown folks, has favorably changed the calculus in any of these regional conflicts.

What does this tell us? Quite a lot, I’d argue – but not what the neoliberal/neoconservative alliance of pundits and policymakers are selling. See for these unrepentant militarists the problem is always the same: Washington didn’t use enough force, didn’t spend enough blood and treasure. So is the solution: more defense spending, more CIA operations, more saber-rattling, and more global military interventions.

No, the inconvenient truth is as simple as it is disturbing to red-blooded patriots. To wit, the United States – or any wannabe hegemon – simply doesn’t possess the capability to shape the world in its own image. See those pesky locals – Arabs, Asians, Muslims, Slavs – don’t know what’s good for them, don’t understand that (obviously) there is a secret American zipped inside each of their very bodies, ready to burst out if given a little push!

It turns out that low-tech, cheap insurgent tactics, when combined with impassioned nationalism, can bog down the “world’s best military” indefinitely. It seems, too, that other regional heavyweights – Russia, China, Iran, North Korea – stand ready to call America’s nuclear bluff. That they know the US all-volunteer military and consumerist economy can’t ultimately absorb the potential losses a conventional war would demand. Even scarier for the military-industrial-congressional-media establishment is the logical extension of all this accumulated failure: the questionable efficacy of military force in the 21st century.

Rather than recognize the limits of American military, economic, and political power, Bush II, Obama, and now Trump, have simply dusted off the old playbook. It’s reached the level of absurdity under the unhinged regime of Mr. Trump. Proverbially blasting Springsteen’s “Glory Days,” as its foreign policy soundtrack, the Donald and company have doubled down. Heck, if Washington can’t get its way in Africa, Europe, Asia, or the Mideast, well why not clamp down in our own hemisphere, our traditional sphere of influence – South and Central America.

Enter the lunacy of the current Venezuela controversy. Trump’s team saw a golden opportunity in this socialist, backwater petrostate. Surely here, in nearby Monroe Doctrine country, Uncle Sam could get his way, topple the Maduro regime, and coronate the insurgent (though questionably legitimate) Juan Guaido. It’s early 20th century Yankee imperialism reborn. Everything seemed perfect. Trump could recall the specter of America’s tried and true enemy – “evil” socialism – cynically (and absurdly) equating Venezuelan populism with some absurd Cold-War-era existential threat to the nation. The idea that Venezuela presents a challenge on the scale of Soviet Russia is actually farcical. What’s more, and this is my favorite bit of irrationality, we were all recently treated to a game of “I know you are but what am I?” from Secretary of State Mike Pompeo, who (with a straight face) claimed Cuba, tiny island Cuba, was the real “imperialist” in Venezuela.

Next, in a move reminiscent of some sort of macabre 1980’s theme party, Trump resuscitated Elliot Abrams – you know, the convicted felon of Iran-Contra infamy, to serve as Washington’s special envoy to embattled Venezuela. Who better to act as “fair arbiter” in that country than a war-criminal with the blood of a few hundred thousand Central Americans (remember the Contras?!?) on his hands back in the the good old (Reagan) days.

Despite all this: America’s military threats, bellicose speechifying, brutal sanctions, and Cold War-style conflict-framing, the incumbent Maduro seems firmly in control. This isn’t to say that Venezuelans don’t have genuine grievances with the Maduro government (they do), but for now at least, it appears the military is staying loyal to the president, Russia/China are filling in the humanitarian aid gaps, and Uncle Sam is about to chalk up another loss on the world scene. Ultimately, whatever the outcome, the crisis will only end with a Venezuelan solution.

America’s impotence would almost be sad to watch, if, and only if, it wasn’t all so tragic for the Venezuelan people.

So Trump and his recycled neocons will continue to rant and rave and threaten Venezuela, Haiti, Cuba, and so on and so forth. America will still flex its aging, sagging muscles – a reflexive habit at this point.

Only now it’ll seem sad. Because no one is paying attention anymore.

The opposite of love is isn’t hate – it’s indifference.

*  *  *

Danny Sjursen is a retired US Army officer and regular contributor to Antiwar.comHe served combat tours with reconnaissance units in Iraq and Afghanistan and later taught history at his alma mater, West Point. He is the author of a memoir and critical analysis of the Iraq War, Ghostriders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. Follow him on Twitter at @SkepticalVet.

via ZeroHedge News Tyler Durden

Visualizing How Americans Make And Spend Their Money

How do you spend your hard-earned money?

Whether you are extremely frugal, or you’re known to indulge in the finer things in life, how you allocate your spending is partially a function of how much cash you have coming in the door.

Simply put, as Visual Capitalist’s Jeff Desjardins writes, the more income a household generates, the higher the portion that can be spent on items other than the usual necessities (housing, food, clothing, etc), and the more that can be saved or invested for the future.

Earning and Spending, by Income Group

Today’s visuals come to us from Engaging Data, and they use Sankey diagrams to display data from the Bureau of Labor Statistics (BLS) that helps to paint a picture of how different household income groups make and spend their money.

We’ll show you three charts below for the following income groups:

  1. The Average American

  2. The Lowest Income Quintile (Bottom 20%)

  3. The Highest Income Quintile (Highest 20%)

Let’s start by taking a look at the flows of the average American household:

The Average American Household – $53,708 in spending (73% of total income)

The average U.S. household has 2.5 people (1.3 income earners, 0.6 children, and 0.4 seniors)

As you can see above the average household generates $73,574 of total inflows, with 84.4% of that coming from salary, and smaller portions coming from social security (11.3%), dividends and property (2.6%), and other income (1.7%).

In terms of money going out, the highest allocation goes to housing (22.1% of spending), while gas and insurance (9.0%), household (7.7%), and vehicles (7.5%) make up the next largest categories.

Interestingly, the average U.S. household also says it is saving just short of $10,000 per year.

The Bottom 20% – $25,525 in spending (100% of total income)

These contain an average of 1.6 people (0.5 income earners, 0.3 children, and 0.4 seniors)

How do the inflows and outflows of the average American household compare to the lowest income quintile?

Here, the top-level statistic tells much of the story, as the poorest income group in America must spend 100% of money coming in to make ends meet. Further, cash comes in from many different sources, showing that there are fewer dependable sources of income for families to rely on.

For expenditures, this group spends the most on housing (24.8% of spending), while other top costs of living include food at home (10.1%), gas and insurance (7.9%), health insurance (6.9%), and household costs (6.9%).

The Highest 20% – $99,639 in spending (53% of total income)

These contain an average of 3.1 people (2.1 income earners, 0.8 children, and 0.2 seniors)

The wealthiest household segment brings in $188,102 in total income on average, with salaries (92.1%) being the top source of inflows.

This group spends just over half of its income, with top expenses being housing (21.6%), vehicles (8.3%), household costs (8.2%), gas and insurance (8.2%), and entertainment (6.9%).

The highest quintile pays just short of $40,000 in federal, state, and local taxes per year, and is also able to contribute roughly $50,000 to savings each year.

Spending Over Time

For a fascinating look at how household spending has changed over time, don’t forget to check out our previous post that charts 75 years of data on how Americans spend money.

via ZeroHedge News Tyler Durden

“The Era Of Negative Population Growth Is Coming Soon”

Submitted by Nicholas Colas of DataTrek Research

Guess which country’s preeminent social sciences think tank wrote in a recent report: “The era of negative population growth is coming soon”. That “soon” is a tell, because this is not from researchers in Japan, Italy, Portugal or Greece. All those countries already show negative population growth.

The country in question is China. Using expected future fertility rates from the United Nations (which must comport with their own analysis, or they would have used their own numbers), the Chinese Academy of Social Sciences reported that:

  • The Chinese population will peak at 1.442 billion people a decade from now in 2029.

  • From 2030 on, the population base will shrink by 0.3% annually until 2050, at which point it will be 1.364 billion.

  • The trend to a smaller Chinese population will extend to at least 2065, at which point the country will be back to levels last seen in 1996 (1.248 billion).

  • All this assumes fertility rates increase from the current 1.6 children per woman to 1.77 by the end of the forecast horizon. The researchers note that if fertility rates remain constant, China’s population will decrease to 1.172 billion people by 2065, the same as it was in 1990.

  • Link to the report at the end of this section. Google Translate works well here.

All this stands in stark contrast to United Nations projections for many regions of the world (2000 – 2050):

  • Asia as a whole: +0.7% per annum

  • Africa: +2.3%

  • South/Central America/Caribbean: +0.8%

  • North America: +0.7%

  • Oceana: +1.2%

  • Only Europe is expected to show population declines on a regional basis, at -0.3%.

China’s “one child” policy, which ran from 1979 – 2015, is one cause of the country’s current demographic challenge. After it was changed to a “two child policy” in 2016, fertility rates did pick up for a year but declined again in 2017 and 2018. Demographers use 2.1 children/woman as a “replacement rate” for the existing population. In 2018, China’s fertility rate was 1.6 children/woman, below the Chinese Academy’s worst-case long-term scenario mentioned above.

Now, you’re no doubt aware of the demographic challenges facing the other countries we mentioned at the top of this section, and how those inform macroeconomic policy and long run growth potential. Japan and much of Europe are already shrinking, a significant issue for policymakers from local officials all the way to the European Central Bank. Add to that an associated increase in median age of the population, and you get a gale of headwinds that are hard to redress.

What’s also interesting to us about the Chinese data: compare the expected median age of the population there in 2050 (30 years from now) to some of the countries/regions we know already face the issue of a shrinking and aging base of citizens:

  • Japan: 48.6 years median age of the population today

  • Europe: 42.7 median age today

  • China’s current median age: 35.6 years

  • China’s median age in 2030: 41.1 years (close to Europe today)

  • China’s median age in 2050: 45.2 years (close to Japan today)

  • Worth noting: North America’s median age is currently 37.5 years, 5% older than China’s current reading. By 2050 projections have it at 42.1 years, 7% younger than China’s population.

The upshot to all this in 3 summary points:

#1: Demography is not destiny, but it is always a factor to consider when assessing a country/region’s long-term growth rates. Recent economic history in Europe and Japan shows that when population growth goes negative and median age rises, a host of economic and political stresses come to the fore.

#2: A country’s potential GDP growth is a function of population and productivity growth, and nothing else. Chinese policy makers know that the impending decline of the local population must come with significant advances in productivity to assure future growth. While the country has scaled back on its “Made in China 2025” rhetoric, it must continue to invest in disruptive technology to enable future productivity gains. Population growth will soon be an outright negative to the GDP equation.

#3: Unlike China, Japan and Europe, US population growth should remain positive through 2050 and beyond. The US Census Bureau does have a slow decline in percentage terms in their numbers, from 0.70%/year now to 0.40%/year in the out years. That may not seem like much, but it is a notable difference when other major economic centers around the world will be shrinking. Score one more point for favoring US equities, our current (and long-standing) investment position.


Chinese Academy of Social Sciences report:

A New York Times article published just after the report was issued, with more information:

Median Age Projections:

via ZeroHedge News Tyler Durden

Off-Duty Pilot Saved Doomed Lion Air 737 From Nosedive Day Before Deadly Crash

An off-duty pilot hitching a ride in the cockpit jumpseat of a doomed 737 Max 8 last October reportedly saved the plane just one day before it crashed off the coast of Indonesia while being operated by a different crew, killing 189 onboard. 

Lion Air Boeing 737-8 MAX

According to Bloomberg, the ‘dead-head’ pilot on the earlier flight from Bali to Jakarta was able to explain to the crew how to disable a malfunctioning flight-control system by cutting power to a motor driving the nose of the plane down. 

Rescue team members carry wreckage from Lion Air Flight 610 at the Tanjung Priok port in Jakarta, Indonesia, on Thursday. Beawiharta/Reuters

The previously undisclosed detail supports the suggestion that a lack of training is may be at least partially to blame in the March 10 crash of another 727 Max 8

The previously undisclosed detail on the earlier Lion Air flight represents a new clue in the mystery of how some 737 Max pilots faced with the malfunction have been able to avert disaster while the others lost control of their planes and crashed. The presence of a third pilot in the cockpit wasn’t contained in Indonesia’s National Transportation Safety Committee’s Nov. 28 report on the crash and hasn’t previously been reported. –Bloomberg

As we noted last week, several pilots had repeatedly warned federal authorities of the Max 8’s shortcomings, with one pilot describing the plane’s flight manual as “inadequate and almost criminally insufficient.” 

The fact that this airplane requires such jury-rigging to fly is a red flag. Now we know the systems employed are error-prone — even if the pilots aren’t sure what those systems are, what redundancies are in place and failure modes. I am left to wonder: what else don’t I know?” wrote the captain. 

After the Lion Air crash, two U.S. pilots’ unions said the potential risks of the system, known as the Maneuvering Characteristics Augmentation System, or MCAS, hadn’t been sufficiently spelled out in their manuals or training. None of the documentation for the Max aircraft included an explanation, the union leaders said. –Bloomberg

“We don’t like that we weren’t notified,” said Southwest Airlines Pilots Association president Jon Weaks in November. “It makes us question, ‘Is that everything, guys?’ I would hope there are no more surprises out there.” 

In the Lion Air crash, a malfunctioning sensor is believed to have tricked the plane’s computers to force the nose of the plane down to avoid a stall. Following the March 10 crash less than six months later – which followed a “very similar” track to the Lion Air flight, All Boeing 737 Max 8s were grounded by US regulators following dozens of countries and airlines doing so first. 

“After this horrific Lion Air accident, you’d think that everyone flying this airplane would know that’s how you turn this off,” said former FAA accident investigation division director Steve Wallace. 

Meanwhile, investigators are now looking into how the new 737 model was approved. The Transportation Department’s inspector general has begun an inquiry into the plane’s certification, while a grand jury under the US DOJ is also seeking records in a possible criminal investigation of the plane’s certification

“We will fully cooperate in the review in the Department of Transportation’s audit,” said Boeing spokesman Charles Bickers. 

via ZeroHedge News Tyler Durden