May 2022 – Page 242

After the War

Dramatic acts of aggression from a big country against outgunned independents defending their own turf can shock the world’s conscience and trigger fundamental changes to the international order.

The Soviet-engineered communist coup in Czechoslovakia in 1948 and subsequent military blockade of West Berlin led directly to the creation in 1949 of NATO. The 1956 joint invasion of Egypt by the U.K. and France (with an assist from Israel) permanently discredited European colonialism, hastening that foul institution’s already rapid demise. Iraq’s forcible annexation of Kuwait in 1990 prompted George Bush and Mikhail Gorbachev to jointly declare that “no peaceful international order is possible if larger states can devour their smaller neighbors,” a principle they said would be woven into an emerging “new world order.”

That order turned out great for the Kuwaiti monarchy, whose rule was restored after a U.S.-led, 39-country coalition drove Saddam Hussein’s soldiers back into Iraq. But for the rest of the Middle East and North Africa, and even within pockets of comparatively stable Europe, the hoped-for settlement following the end of the Cold War has proven disappointingly disorderly—a missed opportunity to design fresh new international institutions around the imperial withdrawal of both superpowers and the concomitant reassertion of responsible self-governance across the rapidly expanding free world.

Russia’s illegal, unprovoked, and unconscionably brutal assault on its former imperial holding of Ukraine has, within its first month, precipitated head-snapping changes to existing geopolitical realities. Germany kiboshed a long-planned Russian gas pipeline and significantly increased its defense budget overnight. Long-neutral Finland and Sweden started making noises about joining NATO. More refugees were displaced from their homes in a matter of weeks than in all the 1990s Balkan wars combined. Moscow’s armies and armaments, while unforgiving on civilian populations, were revealed to be far less potent against actual combatants than virtually anyone predicted, scrambling conventional strategic calculations. European Union leaders fast-tracked Ukraine for membership, and for the first time agreed to take seriously France’s longstanding proposal to create a meaningful defense alliance separate from the United States.

That Washington was largely a bystander to these developments is neither accident nor trifle. Compared to even three decades ago, the countries on the continent that once produced the world’s most cataclysmic wars are in considerably stronger position to prevent new ones from metastasizing. The resolve of their response suggests a once-in-a-generation opportunity to retool the global order, especially America’s role in it, to make Putinesque acts of aggression more costly and less likely.

President Joe Biden, as unsuited as he may look for the task, has a chance to finally wrap a bow on the Cold War, helping both America and the world become more secure by making the last remaining superpower less responsible for the world’s security. It’s a counterintuitive approach, one that does not fit easily into the parochial and self-centered way foreign policy is usually discussed within American politics. But events have made the improbable possible, lending urgency to a long-term rethink that may yet offer Ukrainians a short-term path toward the existential certainty they have so valiantly earned. The end of this war can, with some bold and agile statecraft, become a hinge point—not just for lasting Ukrainian independence, but for the cause of global peace.

The Politics of Postwar

“At last,” President Woodrow Wilson enthused at a luncheon in Portland, Oregon, in September 1919, “the world knows America as the savior of the world!” That boast would prove premature.

Three times in the 20th century, the United States emerged at the end of a bloody and exhausting global conflict more powerful and less damaged than long-dominant European powers. Washington in each case was in prime position to shape the stuff of postwar settlement—the redrawing of borders, exchange of populations, payment of reparations, resizing and redeployment of troop levels, establishment of new security guarantees, and creation of new transnational institutions to effect these changes and resolve future disputes.

The first time, America’s ambitious and naive aspirations largely (though not completely) fell short; the second time, there was literally no other country remotely prepared to shoulder the burdens of European reconstruction and global containment of imperial communism. The third cessation of conflict was, as we shall see, a zig-zaggy, loose-ended mess, with no domestic or allied political consensus about how international relations might be rearranged.

All three postwar settlements provide us with usable lessons, not least of which is the importance of public opinion on U.S. commitments to overseas entanglements.

Washington in 1918 was a newcomer to great-power status, a latecomer to the war, and brimming with new ideas about how to avoid old problems. Wilson held enough leverage after World War I to extract support among the eye-rolling European allies (England, France, Italy) for his idealistic goals of abolishing secret treaties, carving out nation-states for the long-subjugated peoples of Central and Eastern Europe, and launching his dream project, the League of Nations. But the Democratic president never could get the Republican-led Congress to support the latter, ultimately dooming the proto–United Nations to irrelevance and eventual demise.

Senators opposed the League of Nations on grounds that Article 10, committing signatories to “preserve as against external aggression the territorial integrity and existing political independence of all Members,” might commit the U.S. to military hostilities without the expressed consent of Congress. (This was back when such constitutional obligations were still taken seriously on Capitol Hill.) Wilson hardened this resistance by haughtily refusing to renegotiate the article to reflect those particularly American concerns.

The subsequent GOP administrations of Presidents Warren G. Harding, Calvin Coolidge, and Herbert Hoover kept the League out and the skepticism in. Such was the level of anti-interventionist sentiment throughout the 1930s that President Franklin Roosevelt felt compelled to campaign against entering World War II as late as October 30, 1940, when he promised voters that “Your boys are not going to be sent into any foreign wars,” even while Hitler, Mussolini, and their then-partner Stalin held control over nearly the entirety of continental Europe.

Historians will debate until the end of human memory the role that 1919’s peacemaking played in the warmaking of 1939–45. Surely the global turn away from one of Wilson’s other ideals, free trade, did not spread the peace during the 1930s, nor did the continuation of the European colonialism he abhorred. But neither Wilson nor the other internationalists of that first postwar period had a viable retort to America’s domestic unreadiness to play global cop, nor to the unhappy reality that the traditional powers were still unprepared to talk seriously about transnational security guarantees applicable to small independents.

Those dynamics changed dramatically after World War II. European civilization wasn’t just bloodied. It was pulverized—36 million dead, another 40 million displaced, most big cities reduced to rubble. America, on the other hand, was proud owner by V-E Day of “half the world’s manufacturing capacity, most of its food surpluses and virtually all international financial reserves,” as Tony Judt wrote in his masterful 2005 book Postwar. “The United States had put 12 million men under arms to fight Germany and its allies, and by the time Japan surrendered the American fleet was larger than all the other fleets in the world combined.” The U.S. at that moment also enjoyed monopoly possession of the atomic bomb.

The Soviet Union, that already evil empire which nonetheless had just done the vast majority of Allied killing and dying against the Nazis, had by war’s end made a mockery of its Yalta Conference commitments to allow independent self-determination for the countries of Central Europe. Instead, the occupying Red Army started imposing Stalinism almost everywhere east of Vienna. Struggling countries in the near-starving Western sphere of influence—Greece, Turkey, Italy, France, etc.—were also flirting heavily with socialism and even communism.

By 1946, Moscow and Washington were on a collision course militarily, economically, and ideologically in every corner of the globe, with the rest of the world too bedraggled to do much of anything besides occasionally game the superpower conflict to goose their own civil conflict or colonial detachment. Through wars involving superpower troops (Korea, Vietnam, Afghanistan), proxy armies (China, Greece, Angola), civilian scientists (arms race, space), and spies galore (Berlin), the two sides were already locked in a conflict so all-encompassing that it renders ridiculous any juvenile remark in 2022 about a “new Cold War” with Russia.

This long-game struggle, plus the short-term urgency of helping allies get their sea legs, propelled an absolute frenzy of international institution-building after the war, led at every step by the United States. In a 43-month span beginning in October 1945 there emerged, in order, the United Nations, the World Bank (which financed much European reconstruction), the Truman Doctrine of supporting “free peoples who are resisting attempted subjugation by armed minorities or by outside pressures,” the General Agreement on Tariffs and Trade, the Marshall Plan, and NATO.

Each of these bodies would draw their criticism over time, including in the pages of this magazine. But their combined effect—at a time when America was powerful but not omnipotent, and much of Eurasia was broken but not bowed—was to knit the Western bloc into a common system of currency and payment settlements, freer trade, and security guarantees, all aimed at warding off both realistic and paranoid fears of either Soviet attack or Axis powers revival. As Hastings Ismay, the first secretary-general of NATO, famously said about the alliance in 1952, it was intended “to keep the Russians out, the Americans in, and the Germans down.” Europeans (and the Japanese, South Koreans, and so forth) were being given breathing room to rebuild themselves.

It wasn’t just material conditions that enabled much more aggressive U.S. engagement after World War II than after World War I—it was American public opinion. The Cold War policy of “containment” (as coined and shaped in 1946 by the visionary diplomat George F. Kennan) had lasting bipartisan support among the voting public for the duration, with only a mid-1970s blip after the debacle of the Vietnam War and the exposure of security-state excesses.

In the 11 presidential elections from 1948 to 1988, only once did the unambiguously more dovish major-party presidential candidate win the election—Jimmy Carter in 1976. (Lyndon B. Johnson certainly managed to portray Barry Goldwater as a trigger-happy nuke-loving lunatic, but the president was well underway in kickstarting the aforementioned Vietnam debacle.) In most presidential races, the bigger Cold War hawk won.

Democratic legitimacy was the secret sauce in both the post–World War I withdrawal from European affairs and the post–World War II assumption of vast new responsibilities. In each instance, intentionally or not, U.S. policy was tethered to U.S. public opinion. After the Cold War, those strands began to diverge.

The Unfinished War

“The wars of the past prompted our predecessors to create institutions that are supposed to protect us from war,” Ukrainian President Volodymyr Zelenskyy told a joint session of the U.S. Congress on March 16. “But unfortunately they don’t work; we see it, you see it. So we need new ones, new institutions, new alliances….We propose to create an association, U-24, United for Peace, a union of responsible countries that have the strength and consciousness to stop conflicts immediately, provide all the necessary assistance in 24 hours if necessary, even weapons if necessary. Sanctions, humanitarian support, political support, finances: everything you need to keep the peace.”

Zelenskyy was onto something about the failure of old institutions and the necessity of new ones, and not just for Ukraine’s sake. But how did we get so far from the Bush/Gorbachev 1990 ideal of making gross violations of sovereignty an intolerable offense against the international community?

Regrettably, Washington plays a lead role in this degradation—beginning, paradoxically, with the same Gulf War that once was a model for elevating the principle of sovereignty.

Operation Desert Storm, the first major U.S. military effort since Vietnam, required just 42 days of aerial bombardment and 100 hours of combat operations on the ground before Kuwait’s government was restored. Those much-quicker-than-anticipated results produced an audible American exhalation of relief, as the dreaded “Vietnam Syndrome” of military hesitancy was said to have been exorcised once and for all. Interventionism was no longer a dirty word.

So foreign policy thinkers went lunging for more, in the form of a deceptively named new category of warmaking: the “no-fly zone.” From March 1991 to the onset of a new Iraq War in March 2003, the U.S. and British flew warplanes continuously over more than half of Iraqi airspace, bombing Saddam’s anti-aircraft installations and providing air cover for separatist Kurds in the north and Shiites in the south. It was a remarkable, yet only occasionally remarked-upon, violation of Iraqi sovereignty, softening the ground both literally and figuratively for more reckless uses of force later.

Back home, meanwhile, public opinion quickly soured on foreign adventuring. President George H.W. Bush went from an 89 percent approval rating just after the Gulf War in February 1991 to 44 percent one year later, despite the Soviet Union finally imploding in December 1991. The president on whose watch the communist threat collapsed, South African apartheid was dismantled, and Vietnam Syndrome was expunged received a shock primary challenge from anti-interventionist Pat Buchanan and then a thorough clock-cleaning by a small-state Democratic governor whose internal campaign mantra was “It’s the economy, stupid.”

Americans’ preference for peacemaking over policing coincided happily with the need to negotiate a postwar settlement, not just with Moscow, but with Russia’s former imperial holdings, plus a developing world that was only then starting to embrace reconciliation and liberal democracy in the absence of superpower meddling. There were still borders to draw and ratify, reconstruction to initiate, restitutions to consider, stranded minority populations to protect, troop levels to reset, and—above all else for newly independent countries—security guarantees to establish.

Washington, and the rest of the Western powers, responded to the moment with incoherence.

In fairness to Bush, his successor Bill Clinton, and the leadership of France and the United Kingdom, events on the ground were happening faster than even the most agile of diplomatic bureaucracies could process. German reunification went from impossible to inevitable in just three weeks (much to the initial chagrin of Margaret Thatcher, among others). The duration between the dissolution of the Soviet-dominated Warsaw Pact—the only military alliance in history to be used in combat primarily against its own members—and the dissolution of the Soviet Union itself was a matter of months.

The West did some things right. Political leaders, including from parties of the left, pushed harder in the ’90s on the free trade that had built so much wealth in the noncommunist bloc during the Cold War. Trillions of dollars worth of state-owned companies in Western Europe were privatized; the formerly communist countries mostly transitioned into recognizable market economies (albeit with some corruption involved in the privatization process), and the world overall enjoyed history’s most rapid eradication of extreme poverty. Real per-capita gross domestic product in the Baltic states (Latvia, Estonia, Lithuania) has increased sevenfold in two decades. In most of Latin America and sub-Saharan Africa, Washington retreated considerably from its activist role in influencing political developments.

But on the harder questions of ratifying new borders, coping with disputes over dissolving states, and creating new security arrangements, the West was left standing athwart history, yelling “Slow down!” Still touchy about a resurgent Germany and accustomed to dependency on America, Europe utterly squandered the opportunity to either create a new defensive structure altogether or more firmly take the reins of NATO. As Slobodan Milošević ripped Yugoslavia apart and besieged the once-great European cosmopolis of Sarajevo, officials in Paris, London, and Bonn dithered and bickered. Only the deployment of American warplanes in 1995 stopped the slaughter, reinforcing the fatally flawed notion that the U.S. Air Force was the world’s enforcer of last resort for human rights violations.

In the absence of new continental security guarantees, the nascent democracies in Central and Eastern Europe went knocking on NATO’s door. Initially reluctant to “poke the bear” in Moscow, Clinton (especially in his second administration) began to view the extension of post–World War II institutions as preferable to letting friendly independent countries drift in eternal limbo next to an unstable, nuclear-armed power.

Those Americans opposed to NATO expansion, including a late-in-life Kennan, had a point about the dangers of U.S. triumphalism and Russian paranoia. But long before Clinton warmed up to protecting the Visegrád countries (the Czech Republic, Hungary, Poland, and Slovakia) and the Baltics, Moscow was already monkeying militarily in its “Near Abroad”—the Transnistria region of Moldova in 1992 and Georgia’s Abkhazia region in 1992–93. And the greatest single act of Kennan-friendly post–Cold War diplomacy—the 1994 Budapest Memorandum, in which Ukraine agreed to give up its nuclear weapons in exchange for promises of nonaggression from Russia, the U.S., and the U.K.—was torn up by Putin’s annexation of Crimea in 2014, then pounded into dust on February 24, 2022.

The New Way Out

“Properly understood,” the prominent international-relations scholar Stephen M. Walt wrote in a March 21 Foreign Policy symposium, “the war in Ukraine shows that Europe taking greater responsibility for its security is not only desirable but feasible….The bottom line is that Europe can handle a future Russian threat on its own.”

In May, the European Union is slated to take up France’s longtime dream of creating a continent-only defense apparatus. The Biden administration should do everything in its power to encourage this development, both overtly and behind the scenes.

Swearing off future NATO membership is a core Putin demand in negotiations with Ukraine; Zelenskyy, with evident and understandable reluctance to give a murderous aggressor any reward, has expressed willingness to take NATO aspirations off the table. But that shouldn’t prevent him from working with French President Emmanuel Macron and the assertive new German Chancellor Olaf Scholz right now to line up a nuclear-backed security guarantee that need not involve Washington. The Europeans can in turn press Ukraine (and then Moldova, Georgia, and whoever else) to provide full constitutional protections for Russian-speaking minorities. And having established that hand-off of regional responsibility, America can then encourage Japan and South Korea, for starters, to flex their own muscles in the face of potential Chinese meddling.

Washington has serially underestimated the destabilizing role of its own military supremacy. Starting with the no-fly zones in Iraq, continuing with the herky-jerky interventions in Somalia and Haiti, accelerating in the former Yugoslavia, then exploding in Iraq and Libya, unprovoked unilateral (or thinly multilateral) interventions into the affairs of sovereign countries have been, on balance, a disaster. Iraq and Libya in particular helped destabilize the broader Middle East, kicking off the worst global refugee crisis since World War II, at least until Ukraine.

America’s foreign policy establishment should have greeted the end of the Cold War as an opportunity not only to sew up loose ends in Europe, but also to abandon the Eisenhower Doctrine of effecting regime change and taking quasi-colonial military responsibility for securing the flow of oil in the Middle East. A world that feels like it has no responsibility for its own affairs is less likely to act responsibly. And an America that recognizes no limits to its power is more likely to act in corrupt ways, while encouraging the paranoid and malevolent to affix an ever-larger target on Washington’s back.

Fortunately, American public opinion points to a way out of this cycle. Just as voters trimmed the sails of Wilsonian idealism and then buttressed the containment strategy throughout the Cold War, they have, with the understandable exception of the immediate post-9/11 period, consistently expressed opposition to U.S. interventionism abroad over the past 30 years.

From the demise of communism until 2020, every time the White House changed political parties the winner was always the candidate with the less interventionist foreign policy platform—Bill Clinton in 1992, George W. Bush in 2000, Barack Obama in 2008, Donald Trump in 2016. Both Obama and Trump shocked prognosticators by overcoming heavily favored primary opponents, largely (though not only) on the question of war. Even Joe Biden in 2020 campaigned on getting out of Afghanistan, which he, unlike the putatively anti-interventionist Trump, managed to accomplish, if incompetently.

For decades, interventionists—many of whom have a natural sympathy for the freedom-seeking Ukrainians of the world—shrugged off the massive gap between aggressive U.S. foreign policy and the less ambitious American electorate. John McCain in 2008 could not even fathom what the problem was with the idea of U.S. troops being in Iraq for another 100 years. This was a mistake politically, strategically, and morally.

International institutions without democratic legitimacy cannot long last. Responding to the end of the Cold War by letting post–World War II institutions run on autopilot was a recipe for alienation, giving populists of all stripes a reason to rail against faraway, out-of-touch elites. Biden, and foreign policy analysts of all stripes—interventionists, realists, America firsters—should realize they each have an opportunity to infuse at least some of their core values into a new strategic alignment that a majority of Americans are primed to find more congenial.

Ukrainians, who have aroused the world’s sympathy, have a better chance of being saved today and protected tomorrow by a European-led alliance, as do their cousins in Moldova and Georgia. Taiwan and other potential targets of Chinese expansionism will be more secure in an Asia with a stronger and increasingly responsible Japan and South Korea. The Middle East and North Africa will better be able to resolve their own considerably messy affairs without Washington thumbing the scales for dictatorships such as Saudi Arabia and against victims such as the people of Yemen. By not making the White House the protagonist of every international story, we can begin to correct the chest-thumping politics of “credibility,” in which every distant atrocity is interpreted as a strength-test for the commander in chief.

Realigning foreign policy with domestic preferences requires both unorthodox thinking and forthright public messaging. Instead, we have Joe Biden. On March 26, in a major Warsaw speech about Putin’s war, the malaprop-prone president ad-libbed at the end, “For God’s sake, this man cannot remain in power.” No matter how fast the White House walked back the statement, the impression was solidified in certain corners that the real business of Washington and its alliances is not self-defense, but aggressive, unpredictable regime change. This is not the path toward international peace and stability.

Nor is trade protectionism. In his State of the Union address on March 1, Biden managed to pivot in a few short paragraphs from unified free-world support for Ukraine to calls for autarkist trade and procurement policies. He praised Ukrainians’ “iron will” in one breath, while rejecting Ukrainian iron for American infrastructure projects in the next. Instead of viewing tariff reductions as a mutually reinforcing tool for strengthening the economies of and relations with friendly nations, a core American idea for most of his lifetime, Biden is continuing the 1930s-style populism favored by his predecessor.

There is such a thing as the free world. A wonderful thing it is, too, filled with wealth, untapped capabilities, and a natural empathy for the unfairly attacked. Contrary to Wilson’s missionary zeal, that world does not require a savior, nor does any nation volunteering for such a role get any closer to heaven. Most of America’s grievous mistakes have come from a place of paternalism; most of its redemption will come from having the faith to let its friends figure things out on their own.

Russia, in one short month, has revealed itself to be a Potemkin power with nukes, willing to commit mass murder and accelerate toward full dictatorship in order to fulfill unrequited nationalist fantasies about reassembling some of its lost empire. There is even less sympathy for Moscow now than there was in 1991, but there should also be much less fear. If lowly Ukraine can battle Putin to an expensive stalemate, imagine how he’d fare against Poland, let alone a robust European defense community anchored by France and Germany. The United States need not be anything more than a bit player in that story.

The post After the War appeared first on Reason.com.

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Blain: The Russian & Chinese Crises Facing Markets Are Of Different Magnitudes

Authored by Bill Blain via MorningPorridge.com,

“Contradiction and struggle are universal and absolute, but the methods of resolving contradictions, that is, the forms of struggle, differ according to the differences in the nature of the contradictions.”

Ultimately the economic history books will record Russia’s invasion of Ukraine as a speedbump, and perhaps a triumph for a United Europe. The consequences of an Economic War with China could be much, much more significant!

The locus of market attention is no longer Ukraine – its China. The Middle Kingdom’s questionable lockdown strategies are raising a host of consequences and implications that are moving markets as strongly as Russia’s invasion of Ukraine did in February.

Last week, markets tanked as new China lockdowns were enacted. It’s likely more restrictions will follow further stressing supply chains. Yet, it’s no longer really about Covid. It’s about the post-Covid, new geo-political economic future – and where we all fit in on that. Russia will likely prove a historical blip. In contrast, China will likely prove a much larger and longer-term headache for markets and the global economy.

Let’s compare and contrast the two crises:

Russia

Ukraine has highlighted the abject failure of the Europe’s long-term energy security. It’s triggered a wave of inflation leaving central banks ill-equipped to tackle a real-world crisis that requires enormous infrastructure build out and investment – when their only tools are questionable monetary policies like a few points on interest rates or renewed QE. It’s created a wave of food instability that will trigger further consequences across the Emerging Markets.

The critical point is – Europe will likely deal with the challenge. In simple economic terms Europe crushes Russia. Militarily – the events of the last 60 days demonstrate we have less to fear than we thought. Europe benefits from the support of its Allies, primarily the US, and is a major economic block in its’ own right.

The EU’s economic stability is two-fold. Partly it depends on the domestic politics of each nation gains from supporting common purpose – something we Brits simply didn’t understand or accept. The signs are good after Europe quickly came together following the invasion. But, it also depends (in part) on the ECB holding the fraxious tribes of Europe united within the Euro.

The ECB is a hybrid – it’s a political central bank. Don’t bet against the ECB bending over to enable solutions, compromises and accommodations. I has to – and its fortunate its last two Presidents have proved accomplished politicians. The monetary politics of Europe will remain convoluted, messy and probably not without many challenges. Its’ not without risk, but I will bet on Europe succeeding rather than Russia.

Be realistic about Russia:

Yes, it has the potential to become a rogue nuclear power.
But, Russia is not a long-term economic threat.

It is not a significant economic force. 30 years of political failure and the emergence of the Putin Kleptocracy since the breakup of the USSR leaves Russia ineffective – except in non-human resources. It’s increasingly obvious it shot its bolt at Ukraine, where its armed forces have been found wanting. Its spiralling demographic decay will leave it will be irrelevant in a few decades. But it has to be crushed today to restore economic stability to Europe.

Putin chose this war. Russians will pay the price, but they are not stupid. When Putin is gone, sooner or later, the next Russian Warlord, or the one after that, will realise re-engagement with the West is in his (or her) personal interest, blame it all on Putin, and try to rescue what they can as they get hit for war reparations.

I suspect Russia will then open up to global markets, where global players will squabble about how to divvy up its vast mineral and commodities reserves. The mistakes of the oligarch era will not be repeated – Russia will undoubtedly find new ways to screw themselves up. Without minerals, oil and gas – Russia would be utterly irrelevant – and they know it.

Nobody to blame but themselves.

China

China is anything but economically insignificant. But it is in crisis.

Russia we recognise as vaguely European. China is not. Its different. Yet, essentially it faces much the same problems as the West. Its been an investment disaster these past two years, and many analysts now say China is uninvestible. It feels that way looking at my portfolio. That’s why its worth looking again.

The immediate China problem is about the very nature of global trade itself. With China closed, all the consumables, materials, products and widgets the West relies on – our iPhones, Telsas, parts and a host of other “goods” will become largely unavailable. Broken supply chains have triggered massive debates on how the west can regain control of its economic future – which is hardly optimal in service led economies that depend on imports.

Yet, China faces much the same problems as the West has faced. It is struggling with the consequences of Covid Lockdowns. Externally, these will damage global trade. Internally, China has a host of problems to deal with – the over-importance of the ailing property sector, recurrent banking instability, and now the consequences of the overblown punishment of its leading big tech firms damaging its outlook – the mini-cultural revolution the crackdown was will hardly going to inspire the next generation of tech entrepreneurs.

There are some great comments in Robert Armstrong’s FT piece this morning China’s Impossible Trilemma: “China can’t lock down, hit its growth target, and stop buying growth with debt all at the same time..”

President Xi will no doubt secure his third term as Emperor, but he’ll be acutely aware that the CCP relies on a compact with the populace to deliver jobs, prosperity and peace. Break that and social tensions rise. (No such compact exists in Russia.) He’s aware that balance would be profoundly upset by an economic strike against China – the effects of the weaponization of the dollar will not have gone unnoticed in Beijing. He’ll also have noticed the actute underperformance of the Red Army, and wondered what that means for China, where the PLA’s cadres work on essentially the same basis of top-down authority. He’ll understand China’s future prosperity would benefit from continuing to sell 70% of the goods offered on Amazon, and access for Chinese consumers to Western goods.

Xi has the opportunity to avoid the mistake Putin walked into – giving the West the excuse to crush his economy.

Perversely, the main Economic threat to China is not how it interacts with the West, but how the West perceives it.

China is seen to clearly favour Russia over Ukraine, therefore it’s perceived as a clear enemy. Many other nations have also declared themselves neutral, but are favouring Russia (many because of perceived threats by America), but we are still trying to woo them. India, the Gulf and others are perceived in a different light to China. There are trade and geopolitical reasons – like oil – we do so.

But the Western narrative – the one you can read in the press – is about hostility. It treats both Russia and China as clear threats. Both as painted as Enemies of the West. That’s a massive danger. The iteration of the famous Thucydides Trap – where the world’s leading power will inevitably go to war with the emerging power threatening its position – seems more and more likely to be fulfilled.

War with China would be significant, and the economic consequences a couple of magnitudes higher than war with Russia. Let’s not go there.

Let’s look for the optimal economic outcomes instead – which remain achievable. The Chinese leadership are not stupid and we can assume they see the long-game.

I’m not so sure I can same the same for Washington. That’s a serious point – not a Blain jest. Will US politicians be able to see past their partisan lines and spot the opportunities for peace and growth when gridlock dominates and their primary concern is to rubbish each other..? Negotiating with China is not about headlines but long-term. Think Go/Weichi rather than the noughts and crosses Trump thought he was winning as he blagged about trade negotiations.

The World is an imperfect place.

The stories coming out of China on the horrific lockdowns magnify the narrative – killing household pets, quarantine, dynamic clearing of covid suspects (confirming its now a crime to be ill in China), are one aspect of the negative narrative. Economically, its about blocked ports, the unreliability of the economic data, and broken internal supply chains (as lorry drivers can’t move) – all reinforcing the view China is failing to cope with Covid. And, some of the newspapers can’t resist spicing up the story with how China is now reaping the rewards of the global virus it unleashed on the world.

Forget the narrative. Look at reality.

Tyler Durden
Mon, 05/02/2022 – 05:00

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Brickbat: The Slammer

The Tallahassee, Florida, police department has placed Officer Shawn Wright on leave after video showed him picking a man up and slamming him to the ground head first. The department said the man, who was reportedly unhurt, was involved in a minor traffic collision and left the scene. Video showed he pulled away from officers when they tried to arrest him. He was charged with leaving the scene of an accident with property damage and resisting an officer without violence. Both are misdemeanors.

The post Brickbat: The Slammer appeared first on Reason.com.

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Hungary Throws EU Neighbors Under The Bus, Says 10 Nations Technically Buying Gas-For-Rubles From Putin

The Ruble has ‘mysteriously’ surged to six-month highs against the dollar (and even stronger relative to the Euro) over the last few weeks since Russian President Putin demanded Rubles-for-Gas…

But now, Hungarian Prime Minister Viktor Orban’s chief of staff, Gergely Gulyas, appears to have spilled the beans on what is really going on among the Russia-dependent European nations.

Gulyas told public radio on Sunday that while multiple European leaders have publicly proclaimed they won’t comply with Putin’s demand that they buy Russian gas in rubles, 10 EU countries are technically going along with Putin’s plan.

It is unclear which EU countries Guylas was referring to. Russian energy giant Gazprom has already shut off supplies to Poland and Bulgaria after both refused to pay in rubles, but a Bloomberg report last week stated, as Gulyas did, that 10 of the bloc’s member states have already set up accounts with Gazprombank, and four have actually paid for Russian gas using this mechanism.

On Thursday, EU officials confirmed that any company agreeing to open a rouble account in Russia and pay for gas that way would be in breach of sanctions, but as The Guardian detailed last week, there could be a loophole.

According to further guidance issued by the EU last week, the Kremlin’s decree does not stop gas importers asking Gazprom to agree the purchase is legally complete once the first payment, in euros or dollars, has been deposited at Gazprombank.

Any conversion into roubles would take place thereafter, meaning the buyer would not technically have breached sanctions. Another option, the guidance says, is for buyers to make a public declaration that they consider the purchase complete once their dollar or euro payment is made. The only obstacle to this, according to the guidance, is the need for “confirmation from the Russian side” that all of this complies with decree 172.

In other words, Gazprom – or effectively the Kremlin – has to be onboard. Gazprom and Gazprombank are not subject to EU sanctions, so buyers are permitted to negotiate such labyrinthine proposals without breaching sanctions.

Tactics like these appear to be what the likes of OMV and Uniper are examining. Uniper said it was looking into “concrete payment modalities” that would allow it to pay while complying with sanctions.

This apparent legal loophole significantly clouds the picture over the true nature of compliance with Putin’s demand. For instance, responding to reports that OMV was preparing to make rouble payments, the Austrian chancellor, Karl Nehammer, insisted this was not the case.

Gulyas said that Hungary has opened a euro account with Russia’s Gazprombank, which then converts payments into rubles before transferring them to suppliers in Russia. This system, as The Guardian explains, allows European buyers to comply with Putin’s demand, made in late March, that “unfriendly” countries switch to Russia’s national currency to buy its natural gas.

“There are nine other countries using the same payment scheme,” said Gulyas, adding that “there should be no doubt in anyone’s mind that countries importing raw materials from Russia use exactly the same method to pay for Russian gas.”

So, as Gulyas confirmed, while numerous nations are exploiting this loophole to go along with Putin’s demands, these countries’ leaders will never it, in order to ensure they are seen as “being a good European.”

“…because today the idea of being a good European also means that the leaders of those countries are not honest when speaking either in the international arena or to their own people, the other nine countries won’t say that they are doing the same thing.”

Let the denials begin…

Tyler Durden
Mon, 05/02/2022 – 04:15

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Brickbat: The Slammer

The post Brickbat: The Slammer appeared first on Reason.com.

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Buchanan: Will Putin Submit To US-Imposed ‘Weakening’?

Authored by Pat Buchanan,

“Once war is forced upon us, there is no alternative than to apply every available means to bring it to a swift end. War’s very object is victory — not prolonged indecision.”

So said Gen. Douglas MacArthur in his April 1951 address to Congress after being fired by President Harry Truman as commander in chief in the Korean War.

And what is now America’s goal with our massive infusion into the Ukraine war of new and heavier NATO weapons?

Said Defense Secretary Lloyd Austin on his return from a Sunday meeting in Kyiv with President Volodymyr Zelenskyy:

The United States wants “to see Russia weakened to the point where it can’t do things like invade Ukraine.”

“Russia,” said Austin, has “already lost a lot of military capability and a lot of its troops … and we want to see them not have the capability to very quickly reproduce that capability.”

Thus, the new, or newly revealed, goal of U.S. policy in Ukraine is not just the defeat and retreat of the invading Russian army but the crippling of Russia as a world power.

The sanctions imposed on Russia and the advanced weapons we are shipping into Ukraine are not only to enable the country to preserve its independence and territorial integrity but also to inflict irreversible damage on Mother Russia.

Putin’s Russia is not to recover soon or ever from the beating we intend to administer, using Ukrainians to deliver the beating, over an extended period of time.

Turkish Foreign Minister Mevlut Cavusoglu has seen through to the true objectives of some NATO allies:

“There are countries within NATO that want the Ukraine war to continue. They see the continuation of the war as weakening Russia. They don’t care much about the situation in Ukraine.”

But to increase steadily and substantially the losses to Russia’s economy, as well as its military, the war must go on longer.

And a long war translates into ever-greater losses to the Ukrainians who are alone in paying the price in blood of defeating Russia.

Is Austin committed to fighting this war to the last Ukrainian?

How many dead Russian soldiers — currently, the estimate of Russian losses is 15,000 of its invasion force — will it take to satisfy Austin and the Americans?

To achieve, say, a loss of 50,000 dead Russians, how many Ukrainians would have to lose their lives as well? How many Ukrainian cities would have to share the fate of Mariupol?

Clearly, the Joe Biden-Lloyd strategy of indefinitely bleeding Russia contradicts MacArthur’s dictum: “War’s very object is victory — not prolonged indecision.”

Does a war to bleed the other side to death also contradict the moral conditions for a just war?

Then there are the practical considerations.

When we say we will so weaken Russia that it cannot threaten its neighbors again, we are talking about conventional weapons and power.

Nothing done in Ukraine in this two-month war has diminished the Russian arsenal of 6,000 nuclear weapons, the world’s largest stockpile.

And the more we destroy Russian conventional power, the more we force Moscow to fall back onto its ace in the hole — nuclear weapons.

Asked Tuesday about the risk of a nuclear war emanating from the conflict, Russian Foreign Minister Sergei Lavrov replied.

“The risks now are considerable. I would not want to elevate those risks artificially. Many would like that. The danger is serious, real. And we must not underestimate it.”

Putin put it this way:

“If anyone sets out to intervene in the current events from the outside and creates unacceptable threats for us that are strategic in nature, they should know that our response will be lightning-fast …

“We have all the tools for this that no one else can boast of having. … We’ll use them if needed. And I want everyone to know that.”

Tactical nuclear warheads aboard hypersonic missiles would seem to fit precisely what Putin was describing.

Which raises the question:

Will Putin accept a U.S.-induced permanent reduction in Russia’s standing as a great nation? Or would Russia resort to weapons that could avoid that fate and avoid as well the long and debilitating “forever war” some Americans want to impose on his country?

If we are going to bleed Russia into an irreversible strategic decline, is Putin a ruler of the mindset to go quietly into that good night?

Are Putin & Co. bluffing with this implied nuclear threat?

When Georgia invaded South Ossetia in 2008, Putin’s Russian army reacted instantly, ran the Georgians out and stormed into Georgia itself.

When the U.S. helped to overthrow the pro-Russian government in Kyiv in 2014, Russia plunged in and took Crimea, the Sevastopol naval base, and Luhansk and Donetsk.

When Ukraine flirted with joining NATO and Biden refused to rule out the possibility, Putin invaded in February.

When he warns of military action, Putin has some credibility.

And in this talk of using tactical atomic weapons to prevent the defeat, humiliation and diminution of Russia itself, is Vladimir Putin bluffing?

Tyler Durden
Mon, 05/02/2022 – 03:30

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The Countries Committing The Most Of Their GDP To Ukraine Aid

While not directly intervening in the war in Ukraine so far, countries in Europe and the United States have been contributing to the defence of Ukraine via financial, humanitarian and military aid. In absolute terms, the largest supporter as of March 27 was the United States, with a total of €7.6 billion made up of €3.2 billion in humanitarian aid and €4.4 billion in military aid.

But as Statista’s Martin Armstrong shows in the infographic below, using Kiel Institute for the World Economy data, when it comes to a country’s commitment in relative terms, no country came close to Estonia in the first four weeks of the war – its contribution of €0.22 billion in military aid equates to 0.8 percent of the country’s GDP.

You will find more infographics at Statista

The United States’ financial input up to this point was equivalent to 0.04 percent of its economic output.

Worth noting is that the indirect aid sent by countries such as Germany, France and Italy via the EU is not taken into account for these individual assessments. The source states that EU institutions have contributed €1.4 billion and a further €2 billion is attributed to the European Investment Bank.

Tyler Durden
Mon, 05/02/2022 – 02:45

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Decentralized And Neutral

Authored by Hans-Hermann Hoppe via The Mises Institute,

States, regardless of their constitution, are not economic enterprises. In contrast to the latter, states do not finance themselves by selling products and services to customers who voluntarily pay, but by compulsory levies: taxes collected through the threat and use of violence (and through the paper money they literally create out of thin air). Significantly, economists have therefore referred to governments—i.e., the holders of state power—as stationary bandits.

Governments and everyone on their payroll live off the loot stolen from other people. They lead a parasitic existence at the expense of a subdued and “host” populace.

A number of further insights emerge from this.

Naturally, stationary bandits prefer larger loot to smaller loot. This means that states will always try to increase their tax revenue and further increase their spending by issuing more paper money. The larger the loot, the more favors they can do for themselves, their employees, and their supporters. But there are natural limits to this activity.

On the one hand, the bandits have to be careful not to burden their “host,” whose work and performance make their parasitic existence possible, so much that the latter stops working. On the other hand, they have to fear that their “hosts”—and especially the most productive among them—will migrate from their dominion (territory) and settle elsewhere.

Against this background, a number of historical tendencies and processes become understandable.

First of all, it becomes understandable why there is a tendency towards territorial expansion and political centralization: with this, states succeed in bringing more and more “hosts” under their control and making it more difficult for them to emigrate to foreign territories. This is expected to result in a larger amount of loot. And it becomes clear why the end point of this process, the establishment of a world state, would by no means be a blessing for all mankind, as is often claimed. Because one cannot emigrate from a world state, and in this respect there is no possibility of escaping state looting by emigration. It is therefore to be expected that with the establishment of a world state, the scope and extent of state exploitation—indicated, among other things, by the level of state income and expenditure, by monetary inflation, the number and volume of so-called public goods and persons employed in the “public service”—will continue to increase beyond any previously known level. And that is certainly not a blessing for the “host population” that has to fund this state superstructure!
Secondly, a central reason for the rise of the “West” to become the world’s leading economic, scientific, and cultural region becomes understandable. In contrast to China in particular, Europe was characterized by a high degree of political decentralization, with hundreds or even thousands of independent dominions from the early Middle Ages up until the recent past. Some historians have described this state of affairs as “orderly political anarchy.” And it is now common among economic historians to see in this quasi-anarchic state a key reason for the so-called European miracle. Because in an environment with a large variety of independent, small-scale territories in the immediate vicinity of each other, it is comparatively easy for the subjects to vote with their feet and escape the robberies of state rulers by emigration. To avert this danger and to keep local producers in line, these rulers are constantly under great pressure to moderate their exploitation. And this moderation, in turn, promotes economic entrepreneurship, scientific curiosity, and cultural creativity.
Finally, in the light of the above considerations, a well-founded historical classification and assessment of the European Union (EU) is possible.

The EU is a prime example of the aforementioned tendency towards territorial expansion and political centralization, with the resulting consequences: an increase in exploitative state measures and a corresponding growth in the parasitic state superstructure (keyword: Brussels).

More concretely: the EU and the European Central Bank (ECB) are the first step towards the establishment of a European superstate, which should eventually merge into a one-world government dominated by the USA and its central bank, the Federal Reserve. Contrary to euphonious political pronouncements, the EU and the ECB have never been about free international trade and competition. You don’t need thousands and thousands of pages of paper for this, full of ordinances and regulations! Rather, it was always and above all a matter of harmonization of the tax, legal, and regulatory provisions of all member states in order to reduce or eliminate all economic location competition in this way. Because if the tax rates and state regulations are the same everywhere or are increasingly being aligned, then there are fewer and fewer economic reasons for productive people to relocate their activities to another location, and the stationary bandits can be all the more undisturbed and therefore continue in their activity of taking and distributing booty.

In addition, the current EU, as a cartel of various governments, only holds together as long as the wealthier bandits, who can draw on a more productive “host population,” above all the German governments, are willing and able to support their needier counterparts in the south and east, with their less productive “hosts,” on a permanent and large scale. And all at the expense of local producers!

In sum, the EU and the ECB are moral and economic monstrosities. You cannot consistently penalize productivity and economic success while rewarding parasitism, waste, and economic failure without causing disaster. The EU will tumble from one economic crisis to the next and eventually disintegrate.

In view of this, it seems urgent to gain a clear idea of possible alternatives to the current course of increasing political centralization. And the memory of the aforementioned “European miracle” should point the way to proceed. Radical decentralization is required for Europe to thrive. Instead of the EU and the ECB, what is needed is a Europe made up of thousands of Liechtensteins and Swiss cantons, linked by free trade and an international gold standard and competing to keep and attract productive people with attractive locational conditions.

However, in order to make this situation not only conceivable, but feasible, it is necessary that states and politicians are no longer regarded as what they claim to be, but as what they actually are: stationary bandits, gangsters and crooks. Until recently, this insight was unthinkable for the overwhelming majority of the population. But the coronavirus regime over the last two years, with its arbitrary and absurd bans on going out, contact, and assembly, and its constantly changing test, certificate, and vaccination regulations, including compulsory vaccinations, has meanwhile caused a great many politicians to be regarded as heavily armed and unscrupulous violent criminals.

* * *

PS: Do the current military events in Ukraine require a revision or correction of the above analyses?

On the contrary.

First of all, it is not the Russians, the Ukrainians, the Germans, or the Americans who cause wars, but the bandit gangs that rule Russia, Ukraine, Germany, and America and who can pass on the costs of a war to the civilian population in question.

Then, small states or bandit gangs only wage small wars against small opponents. Large states, on the other hand, which emerged from successful earlier small wars, are generally more warlike and wage not only small but also larger wars against large opponents. And the largest and most powerful of all states, the USA, and its vassal states assembled in NATO (the North Atlantic Treaty Organization), is the most keen on war and expansion. That alone is a reason for small states and decentralization.

Finally, when a smaller state is faced with the expansionist drive and threat of a larger one, it basically has two options: It can submit. Or it can try to maintain its independence. And in order to achieve this goal and avoid war or minimize the risk of war, there is only one promising recipe: neutrality. One does not interfere in the internal affairs of the great power, and one does not threaten or provoke it. Even a great power cannot simply invade another country. For this always requires justification to its own population, which has to bear the burden of a war. And the smaller a state, the more difficult it is to portray its behavior as a threat or a provocation. (Who feels threatened by Liechtenstein?!) And this imperative of neutrality applies all the more when, as in the case of Ukraine, you are faced with two major powers with rival claims at the same time and taking the side of one means an additional threat for the other. The current war is the result of multiple violations of this rule by the government of Ukraine. If the government that came to power in a US-orchestrated coup in 2014 had expressly refrained from joining NATO and the EU, like Switzerland did, and the two then breakaway Russian-speaking provinces in the east of the country would have been let go instead of bullied and terrorized, the potential threat to Russia would have been reduced and the present catastrophe would almost certainly not have occurred. Under sustained US pressure, combined with their own audacity, the Ukrainian ruling clique did nothing of the sort and continued to demand NATO membership. This would have extended the US military presence right up to the borders of greater Russia, which had been declared an enemy state. Therefore, no one could doubt that the behavior of the Ukrainian government would be perceived by the Russian side as a tremendous provocation and a serious threat. The actual result of this provocation, which is now available, was not foreseeable, but it was quite foreseeable that one’s own behavior would also make a Russian reaction like the one that actually took place more likely. In the war in Ukraine, as so often in history, Putin does not have just one father, but several. The completely one-sided anti-Russia hysteria and agitation that is currently widespread in the West is therefore not only factually incorrect, but is primarily intended to distract from the West’s own role in the current drama. And it is meant to make us forget that the United States and its NATO vassals have been responsible for far more war casualties and war damage over the past thirty years than Russia has since the collapse of the Soviet Union and currently in Ukraine.

Tyler Durden
Mon, 05/02/2022 – 02:00

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Gordon Chang: What To Do About China

Authored by Gordon Chang via The Gatestone Institute,

Since about 2018, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory, part of the People’s Republic of China. This means that China considers those heavenly bodies to be like the South China Sea. This also means that China will exclude other nations from going to the moon and Mars if they have the capability to do so. We do not have to speculate about that: Chinese officials say this is what they are going to do.
[W]hen Biden says, “Oh, the Chinese just want to compete with us,” he is wrong. They do not want to “compete” within the international system. They do not even want to change that system… They want to overthrow it altogether, period.
Is Xi Jinping really that bold… to start another war? … First, China considers the United States to be its enemy. Second the United States is no longer deterring China. China feels it has a big green light to do whatever it wants.
We Americans don’t pay attention to propaganda… After all, these are just words. At this particular time, these words… [suggest] to me that China is laying the justification for a strike on the United States. We keep ignoring what Beijing is saying. We kept ignoring what Osama bin Laden was saying.
We have to remember that the Chinese regime, unlike the Japanese, always warn its adversaries about what it is going to do
The second reason war is coming is that America’s deterrence of China is breaking down.
Di’s message was that with cash, China can do anything it wants, and that all Americans would take cash. He mentioned two words in this regard: Hunter Biden.
In February, [Biden] had a two‑hour phone call with Xi Jinping. By Biden’s own admission, he didn’t raise the issue of the origins of COVID‑19 even once. If you are Xi Jinping, after you put down the receiver, your first thought is, “I just got away with killing hundreds of thousands of Americans.”
We have news that China is building something like 345 missile silos in three locations: in Gansu, Xinjiang, and in Inner Mongolia. These silos are clearly built to accommodate the DF‑41. The DF‑41 has a range of about 9,300 miles, which means that it can reach any part of the United States. The DF‑41 carries 10 warheads. This means that China could, in about two years…, have a bigger arsenal than ours. …we have to assume the worst because Chinese leaders and Chinese generals, on occasion, unprovoked, have made threats to nuke American cities.
In July, 2021 China tested a hypersonic glide warhead, which circled the world. This signals China intends to violate the Outer Space Treaty, to which China is a party.
As of today, more than eight million people have died outside China. What happened? No one imposed costs on China.
For at least a half‑decade, maybe a little bit longer, Chinese military researchers have been openly writing about a new type of biological warfare….They talk about a new type of biological warfare of “specific ethnic genetic attacks.” In other words, pathogens that will leave the Chinese immune but sicken and kill everybody else, which means that the next disease from China can be a civilization killer.
A lot of military analysts talk about how the first seconds of a war with China are going to be fought in outer space. They are going to blind our satellites, take them down, do all sorts of stuff. Those statements are wrong. The first day of war against the United States occurs about six months earlier, when they release pathogens in the United States. Then we are going to have that day in space. The war starts here, with a pathogen ‑‑ a virus, a microbe, a bug of some kind. That is where it begins.
The One‑China policy is something many people misunderstand. Probably because Beijing uses propaganda to try to fuzzy up the issue…. China has a One‑China principle: that Taiwan is part of the People’s Republic of China, full stop. We have a One‑China policy…, that the status of Taiwan is unresolved…. that the resolution of the status of Taiwan must be with the consent of people on both sides of the Strait.
We need a policy of “strategic clarity,” where we tell China that we will defend Taiwan. We also say we will extend a mutual defense treaty to Taiwan if it wants it, and we will put American troops on the island as a tripwire.
We are Americans. We naturally assume that there are solutions, and good solutions, to every problem. After three decades of truly misguided China policy, there are no … solutions that are “undangerous.” …The current trend of policy is unsustainable. There will be no American republic if we continue to do what we are currently doing and if we continue to allow China to do what it does. I do not think that enforcing a trade deal will start World War III.
China has not met its obligations. As of a few months ago, China had met about 62% of its commitments….. We should be increasing the tariffs that President Trump imposed under Section 301 of the Trade Act of 1974. Remember, those tariffs are meant to be a remedy for the theft of US intellectual property. China has continued to steal US IP. As matter of fact, it has gotten worse…
I do not think that we should be trying to foster integration of Wall Street into China’s markets…. Do not take it from me, just look at their failure to comply with very simple, easy‑to‑comply-with requirements. It was a mistake.
The best response would be if we hit them with everything at once because China right now is weak. If we were going to pick the number one thing to do, I would think trade.
China now has a debt crisis, so they are not going to invest their way out of this crisis, which means the only way they can save their economy is net exports. We should stop buying their stuff.
China has bought the political establishment in the Solomon Islands, except for one brave man named David Suidani. Recently, somebody got the bright idea of publishing all of the specific payments that Beijing has made to Solomon Islands politicians…. We should be doing this with payments to American politicians, we should be doing this across the board.
What bothers me is that, although their assumptions about China have demonstrably been proven wrong, American policymakers still continue with the same policies. There is, in some people’s mind, an unbreakable view that we have to cooperate with China…. This is what people learn in international relations school when they go to Georgetown, and they become totally stupid.
Clearly, Nike and Apple and other companies are now, at this very moment, trying to prevent Congress from enacting toughened rules on the importation of forced‑labor products into our country.
Moreover, the Chinese regime is even more casualty‑averse than we are. Even if Beijing thinks it can take Taiwan by force, it is probably not going to invade because it knows an invasion would be unpopular with most people in China. It is not going to risk hundreds of thousands of casualties that would result from an invasion.
Unfortunately…, we taught the Chinese that they can without cost engage in these dangerous maneuvers of intercepting our planes and our ships. That is the problem: because as we have taught the Chinese to be more aggressive, they have been.
[W]e should have made it clear to the Chinese leadership that they cannot kill Americans without cost. Hundreds of thousands Americans have been killed by a disease that China deliberately spread. From October 2020 to October 2021, more than 105,000 Americans died from fentanyl — which China has purposefully, as a matter of state and Communist Party policy — sold to Americans… we have to change course.
I would close China’s four remaining consulates. I would also strip the Chinese embassy down to the ambassador and his personal staff. The thousands who are in Washington, DC, they would be out.
I would also raise tariffs to 3,600%, or whatever. This is a good time to do it. We have supply chain disruptions. We are not getting products from China anyway. We can actually start to do this sort of stuff.
I would… just hammer those guys all the time verbally. People may think, “Those are just words.” For communists, words are really important, because they are an insecure regime where propaganda is absolutely critical.
I would be going after the Communists on human rights, I would be going after them on occupying the South China Sea, on Taiwan, unrelentingly — because I would want to show the world that the United States is no longer afraid of China…. State Department people, they are frightened. We need to say to the Chinese regime, like Dulles, “I’m not afraid of you. I’m going after you, and I’m going to win.”

Is Xi Jinping really that bold… to start another war?…

First, China considers the United States to be its enemy.
Second the United States is no longer deterring China.

China feels it has a big green light to do whatever it wants.

All the conditions for history’s next great war are in place. Jim Holmes, the Wiley Professor at the Naval War College, actually talks about this period as being 1937.

1937 was the year in which if you were in Europe or America, you could sense the trouble. If you were in Asia in 1937, you would be even more worried, because that year saw Japan’s second invasion of China that decade.

No matter where you lived, however, you could not be sure that the worst would happen, that great armies and navies around the world would clash. There was still hope that the situation could be managed. As we now know, the worst did happen. In fact, what happened was worse than what anyone thought at the time.

We are now, thanks to China, back to 1937.

We will begin our discussion in Afghanistan. Beijing has had long‑standing relations with the Afghan Taliban, going back before 9/11, and continuing through that event.

After the US drove the Taliban from power and while it was conducting an insurgency, China was selling the group arms, including anti‑aircraft missiles, that were used to kill American and NATO forces.

China’s support for killing Americans has continued to today. In December 2020, Indian Intelligence was instrumental, in Afghanistan, in breaking up a ring of Chinese spies and members of the Haqqani Network. The Trump administration believed that the Chinese portion of that ring was actually paying cash for killing Americans.

What can happen next? We should not be surprised if China gives the Taliban an atomic weapon to be used against an American city. Would they be that vicious?

We have to remember that China purposefully, over the course of decades, proliferated its nuclear weapons technology to Pakistan and then helped Pakistan sell that Chinese technology around the world to regimes such as Iran’s and North Korea’s.

Today, China supports the Taliban. We know this because China has kept open its embassy in Kabul. China is also running interference for the Taliban in the United Nations Security Council. It is urging countries to support that insurgent group with aid. It looks as if the Taliban’s main financial backers these days are the Chinese.

Beijing is hoping to cash in on its relationship in Central Asia. Unfortunately, there is a man named Biden, who is helping them.

In early August, Biden issued an executive order setting a goal that by 2030, half of all American vehicles should be electric‑powered. To be electric‑powered, we need rare earth minerals, we need lithium. As many people have said, Afghanistan is the Saudi Arabia of rare earths and lithium.

If Beijing can mine this, it makes the United States even more dependent on China. It certainly helps the Taliban immeasurably.

Unfortunately, Beijing has more than just Afghanistan in mind. The Chinese want to take away our sovereignty, and that of other nations, and rule the world. They actually even want to rule the near parts of the solar system. Yes, that does sound far‑fetched, but, no, I’m not exaggerating. Chinese President Xi Jinping would like to end the current international system.

On July 1, in a landmark speech, in connection with the centennial of China’s ruling organization, he said this: “The Communist Party of China and the Chinese people, with their bravery and tenacity, solemnly proclaim to the world that the Chinese people are not only good at taking down the old world, but also good in building a new one.”

By that, China’s leader means ending the international system, the Westphalian international system. It means he wants to impose China’s imperial‑era notions of governance, where Chinese emperors believed they not only had the Mandate of Heaven over tianxia, or all under Heaven, but that Heaven actually compelled the Chinese to rule the entire world.

Xi Jinping has been using tianxia themes for decades, and so have his subordinates, including Foreign Minister Wang Yi, who in September 2017 wrote an article in Study Times, the Central Party School’s influential newspaper.

In that article, Wang Yi wrote that Xi Jinping’s thought on diplomacy ‑‑ a “thought” in Communist Party lingo is an important body of ideological work ‑‑ Wang Yi wrote that Xi Jinping’s thought on diplomacy made innovations on and transcended the traditional theories of Western international relations of the past 300 years.

Take 2017, subtract 300 years, and you almost get to 1648, which means that Wang Yi, with his time reference, was pointing to the Treaty of Westphalia of 1648, which established the current system of sovereign states.

When Wang Yi writes that Xi Jinping wants to transcend that system, he is really telling us that China’s leader does not want sovereign states, or at least no more of them than China. This means that when Biden says, “Oh, the Chinese just want to compete with us,” he is wrong. They do not want to “compete” within the international system. They do not even want to change that system so it is more to their liking. They want to overthrow it altogether, period.

China is also revolutionary with regard to the solar system. Since about 2018, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory. In other words, as part of the People’s Republic of China. This means that China considers those heavenly bodies to be like the South China Sea: theirs and theirs alone.

This also means that China will exclude other nations from going to the moon and Mars if they have the capability to do so. We do not have to speculate about that: Chinese officials say this is what they are going to do.

Let us return to April 2021. Beijing announced the name of its Mars rover. “We are naming the Mars rover Zhurong,” the Chinese said, “because Zhurong was the god of fire in Chinese mythology, ” How nice. Yes, Zhurong is the god of fire. What Beijing did not tell us is that Zhurong is also the god of war—and the god of the South China Sea.

Is Xi Jinping really that bold or that desperate to start another war? Two points. First, China considers the United States to be its enemy. The second point is that the United States is no longer deterring China. China feels it has a big green light to do whatever it wants.

On the first point, about our enemy status, we have to go back to May 2019. People’s Daily, the most authoritative publication in China, actually carried a piece that declared a “people’s war” on the US. This was not just some isolated thought.

On August 29th 2021, People’s Daily came out with a landmark piece that accused the United States of committing “barbaric” acts against China. Again, this was during a month of hostile propaganda blasts from China.

On the August 29th, Global Times, which is controlled by People’s Daily, came right out and also said that the United States was an enemy or like an enemy.

We Americans don’t pay attention to propaganda. The question is, should we be concerned about what China is saying? After all, these are just words.

At this particular time, these words are significant. The strident anti‑Americanism suggests to me that China is laying the justification for a strike on the United States. We keep ignoring what Beijing is saying. We kept ignoring what Osama bin Laden was saying.

We have to remember that the Chinese regime, unlike the Japanese, always warn its adversaries about what it is going to do. Jim Lilley, our great ambassador to Beijing during the Tiananmen Massacre, actually said that China always telegraphs its punches. At this moment, China is telegraphing a punch.

That hostility, unfortunately, is not something we can do very much about. The Chinese Communist regime inherently idealizes struggle, and it demands that others show subservience to it.

The second reason war is coming is that America’s deterrence of China is breaking down. That is evident from what the Chinese are saying.

In March of 2021, China sent its top two diplomats, Yang Jiechi and Wang Yi, to Anchorage to meet our top officials, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. Yang, in chilling words, said the US could no longer talk to China “from a position of strength.”

We saw the same theme during the fall of Kabul. China then was saying, “Look, those Americans, they can’t deal with the insurgent Taliban. How can they hope to counter us magnificent Chinese?” Global Times actually came out with a piece referring to Americans: “They can’t win wars anymore.”

We also saw propaganda at that same time directed at Taiwan. Global Times was saying, again, in an editorial, an important signal of official Chinese thinking, “When we decide to invade, Taiwan will fall within hours and the US will not come to help.”

It is probably no coincidence that this propaganda came at the time of incursions into Taiwan’s air-defense identification zone.

We need to be concerned with more than just the intensity and with the frequency of these flights, however. We have to be concerned that China was sending H‑6K bombers; they are nuclear‑capable.

Something is wrong. Global Times recently came out with an editorial with the title, “Time to warn Taiwan secessionists and their fomenters: war is real.”

Beijing is at this moment saying things heard before history’s great conflicts. The Chinese regime right now seems to be feeling incredibly arrogant. We heard this on November 28th in 2020, when Di Dongsheng, an academic in Beijing, gave a lecture live-streamed to China.

Di showed the arrogance of the Chinese elite. More importantly, he was showing that the Chinese elite no longer wanted to hide how they felt. Di, for instance, openly stated that China could determine outcomes at the highest levels of the American political system.

Di’s message was that with cash, China can do anything it wants, and that all Americans would take cash. He mentioned two words in this regard: Hunter Biden.

Unfortunately, President Joe Biden is reinforcing this notion. China, for instance, has so far killed nearly one million Americans with a disease that it deliberately spread beyond its borders. Yet, what happened? Nothing.

We know that China was able to spread this disease with its close relationship with the World Health Organization. President Trump, in July of 2020, took us out of the WHO. What did Biden do? In his first hours in office, on January 20th, 2021, he put us back into the WHO.

In February, he had a two‑hour phone call with Xi Jinping. By Biden’s own admission, he didn’t raise the issue of the origins of COVID‑19 even once. If you are Xi Jinping, after you put down the receiver, your first thought is, “I just got away with killing hundreds of thousands of Americans.”

Then there’s somebody named John Kerry. Our republic is not safe when John Kerry carries a diplomatic passport, as he now does. He is willing to make almost any deal to get China to sign an enhanced climate arrangement.

Kerry gave a revealing interview to David Westin of Bloomberg on September 22, 2021. Westin asked him, “What is the process by which one trades off climate against human rights?” Climate against human rights?

Kerry came back and said, “Well, life is always full of tough choices in the relationship between nations.” Tough choices? We Americans need to ask, “What is Kerry willing to give up to get his climate deal?”

Democracies tend to deal with each other in the way that Kerry says. If we are nice to a democracy, that will lead to warm relations; warm relations will lead to deals, long‑standing ties. Kerry thinks that the Chinese communists think that way. Unfortunately, they do not.

We know this because Kerry’s successor as Secretary of State, Hillary Clinton, in February 2009, said in public, “I’m not going to press the Chinese on human rights because I’ve got bigger fish to fry.” She then went to Beijing a day after saying that and got no cooperation from the Chinese.

Even worse, just weeks after that, China felt so bold that it attacked an unarmed US Navy reconnaissance vessel in the South China Sea. The attack was so serious that it constituted an act of war. The Chinese simply do not think the way that Kerry believes they do.

All of this, when you put it together, means that the risk of war is much higher than we tend to think. Conflict with today’s aggressor is going to be more destructive than it was in the 1930s. We have news that China is building something like 345 missile silos in three locations: in Gansu, Xinjiang, and in Inner Mongolia.

These silos are clearly built to accommodate the DF‑41. The DF‑41 has a range of about 9,300 miles, which means that it can reach any part of the United States. The DF‑41 carries 10 warheads. This means that China could, in about two years, as some experts think, have a bigger arsenal than ours.

China has built decoy silos before. We are not sure they are going to put all 345 missiles into these facilities, but we have to assume the worst because Chinese leaders and Chinese generals, on occasion, unprovoked, have made threats to nuke American cities.

This, of course, calls into question their official no‑first‑use policy, and also a lot of other things. China will not talk to us about arms control. We have to be concerned that China and Russia, which already are coordinating their military activities, would gang up against us with their arsenals.

In July, 2021 China tested a hypersonic glide warhead, which circled the world. This signals China intends to violate the Outer Space Treaty, to which China is a party. It also shows that in hypersonic technology, which was developed by Americans, China is now at least a decade ahead of us in fielding a weapon.

Why is China doing all this now? The country is coming apart at the seams. There is, for instance, a debt crisis. Evergrande and other property developers have started to default. It is more than just a crisis of companies. China is basically now having its 2008.

Even more important than that, they have an economy that is stumbling and a food crisis that is worsening year to year. They know their environment is exhausted. Of course, they also are suffering from a continuing COVID‑19 epidemic.

To make matters worse, all of this is occurring while China is on the edge of the steepest demographic decline in history in the absence of war or disease.

Two Chinese demographers recently stated that China’s population will probably halve in 45 years. If you run out those projections, it means that by the end of the century, China will be about a third of its current size, basically about the same number of people as the United States.

These developments are roiling the political system. Xi Jinping is being blamed for these debacles. We know he has a low threshold of risk. Xi now has all the incentive in the world to deflect popular and regime discontent by lashing out.

In 1966, Mao Zedong, the founder of the People’s Republic, was sidelined in Beijing. What did he do? He started the Cultural Revolution. He tried to use the Chinese people against his political enemies. That created a decade of chaos.

Xi Jinping is trying to do the same thing with his “common prosperity” program. The difference is that Mao did not have the means to plunge the world into war. Xi, with his shiny new military, clearly does have that ability.

So here is a 1930s scenario to consider. The next time China starts a conflict, whether accidentally or on purpose, we could see that China’s friends — Russia, North Korea, Iran, Pakistan — either in coordination with China or just taking advantage of the situation, move against their enemies.

That would be Ukraine in the case of Russia, South Korea in the case of North Korea, Israel in the case of Iran, India in the case of Pakistan, and Morocco in the case of Algeria. We could see crises at both ends of the European landmass and in Africa at the same time.

This is how world wars start.

* * *

Question: Why do you believe China attacked the world with coronavirus?

Chang: I believe that SARS‑CoV‑2, the pathogen that causes COVID‑19, is not natural. There are, for example, unnatural arrangements of amino acids, like the double‑CGG sequence, that do not occur in nature.

We do not have a hundred percent assurance on where this pathogen came from. We do, however, have a hundred percent assurance on something else: that for about five weeks, maybe even five months, Chinese leaders knew that this disease was highly transmissible, from one human to the next, but they told the world that it was not.

At the same time as they were locking down their own country ‑‑ Xi Jinping by locking down was indicating that he thought this was an effective way of stopping the disease — he was pressuring other countries not to impose travel restrictions and quarantines on arrivals from China. It was those arrivals from China that turned what should have been an epidemic confined to the central part of China, into a global pandemic. As of today, more than eight million people have died outside China. What happened? No one imposed costs on China.

For at least a half‑decade, maybe a little bit longer, Chinese military researchers have been openly writing about a new type of biological warfare. This was, for instance, in the 2017 edition of “The Science of Military Strategy,” the authoritative publication of China’s National Defense University.

They talk about a new type of biological warfare of “specific ethnic genetic attacks.” In other words, pathogens that will leave the Chinese immune but sicken and kill everybody else, which means that the next disease from China can be a civilization killer.

Remember, Xi Jinping must be thinking, “I just got away with killing eight million people. Why wouldn’t I unleash a biological attack on the United States? Look what the virus has done not only to kill Americans but also to divide American society.”

A lot of military analysts talk about how the first seconds of a war with China are going to be fought in outer space. They are going to blind our satellites, take them down, do all sorts of stuff. Those statements are wrong.

The first day of war against the United States occurs about six months earlier, when they release pathogens in the United States. Then we are going to have that day in space. The war starts here, with a pathogen ‑‑ a virus, a microbe, a bug of some kind. That is where it begins.

Question: You mentioned 1939. Taiwan is the Poland of today. We get mixed signals: Biden invites the Taiwanese foreign minister to his inauguration, but then we hear Ned Price, his State Department spokesman, say that America will always respect the One‑China policy. Meaning, we’re sidelining defending Taiwan?

Chang: The One‑China policy is something many people misunderstand. Probably because Beijing uses propaganda to try to fuzzy up the issue. China has a One‑China principle: that Taiwan is part of the People’s Republic of China, full stop.

We have a One‑China policy, which is different. We recognize Beijing as the legitimate government of China. We also say that the status of Taiwan is unresolved. Then, the third part of our One‑China policy is that the resolution of the status of Taiwan must be with the consent of people on both sides of the Strait. In other words, that is code for peace, a peaceful resolution.

Our policies are defined by the One‑China policy, the Three Communiques, Reagan’s Six Assurances, and the Taiwan Relations Act.

Our policy is difficult for someone named Joe Biden to articulate, because he came back from a campaign trip to Michigan, and he was asked by a reporter about Taiwan, and Biden said, “Don’t worry about this. We got it covered. I had a phone call with Xi Jinping and he agreed to abide by the Taiwan agreement.”

In official US discourse, there is no such thing as a “Taiwan agreement.” Some reporter then asked Ned Price what did Biden mean by the Taiwan agreement. Ned Price said, “The Taiwan agreement means the Three Communiques the Six Assurances, the Taiwan Relations Act, and the One‑China policy.”

Ned Price could not have been telling the truth because Xi Jinping did not agree to America’s position on Taiwan. That is clear. There is complete fuzziness or outright lying in the Biden administration about this.

Biden’s policies on Taiwan are not horrible, but they are also not appropriate for this time. decades, we have had this policy of “strategic ambiguity,” where we do not tell either side what we would do in the face of imminent conflict. That worked in a benign period. We are no longer in a benign period. We are in one of the most dangerous periods in history.

We need a policy of “strategic clarity,” where we tell China that we will defend Taiwan. We also say we will extend a mutual defense treaty to Taiwan if it wants it, and we will put American troops on the island as a tripwire.

Question: You think he is not saying that because he has no intention of actually doing it, so in a way, he is telling the truth?

Chang: The mind of Biden is difficult to understand. We do not know what the administration would do. We have never known, after Allen Dulles, what any administration would do, with regard to Taiwan. We knew what Dulles would have done. We have got to be really concerned because there are voices in the administration that would give Taiwan, and give other parts of the world, to China. It would probably start with John Kerry; that is only a guess.

Question: You mentioned earlier the growing Chinese economic problems. Would you use taking action on the enormous trade deficits we run with China to contribute to that problem?

Chang: Yes, we should absolutely do that. Go back to a day which, in my mind, lives in infamy, which is January 15th, 2020, when President Trump signed the Phase One trade deal, which I think was a mistake. In that Phase One trade deal, it was very easy for China to comply, because there were specific targets that China had to meet in buying US goods and services. This was “managed trade.”

China has not met its obligations. As of a few months ago, China had met about 62% of its commitments. That means, they have dishonored this deal in a material and significant way. If nothing else, China has failed to meet its Phase One trade deal commitments.

We should be increasing the tariffs that President Trump imposed under Section 301 of the Trade Act of 1974. Remember, those tariffs are meant to be a remedy for the theft of US intellectual property. China has continued to steal US IP. As matter of fact, it has gotten worse: for instance, these Chinese anti‑lawsuit injunctions, which they have started to institute.

We need to do something: China steals somewhere between $300 to $600 billion worth of US intellectual property each year. That is a grievous wound on the US economy, it is a grievous wound on our society in general. We need to do something about it.

Question: As a follow‑up on that, Japan commenced World War II because of the tariffs Roosevelt was strapping on oil imports into Japan, do you think that might well have the same effect on China, where we do begin to impose stiffer tariffs on American imports?

Chang: That is a really important question, to which nobody has an answer. I do not think that China would start a war over tariffs. Let me answer this question in a different way. We are Americans. We naturally assume that there are solutions, and good solutions, to every problem. After three decades of truly misguided China policy, there are no good solutions. There are no solutions that are “undangerous.”

Every solution, going forward, carries great risk. The current trend of policy is unsustainable. There will be no American republic if we continue to do what we are currently doing and if we continue to allow China to do what it does.

I do not think that enforcing a trade deal will start World War III. The point is, we have no choice right now. First, I don’t think the Chinese were ever going to honor the Phase One agreement . This was not a deal where there were some fuzzy requirements. This deal was very clear: China buys these amounts of agricultural products by such and such date, China buys so many manufactured products by such and such date. This was not rocket science. China purposefully decided not to honor it.

There are also other issues regarding the trade deal do not think that we should be trying to foster integration of Wall Street into China’s markets, which is what the Phase One deal also contemplated. Goldman Sachs ran away like a bandit on that. There are lot of objections to it. I do not think we should be trading with China, for a lot of reasons. The Phase One trade deal, in my mind, was a great mistake. Do not take it from me, just look at their failure to comply with very simple, easy‑to‑comply-with requirements. It was a mistake.

Question: Concerning cybersecurity, as we saw in the recent departure of a Pentagon official, ringing the alarm on how we are completely vulnerable to China’s cyberattacks. From your perspective, what would an attack look like on China that would hurt them? What particular institutions would be the most vulnerable? Is it exposing their secrets? Is it something on their financial system? Is it something on their medical system or critical infrastructure? What does the best way look like to damage them?

Also, regarding what you mentioned about Afghanistan, we know that China has been making inroads into Pakistan as a check on American hegemony in relationships with India and Afghanistan.

Now that the Afghanistan domino is down, what do you see in the future for Pakistan’s nuclear capability, in conjunction with Chinese backing, to move ever further westward towards Afghanistan, and endangering Middle East security?

Chang: Right now, India has been disheartened by what happened, because India was one of the main backers of the Afghan government. What we did in New Delhi was delegitimize our friends, so that now the pro‑Russian, the pro‑Chinese elements in the Indian national security establishment are basically setting the tone. This is terrible.

What has happened, though, in Pakistan itself, is not an unmitigated disaster for us, because China has suffered blowback there. There is an Afghan Taliban, and there is a Pakistani Taliban. They have diametrically‑opposed policies on China. The Afghan Taliban is an ally of China; the Pakistani Taliban kill Chinese.

They do that because they want to destabilize Pakistan’s capital, Islamabad. Beijing supports Islamabad. The calculation on part of the Pakistani Taliban is, “We kill Chinese, we destabilize Islamabad, we then get to set up the caliphate in Pakistan.” What has happened is, with this incredible success of the Afghan Taliban, that the Pakistani Taliban has been re‑energized — not good news for China.

China has something called the China‑Pakistan Economic Corridor, part of their Belt and Road Initiative. Ultimately that is going to be something like $62 billion of investment into Pakistani roads, airports, electric power plants, utilities, all the rest of it.

I am very happy that China is in Pakistan, because they are now dealing with a situation that they have no solutions to. It’s like Winston Churchill on Italy, “It’s now your turn.”

We should never have had good relations with Pakistan. That was always a short‑term compromise that, even in the short term, undermined American interests. The point is that China is now having troubles in Pakistan because of their success in Afghanistan.

Pakistan is important to China for a number of reasons. One of them is, they want it as an outlet to the Indian Ocean that bypasses the Malacca Strait — a choke point that the US Navy ‑‑ in their view ‑‑ could easily close off, which is correct.

They want to bypass that, but their port in Gwadar is a failure in many respects. Gwadar is in Pakistan’s Baluchistan. The Baluchs are one of the most oppressed minorities on earth. They have now taken to violence against the Chinese, and they have been effective. Pakistan is a failure for China.

The best response would be if we hit them with everything at once because China right now is weak. If we were going to pick the number one thing to do, I would think trade.

Trade is really what they need right now. Their economy is stalling. There are three parts to the Chinese economy, as there are to all economies: consumption, investment, and net exports. Their consumption right now is extremely weak from indicators that we have. The question is can they invest?

China now has a debt crisis, so they are not going to invest their way out of this crisis, which means the only way they can save their economy is net exports. We should stop buying their stuff.

We have extraordinary supply chain disruptions right now. It should be pretty easy for us to make the case that we must become self‑sufficient on a number of items. Hit them on trade. Hit them on investment, publicize the bank account details of Chinese leaders. All these things that we do, we do it all at the same time. We can maybe get rid of these guys.

Question: In the Solomon Islands, they published China’s under-the-table payments to political figures. Should we do the same thing with China’s leaders?

Chang: Yes. There is now a contest for the Solomon Islands, which includes Guadalcanal. China has bought the political establishment in the Solomon Islands, except for one brave man named David Suidani. Recently, somebody got the bright idea of publishing all of the specific payments that Beijing has made to Solomon Islands politicians. This was really good news. We should be doing this with payments to American politicians, we should be doing this across the board.

Why don’t we publish their payments to politicians around the world? Let’s expose these guys, let’s go after them. Let’s root out Chinese influence, because they are subverting our political system.

Similarly, we should also be publishing the bank account details of all these Chinese leaders, because they are corrupt as hell.

Question: Could you comment, please, on what you think is the nature of the personal relationships between Hunter Biden, his father, and Chinese financial institutions. How has it, if at all, affected American foreign policy towards China, and how will it affect that policy?

Chang: There are two things here. There are the financial ties. Hunter Biden has connections with Chinese institutions, which you cannot explain in the absence of corruption.

For instance, he has a relationship with Bohai Harvest Partners, BHR. China puts a lot of money into the care of foreign investment managers. The two billion, or whatever the number is, is not that large, but they only put money with people who have a track record in managing investments. Hunter Biden only has a track record of being the son of Joe Biden.

There are three investigations of Hunter Biden right now. There is the Wilmington US Attorney’s Office, the FBI — I don’t place very much hope in either of these – but the third one might actually bear some fruit: the IRS investigation of Hunter Biden.

Let us say, for the moment, that Biden is able to corrupt all three of these investigations. Yet money always leaves a trail. We are going to find out one way or another. Peter Schweizer, for instance, is working on a book on the Biden cash. Eventually, we are going to know about that.

What worries me is not so much the money trail — and of course, there’s the art sales, a subject in itself, because we will find out.

What worries me is that Hunter Biden, by his own admission, is a troubled individual.

He has been to China a number of times. He has probably committed some embarrassing act there, which means that the Ministry of State Security has audio and video recordings of this. Those are the things that can be used for blackmail. We Americans would never know about it, because blackmail does not necessarily leave a trail. This is what we should be most concerned about.

Biden has now had two long phone calls with Xi Jinping. The February call, plus also one a few months ago. We do not know what was said. I would be very worried that when Xi Jinping wants to say something, there will be a phone call to Biden, and it would be Xi doing the talking without note takers.

Question: Please tell us about the China desk over the 30 years, the influence of the bureaucracy on politics; what can they affect?

Chang: I do not agree with our China policy establishment in Washington, in general, and specifically the State Department and NSC.

This a complicated issue. First, there is this notion after the end of the Cold War, that the nature of governments did not matter. You could trade with them, you could strengthen them, and it would not have national security implications. That was wrong for a number of reasons, as we are now seeing.

What bothers me is that, although their assumptions about China have demonstrably been proven wrong, American policymakers still continue with the same policies. There is, in some people’s mind, an unbreakable view that we have to cooperate with China.

You hear this from Blinken all the time: “We’ve got to cooperate where we can.” It is this formulation which is tired, and which has not produced the types of policies that are necessary to defend our republic. That is the unfortunate thing.

This is what people learn in international relations school when they go to Georgetown, and they become totally stupid. We Americans should be upset because we have a political class that is not defending us. They are not defending us because they have these notions of China. George Kennan understood the nature of the Soviet Union. I do not understand why we cannot understand the true nature of the Chinese regime.

Part of it is because we have Wall Street, we have Walmart, and they carry China’s water. There are more of us than there are of them in this country. We have to exercise our vote to make sure that we implement China policies that actually protect us.

Policies that protect us are going to be drastic and they will be extreme, but absolutely, we have now dug ourselves into such a hole after three decades of truly misguided views on China, that I don’t know what else to say. This is not some partisan complaint. Liberals and conservatives, Republicans and Democrats, all have truly misguided China policies.

I do not know what it takes to break this view, except maybe for the deaths of American servicemen and women.

Question: Is the big obstacle American businesses which, in donations to Biden, are the ones stopping decoupling of commerce, and saying, “Do not have war; we would rather earn money”?

Chang: It is. You have, for instance, Nike. There are a number of different companies, but Nike comes to mind right now, because they love to lecture us about racism.

For years they were operating a factory in Qingdao, in the northeastern part of China, that resembled a concentration camp. The laborers were Uighur and Kazakh women, brought there on cattle cars and forced to work.

This factory, technically, was operated by a South Korean sub‑contractor, but that contractor had a three‑decade relationship with Nike. Nike had to know what was going on. This was forced labor, perhaps even slave labor.

Clearly, Nike and Apple and other companies are now, at this very moment, trying to prevent Congress from enacting toughened rules on the importation of forced‑labor products into our country.

One of the good things Trump did was, towards the end of his four years, he started to vigorously enforce the statutes that are already on the books, about products that are made with forced and slave labor. Biden, to his credit, has continued tougher enforcement.

Right now, the big struggle is not the enforcement, but enhancing those rules. Apple and all of these companies are now very much trying to prevent amendment of those laws. It’s business, but it’s also immoral.

Question: It is not just big Wall Street firms. There are companies that print the Bible. Most Bibles are now printed in China.

When President Trump imposed the tariffs, a lot of the Bible printers who depended on China actually went to Trump and said, “You cannot put those tariffs in because then the cost of Bibles will go up.”

Chang: Most everyone lobbies for China. We have to take away their incentive to do so.

Question: What are the chances that China’s going to invade Taiwan?

Chang: There is no clear answer.

There are a number of factors that promote stability. One of them is that, for China to invade Taiwan, Xi Jinping has to give some general or admiral basically total control over the Chinese military. That makes this flag officer the most powerful person in China. Xi is not about to do that.

Moreover, the Chinese regime is even more casualty‑adverse than we are. Even if Beijing thinks it can take Taiwan by force, it is probably not going to invade because it knows an invasion would be unpopular with most people in China. It is not going to risk hundreds of thousands of casualties that would result from an invasion.

The reason we have to be concerned is because it is not just a question of Xi Jinping waking up one morning and saying, “I want to invade Taiwan.” The danger is the risk of accidental contact, in the skies or on the seas, around Taiwan.

We know that China has been engaging in hostile conduct, and this is not just the incursions into Taiwan’s air-defense identification zone. There are also dangerous intercepts of the US Navy and the US Air Force in the global commons. One of those accidents could spiral out of control.

We saw this on April 1st, 2001, with the EP‑3, where a Chinese jet clipped the wing of that slow‑moving propeller plane of the US Navy. The only reason we got through it was that George W. Bush, to his eternal shame, paid China a sum that was essentially a ransom.

He allowed our crew to be held for 11 days. He allowed the Chinese to strip that plane. This was wrong. This was the worst incident in US diplomatic history, but Bush’s craven response did get us through it. Unfortunately, by getting through it we taught the Chinese that they can without cost engage in these dangerous maneuvers of intercepting our planes and our ships.

That is the problem: because as we have taught the Chinese to be more aggressive, they have been. One of these incidents will go wrong. The law of averages says that. Then we have to really worry.

Question: You don’t think Xi thinks, “Oh well, we can sacrifice a few million Chinese”?

Chang: On the night of June 15th, 2020, there was a clash between Chinese and Indian soldiers in Ladakh, in the Galwan Valley. That was a Chinese sneak attack on Indian-controlled territory. That night, 20 Indian soldiers were killed. China did not admit to any casualties. The Indians were saying that they killed about 45 Chinese soldiers that night.

Remember, this was June 15th of 2020. It took until February of 2021 for China to admit that four Chinese soldiers died. TASS, the Russian news agency, recently issued a story reporting that 45 Chinese soldiers actually died that night.

This incident shows you how risk‑averse and casualty‑averse the Chinese Communist Party is. They are willing to intimidate, they are willing to do all sorts of things. They are, however, loath to fight sustained engagements. Remember, that the number one goal of Chinese foreign policy is not to take over Taiwan. The number one goal of Chinese foreign policy is to preserve Communist Party rule.

If the Communist Party feels that the Chinese people are not on board with an invasion of Taiwan, they will not do it even if they think they will be successful. Right now, the Chinese people are not in any mood for a full‑scale invasion of Taiwan.

On the other hand, Xi Jinping has a very low threshold of risk.

He took a consensual political system where no Chinese leader got too much blame or too much credit, because everybody shared in decisions, and Xi took power from everybody, which means, he ended up with full accountability, which means — he is now fully responsible.

In 2017, when everything was going China’s way, this was great for Xi Jinping because he got all the credit. Now in 2021, where things are not going China’s way, he is getting all the blame.

The other thing, is that Xi has raised the cost of losing a political struggle in China. In the Deng Xiaoping era, Deng reduced the cost of losing a struggle. In the Maoist era, if you lost a struggle, you potentially lost your life. In Deng’s era, if you lost a struggle, you got a nice house, a comfortable life.

Xi Jinping has reversed that. Now the cost of losing a political struggle in China is very high. So there is now a combination of these two developments. Xi has full accountability. He knows that if he is thrown out of power, he loses not just power. He loses his freedom, his assets, potentially his life.

If he has nothing to lose, however, it means that he can start a war, either “accidentally” or on purpose. He could be thinking, “I’m dying anyway, so why don’t I just roll the dice and see if I can get out of this?”

That is the reason why this moment is so exceedingly risky. When you look at the internal dynamics inside China right now, we are dealing with a system in crisis.

Question: China has a conference coming up in a year or so. What does Chairman Xi want to do to make sure he gets through that conference with triumph?

Chang: The Communist Party has recently been holding its National Congresses once every five years. If the pattern follows — and that is an if — the 20th National Congress of the Communist Party will be held either October or November of next year.

This is an important Congress, more so than most of them because Xi Jinping is looking for an unprecedented third term as general secretary of the Communist Party.

If you go back six months ago, maybe a year, everyone was saying, “Oh, Xi Jinping. No problem. He’s president for life. He’s going to get his third term. He will get his fourth term. He will get his fifth term, as long as he lives. This guy is there forever.” Right now, that assumption is no longer valid. We do not know what’s going to happen because he is being blamed for everything.

Remember, as we get close to the 20th National Congress, Xi Jinping knows he has to show “success.” Showing “success” could very well mean killing some more Indians or killing Americans or killing Japanese or something. We just don’t know what is going to happen.

Prior to the National Congress, there is the sixth plenum of the 19th Congress. Who knows what is going to happen there. The Communist Party calendar, as you point out, does dictate the way Xi Jinping interacts with the world.

Question: Going back to the wing-clip incident, what should Bush have done?

Chang: What Bush should have done is immediately demand the return of that plane. What he should have done was to impose trade sanctions, investment sanctions, whatever, to get our plane back.

We were fortunate, in the sense that our aviators were returned, but they were returned in a way that has made relations with China worse, because we taught the Chinese regime to be more aggressive and more belligerent. We created the problems of today and of tomorrow.

I would have imposed sanction after sanction after sanction, and just demand that they return the plane and the pilots. Remember, that at some point, it was in China’s interests to return our aviators. The costs would have been too high for the Chinese to keep them. We did not use that leverage on them.

While we are on this topic, we should have made it clear to the Chinese leadership that they cannot kill Americans without cost. Hundreds of thousands Americans have been killed by a disease that China deliberately spread.

In one year, from 2020 to 2021, nearly 80,000 Americans died from fentanyl, which China has purposefully, as a matter of state and Communist Party policy — sold to Americans. China is killing us. We have to do something different. I’m not saying that we have good solutions; we don’t. But we have to change course.

Question: Biden is continuing this hostage thing with Huawei, returning the CFO of Huawei in exchange for two Canadians. Have we taught the Chinese that they can grab more hostages?

Chang: President Trump was right to seek the extradition of Meng Wanzhou, the chief financial officer of Huawei Technologies. Biden, in a deal, released her. She did not even have to plead guilty to any Federal crime. She signed a statement, which I hope we’ll be able to use against Huawei.

As soon as Meng was released, China released the “two Michaels,” the two Canadians who were grabbed within days of our seeking extradition of Meng Wanzhou. In other words, the two Michaels were hostages.

We have taught China that any time that we try to enforce our own laws, they can just grab Americans. They have grabbed Americans as hostages before, but this case is high profile. They grabbed Americans, and then they grabbed Canadians, and they got away with it. They are going to do it again.

We are creating the incentives for Beijing to act even more dangerously and lawlessly and criminally in the future. This has to stop.

Question: On the off-chance that the current leader does not maintain his position, what are your thoughts on the leaders that we should keep an eye on?

Chang: There is no one who stands out among the members of the Politburo Standing Committee. That is purposeful. Xi Jinping has made sure that there is nobody who can be considered a successor; that is the last thing he wants.

If there is a change in leadership, the new leader probably will come from Jiang Zemin’s Shanghai Gang faction. Jiang was China’s leader before Hu Jintao, and Hu came before Xi Jinping.

There is now a lot of factional infighting. Most of the reporting shows that Jiang has been trying to unseat Xi Jinping because Xi has been putting Jiang’s allies in jail.

Remember, the Communist Party is not a monolith. It has a lot of factions. Jiang’s faction is not the only one. There is something called the Communist Youth League of Hu Jintao. It could, therefore, be anybody.

Question: Double question: You did not talk about Hong Kong. Is Hong Kong lost forever to the Chinese Communist Party? Second question, if you could, what are the three policies that you would change right away?

Chang: Hong Kong is not lost forever. In Hong Kong, there is an insurgency. We know from the history of insurgencies that they die away — and they come back. We have seen this in Hong Kong. The big protests in Hong Kong, remember, 2003, 2014, 2019. In those interim periods, everyone said, “Oh, the protest movement is gone.” It wasn’t.

China has been very effective with its national security law, but there is still resistance in Hong Kong. There is still a lot of fight there. It may not manifest itself for quite some time, but this struggle is not over, especially if the United States stands behind the people there. Biden, although he campaigned on helping Hong Kong, has done nothing.

On the second question, I would close China’s four remaining consulates. I would also strip the Chinese embassy down to the ambassador and his personal staff. The thousands who are in Washington, DC, they would be out.

I would also raise tariffs to 3,600%, or whatever. This is a good time to do it. We have supply chain disruptions. We are not getting products from China anyway. We can actually start to do this sort of stuff.

The third thing, I would do what Pompeo did, just hammer those guys all the time verbally. People may think, “Those are just words.” For communists, words are really important, because they are an insecure regime where propaganda is absolutely critical.

I would be going after the Communists on human rights, I would be going after them on occupying the South China Sea, on Taiwan, unrelentingly — because I would want to show the world that the United States is no longer afraid of China.

We have taught the world that we are afraid of dealing with the Chinese. State Department people, they are frightened. We need to say to the Chinese regime, like Dulles, “I’m not afraid of you. I’m going after you, and I’m going to win.”

Tyler Durden
Sun, 05/01/2022 – 23:20

via ZeroHedge News https://ift.tt/icdbwH0 Tyler Durden

DoD Sends “Phoenix Ghost” Kamikaze Drones To Ukraine

The Department of Defense announced it was sending “121 Phoenix Ghost Tactical Unmanned Aerial Systems” to Ukraine. The never-before-seen kamikaze drone is a brand-new weapon system designed for ambushing Russian tanks.

As reported by Breaking Defense, the Phoenix Ghost tactical drone is similar to the Switchblade drone already fielded in Ukraine.

Ok a bit more from a DoD official, who is loathe to detail the requirements that differentiate Phoenix Ghost from a Switchblade. Its a “one way drone” that “delivers a punch” — likely meaning that it’s a kamikaze drone similar to Switchblade.

— Valerie Insinna (@ValerieInsinna) April 21, 2022

Not much is known about the new drone. The DoD described it as a “one-way” drone that will “deliver a punch” and said it would operate similar to the Switchblade drone system.

The War Zone reported that Pentagon Press Secretary Jack Kirby said the Phoenix Ghost’s capabilities differ from Switchblades.

“I’m gonna be loath to get into much more detail about the system at this point for classification purposes, but you can safely assume that, in general, it works,” Kirby said. “It provides the same sort of tactical capability that a Switchblade does. Switchblade is a one-way drone if you will, and it clearly is designed to deliver a punch. It’s a tactical UAS, and Phoenix ghost is of that same category.”

California-based AEVEX Aerospace is the defense company that designed and manufactured Phoenix Ghost. The company markets itself as “a recognized leader in full-spectrum airborne intelligence solutions.”

The new drone is part of the latest U.S. arms package to Ukraine. Here’s what’s included:

Over 1,400 Stinger anti-aircraft systems;

Over 5,500 Javelin anti-armor systems;

Over 14,000 other anti-armor systems;

Over 700 Switchblade Tactical Unmanned Aerial Systems;

90 155mm Howitzers and 183,000 155mm artillery rounds;

72 Tactical Vehicles to tow 155mm Howitzers;

16 Mi-17 helicopters;

Hundreds of Armored High Mobility Multipurpose Wheeled Vehicles;

200 M113 Armored Personnel Carriers;

Over 7,000 small arms;

Over 50,000,000 rounds of ammunition;

75,000 sets of body armor and helmets;

121 Phoenix Ghost Tactical Unmanned Aerial Systems;

Laser-guided rocket systems;

Puma Unmanned Aerial Systems;

Unmanned Coastal Defense Vessels;

14 counter-artillery radars;

Four counter-mortar radars;

Two air surveillance radars;

M18A1 Claymore anti-personnel munitions;

C-4 explosives and demolition equipment for obstacle clearing;

Tactical secure communications systems;

Night vision devices, thermal imagery systems, optics, and laser rangefinders;

Commercial satellite imagery services;

Explosive ordnance disposal protective gear;

Chemical, Biological, Radiological, Nuclear protective equipment;

Medical supplies to include first aid kits.

Russia’s Ambassador to the U.S., Anatoly Antonov, accused Biden of pumping Ukraine with weapons:

“The U.S. authorities do not seem to be interested in a ceasefire. What matters for John Kirby and his colleagues is that the American military-industrial complex receives additional income by getting rid of obsolete weapons from their warehouses,” Antonov said.

So far, the Biden administration has committed more than $4 billion in security assistance to Ukraine and has just requested a whopping $33 billion more. The massive request includes billions of dollars for economic and humanitarian aid.

Tyler Durden
Sun, 05/01/2022 – 22:45

via ZeroHedge News https://ift.tt/M19AFHq Tyler Durden