Interpreting phase one of the China-United States trade deal

Yesterday, Xinhua News carried an announcement that phase one of a trade deal between China and the United States has been agreed, subject to lrgal review, checking and translation.

If you read the report, the initial impression might be that China has ceded more ground than the United States. While the latter agrees to stop raising tariffs and to begin the process of winding them down, the Chinese side agreed to the following:

‘Implementation of the agreement will help enhance intellectual property rights protection, improve the business environment, expand market access, better safeguard the legitimate rights and interests of all companies including foreign firms in China’.

Various ideologues have been banging upon about the mythical ‘forced technology transfer’ to China, as well as breaches in intellectual property rights. I have commented earlier on how a thief always thinks someone else is a thief, as well as asking how a country that is now ahead in so many areas can ‘steal’ backward technology from someone else.

But as Sunzi said in ‘The Art of War’ quite some time ago, know your enemy better than he knows himself. The Chinese are happy to let the United States continue with its delusions, so that what seem like like concessions are not concessions at all. China has already taken the lead in intellectual propert rights (Alibaba, for instance, has won international awards for its stunningly high  levels of security), and when you use a Chinese-made phone – for instance – your privacy is protected far more than anywhere else in the world. If you see a paradox here, then you are right at one level: a communist state can protect your privacy far better than a bourgeois state. Indeed, all of the items mentioned above are part of the standard process in China, so no surprises.

But there are some items worth noting. To begin with, any discussion of state owned enterprises has been dropped from the agreement. China will simply not budge on its socialist model, so the US side has clearly backed down. Further, the agreement explicitly states that there will be ‘bilateral assessment and dispute settlement’. Earlier, the United States had insisted that it would adjudicate on whether China had honoured its side of the agreement. No-one would accept this in an agreement, so this has clearly been dropped in favour of a bilateral process. Finally, a crucial sentence points out that the agreement will ‘protect the legitimate rights and interests of Chinese firms in their economic and trade activities with the United States’. This is a major move, since – if implemented and followed – arbitrary targetting of Chinese enterprises on bogus ‘national security’ issues will be far more difficult.

Worth noting also is the point that China has agreed to import more US goods, not merely agricultural goods but also high-quality goods. The United States does have a few high-quality goods left to sell, but for some time now China has been leaping ahead, and the trade war of the last two years has enhanced that process. The direction will increasingly be the other way.

There is one last point that the agreement makes clear: China no longer needs the United States for prosperity, while the United States clearly needs China. How so? The United States has suffered double the economic damage compared to China, which has withstood the stress test remarkably well. So the United States has increasingly been keen to settle a deal. For example, Chinese trade with the United States is now about 10 percent of China’s total. Yes, 10 percent. Before the trade war began, it was 20 percent, but China has adeptly diversified, with countries involved in the Belt and Road Initiative, Africa and Europe. Of course, China would like smooth trade relations with all countries, but the time of reliance on the United States is over. No wonder the United States wanted a deal.

 

Dong Desheng (‘Uncle Petrov’) – a member of China’s Russian minority nationality

You may know that China has 56 minority nationalities (sometimes erroneously called ‘ethnic groups’ by outsiders), and that it has the world’s most progressive policies for the minority groups – policies that come out of the socialist tradition and were originally developed in the Soviet Union.

But you probably do not know that one of the smallest of these nationalities is the Russian one. It numbers about 15,000 and they live mostly on the northeastern border along the Heilongjiang or Amur River. Most of them came over to China during the brutal Civil War after the Russian Revolution, but they are now very much part of China.

One member of the Russian minority nationity has made quite a name for himself on Chinese short video apps, such as Kuaishou and Douyin. His name is Dong Desheng and he provides snippets into daily life on the farm and with family. On screen, he is known to his more than 2 million followers as ‘Uncle Petrov’.

But let’s make on thing very clear: Dong Desheng is fully Chinese, speaks only Chinese (in the north-eastern dialect) and is proud to be Chinese.

You can find a story here, with Desheng stressing how much China’s positive policies for groups such as his have enabled his popularity.

Why Is China Slum-Free?

One thing you will not find in China is a slum. Why?

One reason appears in the following statistics: in 1949, 97 percent of the population lived in poverty and life expectancy was 35; today, only 3 percent live in poverty (and this is unacceptable in China) and the life expectancy is 77.

Another reason can be found in this article in the People’s Daily. Well worth a read, but note the following: ‘More than 80 million units of government-subsidized housing have been built, helping over 200 million people with their housing problems, forming the world’s most extensive housing security system’.

Two must-see documentaries on terrorism in Xinjiang

Two recently released videos on terrorism in Xinjiang, with much material not seen until now. The first concerns the ‘East Turkistan Islamic Movement’ (ETIM), with close connections to the Washington-funded ‘World Uyghur Congress’ (WUC).

The second concerns the complex and long-term counter-terrorism work in Xinjiang, which is made even more complex by some ‘Western’ countries supporting such terrorism.

Two points worth noting:

First, the Chinese analysis of the root cause of terrorism concludes that is not primarily due to religion or ethnicity, but to foundational socio-economic matters. Thus, poverty, connected with lack of education and  employment, all come first – as aspects of the economic base – and they provide fertile ground for extremist religious views. Obviously, a distinctly Marxist analysis of terrorism, and it also shapes short and long-term policies in Xinjiang.

Second, when the security bodies of Russia, Eastern Europe, Central Asia and East Asia meet, one of the common items on the agenda is dealing with the way some ‘Western’ countries complicate the problems by fostering terrorism in some parts of the world.

*NB: Youtube has been systematically deleting these two videos, with an effort to prevent the many likes and comments appearing as well. The previous links suffered this fate, so I have updated them. They be deleted once again. So you will need to go into youtube and search ‘The Black Hand: ETIM and Terrorism in Xinjiang’ and ‘Fighting Terrorism in Xinjiang’. Fortunately, some people keep reloading them so they can be viewed in more places around the world – already 100s of millions have done so.

China’s military technology at least four years ahead of the rest

More and more aspects of Chinese technology have now leapt ahead of the rest of the world, from high speed trains to internet technology. Now it is military technology.

I remember reading this article by Vasily Kashin in October, soon after the amazing 70th anniversary celebrations of the New China. I have mentioned this article on a number of occasions in China, to much excitement, and returned to it recently.

Kashin is a Russian military expert and viewed with great interest the new military hardware on display at the wonderful parade in Beijing on 1 October, 2019. I recommend that you read the whole article, but these points are particularly noteworthy:

‘Making its debut at the China Day parade was the Dongfeng-41 (DF-41) intercontinental ballistic missile, which is capable of reaching any point in the continental United States in 30 minutes at Mach 25 carrying as many as 10 independently-targetable warheads … the introduction of these weapons of mass destruction by a US rival other than Russia remains impressive and sobering’.

Kashin mentions evidence of serious innovations, with methods never tried fully elsewhere, such as the use of the ramjet engine in cruise missles and high-altitude drones with liquid-propellant rocket engines. He observes that ‘China is taking a leading position in many areas regarding the development of military equipment’ and that ‘Chinese military and engineers are not afraid to try extremely original, never-used concepts and approaches’.

As for being at least four years ahead:

Kashin refers to the medium-range ballistic missile DF-17, the ‘first missile in the world equipped with a hypersonic manoeuvrable warhead. The United States expects to form the first experimental battery of its medium-range ballistic missiles with hypersonic warheads by 2023. Thus, the Americans are at best lagging four years‘.

A final observation: it makes the accusation levelled at China of ‘technology theft‘ or ‘forced technology transfer’ quite empty. How can you steal someone’s else’s technology when yours is the most advanced?

How anti-China stories are concocted (updated)

The gossip-scoop formula of a few media outlets in a small number of former colonising countries seems to have developed a fondness for anti-China stories. We know well enough at a general level that they are based on selective misinformation, but recently two clear examples of how such a process functions came to light.

The first concerns a former employee of the British Consulate in Hong Kong, who claimed to have been ‘tortured’ by ‘secret police’ (playing on an old anti-communist trope) while visiting Shenzhen. Actually, he was arrested for visiting a massage parlour and imprisoned for the standard period of time in China, before being released. You can find the story here and here, including video evidence.

The second concerns a convicted fraudster from China, who has already served time and is wanted for another fraud case. He skipped China on fake passports and turned up in Australia, where he is trying to pass himself off as a ‘spy’ who wants to ‘defect’, with inside information. Although I do not read Australian papers, you can bet that they are doing their best to tell another tall tale. You can find the whole story here, here and here.

Update: In regard to the bogus ‘spy’, who turned up in Australia recently, the spooks in that part of the world have decided that the man in question – Wang Liqiang – is at most ‘a bit player on the fringes of the espionage community’, and some have realised at last that the whole case is a ‘spy farce’.

 

From Germany embracing Huawei’s 5G to Chinese economic prowess

While I have been researching Eastern European market socialism, with its breakthroughs and logjams, have not posted so much recently. But there are some interesting recent developments.

First, despite all the hype about Huawei in small corners of the world, business is booming with company sales improving more than 25 percent compared to last year. Its new phone, the Mate 30, simply challenges you to do without the nefarious dealings of Google. For some time now, I have not been using any of the Google items, so this is good news. Further, Germany has decided that Huawei poses no risks whatsover, and indeed that it helpfully prevents US spying, so the company that has most global patents in 5G will be integral to Germany’s development.

On a related note, despite all the uncertainties of the global situation and with a new wave of US-driven nationalistic protectionism, the Chinese economy is moving ahead solidly. Chinese experts have have been predicting a gradual slowing of growth for some time, as China makes a transition from high volume to high quality, and with a focus on ecological civilisation (shengtai wenming). Then again, 6 to 6.5 percent growth now in China is equivalent to 15 percent 10 years ago, and it is way above standard levels elsewhere.