Symphony

Cadence of Conflict: Asia, May 21, 2018

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

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

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

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

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

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Cadence of Conflict: Asia, May 7, 2018

https://www.youtube.com/watch?v=0d1Loi7sh1I

This was week of talk. A delegation from Washington went to talk with China. Trump talked about talking nice while talking. Economic talking heads are talking about the talks and everybody's talking about it. Once the delegation that went to Beijing to talk gets back, they will talk with Trump. Warren Buffet even had some things to talk about.

Trump's delegation to Beijing was indeed an olive branch. It spelled out "the line" in the sand, toured it, explained, it, discussed it, explored it, and made that line very, very clear. To quote Morgan Freeman's Lucius Fox, "Mr. Wayne didn't want you to think that he was deliberately wasting your time." But, the line is not the least bit likely to be respected.

China will ignore everything the US delegation explained and forewarned, but they will never be surprised when Trump does exactly what the delegation said he would, though they may act like it. More importantly, the list of expectations shows how well Trump knows China and Chinese methods of doing "business".

Words like "retaliate" and "oppose" often surface with disfavor, as well as the US clearly being wise to the tactic of unofficially using backdoor channels to unofficially impose other restrictions to get what one wants. And, the US maintains its position on the "301" trade notice that China is non-market economy, specifically that China is to drop the matter completely and withdraw its appeals on the matter with the WTO.

There is no wiggle room in the US demands and those demands strongly demonstrate that Trump knows exactly the kinds of things Chins is likely to do. In essence the list of demands forbids exactly what China is most likely to do in the near future.

By contrast, China's demands are mainly that the US back off on its recent action; that's all. Consider the argument going around from pro-China stories about the trade "imbalance"—especially that US' service and consulting help to narrow the "trade deficit". The list of Chinese demands don't account for this or ask that they be calculated in the "trade deficit".

The mere demands, in themselves, tell us that China does not know what is about to happen in Washington and that Trump knows all to well—probably better than any of his advisers in the White House—what will happen in Beijing. China is in great danger.

Surprises are coming, somewhere. That's how history always plays out. No war ends without the unexpected and there's always a joker or two hiding in the deck. The surprises will likely include special and disputed territories, such as Macau, Hong Kong, and Taiwan, as well as international public opinion and some sector of trade or international protocol not yet considered or discussed by anyone—they will surprise everyone. That "surprise sector" could include ocean boundaries or specific products often traded. It could also be an act of God, such as an earthquake, hurricane, or tsunami. But, we have no idea except that any intermediate history student should anticipate at least two surprises before the current cloud passes in the greater storm.

China looks at the US the way the poor working class looked at the aristocracy in Russia. Beijing thinks they are demanding "what is their right". Remember, this is akin to "Opium War III", started by a trade imbalance. China demands that the money and "tax payable by way of free technology" continue to flow net into China; the US demands things like "equal" and "fair" in the flow. That is rhetoric from the Opium War prelude. If that war resurfaces, the "English" speaking country won't be Britain, though Britain still has a dog in the fight: Hong Kong is not to be changed for fifty years, yet this week Hong Kong military youth groups—comparable to Boy Scouts—rejected Chinese requests that they march according to PLA marching steps—meaning that China tried to make a change and Hong Kong could become a target for punitive action from China. Hence, Hong Kong is "fair play" in everyone's opinion, including public opinion about everyone in the game.

If China had any kind of conflict with the West—whether militarily or over trade—the conclusion could require complete surrender of Hong Kong back to British rule—and Hong Kongers wouldn't mind.

In the territorial disputes, Taiwan declaring independence would certainly rock the boat. Research says Taiwanese overwhelmingly view China as unfriendly. So, Taiwanese certainly wouldn't mind making their contribution to making a few waves.

China is already on the bench with the Korean issue. Pyongyang just updated the North clocks to no longer be thirty minutes off, but back in time with the South. Where's China?—exchanging trade demands with the country whose trade blockade preceded the Korean talks.

In all this, Warren Buffet's advice is that China is a good place for the West to invest. We'll see.

Symphony

Cadence of Conflict: Asia, April 9, 2018

China has been a source of great change.

Taiwan has received a license from the United States to build its own submarines. Wang, a legislature who sits on the Foreign Affairs and National Defense Committee said that friendliness from the US is the highest it has ever been. Japan just commissioned its first marine force since WWII. 1,500 troops are ready, specifically to repel invasion of Japan's islands. Thanks to China's inspiration and initiative, many nations in the region are also making their contribution to peace and stability in Pacific Asia.

The US is re-evaluating trade with China. While much is just talk, Trump maintains friendly rhetoric. The shakeup with trade will force countries to reinvent and reevaluate trade policy. While a looming "trade war" remains the talk of many so-called "experts", the long-term benefit will be the overall rebirth of trade throughout the world. Everyone will need to rethink trade. Any kind of thinking is good, especially in these times.

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Cadence of Conflict: Asia, April 2, 2018

China and the US have fixed their rudders on a ramming course. The only remaining question will be over whose hull is stronger.

The "yuge" US trade deficit with China is purported to be $375B USD. Bloomberg was sure to point out that the figure is inflated, some way or another. Xinhua news reports that a more accurate figure is a mere $298B USD deficit. Trump sent a "Section 301" notice of unfair trade tactics to China along with $50–60B USD in tariffs, depending on which news source you read. Trump also asked China to reduce the deficit by a whopping $100B USD and China says that the US is being unfair, placing tariffs on US food.

Asian markets are up, but a Caixin market index—something like a DOW Jones average in China—isn't up as much as hoped. Everyone has an opinion on what all that means.

Companies in America believe that tariffs harm the consumer. Some voices argue that the US has a "service" trade surplus with China, but still a deficit overall. Trump argues that trade deficits harm the worker and the overall economy. Basic macro-economic theory would say that workers would afford higher prices with much higher pay.

Trade deficits initiated the Opium Wars with China when China welcomed a one-way flow of silver from Britain for tea, but would not allow the eager Chinese population to import British goods. The Opium Wars ended with surrender of several lands to Britain, including Hong Kong. China's current and main land dispute is over Taiwan. The stage is set for history to repeat and so far it has.

Taiwan is certainly chumming up to the US as China attempts to endear the Taiwanese. Most recently, Taiwan is buying more advanced missiles from the US while two Senators advocate selling F-35s to Taiwan—a sale more likely since Taiwan's current administration is unlikely to set up secret talks with China as the rival party attempted nearly four years ago. China banned Taiwanese movies casting a purportedly pro-independence Taiwanese actor, Lawrence Ko.

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Cadence of Conflict: Asia, March 12, 2018

https://www.youtube.com/watch?v=bMfrJHgqPiw

As talks between Kim and Trump march forward, China is resigned to the new situation at its eastern border and is focusing on other areas, specifically trade. In truth, China's main trade opponent is not the US, but Vietnam.

Vietnam's main edge in trade will be that it is less expensive. Vietnam is, in many ways, less developed, yet more free to be expressive. Hanoi doesn't sanction the same censorship as Beijing does. Many hard-working Vietnamese are hungry, even desperate for income. A hard-working, uncensored, hungry, less-expensive people will be difficult for China to compete with on many fronts. This is entirely beside any point about political tension between China and Vietnam.

The meeting between Kim and Trump is less-than-satisfactorily explained. Suddenly they want to talk? Some "teamwork" consultant trying to sell a book will likely attribute it all to diplomacy, along with the preemptive speculation that Kim would give up the nukes because he got them. More is going on behind the scenes and if the true story is ever told it may not be told for ten or twenty years.

As for the Western spin about China's constitutional changes, it is all about the party, not about Xi. The humble pig farm worker, Xi Jinping, did not rise to power by publicly trying to serve himself. He has followed Robert Greene's 48 Laws of Power to a tee and will continue to do so—that means putting the party first in his public agenda.

Symphony

Cadence of Conflict: Asia, September 25, 2017

China is taking a turn for the better over North Korea's "Rocket Man". Stronger sanctions, limits on trade, cutting off oil, halting banking—it was all a wise move on China's part.

At the United Nations, North Korea made no new friends. They made no indications of any change of heart. North Korea shares the same view of President Trump as the American Left: that he is crazy and irrational and should be called the types of names expected on an elementary school playground.

Even China's new best buddy, Russia, is concerned for stability in the region. It's not a threat. It doesn't sound like a threat. Russia is genuinely concerned. Conflict with North Korea is, indeed, a nosedive and it does affect all Koreans, both North and South, as well as Japan, Russia, and, of course, China. Ending trade is the best bet.

Keeping North Korea alive and kicking as a China-Russia buddy is no longer a reasonable "hopeful". Now, it's about damage control. China is being urged to consider cleaning up the dismembered parts of a soon-to-be-former North Korea to avoid other problems.

Japan's Prime Minister, Shinzo Abe, is expected to call an election. There's no better time to get re-elected than when the backyard "Rocket Man" is firing missiles over your country and Russia and China won't do anything about anything except cut off trade with "Rocket Man". So, from this week's ongoing drama with North Korea, Japanese Prime Minister Abe is likely to remain in office and China got more involved.

Symphony

Cadence of Conflict: Asia, September 4, 2017

https://www.youtube.com/watch?v=QQy0_XBp_Ks

Korea's situation is amplifying. We know this. North Korea is making more threats than ever with it's "boy king" on the iron clad throne. We know that military options are 1. relevant and 2. undesirable. The Pentagon consistently barks about "military options", while "economic options" stay on the table—don't overlook how talk of military bolsters economic action. Rather than reviewing the obvious, consider North Korea through the eyes of the White House—viewing both economics and security—and from the rest of the world.

As the Pentagon, economists, and surrounding nations sees things, not China, but specifically the Communist Party seated in Beijing, is viewed as the "menace of Asia", venturing into increased trouble with Vietnam, India, the Philippines, Japan, South Korea, Taiwan, Myanmar, Malaysia, Mongolia, Africa, Europe, and others. North Korea has six months of oil remaining, and China does 90% of North Korea's trade. No Beijing Communist Party feeding the Kim Dynasty equals no Kim Dynasty nukes. That's how the Pentagon, the US Treasury, and many surrounding nations view China and North Korea.

It will never be said, just as much as it will always be considered: North Korea is a stepping stone to facing the Beijing Communist Party. For the Pentagon, it's practice and demonstration. For economics, North Korea is an excuse to cut off trade with China who manufactures technology, but does not develop their own, and uses copied technology with trade money to make it more difficult for their neighbors to sleep at night. Right or wrong, justified or not, that's how others view China these days.

Now, Xi Jinping addresses an assembly over the BRICS bank group, while still not having dealt with the menace in its own back yard. Without a word being mentioned, Brazil, Russia, India, and South Africa—and the nations who trade with them—will view China as being the "maker of promises that won't be kept".

China had so much going for it, as did the Communist Party in Beijing. They had trade, they had marked-off territory that no one encroached. But, it wasn't "what they deserved by rite", thereby provoking them into too much venture and not enough housecleaning. Make no mistake, North Korea is only the tip of the iceberg marking regional vendettas that loom beneath the surface, both militarily and economically. The US is not as friendly as it seems, "considering either" economics "or" military; it has already been implementing both as part of a greater regional ambition.

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Cadence of Conflict: Asia, February 27, 2017

Americans love flags. The over-sized flag, the “Star Spangled Banner”, was a strategic tool of Fort McHenry at the Battle of Baltimore and the US national anthem itself is named after the flag. If the United States ever truly intended to communicate that it believes Beijing seats the rightful government over the island of Taiwan, then Washington DC would have demanded that Taiwan fly the Chinese Communist flag over its own flag, like Hong Kong does. But, it didn’t and they didn’t ask. The test of what Donald Trump thinks about China is not a question of how many times he sees the word “China” on his globe at home, but what flags he accepts flown where.

Is China wise to what’s going on? Perhaps money is making all the difference. China’s PLA Navy is headed for an increased budget. If money was China’s answer, perhaps money tipped-off Beijing in the first place.

According to Obama Treasury rules, China is only 1/3 of a “currency manipulator”, exceeding a $20B trade deficit with the States. The other two rules relate inflation to GDP and official currency purchases to GDP—two things where China plays by a different set of rules than American economics. China “declares” its own currency value, it is not determined by the markets, making what the US refers to as “inflation” irrelevant to China. The second irrelevant Obama rule relates to “official” currency purchases. If only economics were only affected by “official” purchases, many other economic problems would be solved. But, economies are affected by “actual” purchasing, not merely whatever we happen to label as “official” this decade. The Chinese, especially, are experts at looking good “officially” while doing the bulk of their work under the table. Why else would Asians be so focused on cram schools and testing?

Then, there is the task of calculating “GDP” in a heavy back-and-forth trade economy. In 2011, the US slapped tariffs on China-made solar panels, which were made with materials imported from the US, which China also slapped a tariff on. Not only is actual “domestic” product difficult to measure in a “Venn diagram” of overlapping markets, there is also the problem that China’s government behaves like a company itself—benefiting from tariff revenue, thereby triggering another slew of investing and purchasing opportunities. If economics were a pair of glasses, China operates in ultraviolet light that no pair of US lenses can detect.

So, not only were the Obama Treasury “currency manipulator” rules an attempt to measure the light with a wind sensor, Trump gets what Trump wants. If China is destined for the “currency manipulator” list, it will get on that list one way or another, and there is a laundry list of ways that can happen.

But, then, there is North Korea.

While the “experts” lecture the world about how “trade wars” always backfire, China harbors its own trade war with the government in Northern Korea. Kim Jong Un isn’t happy with Beijing and Beijing wants to talk about it with the US.

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Encore of Revival: America, January 16, 2017

President-Elect Trump criticized the intelligence community for having fake reports and allowing those reports to leak. He conducted his own “leak” fishing expedition and plugged the leak—or “caught, fired, and fried” the leak. If he can find his leaks with no power of the pen, why can’t the “intelligence” people find their leaks? That must be Trump’s question, anyway. Of course he Tweeted against the agencies.

Is it wrong for a president-elect to criticize people he can soon fire? There is no way that this president-elect has criticized his soon-to-be subordinates as much as the soon-to-be ex-president will continue to criticize without end. Obama plans to stay in Washington, and it isn’t because he likes gazing at the Eisenhower Building.

When Brennan lectures, “It’s more than about Mr. Trump; it’s about the United States of America,” he’s talking about his future boss. That’s not right or wrong; that’s just not smart. Even Comey was smart enough not to go up against Obama. Maybe Brennan expects to be fired anyway.

A lot of people aren’t thinking about what will happen when the man they continue to criticize becomes president. They weren’t thinking about all the deals they made that weren’t going to last. Whether the trade deals were good or bad, Americans were never going to tolerate China and Mexico taking American jobs forever. Clinton’s and Bush’s and Obama’s trade deals weren’t going to last. But, people didn’t see that either. They didn’t see a lot of stuff that was coming. That’s somewhat of a unifying quality among the anti-Trumpists. It still is, apparently.

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Cadence of Conflict: Asia, November 21, 2016

With TPP’s immanent floundering in the Pacific, China attempts to step into America’s shoes. But, those are big shoes to fill. As big of a deal as Asia thinks itself to be, any trade deal needs to include the Americas or it really isn’t worth writing headlines about—or even the agreement papers. China’s current proposal to replace TPP with a pure-Asia trade agreement is called “Regional Comprehensive Economic Partnership (RCEP)”—again, with an introspective worldview evident in the name, not identifying which “region” is involved because the region is presumed by those in it. RCEP won’t even make a dent in the ocean.

Instead, Trump still dominates the headlines. Japanese President, Shinzo Abe thinks Trump is “trustworthy”. He met with the president elect at Trump Tower.

Other than Trump and trade, the rest of the news reset itself to stories questioning China’s economy. Metal is up for suspicious reasons. Apple isn’t that great and wasn’t going to be that great anyway. And, China is already spying on us through their cell phones. It almost seems that newspapers agree with Trump about having more mobile phones made in the USA.

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Cadence of Conflict: Asia, July 25, 2016

The words “China” and “tariffs” are appearing in headlines together again. Cambodia is seen as a Chinese puppet in ASEAN. And, one dissenting opinion from Forbes claims that tariffs are only about consumers, not about jobs and whole economies. Contrary to China’s unspoken messages, Beijing asks for more economic cooperation, but Europe is stealing the limelight.

If China were truly interested in global economic growth, they should move their shadow away from the economic shipping lanes in the South China sea. But, that idea doesn’t exactly come to mind to the Communist worldview, which presumes that success is bestowed rather than sown and reaped.

Taiwan’s order of 50 some amphibious vehicles from the US has been delayed until 2020, three and a half years. Yet, the US called on Taiwan to create a vehicle for a lunar landing. One would think that Taiwan might build 50 some lunar landing vehicles for Taiwanese use under water, especially since the specs should not be as complex, but that was not reported. Perhaps the US could divert NASA resources to Taiwan’s security to ensure that the lunar vehicle supplier is not crushed by an invasion from China, but that was not reported either.

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