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 Forecasting America's Destiny ... and the World's


Web Log - July, 2019


31-Jul-19 World View -- China claims Muslim Uighurs released from concentration camps

From 'Re-education' to slave labor

by John J. Xenakis

This morning's key headlines from

China claims Muslim Uighurs released from concentration camps

Shohrat Zakir, center, just before making the statement that Uighurs have been released (AP)
Shohrat Zakir, center, just before making the statement that Uighurs have been released (AP)

A new bizarre announcement from the Chinese Communist Party (CCP) claims that most of the Muslim Uighurs and Kazakhs that have been arrested and put into concentration camps ("re-education centers") have now been released.

Starting in 2016, reports were coming out of East Turkistan (Xinjiang Province) that tens or hundreds of thousands of Muslim Uighurs and Kazakhs were being arrested and put into concentration camps. At first, the CCP vehemently denied that these concentration camps even existed. But more and more satellite imagery was published showing the existence of huge concentration camps and crematoria. By 2019, the evidence collected from satellites and on the ground indicates that over one million Uighurs and Kazakhs have been locked up in these concentration camps.

With the overwhelming evidence piling up, the the CCP was forced last year to admit that they had locked up a million Uighurs and Kazakhs in "reeducation centers," but claimed that the Uighurs and Kazakhs were being locked up so that they could be "reeducated" and given new skills that they could use in Chinese society.

On Tuesday, Xinjiang Governor Shohrat Zakir made an announcement:

"Most of the graduates from the vocational training centers have been reintegrated into society, More than 90 percent of the graduates have found satisfactory jobs with good incomes. ...

Many of these training centres have become venues for short-term classes on farming skills, and some are offering short-term skills improvement courses for people before they take up their new jobs."

People in the West are scratching their heads wondering what this means. If there were hundreds of thousands of former prisoners suddenly walking free in the streets of Xinjiang province, then it would already have been noticed, and no announcement would be necessary. So if these hundreds of thousands of Uighurs and Kazakhs are no longer in the "reeducation centers," then where are they?

From 'Re-education' to slave labor

One possibility is that they've been sent to the crematoria, much like the "graduates" of Hitler's concentration camps. That may turn out to be true for a substantial number of them, but we may not know for a long time, just as we never found out about Hitler's crematoria until after the war.

Barry Sautman, an expert on ethnic politics in China at the Hong Kong University of Science and Technology, provides a different possible explanation:

"They may mean that such persons no longer reside within the centers. It does not mean that such persons have returned to the status quo ante, are no longer under close supervision, or work somewhere other than an enterprise connected to one of the centres."

This makes sense. If you have a million prisoners, then use them as slave labor on farms and in factories.

Hitler's Force Labor System, 1939-1945

That's what Hitler did, according to the project "Forced Labor 1939-1945" archive in Berlin:

"Nazi Germany created one of the largest forced labor systems in history: Over twenty million foreign civilian workers, concentration camp prisoners and prisoners of war from all of the occupied countries were required to perform forced labor in Germany in the course of the Second World War.

At the height of the so-called “Ausländereinsatz” (use of foreigners) in August 1944, six million civilians were forced to perform forced labor in the German Reich, most of them from Poland and the Soviet Union. Over one third were women, some of whom were abducted together with their children or gave birth to their children in the camps. In 1944, nearly two million prisoners of war were exploited to work in the German economy. From 1943, German industry also increasingly used concentration camp detainees as a source of forced labor."

So it seems likely that the CCP is using Uighurs and Kazakhs concentration camp detainees as forced labor.

Using these prisoners as forced laborers makes a lot of sense. But also, as I've described in my book, "War Between China and Japan," both Chiang Kai-Shek and Mao Zedong admired Adolf Hitler and his methods, and Xi Jinping is also copy Hitler's methods in illegally annexing the South China.

This story about "releasing" Uighurs and Kazakhs is just breaking today, so there's a lot we don't know. But as I keep pointing out, the CCP has adopted some of the stupidest policies in the history of the world since World War II, and using Uighurs and Kazakhs as slave labor would be consistent with that.

Those interested in understanding China today and in history should read my book, "World View: War Between China and Japan: Why America Must Be Prepared" (Generational Theory Book Series, Book 2) Paperback: 331 pages, with over 200 source references, $13.99


(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (31-Jul-2019) Permanent Link
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17-Jul-19 World View -- Japan - South Korea trade dispute worsens

Roots of the Japan-Korea dispute

by John J. Xenakis

This morning's key headlines from

Japan - South Korea trade dispute worsens

Japanese patrol plane launches anti-missile flares during a fleet review in 2015 (AFP)
Japanese patrol plane launches anti-missile flares during a fleet review in 2015 (AFP)

Korean chip and display manufacturers, including Samsung Electronics, SK Hynix, and LG Electronics, are scrambling to recover from being hit with a one-two punch -- first the US-China trade war, and then Japan's export restrictions on needed materials.

The US-China trade dispute has roiled supply chain relationships throughout Asia. Officials in many companies are moving factories and finding new suppliers, hoping that the dispute will end soon or that, at worst, Donald Trump will lose the next presidential election and the trade dispute can then be settled.

So a lot of people are shocked and surprised that there's suddenly a new trade dispute, this time between Japan and South Korea, and this one may be as intractable as the US-China dispute.

Starting in July, Japan tightened restrictions on the export of three materials used in manufacturing chips and displays, citing what it has called “inadequate management” of sensitive items exported to South Korea, as well as a lack of consultations about export controls. The three materials are EUV photoresist, hydrofluoric acid (etching gas) and fluorinated polyimide.

It's believed that Samsung's existing inventory of EUV photoresist is not large, since stocks can expire within a few weeks, and require demanding storage conditions.

It's going to be difficult to find alternate suppliers since Japan controls 92% of the global resist supply and 94% of fluorinated polyimid.

Two South Korean companies, Dongjin Semichem and Foosung Co, do manufacture the restricted materials, but not in the quantities needed by Samsung and SK Hynix.

Chips -- the law of supply and demand

Both Samsung and SK Hynix have announced 10% cuts in DRAM production, and probably the same in NAND memory production, because of the restrictions announced by Japan on July 1.

Perhaps counter-intuitively, this has benefited both companies, with Samsung's stock shares increasing 2% since July 1, and SK Hynix shares up 8%. This is despite a general fall in Seoul's stock market.

The reason is that the production cuts are reducing the supplies of these chips, while demand remains the same, and so prices are going up, and so profits at Samsung and SK Hynix are also going up. In fact, the prices of DRAM chips have been falling in the last year, and are now returning to their former levels.

The shortages of these chips will mean higher prices for consumers wanting to buy iPhones and other electronic devices, but what is bad for consumers in this case is good for the manufacturers.

Roots of the Japan-Korea dispute

The mutual hatred of the Japanese and Korean people goes very deep. Korea has been the staging ground for earlier invasions by both China and Japan against one another — for example, Kublai Khan's invasions of Japan in 1274 and 1281 or Toyotomi Hideyoshi's attempts to invade Ming China via Korea in 1592 and 1597.

During much of the last two millennia, Korea has been a vassal state of China, in a tributary relationship, meaning that Korea paid China a great deal of money, usually gold and slaves, in return for guarantees of defense from outsiders (i.e., Japan).

Since Korea lies between Japan and China, there have been many wars fought between Japan and Korea, or between Japan and China on Korean soil. In my opinion, the most important and significant battle in east Asia during the last millennium, prior to World War II, was the Battle of Myongnyang (Myeongnyang) on October 26, 1597. The Koreans won a brilliant naval victory against the Japanese navy, using technologically advanced "turtle ships," believed to be the world's first ironclad warship. A Korean contingent of 12 ships lured a Japanese force of hundreds of ships into a narrow channel and destroyed 133 Japanese vessels without any Korean losses. Even today, the battle is described in mythic terms, as an almost miraculous victory.

Japan finally achieved its revenge in the first Sino-Japanese war (1894-95), which was a victory of Japan over China. China relinquished all claims of influence over Korea, which became a Japanese protectorate until it was annexed outright in 1910. Japan also took control of Taiwan, the Penghu Islands, and the Liaodong Peninsula. Korea was a Japanese colony until 1945, when Japan was defeated in World War II.

Those interested in understanding the millennia of east Asian history should read my book, "World View: War Between China and Japan: Why America Must Be Prepared" (Generational Theory Book Series, Book 2) Paperback: 331 pages, with over 200 source references, $13.99

Korea-Japan flareups

So with those centuries of history, nobody should be particularly surprised when differences between the two countries are flaring up again. There have been two major flareups in the last year, and neither of them appears close to resolutions.

During World War II, Japanese soldiers used Korean girls, both prostitutes and civilians, as "comfort girls." Korea has demanded reparations for the use of the comfort girls, and for other slave labor performed by the Koreans.

The Japanese claim that all such awards were already paid in a settlement concluded in a 1965 treaty.

Then, in 2015, Japan and Korea concluded a bilateral agreement which was intended at the time as the “final and irreversible” resolution of the comfort women issue. However, that turned out not to settle the issue after all. South Korea is now saying that demands from the victims are causing the agreement to "wither," and on October 30 of last year, South Korea's supreme court awarded compensation to four Korean citizens forced to work for the Japanese during World War II, an award that the Japanese are refusing to acknowledge. This is still an explosive issue with vitriolic views on both sides that are unlikely to be settled in the near future.

A second dispute is related to a military issue that occurred late last year.

According to Japan, on December 20 a South Korean warship locked its fire-control radar onto a Japanese patrol plane, as if preparing to shoot it down. Japan made a formal protest to South Korea, claiming that it was a "hostile act." South Korea denied that the radar lock had occurred. In the vitriolic talks that have occurred since then, Korea has claimed that Japanese Self-Defense Force planes have deliberately flown at low altitude near South Korean naval vessels multiple times, terming the acts a "clear provocation."

This brings us back to Japan's announcement that it was restricting sales of the three materials needed by South Korean firms to manufacture chips. Japan has never given a reason for the restriction, except to make some vague claims about national security. At a meeting of the World Trade Organization (WTO), the Japanese representative said the measures are "not a trade embargo but an operational review necessary for proper implementation of Japan's export control system based on security concerns," whatever that means. But it's believed that the Japanese are retaliating for the comfort girl and radar lock issues.

Japan and South Korea are US and Western allies, and have common enemies -- North Korea and China. After centuries of war, there's little chance that the people of the two countries will ever love each other, or even that the current disputes will ever be completely settled. All that we can hope for is some sort of ceasefire.


Related articles:

(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (17-Jul-2019) Permanent Link
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12-Jul-19 World View -- Syria war may be fizzling, as al-Assad 'hits a wall' in Idlib

Does the Syria war have a political solution?

by John J. Xenakis

This morning's key headlines from

Syria war may be fizzling, with Idlib conflict frozen

For the past three years, Syria's president Bashar al-Assad has publicly vowed that he would regain control of all of Syria, even if it meant exterminating all of millions of civilians in his Sunni Arab opposition.

Al-Assad used a similar period in one region after another -- Aleppo, Ghouta, Daraa, etc. He begins by bombing peaceful protesters, particularly women and children. As soon as someone become violent in revenge, he declares the whole community or ethnic group to be "terrorists," and uses that as an excuse for full-scale genocide and ethnic cleansing. The genocide is performed with missiles, barrel bombs, chlorine gas and Sarin gas, all particularly targeting women and children, as well as schools, markets, and hospitals. In each region, under pressure from Russia and the United Nations, allowed hundreds of thousands of people to flee to the northwest province of Idlib.

Al-Assad has vowed since May 2018 that he would attack Idlib in exactly the same way, in order take control of it. This has led to widespread fears of a major humanitarian catastrophe, since "there's no Idlib for Idlib," meaning that there's no place for the people to flee to. Thanks to the influx of refugees from other regions, Idlib now has over three million people, mostly women and children, and al-Assad claims that all of them are "terrorists." Approximately 70,000 are believed to be members of Hayat Tahrir al-Sham (HTS), an anti-Assad rebel group formerly associated with al-Qaeda.

If al-Assad assaulted Idlib in the same way as the other regions, perhaps millions of people would try to cross the border into Turkey. Turkey will bear the brunt of this disaster. Turkey is already hosting 3.5 million refugees, and is doing everything possible to prevent any more refugees from Syria from entering Turkey. If a new mass of refugees does enter Turkey, then some of the Idlib refugees will undoubtedly continue on into Europe, resulting in a new European migrant crisis.

Al-Assad 'hits a wall'

I and many other people expected al-Assad's assault on Idlib to have begun long before now. But there was almost know military action at all in the last year, until April 26, when it began bombing residential areas, schools, hospitals, markets and other places where women and children are likely to be found. It seemed that the full force of al-Assad's assault on Idlib had begun.

However, al-Assad's assault on Idlib appears to have "hit a wall." More than two months of Russian-backed operations in and around Idlib province have yielded little or nothing. Al-Assad's assault has been met with a counterpunch from anti-Assad rebels who have been well-armed with guided anti-tank missiles supplied by Turkey.

The instability of Idlib province

The fact that al-Assad has accomplished little in Idlib in the last year, and has hit a roadblock since resuming operations on April 26, is making observers wonder if the war may be reaching a diplomatic solution, with no clear victory by either al-Assad or the anti-Assad rebels. There are a number of political reasons supporting that conclusion.

Russia's president Vladimir Putin has been under domestic pressure because of the cost of Russia's support for Syria in the war. That's not surprising, since Russia already has what it wants from the Syria war. Russia was completely shut out of the Mideast in the 1990s after the collapse of the Soviet Union. Now, for the first time in decades, Russia has two military bases in the Mideast -- the Tartus naval base, and the Hmeimim airbase, both of them in Syria, in return for supporting al-Assad. Russia is now firmly in control of those two bases, and now that it has the bases it wants, and also wants to spend less money, it can pull back from the war in Syria.

In the past, Russia, Iran, and Iran's puppet Hezbollah were all fighting alongside al-Assad's forces against his Sunni Arab opposition. Turkey had no choice but to watch what was happening from afar.

But now, Russia wants to be main power in the Mideast. Furthermore, Russia does not want any more Mideast wars, since they would inevitably require Russia to intervene. So Russia wants to support Turkey in preventing a massive new refugee crisis in Idlib. Russia would also like to keep Iran and Hezbollah under control, so that they don't threaten a war with Israel.

However, there are also major political factors working against a political solution. The HTS anti-Assad rebels have been attacking Syrian forces. Theoretically, based on an agreement between Turkey and Russia, Turkey is supposed to prevent these kinds of attacks between HTS and al-Assad forces, by means of a buffer zone separating them, but this has not been entirely successful.

Does the Syria war have a political solution?

When the war in Syria began in 2011, I wrote that it would fizzle because Syria is in a generational Awakening era. That's what should have happened. The war almost fizzled after four years in 2015 when al-Assad's army, ridden with desertions, was facing defeat from his Arab Sunni opposition. But that was point at which he was saved by Russia, which brought the full force of its armed forces in support of al-Assad.

Now another four years have passed, and once again it appears that war is about to fizzle. Maybe this time there will finally be some sort of political settlement. It's certainly true that after eight years, pretty much everyone is sick and tired of fighting the war.

Syria's current "civil war" is also an Awakening era war because it comes just one generation after the real civil war that occurred in Syria.

Syria's last generational crisis war was a religious/ethnic civil war between the Shia Alawites versus the Sunnis. That war climaxed in February 1982 with the destruction of the town of Hama. There had been a massive uprising of the 400,000 mostly Sunni citizens of Hama against Syria's Shia/Alawite president Hafez al-Assad, the current president's father. He turned the town to rubble and killed or displaced hundreds of thousands. Hama stands as a defining moment in the Middle East. It was so shocking that it largely ended the war.

That worked because at that time, Syria was in a generational crisis era, and the destruction of Hama was the climax of the war. The reason for Bashar al-Assad's delusions is that he thought that the destruction of Aleppo in 2016 would end the war in the same way that his father's destruction of Hama ended the war. But this is a generational Awakening era, and that kind of outcome doesn't work. The reason that it doesn't work is that there are many survivors who were shocked by the destruction of Hama in 1982, but are no longer shocked by similar actions since they've seen it all before. So the destruction of Aleppo did not end the war, as Bashar al-Assad delusionally hoped, and now the war is back in full force.

So that's why the war should have fizzled, since both the Shia/Alawites and the Arab Sunnis have vivid memories of the 1982 war and don't want it to repeat. So why didn't war fizzle quickly?

As I've written many times in the past, Bashar al-Assad is the worst genocidal monster so far this century. He is apparently in some kind kind of psychotic competition with his late father, and wants to prove that he can slaughter just as many people, just as effectively.

(As an aside, North Korea's child dictator Kim Jong-un is also in a similar psychotic competition with his own late father, Kim Jong-il, as I've mentioned in the past.)

The Syrian war began in 2011 when al-Assad ordered his army and air force to attack peacefully protesting civilians, including women and children. Things really turned around in August 2011, when al-Assad launched a massive military assault on a large, peaceful Palestinian refugee camp in Latakia, filled with tens of thousands of women and children Palestinians. He dropped barrel bombs laden with metal, chlorine, ammonia, phosphorous and chemical weapons onto innocent Sunni women and children, he's targeted bombs on schools and hospitals, and he's used Sarin gas to kill large groups of people. He considers all Sunni Muslims to be cockroaches to be exterminated.

This attack on Arab Sunnis attracked tens of thousands of young jihadists to Syria to fight al-Assad. By 2014, these jihadists had formed the so-called Islamic State (IS or ISIS or ISIL or Daesh). There were numerous anti-Assad rebel groups, including the Free Syrian Army (FSA), Syrian Democratic Forces (SDF), al-Qaeda-linked Jabhat al-Nusra (al-Nusra Front) later renamed Jabhat Fateh al-Sham or JFS, and then renamed again to Hayat Tahrir al-Sham (HTS). There were also Kurdish forces including PYD = Kurdish Democratic Union Party, YPG = Kurdish People’s Protection Unit, armed wing of the PYD, and YPJ = Women’s Protection Units. And of course there were also Turkish forces, American forces, Hezbollah and Iran's Islamic Revolution Guards Corps (IRGC).

The point is that the Syrian civil war is not really a civil war. Rather it's a mash of over a dozen different forces vying for control of different parts of Syria.

In the past eight years since Syria's war began, I've written analyses of Awakening era wars in many other countries, where the preceding crisis war was an ethnic or tribal civil war. All the leaders in such cases exhibit some level of violence against their former tribal or ethnic enemies. These include Bashar al-Assad in Syria, Paul Biya in Cameroon, Pierre Nkurunziza in Burundi, Paul Kagame in Rwanda, the military junta in Thailand, Yoweri Museveni in Uganda, Robert Mugabe in Zimbabwe, Salva Kiir in South Sudan, Joseph Kabila in Democratic Republic of Congo (DRC), and Hun Sen in Cambodia.

From the point of view of Generational Dynamics, what we can expect with respect to Idlab and the war in Syria is as follows: The Syria war will not reach a climax (such as the climax in 1982). Intead, the war will fizzle, or there will be some kind of poltical settlement. Throughout history, what has always happened in such situations is there are always alternating periods of peace and low-level violence or war. Each period of violence will be worse than the previous one, land will be settled by some kind of peace agreement, which will be quickly broken by one or both sides. Finally, after several decades, there is a massive new generational crisis war, and the cycle repeats.

At the very least, we can breath a sigh of relief that al-Assad has "hit a wall" in Idlib, so that there won't be a new humanitarian catastrophe.


(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (12-Jul-2019) Permanent Link
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10-Jul-19 World View -- US approves sophisticated weapons sales to Taiwan, despite China's fury

Pundits fear conflict with US-China trade talks

by John J. Xenakis

This morning's key headlines from

US approves sophisticated weapons sales to Taiwan, despite China's fury

The US State Dept. has approved the sale of sophisticated weapons to Taiwan. The sales will include 250 Stinger anti-aircraft missiles and 108 General Dynamics M1A2T Abrams tanks.

According to a statement from the Dept. of Defense:

"This proposed sale will support the foreign policy and national security of the United States by helping to improve the security and defensive capability of the recipient, an important force for political stability, military balance, and economic progress in the region.

The recipient intends to use these defense articles and services to modernize its armed forces and expand its existing air defense architecture to counter threats. This will contribute to the recipient military's goal to update its capability while further enhancing greater interoperability between the recipient, the U.S., and other partners. The recipient will have no difficulty absorbing this equipment into its armed forces.

The proposed sale of this equipment and support will not alter the basic military balance in the region."

Although the statement says that the sale "will not alter the basic military balance in the region," it's clear that the intended purpose is to allow Taiwan to defend itself against an attack by China. China has stated that it will, as a last resort, invade Taiwan in order to annex it to China, as it has already illegally annexed the South China Sea to China.

The intent is that anti-aircraft missiles will permit Taiwan to defend against a missile attack by China, and the tanks will permit Taiwan to defend itself from a land attack by China.

According to a tweet by Taiwan's president Tsai Ing-wen:

"Pleased that the #US government has approved another arms sale package, boosting #Taiwan’s self-defense capabilities. We’ll continue to speed up investment in national defense, & partner with like-minded countries to defend democracy while promoting regional peace and stability. Tsai Ing-wen (@iingwen) July 9, 2019"

However, China's Foreign Ministry responded harshly:

"The US arms sale to Taiwan gravely violates international law and basic norms in international relations, seriously breaches the one-China principle and the three China-US joint communiques, flagrantly interferes in China's domestic affairs and harms China's sovereignty and security interests. China deplores and resolutely opposes it. We have lodged stern representations with the US.

Taiwan is an inalienable part of the Chinese territory. No one should underestimate the Chinese government and people's will and resolve to defend our sovereignty and national integrity against foreign interference. We urge the US to stay committed to the one-China principle and the three joint communiques, cancel this arms sale immediately and stop military ties with Taiwan to prevent further damage to China-US relations and peace and stability across the Taiwan Strait."

As I've written in the past, China does not want a war with the US. However, China is planning a war of extermination against Japan, in revenge for Japan's atrocities in World War II, and also a war of annexation against Taiwan. China is developing a huge arsenal of missiles and ships to attack the United States because the Chinese know that the US will defend Japan and Taiwan when they're attacked by China.

Pundits fear conflict with US-China trade talks

A number of commentators are complaining about the timing of this announcement of arms sales to Taiwan because it will further complicate the US-China trade talks. The US and China were close to an agreement in May, when the Chinese negotiators reneged on all their written commitments.

The reality is there will never be a US-China trade agreement, because China will never give up its illegal trade practices and illegal theft of foreign intelligence and intellectual property, no matter what Donald Trump or anyone else does, whether the US sells arms to Taiwan or not.

As usual, the mainstream media are totally baffled by Trump's foreign policy. The purpose of the US-China trade talks is only partially about trade. It's mostly about derailing China's headlong rush into launching World War III. As I've said many times in the past, World War III is 100% certain, and cannot be prevented. However, I'm not going to criticize Trump for taking steps to prevent WW III, even if it's impossible to prevent World War III.


(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Jul-2019) Permanent Link
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4-Jul-19 World View -- UK-China war of words escalates sharply over Hong Kong riots

Did China set a trap for the protesters?

by John J. Xenakis

This morning's key headlines from

UK-China war of words escalates sharply over Hong Kong riots

Protesters install an old British colonial flag in the Legislative Council chamber on Monday (SCMP)
Protesters install an old British colonial flag in the Legislative Council chamber on Monday (SCMP)

Although it's still only a war of words, tensions and acrimony have risen sharply in the last three days, following the pro-democracy protests in Hong Kong.

On Monday, hundreds of thousands of Hong Konger made peaceful pro-democracy protests. However, a small group of protests smashed the thick glass in the exterior glad doors and walls of Hong Kong’s Legislative Council (LegCo) building, and entered and vandalized the building.

This has infuriated Chinese Communist Party (CCP) officials, some of whom are calling for a get-tough policy in Hong Kong that removes some of freedoms granted to Hong Kong in the "one country, two systems" policy that distinguishes Hong Kong's governance from that of the rest of China.

But apparently nothing infuriated the CCP officials in Beijing more than seeing the British colonial flag installed at the head of the Legislative Council Chamber, as shown in the picture at the beginning of this article.

Starting on Tuesday, CCP officials have been talking in a manner much harsher than they've talked in the past. One CCP official suggested that Hong Kong's "one country, two systems" should be brought to an end:

"Yet, some extremists on the pretext of opposing the amendments to the relevant Bill of the special administration region government, attacked the Legislative Council building in an extremely violent manner and deliberately damaged its facilities.

This serious illegal act tramples on the rule of law in Hong Kong, undermines Hong Kong's social order and undermines the fundamental interests of Hong Kong. It is a blatant challenge to the ‘one country, two systems’ bottom line."

A number of people on Chinese social media are being quoted as supporting the government position:

"There's definitely a problem with the policies towards Taiwan and Hong Kong. Why does the central government think that as long as it gives enough benefits and special rights, the people will be loyal to you?"

Here's another:

"One country, two systems is too lax, and this is the result. If Hong Kong wants to return to normal, it should start with decolonization and change the name of Victoria Harbour to Oriental Pearl Harbour."

On the other hand, many of the young protesters on Monday were expressing concern that the "one country, two systems" policy is scheduled to end in 2047, well within the expected lives of the protesters. This is leading many young protesters to demand that Hong Kong be returned to Britain.

Nearing a repeat of the 1989 Tiananmen Square massacre

This is not the end of the story. After Monday's "victory," the protesters are only going to become more bold in pro-democracy protests. Pro-independence activists in Taiwan will also be emboldened. The CCP thugs are seeing the pro-democracy protests in Hong Kong as a repeat of the 1989 pro-democracy protests in Tiananmen Square, which ended with the mass slaughter of thousands of peacefully protesting college students.

This is the danger that many in the international community fear. The paranoid, delusion people in the high ranks of the CCP consider democracy to be not a form of government but an ideology, and ideology opposed to Communism, Socialism and Marxism, and they see a pro-democracy demonstration as threatening the CCP's very existence. That reasoning led to the massacre of thousands of peacefully protesting college students in Tiananmen Square in 1989, and many analysts fear that the CCP will do a repeat if there's another huge pro-democracy protest in Hong Kong, last the the last three in the past couple of months.

For the CCP, the anxiety and hysteria is particularly acute, since Hong Kong is in southern China, and CCP officials fear a new massive anti-government rebellion in the south, as happened in the past with the Taiping Rebellion (1852-64), and Mao's Communist Revolution (1934-49). (See "22-Jun-19 World View -- Hong Kong protests show historic split between northern and southern China")

Britain and China exchange threats in escalated war of words

China's president Xi Jinping has said that if it hadn't been for Britain's 1840s invasion of China, the Opium Wars, then China would be a great nation today. It was as a result of those wars that Britain acquired Hong Kong as a colony, which it returned to Chinese rule in 1997.

Under the terms of the 1984 Joint Declaration on Hong Kong, signed by China and Britain, Hong Kong is to be a "Special Administrative Region" of China, having its own laws, freedoms, financial system and judicial system, for 50 years, from 1997 until 2047. This is known as "one country, two systems."

Britain's government claims that even though Hong Kong is part of China, Britain still has some responsibility to protect Hong Kong freedoms under the terms of the Joint Declaration that China and Britain signed in 1984.

Britain's Foreign Secretary, Jeremy Hunt, began the war of words:

"My heart goes out to those worried they’ll lose their precious way of life. I don’t support violence in any circumstances but I understand their worries about changes happening in Hong Kong.

The Chinese government say this is an internal affair and it’s not for Britain to meddle in this, but we signed an agreement ensuring ‘one nation, two systems’ for 50 years, so I hope there are not changes which undermine that legally binding agreement."

CCP officials have described this statement as "very offensive." China's position is that the Joint Declaration is an old document that is no long relevant. China's Foreign Ministry spokesman said:

"Let me reiterate, the Joint Declaration resolved the Hong Kong issue, which was left over by history. As Hong Kong returned to the motherland and work relating to the transitional period came to an end, the rights and obligations of the British side under the declaration were completely fulfilled. On July 1, 1997, China resumed sovereignty over Hong Kong and the Chinese government started administering it in accordance with the Constitution and the Basic Law. The UK no longer has any responsibility for Hong Kong. Hong Kong affairs are purely China's internal affairs that brook no foreign interference.

I would also like to stress that China deplores and strongly rejects the frequent British interference in and criticism of Hong Kong affairs. We advise the UK to know its place, stop meddling in Hong Kong affairs in any form and do more for its prosperity and stability rather than the opposite."

China’s ambassador to London, Liu Xiaoming, appeared on British television and accused the British government of meddling:

"The U.K. government chose to stand on the wrong side, it has made inappropriate remarks, not only to interfere in the internal affairs of Hong Kong but also to back up the violent lawbreakers. [Britain has tried to obstruct Hong Kong officials from] bringing the criminals to justice, which is utter interference in Hong Kong’s rule of law."

I heard several commentators express the fear that the war of words could escalate into something more serious. The last sentence in the preceding paragraph shows one possible scenario.

Let's suppose that Britain takes some action to help Hong Kong activists escape via ship from Hong Kong to avoid prosecution. China could then block the ship on the high seas, and things could escalate further.

In my book, "War between China and Japan," I discussed at length how world wars are triggered by trivial events, as the hatred and vitriol grows during a generational Crisis era. China repeatedly whines that China would be a great nation if it hadn't been for Britain's Opium Wars, and nostalgia in Hong Kong for the days when Hong Kong was a British colony seems to be growing, which clearly infuriates the CCP officials.

As I described in my book, in this febrile atmosphere even a simple event could trigger tit-for-tat escalations back and forth, and lead to a major military crisis.

In a previous protest, girl holds British flag and placard reading 'Make Hong Kong Great Britain Again' (SCMP)
In a previous protest, girl holds British flag and placard reading 'Make Hong Kong Great Britain Again' (SCMP)

Did China set a trap for the protesters?

When the protesters were breaking into the Legilative Council (LegCo) building, they had to smash through doors and windows with thick glass, designed to withstand terrorist explosions. It took several hours to finally break through.

During all this time, there were riot police nearby, but they did nothing to stop the vandalism. In fact, when the small group of vandals approached, they turned away.

As midnight approached, the protesters finally left the LegCo building, and all that were left were reporters. The BBC reporter wondered why he was being allowed inside the building, and was allowed to broadcast these scenes to the world. He raised the question about whether the government was setting some kind of trap, so that they could be called rioters and terrorists.

That seems to be exactly what happened. The riot police were right there, and could have stopped the smashing of the LegCo building doors and windows, but just stood aside and them the vandals proceed. Now the Chinese government will be able to use this incident as a reason to impose stricter laws and procedures on Hong Kong residents.



(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Jul-2019) Permanent Link
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3-Jul-19 World View -- Vietnam to gain from collapse of US-China trade talks

North vs South Vietnam

by John J. Xenakis

This morning's key headlines from

Vietnam to gain from collapse of US-China trade talks

Anti-Chinese protesters in Vietnam in 2014 (AFP)
Anti-Chinese protesters in Vietnam in 2014 (AFP)

Thanks to China's new Foreign Investment Law and the apparently complete collapse of the US-China trade negotiations, companies doing business in China are now considering moves to China's neighbors, especially Vietnam.

China passed its Foreign Investment Law in March. It allows any Chinese Communist Party (CCP) official to visit a foreign-owned business with offices in China and demand copies of all confidential company business records and company data, as well as its source code and all other intellectual property. Compliance is required.

US and Chinese trade negotiators had reached a 150-page written agreement that removed all of these regulations.

US trade negotiators had thought that they had an agreement with the Chinese negotiators that threw out all these onerous conditions. But late in the evening, Friday May 3, Washington received the latest edits from their Chinese counterparts that completely reneged on all of Beijing's commitments. It's now believed that Beijing never had any intention of honoring the its commitments, but expected that political pressure would force President Donald Trump to accept the watered-down agreement anyway. Instead, Trump angrily announced a new rounds of tariffs and restrictions on Huawei. It's believed to be quite a shock to Beijing that Trump is receiving wide support from the international community and Democrats in Washington to stand up to China, at least for the time being. China will not back down from its trade model that uses subterfuge, extortion, and ignoring its commitments and obligations, and Trump cannot back down because to do so would be appeasement, and would do no good anyway.

And so the US-China trade negotiations have mostly collapsed, although the talks may be revived as a result of last week's meeting between Donald Trump and Xi Jinping.

Business opportunities in Vietnam

The collapse of the US-China trade talks is shaking up all of Asia, and there are certainly going to be winners and losers. Vietnam is hoping to be one of the major winners, as businesses look for countries to which to shift their manufacturing out of China, in order to avoid the US tariffs.

Vietnam’s economy today is one of the fastest-growing and most vibrant in the world. GDP grew at 7% in 2018, with similar growth forecast for 2019.

Vietnam also has a young, ambitious labor force, with two-thirds of the population under age 35. Just as the West had its "baby boom" after World War II, Vietnam had its own baby boom after the extremely bloody generational crisis civil war between North and South Vietnam in the 1970s, and those babies are now of working age.

Furthermore, labor costs are a fraction of what they are in neighboring countries. According to one estimate, labor costs in Vietnam are half those of China, with the same worker productivity.

Because of the US-China trade dispute, many companies are considering moving their manufacturing facilities from China to Vietnam, since exports from Vietnam would not be subject to the US tariffs.

For example, China's wireless earphone maker GoerTek has expressed an intent to move production to Vietnam, to avoid the tariffs, because labor is cheap, and because Vietnam is close by. Taiwan's massive tech firm Hon Hai Precision Industry Company, better known as Foxconn, has begun moving its production to Vietnam in recent months.

Vietnam was flat on its back after the 1970s wars, but the economy has changed substantially in the last decade or so. For example, fifteen years ago Vietnam imported almost all the food it consumed, but today Vietnam is in the top two exporters of rice and coffee and exports a lot of seafood worldwide, mainly to China and Hong Kong.

North vs South Vietnam

Those wanting to do business in Vietnam should distinguish between the the North and the South, because they have two very different cultures, and in many ways they're like two different countries.

North Vietnam (Vietnamese Kingdom) was originally populated by ethnic Chinese, while South Vietnam (Champa Kingdom) was populated by Polynesian settlers from Indonesia and Malaysia. These ethnic differences resulted in one North-South crisis civil war after another over the centuries.

The country was united by the Tay-Son rebellion (1771-1790), the most celebrated military event in Vietnamese history, ending in a brilliant battle in 1789 where the Vietnamese troops repelled a much larger Chinese army. The North and South remained technically united through the French colonial period, until Ho Chi Minh founded the Vietnam Communist Party and drove the French out of North Vietnam in 1956.

The North and the South went through bloody civil war (America's "Vietnam war") that united the two regions under the North Vietnamese communists. However, although the war has ended, there's still a great deal of animosity between the North and the South. Furthermore, after the war ended, Vietnam followed up with wars against Cambodia, and then a border war with China.

After the 1970s wars, the Communist government in Hanoi applied Communist restrictions on businesses in the South, with the continued use of wartime planning mechanisms that emphasized output targets and paid little heed to production.

In 1986, Hanoi adopted the Doi Moi economic reforms, with a significant effect on the south, making it the engine for Vietnam’s industrial growth. These reforms were inspired by Deng Xiaoping's 'Reform and Opening Up' of China in 1978.

Doing Business in North Vietnam after the US-China negotiations

Most companies moving their production facilities from China to Vietnam to evade US tariffs want to select sites for convenience, in North Vietnam, close to China's border. The Hanoi government is encouraging investments from China, but North Vietnamese public in general is opposed.

Capital inflows from mainland China, Hong Kong and Macau stood at $700 million in 2011, but by last year had topped $2.4 billion. China is the fifth biggest investor in Vietnam behind Japan, South Korea and Singapore. But critics, especially among North Vietnamese, argue that Chinese projects exploit cheap labor and minerals, while polluting the environment and landing the locals in debt.

Vietnamese hostility toward China is great for a number of reasons. In the late 1970s, after the Vietnam civil war, there was an extremely bloody border war between China and Vietnam that left a lot of dead but was otherwise inconclusive. More important, China has illegally annexed the South China Sea, including regions that historically belonged to Vietnam. China's navy has even attacked Vietnamese fishing boats in Vietnam's own territorial waters.

In 2014, thousands of anti-Chinese protesters in Vietnam, furious over China's installation of an oil rig in waters in the South China Sea historically claimed by Vietnam, turned violent and torched a number of factories in a southern Vietnam industrial park. It was Chinese factories that were the nominal targets, but the angry mob also attacked properties owned by Korea, Singapore, Taiwan and Japan.

Public opposition last year to Chinese investments became focused when thousands of people filled the streets of several major cities across Vietnam in June, 2018. They were protesting a proposal to create three "economic zones" which would give special business and trade privileges to foreign investors. They were particularly objecting to a proposal to allow 99 year leases by foreign investors, which allow the Chinese to set up Chinese enclaves that would remain forever. The Vietnamese public strongly opposed the economic zones. So far, public pressure has prevented the Communist government in Hanoi from gaining approval of the economic zones.

Doing business in South Vietnam -- Ho Chi Minh City (HCMC or Saigon)

Those who wish to do business in South Vietnam should focus on the city of Saigon, which was renamed to Ho Chi Minh City or HCMC by the Communists after the 1970s civil war. Last year HCMC attracted foreign investment of over $7 billion, 22% of the country’s total.

HCMC is experiencing a major real estate boom, thanks to low property prices. The following are average property prices in Asian cities, per square meter:

According to one study, 35,000 new apartments were put on the market between 2015 and 2018. During 2016-17, developers and corporate buyers snapped up about $1.2 billion of residential-zoned land. Most of this was from foreign buyers, mostly from South Korea, Hong Kong and China. According to estimates, over a third of historic old Saigon city buildings have been destroyed in the last 20 years to make room for new construction.

However, the disproportionate investment in real estate is raising concerns. Foreign investment money is pouring into Saigon for real estate, but not so much for industries.

During the first four months of 2019, real estate accounted for 46.8% of foreign investment, with little going for industries such as manufacturing or agricultural processing.

In response, the HCMC People's Committee chairman Le Thanh Liem has called for $53.8 billion in foreign invesments, focusing on nine areas, including transport, infrastructure, agriculture, commerce-service, education, and healthcare. 1,000 hectares of land would be earmarked for industrial purposes to attract investors.

This should represent a big opportunity for investors or for businesses that would like to relocate to South Vietnam, because of low-cost labor, low-cost housing, and government incentives for foreign investment.


(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Jul-2019) Permanent Link
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