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Published: Tue, 25 Oct 2016 00:00:00 -0400

Last Build Date: Tue, 25 Oct 2016 00:46:27 -0400


The Fate of Baishizhou

Thu, 22 Sep 2016 09:50:00 -0400

(image) Recommended reading: Foreign Policy's dispatch from Baishizhou, a dynamic district in the Chinese city of Shenzhen:

Start with Cannery Row, then jerry-rig it to accommodate half the population of Iceland, and you're close to Baishizhou. A tangle of damp alleyways opens at odd intervals onto wider avenues of frenzied commerce—fruit carts, shoe repair, blind massage, hot pot, pig's feet on rice, coal-roasted sweet potato, fortune tellers, handymen for hire, smartphone engravers, karaoke parlors, smoke shops, love hotels, furniture dealers, street-side lamb butchers, elementary schools, mahjong rooms, communal laundry wells, open-air billiard halls, and a vast number of hair salons where customers can get a head massage, a cut, and a wash for about four dollars. All of it hustles by under a sun-blocking canopy of braided telephone wires....Baishizhou also includes a densely built industrial area that's populated with small- and medium-sized businesses—from kitchen-supply companies to surface-mount technology workshops—and skirted with shops and restaurants.

How did such a place emerge? Interesting story:

In the late 1970s, when Beijing undertook plans to turn Shenzhen into the country's first Special Economic Zone—an experimental area with more liberal financial policies—the government first had to purchase land from the local villagers living there, mostly farmers and fishermen, and convert it to municipal property. Officials took the path of least resistance, buying up farmland and leaving the actual villages untouched. This left villagers with lump sums of cash but extinguished the basis for their agricultural lifestyle, and essentially set them adrift in a rising sea of construction projects. Crucially, though, their homes were still designated as rural land. Although they were living at ground zero for Shenzhen's big bang of urbanization, they still held onto special home ownership rights, giving them a degree of freedom in deciding what to do with their pockets of the city.

Unfortunately, "Shenzhen's government has slated Baishizhou for renewal, and the current proposal from Hong Kong-based developer LVGEM aims to replace it with 59.2 million square feet of high-rises, malls, and hotels, along with a skyscraper billed as a new icon for the district." So there's a lot of uncertainty in the area, and the article covers that too.

To read the whole thing, go here. For more on the anarchic side of Shenzhen, go here.

Will We Build a Wall Against Chinese Immigrants, Too?

Tue, 20 Sep 2016 09:50:00 -0400

Can you guess who the victims were of the largest mass-lynching in American history and where it took place? Most people would, I think, guess blacks first, then maybe Mexicans or Native Americans. And we'd assume it was somewhere in the old Confederate states. Writing in the Boston Globe, Jeff Jacoby notes that the 18 men and boys killed on October 24, 1871 were chosen dragged out of their houses and beaten and hanged because they were Chinese. The locale wasn't Alabama or Mississippi, either. It was Los Angeles, California. They were Chinese, and they were murdered by a mob, nearly 500 strong, that included some of the city's leading citizens. "Their first victim was an elderly, inoffensive Chinaman, whom they seized and dragged headlong through the streets, beating and abusing him at every step," the Los Angeles Daily Mirror later recounted. At the corner of Temple and New High streets, the lynch party tied a noose around the old man's neck and hauled him up. "The rope broke and the unfortunate wretch, innocent of any wrong, asked for mercy from his cruel tormentors. This was denied with jeers, and he was again hung up; this time successfully." As readers of Reason know, the first mass exclusions on the basis of country of origin (then as now a proxy for protean categories of race) covered the Chinese in a law titled with unabashed descriptiveness: The Chinese Exclusion Act of 1882. (Read Erika Lee's recent history The Making of Asian America for more.) Jacoby notes that Chinese now comprise the single-largest group emigrating to the United States: In 2013, according to the Census Bureau, China was the country of origin for 147,000 US immigrants, compared to just 125,000 who came from Mexico. Over the previous 10 years, immigration from China and other Asian countries had been rising, while immigration from Mexico decreased. Since at least 2009, reported demographer Eric Jensen, more immigrants to America have been Asian than Hispanic. By 2013, the disparity was unmistakable: Asians accounted for 40.2 percent of the total immigration flow. Hispanics made up only 25.5 percent. Last week, The Wall Street Journal crunched even more recent numbers. "In 2014, there were 31 states where more immigrants arrived from China than from Mexico. . . . Even in California, a top destination for Latinos, Chinese immigrants outnumbered Mexican immigrants." (The data include all immigrants, legal and illegal.) If Mexicans are the enemy within—all this talk of deporting millions of undocumented immigrants is mostly aimed at them—China has mostly replaced Russia or Japan as our major enemy without. Hillary Clinton, Bernie Sanders, virtually all of the failed GOP candidates for president, and especially Donald Trump mince no words in saying they will hold China accountable for flexing its regional military might, "manipulating" its currency (something all national central banks do simply by existing), and especially "stealing" American jobs. And of course, Chinese immigrants in America threaten "us" in a way that is less like low-skilled Mexicans and more like the fears stoked by Jews back in the early 20th century: Chinese kids are so super-smart, especially in math and engineering, right, that they aren't taking manual-labor gigs away from low-income, low-skilled natives? They're taking away all the slots at the University of California system and maybe even the Ivy League! They're not human, they work too hard! Jacoby closes his piece with a trenchant observation about how "we" (real Americans, who can trace at least two generations in the U.S. of A.!, but not inlcuding blacks) always eventually do the right thing after exhausting all other options: We look back today at the demonization of Chinese immigrants in the 1870s and 1880s and are aghast that so many Americans could have spouted such ludicrous, ugly stuff. We have come a long way from the Chinese Exclusion Act to today's robust Asian immigration flows. A generation or two hence, Americans will look back at the harsh and unworthy immigration[...]

Thomas Friedman, Admirer of Dictators, Slams Trump for Admiring Dictators

Thu, 15 Sep 2016 06:30:00 -0400

New York Times columnist Thomas Friedman criticizes Donald Trump's "idiotic observation that Vladimir Putin is a strong leader" who gets stuff done, unlike Barack Obama. Friedman endorses former world chess champion Garry Kasparov's take on Trump's praise of Russia's president: "Vladimir Putin is a strong leader in the same way that arsenic is a strong drink. Praising a brutal KGB dictator, especially as preferable to a democratically elected U.S. president, whether you like Obama or hate him, is despicable and dangerous." Friedman and Kasparov are right. Trump's attraction to oppressive autocrats is more than a little disturbing, especially since it is precisely their dictatorial strength that he admires. But Friedman fails to acknowledge that he himself is guilty of the same idiocy. "One-party autocracy certainly has its drawbacks," the foreign policy sage conceded in a 2009 column. "But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century." In particular, Friedman admired the Chinese government's commitment to "clean power and energy efficiency," which he contrasted with the Republican Party's benighted resistance to "energy/climate legislation and health care legislation." The Republicans' failure to agree with Democrats on those issues, Friedman said, makes the United States a "one-party democracy," which is "worse" that China's autocracy. Friedman offers more praise for China's rulers in his 2008 book Hot, Flat, and Crowded, where he says their oppressive, cruel, and brutal limits on reproductive freedom "probably saved China from a population calamity" and hopes the current regime will show the same tyrannical fervor in pursuit of "net-zero buildings." In 2014 Mark Bittman, then a fellow Times columnist, took a cue from Friedman, hoping that China's dictators, unencumbered by democracy, the rule of law, or civil liberties, would show the rest of the world how to take on "the scourge of junk food." Bittman's reasoning echoed Friedman's: "Say what you will about the Chinese, but they know how to make wholesale changes, and sometimes those changes are inarguably for the good." Trump also admires the power of China's leaders. In a 1990 interview with Playboy, he said they "almost blew it" in response to the Tiananmen Square protests the previous year but then realized they had to be "vicious" and "horrible" to maintain order. "They put it down with strength," he said, which "shows you the power of strength." By contrast, he said, "Our country is right now perceived as weak." Asked about those remarks during a Republican presidential debate last year, Trump provided this clarification: "I was not endorsing it. I said that is a strong, powerful government that put it down with strength. And then they kept down the riot. It was a horrible thing. It doesn't mean at all I was endorsing it." But it sorta does mean that, doesn't it? By describing the protests as a "riot" and admiring the strength shown by the government's "horrible" response, which according to Trump came after the regime "almost blew it" by taking a more restrained approach, he is saying the violent crackdown, which killed hundreds (possibly thousands) of people, was the right way to go, even while claiming he is "not endorsing it." Friedman's admiration of the Chinese government's power, which allows it to accomplish policy goals (clean energy and population control) he views as desirable, is, if anything, less ambiguous than Trump's. Although "one-party autocracy certainly has its drawbacks," the columnist says, it gets good things done, unlike our dysfunctional democracy, which is "worse." The implication is that we'd be better off, on balance, if our government were more like China's. At least Trump had the sense to say Russia has "a very different system" of government, and "I don't happen to like[...]

Obama and Xi 'Ratify' Paris Climate Change Agreement

Sat, 03 Sep 2016 10:24:00 -0400

President Barack Obama and Chinese President Xi Jinping announced at the G-20 Summit in Hangzhou today that both countries will join the Paris Climate Change Agreement. The White House must be annoyed that lots of headlines are declaring that President Obama is "ratifying" the the agreement. The Paris Agreement will come into effect 30 days after 55 countries emitting at least 55 percent of the world's greenhouse gases commit to it. The U.S. and China emit about 40 percent of the world's greenhouse gases. In March, 2015, President Obama submitted the U.S.'s Intended Nationally Determined Contribution pledge to cut by 2025 U.S. greenhouse gas emissions by 26-28 percent below their levels in 2005. At the Hangzhou conference, President Obama reaffirmed those cuts and President Xi restated that China would begin cutting its emissions around 2030 or so. But what about that pesky "ratification" issue? The Constitution provides that the President "shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two-thirds of the Senators present concur." In order for a treaty to be ratified two-thirds of the Senate must vote in favor of a resolution of ratification. If the resolution passes, then ratification takes place when the instruments of ratification are formally exchanged between the United States and the relevant foreign governments. The Paris Agreement was specifically crafted during the United Nations negotiations to try to get around this provision of the Constitution. As I reported in my article, "Obama's Possible Paris Climate Agreement End Run Around the Senate," back in 2014 from the United Nations Lima climate change conference: A 2010 Congressional Research Service (CRS) legal analysis of climate agreements ... notes that a 1992 Senate Committee on Foreign Relations report dealing with the ratification of the UNFCCC (United Nations Framework Convention on Climate Change) flatly stated that a "decision by the Conference of the Parties to adopt targets and timetables would have to be submitted to the Senate for its advice and consent before the United States could deposit its instruments of ratification for such an agreement." The 1992 Senate report also explicitly added that any presidential attempt "to reinterpret the Convention to apply legally binding targets and timetables for reducing emissions of greenhouse gases to the United States" would also require the Senate's prior advice and consent. The State Department's own Foreign Affairs Manual notes that presidents may conclude executive agreements in three cases, e.g., pursuant to a treaty already authorized by the Senate; on the basis of existing legislation; and pursuant to his authority as Chief Executive when such an agreement is not inconsistent with legislation enacted by the Congress. Consequently, President Obama might assert that he has the authority to bind the U.S. to take on international obligations under the Paris climate agreement because it is pursuant to the already authorized UNFCCC and is consistent with existing federal environmental legislation. On the other, the Manual offers guidance for deciding when a treaty or when an executive agreement is appropriate. Relevant considerations include (1) the extent to which the agreement involves commitments or risks affecting the nation as a whole, (2) whether the agreement is intended to affect State laws, and (3) the preference of the Congress as to a particular type of agreement. Clearly any international agreement that purports to impose legal limits on the emissions of greenhouse gases would involve risks to the nation as a whole and affect state laws. And, as noted earlier, the Senate has plainly stated that setting any greenhouse gas reduction targets and timetables under the UNFCCC would require its advice and consent. As I predicted, President Obama is asserting that he is concluding an executive agreement and so he can commit the U.S. to joining the Paris Agreement because i[...]

The Economic Stimulus Perplex: Could Regulation Be the Problem?

Mon, 15 Aug 2016 12:11:00 -0400

The orthodox Keynesian policy prescription to get out of a recession/depression is for the government to boost demand by massive increases in government spending and borrowing. The idea is that recession-wary consumers are refusing to spend their money thus reducing production and the associated creation of new jobs. In the wake of the Great Recession, the U.S. government enacted the American Recovery and Reinvestment Act (ARRA) to stimulate the economy. Paul Krugman, the modern avatar of Keynesianism, has decried that stimulus as "too small and too short-lived," urging Congress to massively borrow and spend on infrastructure projects. As it happens both major party presidential candidates are in favor of ramping up federal infrastructure spending. In fact, Trump promises to spend twice as much as Clinton. While considering a new stimulus proposal by the Economic Policy Institute in today's Washington Post, columnist Robert Samuelson cogently wonders why $5.1 trillion in tax cuts and deficit spending between 2009 and 2012 produced such tepid economic growth. As the Great Recession unfolded, he notes that the Chinese were enthusiastic Keynesians spending vast amounts on infrastructure projects. "But it didn't solve China's underlying economic problems, which are now worse for having festered," he notes. Japan is another Asian country that has tried numerous times to use government deficit spending to jumpstart economic growth. The latest version of this is Abenomics, named after Prime Minister Shinzo Abe whose government has adopted several large stimulus packages aimed at building infrastructure and encouraging consumer spending. The results have been disappointing; the economy grew at 0.2 percent rate in the second quarter of 2016. Abe is doubling down, and has announced a new stimulus package totaling $274 billion dollars. In his column, Samuelson asks, "What ails the private sector? Can we do anything about it? Those are the crucial questions." Perhaps the answer to what ails the private sector is excessive regulation. A recent study by the conservative American Action Forum estimates that the Obama administration is on track to adopt over 600 major regulations (those costing more than $100 million each) by the end of the president's term. The total cost of complying with all of the new regulations will add up to $813 billion. The libertarian Competitive Enterprise Institute calculates that extent and cost of Washington's rules and mandates is $1.8 trillion annually, amounting to about $15,000 per household each year. Even the New York Times on Sunday called President Obama, the regulator-in-chief whose new rules have "imposed billions of dollars in new costs on businesses and consumers." I have reported earlier analyses that found that regulatory drag has made the U.S. economy $4 trillion smaller than it would otherwise have been. That amounts to a lot of foregone jobs and consumption. I would like to suggest that hugely escalating regulatory costs under the Obama administration have mostly offset whatever the benefits that orthodox Keynesians would expect from economic stimulus. In other words, President Obama has been trying to use Keynesian stimulation to rev the economy while simultaneously jamming down hard on the regulatory brakes.[...]

China's Rare Earth Minerals Mercantilism Totally Fails: I Told You So Six Years Ago

Mon, 25 Jul 2016 12:05:00 -0400

(image) Back in 2010, Chinese central planners believed that they had the world over a barrel because their country was the source of 95 percent of various rare earth minerals used in many modern technologies. The Chinese government imposed limits on the amounts that could be exported with the goal of forcing Western technology companies to move their manufacturing operations to the Middle Kingdom.

As I argued in my column, "Rare Earth Ruckus," back in 2010, this Chinese mercantlist ploy would backfire as entrepreneurs opened rare earth mining operations in nice stable countries like Australia, Malaysia, and Canada. In addition, innovators would develop technologies that did not depend upon the minerals that China was trying to cartelize. Of course, some American politicians panicked and introduced legislation offering federal loan guarantees to companies to develop rare earth supplies in the United States (as though higher prices wouldn't incentivize that). I concluded:

In the end, new supplies and innovation will ensure that the future of the world's high tech economy will not depend upon the whims of the mercantilist mandarins who steer Chinese industrial and trade policy.

And so it has come to pass. A nice Wall Street Journal op-ed, "China's Rare-Earths Bust," confirms my prediction. For example, the op-ed notes that Honda is introducing a hybrid car engine that does not depend upon magnets made using rare earth minerals and which is 10 percent cheaper and 8 percent lighter. From the op-ed:

Beijing's mercantilist gambit had predictable effects—predictable, at least, for anyone familiar with the work of Julian Simon. The economist taught that fears over natural-resource scarcity often underestimate the flexibility of markets and the ingenuity of the human brain, which Simon called the ultimate resource. Those who warned about "peak oil" were blindsided by fracking, and rare-earth doomsayers failed to foresee how Beijing's supply squeeze would spur overseas investment in new supplies and substitutes. (image)

Just last year, I participated in a Cato Unbound debate on this issue with economist Dambisa Moyo, author of Winner Take All: China and Global Race for Resources. I don't know where she learned her economics, but it's clear that Moyo simply doesn't know what she is talking about. As I argued:

Moyo would do well to advise China's leaders to stop their economically ignorant pursuit of resource nationalism. ... The Party leaders evidently are still in thrall to the failed ideology of economic central planning and the ultimate results of those policies will not be pretty.

That's still true.

H/T David Ridgely.

Brickbat: Unhealthy Viewing

Mon, 27 Jun 2016 04:00:00 -0400

(image) The Chinese government has banned broadcast and Internet TV shows that show "the dark side of society." That includes depictions of gay characters, extramarital affairs, one night stands, smoking, drinking and reincarnation.

How Trump and Bezos Can Bury the Hatchet

Mon, 20 Jun 2016 16:00:00 -0400

The hottest political fight in America right now may not be between Donald Trump and Hillary Clinton, but between Trump and Jeffrey Bezos, who is the founder and CEO of and the owner of The Washington Post. Look for it to end up like Trump's last big public feud with a high-profile media figure: in a conciliatory meeting like the one that Mr. Trump had with the Fox News anchor Megyn Kelly. The underappreciated fact is that on one of Trump's key issues—trade with China—Trump and Bezos have a mutual interest that overlaps more than either of them probably realize. I realized this, strangely enough, not as a political reporter or analyst but as an Amazon customer. Two recent items I ordered from the online retailer showed up at my house not in the familiar Amazon logo packaging, but in envelopes mailed directly via China Post, one from Shenzhen, the other from Zhejiang, in China. Welcome to the cutting edge of retail supply chain. Americans used to worry about job loss because our manufacturing jobs had turned into lower-wage positions as Walmart greeters or cashiers selling made-in-China goods. Then we worried about job-loss as the Walmart greeter and cashier jobs turned into temporary jobs picking out orders at Amazon warehouses (or overseeing robots that did that). Now we're approaching the day at which we don't need either the Walmart store or even the American-based Amazon warehouse or distribution center. Instead, the item just gets mailed directly to your house by some low-wage worker in China. That scenario is a bit too much even for Bezos, who made his billions in part by ruthlessly and efficiently cutting costs to offer customers the lowest price in an Internet shopping environment where prices were more transparent and easily comparable than ever before. Last year, Amazon's vice president for global public policy, Paul Misener, testified before a House of Representatives subcommittee, complaining about international agreements that give Chinese companies a cheaper deal on U.S. Postal Service delivery than American ones. "This disparity discriminates against American businesses shipping domestically. To allow fair competition in shipping to U.S. consumers and equitable treatment of American businesses, the international agreements must be reformed," Misener said. The Amazon lobbyist sounded quite a bit like Trump, complaining about international trade deals that favor foreigners over Americans, and calling for those deals to be renegotiated. "American businesses of all sizes end up paying more than Chinese companies for deliveries to American consumers," Misener testified. "Chinese companies end up getting a better deal from the USPS than American businesses. Amazingly, when combined with extremely low bulk shipping rates from China to U.S. transfer points, shipments from China to points throughout the United States are often cheaper than shipments entirely within the United States." In other words, it costs less to mail the item I bought directly from China than to deliver it from an American-based Amazon distribution center. Misener called the deals that give the Chinese lower shipping costs than American companies a "serious problem." The Bezos-owned Washington Post highlighted the issue in a 2014 article with the provocative headline "The Postal Service is losing millions a year to help you buy cheap stuff from China." (The Post reporter who wrote that story, Jeff Guo, told me that the idea for it did not come from Bezos.) Earlier this month Trump issued a Facebook post stating, "Based on the incredibly inaccurate coverage and reporting of the record setting Trump campaign, we are hereby revoking the press credentials of the phony and dishonest Washington Post." In a statement, the Trump campaign amplified the message, complaining, "The Washington Post is being used by the owners of Amazon as their polit[...]

China's Other Cultural Revolution

Sun, 05 Jun 2016 00:00:00 -0400

Set amid dusty sandstone-colored hills in northern Shaanxi, Yan'an is a hallowed place. Taken over by Communists at the end of the Long March in 1936, it served as the temporary Red Capital during the Second World War. Decades later, Yan'an had become the symbolic home of the ideal Communist man, one who merged with the collective in war and work alike. The "Yan'an spirit" heralded selfless dedication to the greater good, as people fused into a force powerful enough to move mountains. But when a team of propaganda officials arrived in Yan'an in December 1974, they were shocked to find a thriving and sophisticated black market. The country was eight years into the Cultural Revolution, a massive effort to purge Chinese society of bourgeois influences and move it closer to communist purity. But beneath the surface, something rather different was underway. One village had abandoned any attempt to wrest food from the arid soil, opting to specialize in selling pork instead. In order to fulfill their quota of grain deliveries to the state, the villagers used the profit from their meat business to buy back corn from the market. Local cadres, instead of enforcing the planned economy as they were supposed to, sided with the villagers and supervised the entire operation. Yan'an was not alone in taking to the market. Entire communes in Luonan had divided up all collective assets and handed responsibility for production back to individual families. Many villagers abandoned two decades of monoculture, imposed by a state keen on grain to feed the cities and to barter on the international market, and cultivated crops that performed well on the black market. Some rented out their plots and went to the city instead, working in underground factories and sending back remittances to the village. In parts of Pucheng, propitious couplets in traditional calligraphy largely displaced loud slogans in brash red; officials expressed little interest in reading newspapers, let alone keeping up with the party line. "Not one party meeting has been called, and not one of the prescribed works of Marx, Lenin, and Chairman Mao has been studied," complained one report. In some production brigades, telephone conferences were not a realistic prospect, since the lines had been cut down and were used by the villagers to dry sweet potatoes. Instead of working for the collectives, people with any kind of expertise offered their services to the highest bidder. There were doctors who gave private consultations for a fee. There were self-employed artisans. Meanwhile, millions of people were going hungry, some of them eating mud or tree bark. In Ziyang, where one inspector had come across a starving family of seven surviving in a shed in the midst of winter, the local authorities had shrugged their shoulders. But elsewhere in the province, some cadres preferred to hand out the land to the villagers and let them try to survive by their own means rather than watch them die of hunger or steal the grain directly from the fields. Such disobedience had a long history, but it became especially widespread after the mysterious 1971 death of Lin Biao, formerly Mao's heir apparent, and the man in charge of the army that had transformed the country into a garrison state after 1968. In some cases, local cadres took the lead, distributing the land to the farmers. Sometimes a deal was struck between representatives of the state and those who tilled the land, as the fiction of collective ownership was preserved by turning over a percentage of the crop to party officials. Bribery often greased the wheels of free enterprise, as villagers paid cadres to look the other way. The Cultural Revolution had badly damaged the Communist Party. Now, in a silent revolution, millions upon millions of villagers surreptitiously opened black markets, shared out collective assets, divid[...]

China Reacts to U.S. Lifting of Arms Embargo Against Vietnam

Tue, 24 May 2016 15:01:00 -0400

While visiting Vietnam, President Obama announced the United States would be lifting the arms embargo against the country, calling it a "vestige" of the Cold War. The move is part of the "Asia pivot," or as the Defense Department described it in their statement on the embargo, "emphasis on U.S. relations with partners in the Asia-Pacific region." Secretary of State John Kerry said today that the lifting of the embargo was about promoting a "rules-based order" in the region, which he called the fastest-growing marketplace in the world. China initially signaled support for a lifting of the arms embargo against another communist country. A spokeswoman for the Ministry of Foreign Affairs called the ban "a product of the Cold War" that "should no longer exist." "We hope the lifting of all such bans will benefit regional peace and development," she said. "And we are happy to see the United States and Vietnam develop normal cooperative relations." That was Monday. By Tuesday there were a number of editorials in government-mouthpiece newspapers that slammed the lifting of the embargo. Although nominally connected ideologically, Vietnam and China have a number of territorial disputes, including in the South China Sea, where other countries in the region, including the Philippines, Malaysia, and Taiwan, also make disputed claims. An editorial in China Daily expressed concern about President Obama's Vietnam trip bolstering U.S. containment of China. "Whatever common interests the two countries pursue," the editorial declared, "they should never compromise China's national interests and threaten regional security." The editorial insisted that despite disputes in the South China Sea, "China and Vietnam have made public their commitment to resolving their differences properly through cooperation and dialogue". China Daily criticized talk about the arms deal as part of the Asia pivot. "This, if true, bodes ill for regional peace and stability," the editorial warned, "as it would further complicate the situation in the South China Sea, and risk turning the region into a tinderbox of conflicts." "It remains to be seen whether such a worry is justified," China Daily acknowledged. "To distance himself from a confrontational stance against China, Obama was quick to separate the decision to lift the Vietnam arms sales ban from any shared interest to contain China, saying it was based on completing the normalization of relations with Vietnam not on China," the China Daily editorial read. "We hope Obama means what he says." The nationalist Global Times took a less charitable stance, calling Obama's claim that the lifting of the arms embargo isn't aimed at China as "a very poor lie which reveals the truth—exacerbating the strategic antagonism between Washington and Beijing" in its own editorial. "Trade in arms between the US and Vietnam, two nations with completely different political systems, is of great symbolic significance," the editorial declared. "Obviously, Obama is planning to create some diplomatic legacies before leaving office, as well as further promote the rebalance to the Asia-Pacific. "When the US has an urgent need to contain China in the South China Sea, the standards of its so-called human rights can be relaxed," the editorial continued. President Obama "nudged" Vietnam on  human rights issues, as the Washington Post described it. At least three activists who were scheduled to meet with the president were prevented from doing so by Communist authorities, according to the president himself. The Global Times claimed the U.S. had three "strategic emphases," or "nets" they were knitting around China with the help of Vietnam—ideological, security, and economic. It said the U.S. was trying to "keep disseminating American values in the Southeast Asian region through underlining human[...]

U.S. Sends Destroyer Past Disputed South China Sea Islands to Challenge Countries That Make Claims

Tue, 10 May 2016 12:06:00 -0400

(image) The United States sent a destroyer to within 12 nautical miles (the limit of internationally-recognized maritime boundaries) of the disputed Spratly Islands in the South China Sea in a show intended to challenge the countries laying claim on the largely uninhabited (but militarily occupied) archipelago.

"USS William P. Lawrence exercised the right of innocent passage while transiting inside 12 nautical miles of Fiery Cross Reef, a high-tide feature that is occupied by China, but also claimed by the Philippines, Taiwan, and Vietnam," a Defense Department statement insisted, according to CNN.

"This operation challenged attempts by China, Taiwan, and Vietnam to restrict navigation rights around the features they claim ... contrary to international law," the Defense Department said. "This operation demonstrates, as President Obama has stated, that the United States will fly, sail, and operate wherever international law allows. That is true in the South China Sea as in other places around the globe."

The United States, notably, does not make any claims on the Spratly Islands, which sit thousands of miles from U.S. shores and more than 1,500 miles from Guam. Vietnam, the Philippines, and Malaysia all claim sovereignty over the Spratly Islands and are closer to them than China. Taiwan also claims the Spratly Islands, which are one of a number of disputes between the various countries over sovereignty in the South China Sea.  China and Japan also have territorial disputes in the East China Sea.

The United States' aggressive stance around territorial disputes in which its allies are involved are part of President Obama's "Asia pivot," an attempt to contain China militarily. The Obama administration has expressed confusion over why China's foreign policy has become more confrontational as a result of the "pivot." To crib an old Ron Paul bit, what if China sent a ship to pass within a few miles of, say, Machias Seal Island, an island over which the U.S. and Canada both claim sovereignty. Would it make a difference if Canada had warmed up to China first?

Aside from the obvious recklessness involved in deciding to be a world's policeman by "challenging" the sovereignty of other countries, U.S. involvement around the territorial disputes of its allies in places like the South China Sea make regional cooperation more difficult to attain. When the U.S. flexes its muscles on behalf of an ally's disputes it provides a subsidy—bearing the costs of a foreign policy posture on behalf of the ally—that distorts the cost-benefit analysis of the ally's broader foreign policy while desensitizing it to the costs and consequences of intransigence. Who do the islands in the South China Sea belong? U.S. policymakers don't need an answer—it's not America's business.

Crackdown in China

Thu, 28 Apr 2016 10:05:00 -0400

Orville Schell, who's been covering China for decades, worries that the country is taking another authoritarian turn:

(image) China has long been a one-party Leninist state with extensive censorship and perhaps the largest secret police establishment in the world. But what has been happening lately in Beijing under the leadership of Chinese Communist Party General Secretary Xi Jinping is no such simple fluctuation. It is a fundamental shift in ideological and organizational direction that is beginning to influence both China's reform agenda and its foreign relations.

At the center of this retrograde trend is Xi's enormously ambitious initiative to purge the Chinese Communist Party of what he calls "tigers and flies," namely corrupt officials and businessmen both high and low. Since it began in 2012, the campaign has already netted more than 160 "tigers" whose rank is above or equivalent to that of the deputy provincial or deputy ministerial level, and more than 1,400 "flies," all lower-level officials. But it has also morphed from an anticorruption drive into a broader neo-Maoist-style mass purge aimed at political rivals and others with differing ideological or political views.

To carry out this mass movement, the Party has mobilized its unique and extensive network of surveillance, security, and secret police in ways that have affected many areas of Chinese life. Media organizations dealing with news and information have been hit particularly hard. Pressured to conform to old Maoist models requiring them to serve as megaphones for the Party, editors and reporters have found themselves increasingly constrained by Central Propaganda Department diktats. Told what they can and cannot cover, they find that the limited freedom they had to report on events has been drastically curtailed....

[T]he crackdown has hardly been limited to the media. Hundreds of crosses have been ripped from the steeples of Christian churches, entire churches have been demolished, pastors arrested, and their defense lawyers detained and forced to make public confessions. And even as civil society has grown over the past few decades, a constraining new civil society law is now being drafted that promises to put NGOs on notice against collaborating with foreign counterparts or challenging the government.

There is much more, which you can read here.

Governments Hating On Press Freedom More, Says Reporters Without Borders

Thu, 21 Apr 2016 17:01:00 -0400

(image) The press freedom group Reporters Without Borders has issued the 2016 edition of its annual World Press Freedom Index. Let's just say that the news is not good. Dictators, party hacks, caudillos, kings, petty bureaucrats, spy agencies, and even the Obama administration just want reporters to shut up.

Republican presidential candidate frontrunner Donald Trump wants to "open up our libel laws so when they [reporters] write purposely negative and horrible and false articles, we can sue them and win lots of money." Shades of the infamous Alien and Sedition Acts of 1798 which, as explains, "prohibited public opposition to the government. Fines and imprisonment could be used against those who 'write, print, utter, or publish . . . any false, scandalous and malicious writing' against the government."

Of course, the kinds of government pressures and harassment faced by journalists in the U.S. and most other industrialized countries is small potatoes when compared to the deadly dangers faced by reporters in China, the Arab World, much of Africa, and in many Latin American countries.

Reporters Without Borders notes that its 2016 edition of the World Press Freedom Index...

...shows that there has been a deep and disturbing decline in respect for media freedom at both the global and regional levels. Ever since the 2013 index, Reporters Without Borders has been calculating indicators of the overall level of media freedom violations in each of the world’s regions and worldwide. The higher the figure, the worse the situation. The global indicator has gone from 3719 points last year to 3857 points this year, a 3.71% deterioration. The decline since 2013 is 13.6%.

(image) *

The lower the score, the greater the press freedom found in a country. For example, Finland has the lowest score at 8.59. In the latest report, the U.S., with a score of 22.46, stands at 41st out of 180 countries ranked. With regard to the U.S., Reporters Without Borders notes: 

Freedom ends where national security begins

US media freedom, enshrined in the First Amendment to the 1787 constitution, has encountered a major obstacle – the government’s war on whistleblowers who leak information about its surveillance activities, spying and foreign operations, especially those linked to counter-terrorism. Furthermore, US journalists are still not protected by a federal “shield law” guaranteeing their right not to reveal their sources and other confidential work-related information.

While any score below 25 is considered satisfactory, our country could do a lot better.

*Where is Greenland?

China Trade Isn't Killing America's Working Class

Fri, 25 Mar 2016 10:00:00 -0400

American politics aren't exactly immune to bouts of protectionism. A Bloomberg poll has found that two-thirds of Americans, Republicans and Democrats, are four-square behind it—a sentiment that Bernie Sanders is exploiting on the left and Donald Trump on the right. But although free trade has always been a tough sell to the general public, American economists across the political spectrum have long held firm that globalization and trade liberalization are, on balance, a boon for the country. But now this consensus may be fraying, with The New York Times' agent provocateur Paul Krugman recently declaring that such thinking is "fundamentally dishonest" elitist bunkum. Krugman won a Nobel Prize back in 2008 for advancing precisely such "fundamentally dishonest" stuff. But what's partly driving him now is the much talked about work of Massachusetts Institute of Technology's David Autor, purportedly showing that the American middle class never recovered from the assault on its jobs by trade liberalization with China. "It is fair to say," Krugman declaims, "that the case for more trade agreements—including TPP, which hasn't happened yet—is very, very weak. And if a progressive makes it to the White House, she should devote no political capital whatsoever to such things." That is astonishingly myopic. For starters, there is every reason to believe that even after job losses are factored in, trade with China and other developing countries has benefited even working-class Americans. A study by UCLA's Pablo D. Fajgelbaum and Columbia University's Amit Khandelwal found that the economic effects of trade are definitely skewed—but in favor of lower-income consumers, who enjoy 90 percent of trade's benefits. Why? Because trade lowers prices in areas such as food, clothing, and low-end consumer goods where these folks spend the bulk of their paychecks. Likewise, another study by University of Chicago's Christian Broda and John Roma found that, thanks to trade, inflation for the basket of goods that poor people buy has been much lower than for those that rich people purchase. Those in the top five percentile have experienced 1.2 percent annual inflation, and the bottom 10th 0.4 percent. This means that in terms of actual buying power, poor people are not falling behind rich people as rapidly as the doomsayers would have you believe, and may in fact be closing the gap. Shutting the door to cheap Chinese imports won't bring manufacturing jobs back to America. Why? Because American manufacturers that open shop here are far more likely to heavily automate rather than hire overpriced American labor to remain globally competitive. (Are you listening, Mr. Trump?) And for those who remain without jobs, cutting off cheap imports will mean that their unemployment checks will go less far. In short, in a world with diminished trade, Americans won't get better-paying jobs, they'll just get even poorer. Autor estimates that about a quarter of manufacturing job losses in America between 2000 and 2007 were the result of Chinese imports. Other estimates put these losses closer to a fifth—with automation causing the rest. Either way, it's hardly news that trade would result in some job losses. What is news is that, post trade liberalization with China, workers who lost their jobs didn't quickly bounce back and move on to higher and better things in growing industries, as standard trade theory would predict and as has historically been the case. Indeed, usually even if whole towns and cities succumb to trade or other forces of creative destruction, the vast majority of their inhabitants flee to better climes elsewhere. This time around, however, a significant number of Americans seem to have gotte[...]

China Bashing Is a Bipartisan Sport and It's Back With a Vengeance

Tue, 22 Mar 2016 13:17:00 -0400

Neither Republicans nor Democrats are immune to bouts of protectionism. But what’s interesting this election cycle (image) is that both sides are experiencing a particularly bad case of it at the same time given the twin rise of Donald Trump and Bernie Sanders. However, neither of these populist demagogues has arisen in an intellectual vacuum. Smart-set folks in their camp — some reformocons on the right and Paul Krugman on the left — have for a while now been beating the protectionist drum and blaming China for the travails of the American middleclass.

But, I note in my column at The Week, it’s far from clear that the American working class is doing as poorly as these brainiacs suggest; or that trade liberalization for China or any other country has hurt rather than helped these folks; or that protectionism would be an effective cure.

There is evidence suggesting that there are plenty of unfilled jobs, but working class Americans are just not as into them as they used to be. There are many reasons why, but:

Chief among them is Congress' relaxation of the rules for claiming Social Security disability during the Reagan years so that a worker's own subjective self assessment — rubber stamped by his own self-selected physician — would be enough to file a successful claim. What's more, it also made the payment more generous.

The upshot was that when the Great Recession hit in 2008, many able-bodied adults went on Social Security disability after their unemployment benefits ran out and never got off. Scott Lincicome of Cato Institute notes that between 1990 and 2014, the percentage of working-age adults receiving disability more than doubled.

Go here to read the whole thing.