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Published: Thu, 08 Dec 2016 00:00:00 -0500

Last Build Date: Thu, 08 Dec 2016 22:01:19 -0500


Dana Rohrabacher Doesn’t Want a Cold War With Russia—He Wants One With China

Thu, 08 Dec 2016 12:15:00 -0500

Potential Trump Secretary of State nominee and California Republican Rep. Dana Rohrabacher's interview with Yahoo!'s Bianna Golodryga went viral after Rohrabacher called Russia's human rights abuses "baloney" and questioned the reporter's motives, asking where she was from. When Golodryga said she came from Moldova, a former Soviet republic, Rohrabacher answered that that was good because "the audience knows you're biased." Rohrabacher, a former speechwriter for Ronald Reagan, also compared Vladimir Putin to Mikhail Gorbachev, because both were both powerful leaders of countries the U.S. needed to be friends with. Golodryga had compared Russia's human rights abuses to those of China, a country Rohrabacher insisted was not America's "friend," and later suggested was one of the reasons a closer U.S.-Russia relationship made sense. "I said they are both human-rights abusers. How am I wrong?" Golodryga asked Rohrabacher. "How are you wrong? In China they don't have an opposition party," he answered. While Russia is no longer officially a one-party state, more than a decade of rule by Putin and the concomitant crackdown on opposition has made those forces weaker than they've been since the fall of the Soviet Union. Rohrabacher dismissed allegations Russia had interfered with elections in the U.S., saying such things happened around the world and that the U.S. did it as well. Rohrabacher called China the world's "largest human rights abuser." With a population of 1.2 billion, there isn't a larger anything than China. But the U.S. has allies like Egypt and Saudi Arabia that are vicious human rights abusers as well. Not only does the U.S. decline to take an antagonistic position toward those countries—it sends them billions of dollars in military and other aid every year. Saudi Arabia has been dropping U.S.-made bombs in Yemen for the last year and a half. "We don't need China," Rohrabacher insisted, "China is against us no matter, the Chinese are not our friends." He suggested the country of 1.2 billion people had become the world's second largest economy because the United States had "acted like fools," building up China's economy, and bemoaned the normalization of U.S.-Chinese trade relations. "We have transferred wealth, we have transferred technology," Rohrabacher said. "We have opened our markets to them while they have controlled everything on that side." Golodryga asked about whether it was wise for President-elect Donald Trump to "provoke" China by talking to the president of Taiwan, given China's potential role in keeping North Korea and its nuclear aspirations in check. "The last thing that's going to motivate the Chinese is that they want to do favors for us, because we're kowtowing to them, we're telling them how sincere friends we want to be," Rohrabacher said. He's not wrong there, but would eventually be. "If the Chinese are ever going to intercede for us," Rohrabacher continued, "it's going to be based on that we have a strong leader who is not a push over, and a strong leader who will actually threaten them, not military action, threaten them with consequences if they're supporting the military dictatorship attaining nuclear weapons power in Korea." But what's going to motivate China to curb North Korea is the threat North Korea presents for regional stability, unless Chinese leadership are led to believe the U.S. was willing to take up the costs of dealing with North Korea instead. Rohrabacher claimed that China's military build-up in the South China Sea (he called it "the middle of the Pacific"—it is not), its threats to shoot down planes over territory it claims, its "territorial claims all over the world," and its human rights abuses, all meant that the Chinese were "not our friends." He did not explain why Russia's human rights abuses precluded it from being America's "friend," choosing instead to question Golodryga's motives in bringing that up. As for the assertion that China has made territorial claims around the world, it's unclear where that came from. China is involved in several territorial dis[...]

Trump Takes Call From Taiwan President, Freak Out Ensues

Mon, 05 Dec 2016 11:41:00 -0500

On Friday, President-elect Donald Trump and Taiwan President Tsai Ing-wen talked on the phone for about 10 minutes—no president or president-elect had spoken to the president of Taiwan since the U.S. withdrew its diplomatic recognition of Taiwan in 1979. The Chinese government lodged a formal complaint about the call with the U.S. government, calling the one China policy "the political basis of the China-U.S. relationship." The White House reasserted U.S. support for the one China policy after the phone call. The policy is also something both major parties in Taiwan accept in principle although, like different U.S. administrations, they differ on their interpretation of what "one China" means for Taiwan's political independence. Many observers insisted the phone call was unprecedented; Vanity Fair suggested it and other "flippant calls" were already creating diplomatic crises. Critics said it could "alter decades of foreign policy," The Guardian reported. Some experts did note the call could've been a "calculated move." The last few weeks have been filled with chatter about news not comporting with the political mainstream being equivalent to Russian propaganda. Overplaying fears about the recklessness of Trump's Taiwan call would certainly look to play into Chinese propaganda about the importance of not engaging Taiwan, yet it doesn't mean such fears are a part of a propaganda network. That would be preposterous. China's China Daily insisted there was "no need to over-interpret" the Trump call, writing it off, like other state-run outlets in China, as a product of the Trump team's "inexperience." China also called the move "petty" on Taiwan's part, and reached out to Henry Kissinger to tell him they hoped for "stability." As Foreign Policy notes, the phone call was not an unprecedented breach of protocol in U.S.-China relations—in 1980 and 1981 the incoming Reagan administration sought to renormalize relations with Taiwan, inviting senior officials to various inauguration events. When the Chinese government suggested the U.S. revisit the Taiwan Relations Act, which governs U.S. relations with Taiwan, Reagan told his envoy the act should be even tougher. "Beijing stopped pushing and the Reagan administration enjoyed a far more productive and stable U.S.-PRC relationship than his predecessors, while simultaneously deepening trust with Taiwan," Foreign Policy's Michael Green wrote, acknowledging that the Trump administration would find it "difficult to sustain this first move when there are so many other thorny issues they will have to work with Beijing." For his part, Trump took to Twitter to defend his call, insisting the Taiwan president had called him, and pointing out that it was "interesting how the U.S. sells Taiwan billions of dollars of military equipment but I should not accept a congratulatory call." International relations professor Dan Drezner suggested on Twitter that the phone call was more important than "some guns" because it was an action that threatened "the core of the PRC's self-conception of its sovereignty." The U.S. has completed dozens of arms deals with Taiwan since the 1979. China's response to the call was described as "measured," but while Trump team officials tried to downplay the significance of the phone call, Trump returned to Twitter to bring up other issues with China, complaining that the country did not ask for permission to "manipulate" its currency or militarize the South China Sea. Neither, though, did the U.S. ask China for permission to engage in the "Asia pivot," which Obama announced in Australia in 2011 and which sought to increase the U.S. military presence and American influence in the regions around China. For some reason, four years later, the Obama administration was still confused why the Chinese government had begun to take a more confrontational stance vis a vis the United States. It's a basic lack of understanding that undercuts the idea that the State Department officials and other foreign policy advisors necessarily have some kind of en[...]

China Burns More Coal: Climate Promises Broken or Just Deferred?

Wed, 30 Nov 2016 16:00:00 -0500

(image) At the end of the U.N. COP22 climate change conference in Marrakech earlier this month, Greenpeace China policy advisor Li Shuo fatuously declared: "We have seen China continue with its climate actions and support for the Paris Agreement because it is in its self-interest to do so. China´s drop in coal consumption is driving down global emissions and tackling air pollution at home. We can expect further action as China reaps the benefits of its climate policies." Also at Marrakech, Chinese climate change negotiators reportedly chided President-elect Donald Trump for once tweeting that global warming was a hoax devised by the Chinese. A headline in The Guardian declared that "China emerges as global climate leader in wake of Trump triumph."

The Marrakech conference ended just 12 days ago. Today the New York Times is running a front page article, "Despite Climate Change Vow, China Pushes to Dig More Coal." As the paper of record explains:

A lack of stockpiles and worries about electricity blackouts are spurring Chinese officials to reverse curbs that once helped reduce coal production. Mines are reopening. Miners are being lured back with fatter paychecks.

China's response to coal scarcity shows how hard it will be to wean the country off coal. That makes it harder for China and the world to meet emissions targets, as Chinese coal is the world's largest single source of carbon emissions from human activities....

"I get a kick out of people in the West who think China is decarbonizing, because I see no sign of it whatsoever," said Brock Silvers, a Shanghai banker who has previously served on the boards of two Chinese coal companies.

Of course, back in 2014 U.S. President Barack Obama and Chinese President Xi Jinping issued a "joint announcement on climate change" in which the Chinese government promised to peak its greenhouse gas emissions by 2030. So that means there's plenty of time for China to keep its climate promises.

Documentary Recalls Horrors of Korean War

Fri, 28 Oct 2016 15:00:00 -0400

American Experience: The Battle of Chosin. PBS. Tuesday, November 1, 9 p.m. When the Chinese mortar shell exploded, it sent the American soldier hurtling through the air, his body savaged but his mind eerily dreamy as he fell back to earth, cataloging the carnage surrounding him. He took particular note of a severed limb casually askew on the ground. "Some poor guy lost a leg," the soldier thought to himself sadly. When he tried to stand, the dream blinked back to reality: The poor guy without a leg was him. So it goes in The Battle of Chosin, an episode of the PBS documentary series American Experience airing November 1. It's a series of postcards—surreal, grisly, terrifying—from a largely forgotten battle in the mostly unremembered war that the United States fought in Korea from 1950 to 1953. For two weeks beginning in late November 1950, a U.S.-commanded force of nearly 15,000 men, mostly U.S. Marines, fought its way out of an encirclement of 120,000 Chinese troops near the Chosin Reservoir in North Korea. The combat, at such close quarters that the fighting was often hand-to-hand, took place on steep, craggy mountain terrain ("you had two directions to go in Korea, that was either straight up or straight down, recalls one American soldier) in temperatures that plunged to 50 degrees below zero on some nights. It was a frozen killing field so gruesome that the soldiers interviewed in The Battle of Chosin are often reduced to ghastly free association in their attempts to describe it: "Grotesque. ... Horrible. Nightmare." Producer-director Randall MacLowry and writer Mark Zwonitzer, though both American Experience veterans (together and separately, they've chronicled everything from the creation of Silicon Valley to the campaign to stamp out polio), have little experience in making military documentaries. That doesn't show at all in The Battle of Chosin, which dexterously alternates between broad discussions of strategy and grunt's-eye-view of the fighting on the ground. They've assembled a truly awesome collection of archival footage and still photographs; as grim and exhausting as the battle got, military combat photographers apparently never put down their cameras. Battle opens with a quick, deft summary of the outbreak of the Korean War five months earlier. North Korean troops poured across the border, quickly captured Seoul and within a few weeks were on the verge of driving out U.S. and South Korean forces. But American commander Douglas MacArthur's risky decision to launch an amphibious assault behind the North Korean lines broke the communist offensive, sending them in headlong retreat north with U.S. forces in hot pursuit. As Thanksgiving approached, American troops were nearing the Yalu River, the border between North Korea and China, and U.S. forces were so totally in control that American planes were ferrying turkey and dressing rather than bombs and bullets to the front. Though there were some nervous voices in Washington—including that of President Truman himself—expressing worries that China might intervene on behalf of the shattered North Korean army, MacArthur dismissed the Chinese as a "peasant army" that would crumble in the face of American military technology. Even when American troops traded some sporadic shots with infiltrated Chinese soldiers—their distinctive quilted uniforms made them easy to recognize—U.S. commanders were unconcerned. The spearhead of the drive on the Yalu was the 1st U.S. Marine Division, augmented by smaller units of the U.S. and South Korean army, arrayed in a semi-circle around the Chosin Reservoir on the eve of an offensive that their commanders had promised them would end the war by Christmas. Instead, they were awakened the night of Nov. 27 by a series of murderous human-wave attacks by a Chinese force that would number at least 60,000 soldiers. Under-armed (only the first wave of men all carried guns; most of those in subsequent waves were expected to snatch their weapons from [...]

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[...]

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 lea[...]

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 [...]

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 [...]

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, [...]

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[...]

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.