Why are humans such warmongers?
One of the primary purposes of CPI is to prevent war between the West and China. This is a really difficult task because humans love war. It’s one of the fundamental defects in humanity, and it is universal. This apparent affection for conflict crosses all language divides and cultural differences so easily, so naturally. Fight, fight, fight!
Magazine stands in airports and train stations across China are filled with military publications, covered in flashy pictures of weapons and sensational headlines. So many on the planet are enamored with catchy names, acronyms, and model numbers of military gear. War is sexy and exciting. Whether you look at the US defense budget as a number, as a share of GDP, or in comparison to spending on other things…they all boggle the imagination. Everywhere on the planet—in the furthest reaches–there are US military bases or troops just as short hop away.
There are compelling reasons to love military things. Protecting yourself or your nation from bad regimes is important. There are bad actors out there. Governments, like individuals, do bad things. China was INVADED! It was subjugated through force; its people pillaged and murdered. This is a very understandable reason to “love” military things.
Some argue that Vladimir Putin went to war with no apparent concern for Russia’s economy. Others argue that President Xi Jinping will go to war as a cover for a stumbling economy. When smart people begin to make the argument for war, it can be very compelling. They apply their gifts to convincing others that their opinions, what they think will happen, are correct and worth fighting over. They excel in gathering people to their camp. No cost is too high to achieve what they want. It’s very sad!
We all know that war is a fundamental organizing force of humanity and that war has been a primary motivating factor in all human history. But war is also so very ugly, so destructive, so wasteful, and often, so pointless. Some things, of course, are worth fighting for. It is important to know the difference and to have leadership who know as well. Is Taiwan worth fighting for? For either side? CPI will continue to expound that China and the West are not each other’s worst enemies. Since from earliest times humanity is programmed to conflict, may we all have leadership who can redirect this programming to competition, not combat.
Stories to Read
You would have to be a hermit to have missed the news blasting from everywhere (unfortunately, both sides–the West and China—relish sharing bad news about the other) that there are currently a lot of challenges for China’s economy. Here is a summary list of some of these challenges: (1) a very small drop in consumer prices, i.e. deflation; (2) drops in both exports and imports; (3) a drop in bank lending, indicating less impetus or enthusiasm for taking risks on new projects, which are important for growing the economy; (4) Beijing has been sending finance experts out to the provinces to dig into local debt problems and seek solutions; (5) two more large property development companies have delayed payment on their debts; (6) youth unemployment is very high, around 20%; (6) the RMB (“yuan,” China’s currency, CNY) is now weaker against other major currencies than it is has been for a long time; and (7) recent bad weather events will affect fall harvest and stoke up worries about food security. Some of these, of course, are also linked to each other. For example, property developers not doing well means less new development, which means less revenue from land use sales by local governments, which exacerbates the local debt problem. All nations have economic struggles at times, but in China these take on a larger significance due to the greater role the government still plays in central planning efforts.
Unfortunate Natural Calamities—
Heavy rainfall has caused severe, historical flooding and deaths in Beijing and surrounding suburbs. The last reporting indicated 33 dead and 18 still missing. There was heavy rainfall and mudslides in Sichuan province, with 7 deaths. Also, areas in China’s far northeast had heavy rainfall and flooding. The central government has been reporting steadily increasing amounts of financial aid earmarked for recovery and re-building in these areas. In the early morning hours of August 5, an earthquake occurred in the city of Dezhou, in eastern China. The quake knocked down houses and injured 21, but there are no reported deaths. Again, all nations suffer unfortunate natural crises, but many Chinese, almost in a cosmic or superstitious way, link natural events with governance, which means that events like these must be handled very carefully by authorities in China.
The Spratly Islands are part of the general dispute in the South China Seas between China and several neighboring countries over territorial claims. The Spratly Islands are about 400 nautical miles from China and about 30 nautical miles from the Philippines. Long ago the US gave the Philippines an old ship, and at some time in its life, this ship grounded on a reef in the Spratly Islands and has been lying there rusting ever since. The Philippines has some troops on the island near this reef. This week as they tried to re-supply the troops on the reef, the small boat carrying supplies to shore was fired upon by a water cannon from a Chinese navy ship. It was all filmed and can be viewed on the Internet. China put out a statement claiming that the Philippines promised to remove that rusting vessel a long time ago and thus should not be re-supplying anything/anyone on the island. The Philippines said that they had never heard of that promise. For reference, water cannons on large ships are not like squirt guns; they can hurt people and sink or damage small boats.
Supply Chain Manipulations—
A couple of weeks ago, Pew Research did a survey of what middle class people across various nations think of China. They also compared these survey results with prior surveys. This gave a snapshot of what people think now, but it also allowed us to assess whether views are becoming more positive or more negative. Across most of the nations surveyed, views of China are becoming more negative. One exception is Mexico, where China scored a very positive increase. At the same time, one aspect of the move to “de-risk” from China has caused some manipulations of the supply chain. Instead of the US importing goods directly from China, more and more goods from China are shipped first to Mexico and then get imported into the US from Mexico (even though they are originally from China). To be fair, this is happening in many ways, for many different goods, and through many other nations—not just Mexico. However, one does wonder if this growing occurrence has any impact on views of China in Mexico?
Audit in China University Waste
A very important question among many Western nations is whether they should fear China’s advances in science and technology. That is a difficult question to answer; perhaps there is no answer. People who have long association with China have experienced that there are many intentions, many ideas, many policies, many projects…that never come to fruition. From that perspective, perhaps it would be better to not get too frightened by headlines and announcements of China’s research advances and discoveries. Yet, had you bet thirty years ago against China developing into the nation it is today, you would have lost. Against this backdrop is the recent release of an audit of government-funded university research projects in China. The audit claims there is a less than 1% success rate at bringing research into actual application. It also says that extensive waste and ineffectiveness are part of a flawed system. The report highlighted one university that had 862 projects but not one success, with a total price tag of $18.2 (US) million.
Corruption in State-run Hospitals—
The healthcare system in China is primarily state-run. Approximately 80% of all hospital beds are in state-run facilities, with the remaining 20% are in private facilities. The government has been encouraging the development of more private healthcare, but it has been a challenge. The dominance of state-run facilities is very strong and—being “state-run” by the government—they have many levers to pull to protect their interests. All the medical schools are state-run, and all medical licensing is done by/through the state, etc. Reports have come out about China’s corruption, and authorities are particularly investigating senior hospital administrators. A recent headline from the South China Morning Post read: “China corruption watchdog nabs 160 hospital bosses in healthcare blitz” (August 12, 2023). A sub-story to the above is that there has been some official celebration about a dozen pharmaceutical companies that have withdrawn their applications for IPO. The claim is that because corruption in the hospitals is being reigned in, these companies felt they could not use illegal means of promoting drug sales through stricter hospital channels, and therefore, doubting their market and business model, they withdrew their intention to go public.
Anti-spying Class Worked—
Much has been said recently about China’s new anti-espionage law and the Ministry of State Security (MSS) launching their own WeChat presence and providing to the Chinese public channels for ordinary people to report spying. The July 30th CPI newsletter mentions America’s CIA Director speaking openly about re-establishing its network of information sources in China. This week an article appeared in the Global Times about anti-spying classes being taught to middle schoolers in one of China’s northern cities. Well…it seems the training worked! China reported that a 52-year-old Chinese man surnamed Zeng who had been working in the defense industry has been caught spying for the US. It was mentioned that he had fallen for “Western values.”
People to Know
Cambodia does not share a border with China, and yet, the two nations are close. Hun Sen ran Cambodia for almost 40 years and has just relinquished power to his son, Hun Manet. The interesting thing is that Hun Manet is a graduate of West Point. Yes, that West Point. The Global Times headline was: “Friendship and trust between China and Cambodia is expected to further solidify under new PM Hun Manet” (August 7, 2023). Hun Manet legitimately attended West Point and graduated with a degree in Economics. He then spent his whole life in the military in Cambodia, rising to the rank of general, including commanding live combat in a border dispute with Thailand, around 2011. He now runs Cambodia as the Prime Minister. What does he really think of China and where will Cambodia align itself in the international world order? We’ll have to wait and see.
Many people were either detained in President Xi Jinping’s anti-corruption crackdown or went into hiding on their own. They are now starting to reappear. Ms. Duan has been seen in public, giving a speech at a nursing home in Nanjing. Duan was detained in 2018 due to her association with senior official Mr. Sun Zhengcai, who was arrested for corruption in 2017. Mr. Sun had been the Party Secretary of Shunyi District in Beijing and later promoted to be party head in Chongqing, Sichuan province. It was in Beijing’s Shunyi District that Duan and Sun knew each other and did business together that got them both into trouble.
There are two things that make this story grab attention, especially for foreign expats. First, Shunyi District is where many foreign expats called home in Beijing before the great exodus. There are many gated villa compounds with larger houses, which foreigners enjoyed; and many of Beijing’s international schools are located in Shunyi District. Shunyi District is also home to the Beijing Capital International Airport, making it convenient for frequent travelers. Second, Ms. Duan had been married to author Desmond Shum, who published a tell-all book in 2021 called Red Roulette, in which he recounted many of the happenings and schemes that Duan and Sun used to make vast amounts of money during those heady days in China.
Chris Miller is the author of “Chip War: The Fight for the World’s Most Critical Technology” (2022), and he recently wrote an opinion piece in the Economist. In the piece, he argues that de-risking will not work. His view is that the technology restrictions put into place so far are little more than an irritant and will not succeed in containing China’s military development. Essentially, the West wants to have its cake and eat it too. True de-coupling is too invasive, which is why Western leaders have rallied around “de-risking.” But de-risking apparently has its own risks.
Terms to Ponder
Tangping and bailan—
The unemployment rate among China’s young is about 20%. The underemployed rate among them would be difficult to gauge, but one can guess that it is also high. There are many stories in the Chinese media about the kinds of jobs that young people—even college graduates—are taking, including farming (which in China, often means with a hoe).
Parents all over the world want the best for their children, but there is a uniquely invasive quality to how Chinese parents, society at large, and the government in China all load expectations on young people. The “survival harmony” of small Chinese village life developed over centuries (“we must work together; this is our culture”) and has evolved in today’s era to become smothering and oppressive. Few children in the West (or their parents) have ever experienced the kind of pressure that exists in China’s schools, as whole families (literally) face the gaokao (China’s national examinations for college) each year. In the last couple of years an expression has emerged among China’s young called tangping or lying flat. It means doing just enough to get by, not striving for the best college, the best job, the best spouse, etc. The term has spread far, and even senior officials have referred to it. Recently a new term has burst onto the scene called bailan, which means “let it rot.” While tangping has an innocence to it, almost a Zhuangzi or Li Bai element to it (Li Bai is a famous Tang Dynasty poet who loved to relax and drink wine; Zhuangzi is credited with many of China’s famous Zen sayings), bailan would be to actively do a bad job. Neither represents a good life plan.
Is China a Ticking Time Bomb?—
This past week, US President Joe Biden at a Democratic Party fundraising event said that China’s economy is a “ticking time bomb.” Then he said something to the effect that China is run by bad people and when bad people feel pressure—in this case from a crumbling economy–they tend to do bad things. What the president said raises two questions: (1) “Is the economy in China on the state of collapse?” and (2) “Are the people who run China bad people willing to do bad things to stay in power, i.e., is it a regime or a government?”
1. Many metrics show that China’s economy is doing badly. When the economy is doing badly in China, in some ways the effect is worse than in other nations. The reason is the “Basic Deal” between the Communist Party of China (CPC) and the Chinese people.
2. The Basic Deal is that “people will give up their freedoms—no voting, no free press, etc—and the government promises to get it right and take care of them.” The problem with the Basic Deal—which may surprise you—is that it actually makes government even more responsive to complaints, protest, and social instability. In tough times, elected government officials can say, “The other party did it,” but in China’s “Basic Deal,” there is an element of having to address people’s concerns because there is only one party so there is nobody else to blame. Many foreigners have commented on how great the service is from China’s government because in some ways departments and officials end up over-compensating because they know it’s a one-party state. The whole world saw how rapidly the COVID lockdowns ended when the government was spooked. This raises the question: what happens when the Chinese people have “had enough” with economic struggles?
3. There are some principles of good governance that seem to be universal, like checks and balances, separation of powers, participation of citizens (called “republicanism”), and popular sovereignty. Nations can apply these principles differently and in different systems, but successful governance somehow or other seems to require that these principles be present. It is not just Western nations that exhibit these elements of successful governance; there are examples in Asia, Africa and Latin America. These are the things that mark the difference between a regime and a government. In its history, the CPC has shown aspects of these principles in the way it operates. When these principles are present, results tended to be better. When they were absent, things tended to go poorly. Some argue that President Xi Jinping’s third term, the apparent absence of factions/debate in the Party, and the stark inflexibility in today’s China indicate we are in an era when these principles are absent.
4. The Reform and Opening Period in China seems now to have officially come to an end. That optimism and hope that powered China has faded. The belief that things will get better and that China will become more “normal,” more integrated with the broader world, is gone. The government has re-encroached further into every aspect of life, leaving people feeling aimless and not enthused about anything. The economic problems are a symptom, not a cause. President Xi Jinping, in his Work Report to the National People’s Congress last year, made many references to stormy weather ahead. “Ticking time bomb” may not be the best expression, and the delivery of the message by US President Joe Biden could perhaps have been more eloquent, but both men were saying similar things. Is it too much to hope for a new spirit in China? What can both sides do together to re-direct?
An Oklahoma State Superintendent, Mr. Ryan Walters, posted to Twitter that the Tulsa Public School system was “taking money” from China. It appears that a high school teacher of Chinese descent from a Tulsa high school attended a training workshop at a university in Texas where there is a Confucius Institute. Based on this, Mr. Walters came to the conclusion that this teacher’s Tulsa school is being paid off by Beijing. Maybe the US needs some anti-spying training to help identify actual spies!
Founder and Chief Investment Officer of Hayman Capital Management, Mr. Kyle Bass, believes that there will be war between China and the US, that China will start it, and soon. He believes that listening carefully to what President Xi Jinping says makes it very clear that China intends to invade Taiwan. He comes to his conclusion using the following: (1) increased PLA maneuvers near Taiwan, (2) passing of the new anti-espionage law, and (3) that China is refining much more diesel fuel than it can use and there is no export market for the fuel because of slowing global demand.
Civil engineering of the Forbidden City—
Nearly every foreign tourist who visits Beijing makes a stop at the Forbidden City. If you have never seen the 1987 movie The Last Emperor, directed by Bernardo Bertolucci, you owe it to yourself to watch it. It’s a classic for anyone who loves China. While you are watching, pay close attention to the moats, canals, bridges, fountains, and elevations of the pavilions where the emperor lived. Despite very heavy rainfall and flooding nearly everywhere else in Beijing, the Forbidden City stayed dry. Indeed, there was an awful lot of water flowing through the ancient canals and drains, but no flooding. That water management system engineered hundreds of years ago did its job.
Disney-like animation film 30,000 Miles from Chang’An–
A new animation film called 30,000 Miles from Chang’An is out in China. It celebrates the Tang Dynasty (618-907 AD). There is something for everybody to love about the Tang Dynasty—Chinese cultural confidence, Silk Road trade, religious tolerance, art, and poetry that is still loved and quoted today. Many in China are celebrating this film as an alternative to Disney. It seems that not just Florida’s Governor Ron DeSantis is down on Disney, critics in China also do not like the woke subliminal messaging they claim are in Disney productions. It is probably fair to assume that there is also subliminal messaging in 30,000 Miles from Chang’An, just not Disney’s.