Our So-Called Foreign Policy: Long Overdue Curbs on U.S. Financial Investment in China Seem at Hand

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CCP Virus, China, coronavirus, COVID 19, cybersecurity, government workers, human rights, investing, investors, MSCI, national security, Our So-Called Foreign Policy, pensions, privacy, rogue regimes, sanctions, Steven A. Schoenfeld, surveillance, Thrift Savings Plan, Trump, Wuhan virus

A major debate has just broken into the open over some crucial questions surrounding the future of U.S.-China relations. Chances are you haven’t read about it much, but it essentially involves whether Americans will keep – largely unwittingly – sending immense amounts of money to a foreign regime that was long posing major and growing threats to America’s security and prosperity even before the current CCP Virus crisis. The details, moreover, represent a case in point as to how stunningly incoherent America’s China policy has been for far too long.

The controversy attained critical mass this week when the Trump administration on Monday “directed” the board overseeing the main pension plan for U.S. government employees and retirees (including the military) to junk a plan that would have channeled these retirement savings into entities from the People’s Republic. The President can’t legally force the managers of the Thrift Savings Plan (TSP) to avoid China-related investments. But he does have the authority – in conjunction Congressional leaders – to appoint members to the board, and has just announced nominations to fill three of the five seats. 

This afternoon, the board announced that its recent China decision would be deferred. But because it’s still breathing, all Americans need to ask why on earth the U.S. government has ever allowed any investment in shares issued by entities from China (as known by RealityChek regulars, I refuse to call them “companies” or “businesses,” because unlike their supposed counterparts in mostly free market economies, they’re all ultimately agents of and most are massively subsidized by the Chinese government in one way or another). And why doesn’t the board just kill off the idea for good?    

After all, at the very least, Chinese entities often engage in the most fraudulent accounting practices imaginable, thereby preventing outsiders from knowing their real financial strengths and weaknesses. As just pointed out by Trump administration officials, many also play crucial roles in China’s human rights violations and engage in other practices (e.g., hacking U.S. targets, sending defense-related products and technologies to rogue regimes) that could subject them to national or global sanctions. Worst of all, the thick and secretive web of ties between many of these entities and the Chinese military mean that in a future conflict, U.S. servicemen and women could well get killed by weapons made by Chinese actors partly using their own savings.

Further, government workers’ savings aren’t their only potential or even actual source of U.S. financing. Any American individual or investment company or private sector pension plan is currently allowed to direct money not only toward any Chinese entity listed on American stock exchanges (even though regulators keep complaining about these entities’ lack of transparency – while generally continuing to permit their shares to trade). Such investment in Chinese entities listed on Chinese exchanges is perfectly fine, too. In addition, as documented on RealityChek, U.S.-owned corporations have long been remarkably free to buy stakes in Chinese entities whose products and activities clearly benefit the Chinese military.

Still, the idea of the federal government itself significantly bolstering the resources of China’s regimes belongs in wholly different categories of “stupid” and “reckless.” And don’t doubt that major bucks are involved. The total assets under management in the TSP amount to some $557 billion. And about $40 billion of these are currently allotted to international investments. (See the CNBC.com article linked above for these numbers.)

Could there be any legitimate arguments for permitting these monies – most of which are provided by U.S. taxpayers – to finance an increasingly dangerous Chinese rival? Defenders of the TSP China decision (prominent among whom are officials of public employee unions, who seem just fine with underwriting a Chinese government whose predatory trade practices have destroyed the jobs and ruined the lives and jobs of many of their private sector counterparts) maintain that the prime responsibility of the managers is maximizing shareholder value. And since the TSP had decided that the optimal mix of international holdings are essential for achieving this aim, it quite naturally and legitimately decided to move its overseas investments into the MSCI All Country World ex-US Investable Market index.

This tracking tool and the fund it spawned are widely considered the gold standard for good investment choices lying outside the United States, and in early 2019 decided to speed up a previous decision to triple the weighting it allots to China companies. The share is only about three percent, but who’s to say it stops there?

The TSP board unmistakably should be mindful of its fiduciary responsibilities to current and former federal workers. But as noted by the Trump administration, how can it adequately promote them when it’s transferring their savings into Chinese entities that are simply too secretive to trust and that may be crippled by U.S. sanctions?

More important, as managers of a government workers’ pension fund, TSP board members can’t expect to be treated like private sector fund managers. They clearly have responsibilities other than maximizing shareholder value, and undermining U.S. policies toward China (or on any other front) can’t possibly be part of their mandate.

Bringing the TSP in line with the broader emerging U.S. government approach to China wouldn’t solve the entire problem of huge flows of American resources perversely adding to Beijing’s coffers. This article by investment analyst Steven A. Schoenfeld (full disclosure: a close personal friend) details the alarming degree to which MSCI along with other major indexers have increased the China weightings in their emerging markets indices in particular to alarming levels – levels that aren’t easy to reconcile with the imperative of investment diversity, and that haven’t exactly been broadcast to the large numbers of individual investors who rely on them.

Even immediate, permanent new restrictions on TSP would do nothing to address this issue. Nor would they affect continuing private sector investment in Chinese entities that supply that country’s armed forces, and that strengthen its privacy-threatening hacking and surveillance capabilities.

But TSP curbs would be a start. And any TSP managers that don’t like them can quit and go to work on Wall Street.

Im-Politic: Evidence that Trump Would Be Foolish Not to “Run on China”

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2020 election, CCP Virus, China, climate change, coronavirus, COVID 19, cybersecurity, Democrats, environment, Gallup, human rights, Im-Politic, Jobs, Joe Biden, Pew Research Center, polls, public opinion, Republicans, tariffs, Trade, trade deficit, trade war, Trump, Wuhan virus

Monday I laid out the case that presumptive Democratic presidential nominee Joe Biden has cheer-led every major Washington policy decision in recent decades that has enabled the rise of a wealthy, powerful, and worst of all, hostile and dangerous China. So it’s at least awfully interesting that the day after, a new poll was released making clear that the Trump campaign’s decision to brand the former Vice President as “soft on China” is not only on the mark substantively, but a smart political move.

The poll, conducted by the Pew Research Center, shows that Americans of all political stripes have turned into strong China critics. And especially important – there’s much more going on here than blaming Beijing for the CCP Virus outbreak. Respondents across-the-board now strongly agree that China poses a major threat to a wide range of U.S. interests – including on the trade front, where President Trump’s tariffs were widely reported to be devastating pretty much every major group of actors in the American economy, from businesses to consumers, and from farmers to manufacturers.

P.S. It’s not like Pew has ever itself shown any signs of being critical of China. Indeed, its introduction to the results includes this moral equivalence-friendly assessment: “…with the onset of an unprecedented pandemic, the stage has been set for both sides to cast aspersions on the other.”

The finding Pew emphasizes is a dramatic rise in unfavorable American views of China since Mr. Trump’s inauguration. When he entered office at the beginning of 2017 , the respondents Pew interviewed disapproved of China, but only by a narrow 47 percent to 44 percent margin. The most recent results show unfavorable ratings thumping favorable by 66 percent to 26 percent. The latest negative reviews garnered by Beijing, moreover, represent its worst such showing since Pew began asking the question in 2005.

And as Pew points out, looking at this divergence over time makes clear that China’s ratings began deteriorating long before the virus appeared. In fact, the sharpest increases in Beijing’s unfavorables and sharpest decreases in its favorables started in 2018 – when the administration began announcing and imposing steep levies on huge amounts of prospective imports from China.

Indeed, China’s image among Americans is now so bad that it’s shared among Democrats and Republicans alike. Frustratingly, the survey doesn’t measure the attitudes of declared political independents, but the latest figures show that 72 percent of Republicans and those “leaning” Republican hold unfavorable views of China, and that 62 percent of Democrats and their “leaners” agree. And both negatives are up sharply since the trade war began – or more accurately, since the United States started fighting back.

Not that trade is the only China-related concern expressed in the Pew survey, or even the strongest. Pew gauged U.S. opinion on several China-related issues, and the biggest worries were voiced over “China’s impact on the global environment.” Fully 91 percent of respondents labeled it as a “very serious” or “somewhat serious” problem for the United States, the former responses hitting 61 percent. Next came “cyberattacks from China,” rated as problems by 8 percent of those surveyed, and as “very serious” problems by 57 percent.

Coming in third and fourth were the economic issues. Eighty five percent saw the U.S. trade deficit with China as a problem, including 49 percent calling it serious. And for “the loss of U.S. jobs to China,” the numbers came in at 85 percent and 52 percent, respectively. Interestingly, those latter results nearly matched those for the issue of “China’s growing military power” (84 percent and 49 percent, respectively).

Important to note, however, is evidence that, high as they are, the economic concerns have been leveling off in recent years, while the environmental concerns have been rising (along with those centered on human rights). That’s not necessarily great news for Mr. Trump, whose focus has been on the jobs and overall economy impact (along with the technological threat from China – which is a major source of public China-related concern).

Much better news for the President – Americans aged 50 and older (whose voter turnout rates have long been high) – hold the most negative views of China. Yet this year, Beijing’s image has turned negative for Americans in the 18-29 age class for the first time ever. And for both groups, disapproval of China surged starting in 2018.

Of course, China’s not the only issue on which Americans will be voting this fall. But the latest Gallup results, for example, show that virus-related issues have surged to the top of their rankings for the “most important problem facing the U.S.” If the President can link the virus with the overall China challenge in voters’ minds, his odds of reelection would seem to be pretty good. His biggest obstacle? Possibly the companion Gallup finding that right behind the virus on the list of national problems is “The government/poor leadership.”

Following Up: More Reasons for the NBA to Get Woke on China

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basketball, China, Following Up, Hong Kong, human rights, India, Japan, LawfareBlog.com, National Basketball Association, NBA, Nikkei Asian Review, sports, Uighurs, Victor Cha

Earlier this month, I published a piece on The American Conservative website scolding the National Basketball Association (NBA) and some of its star players and coaches for too often knuckling under to Chinese human rights-related pressure for fear of getting shut out of the People’s Republic’s vast and rapidly growing market. I justified my call for a more outspoken China stance by this normally politically outspoken league by noting that China wasn’t the only big foreign market capable of adding to the league’s already healthy profits and thus to the players’ and coaches’ already titanic salaries. And I observed that in fact, U.S. pro basketball has enough leverage with China to lead a global sports world push for better behavior from Beijing, especially when it comes to Hong Kong and the country’s Uighur Muslim minority.

That’s largely why it’s been great to see these arguments being reinforced lately both by some new NBA-related business developments and by a leading authority on Asian affairs.

On the business front, a recent report from Japan’s Nikkei Asian Review (NAR) observes that the league is indeed continuing full steam ahead with its efforts to win fans and rake in bucks in Japan and India. The former, not so incidentally, is the world’s third largest single national economy (after the United States and China). The latter has a population so huge and still growing so fast that it’s soon expected to surpass China as the world’s biggest.

According to NAR, this fall the NBA played its first games in Japan (exhibitions) in 16 years and the stands were packed. Moreover, the publication cites one estimate claiming explosive recent growth in subscriptions for the streaming service authorized to carry league games.

Further, the NBA’s popularity in Japan looks set to keep surging for the foreseeable future. For next year’s summer Olympics will be held in Tokyo, and the U.S. and other foreign teams slated to compete will contains dozens of NBA stars. And in 2023, Japan will be one of the co-hosts (along with other big Asian countries the Philippines and Indonesia) of the basketball World Cup.

But perhaps the biggest boost to the NBA’s popularity has been Washington Wizards rookie Rui Hachimura. Hachimura isn’t the first Japan-born player to appear in an NBA game. But so far he looks to be the best by far, and could boost the league’s Japanese fan base in ways reminiscent of Yao Ming’s impact in China.

As for India, the league opened its first office in that population giant in 2017, and although its athletes don’t seem NBA- (or major college-) ready yet, but its fans could identify with Vivek Ranadive, Indian-born owner of the Sacramento Kings. And the Kings played the Indiana Pacers in Mumbai this fall shortly before the Japan exhibition games.

Meanwhile, my claim that the NBA possesses ample clout to confront China successfully on human rights issues was seconded recently by Victor Cha, a Georgetown University political scientist and former National Security Council Asia specialist under George W. Bush’s administration. In a December 8 post for the Lawfare blog, Cha wrote:

“China may continue to ban broadcasts of [certain NBA] games, but how long before Chinese people express frustration? It’s not like there is an alternative to NBA stars like Lebron James or Steph Curry for youth on a Chinese basketball team to worship. China’s punishment may be costly in the short term, but in the long run, the demand signal from Chinese consumers will remain strong. And if the Beijing authorities are seen to be standing in the way, the Chinese Communist Party may be doing more harm than good to its own domestic standing. Moreover, the attention brought to the Chinese over the NBA ban could make the Chinese people aware of alternative narratives of the events in Hong Kong beyond the official media’s framing of the protests as criminal, thuggish and unjustified behavior.”

And I would strongly second Cha’s broader conclusion that “China’s predatory liberalism is an affront to the liberal international order, and the NBA, whether intended or not, is now a part of this struggle. Its actions going forward will set precedents, hopefully positive, for governments, companies, and individuals both inside and outside of China.”

Making News: A New China (and Basketball!) Op-Ed, and Back on CNBC Today!

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China, CNBC, European Union, Hong Kong, human rights, Making News, National Basketball Association, NBA, The American Conservative, Trade, Trump

I’m pleased to announce that a new op-ed article of mine was posted last night.  Appearing on the website of The American Conservative, it explains why the National Basketball Association and its often politically outspoken players and coaches can easily afford to lead a global campaign to press China to clean up at least some of its human right act in Hong Kong and elsewhere.  Click here to read.

Also, I’m scheduled to return to CNBC this afternoon to discuss all the fast-breaking developments in U.S. trade policy across the board – including with China and the European Union.  The segment is slated to begin at 2 PM EST and, as usual, if you can’t tune in (or if you’re dying to see it again), I’ll be posting a link to the streaming video as soon as one’s available.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

 

Our So-Called Foreign Policy: Signing the Hong Kong Democracy Bill Should be a No-Brainer for Trump

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China, Congress, democracy, Hong Kong, Hong Kong protests, human rights, Our So-Called Foreign Policy, sanctions, trade deal, trade talks, Xi JInPing

Full disclosure: I don’t believe that promoting human rights and democracy abroad should be a high priority for U.S. foreign policymakers. (My most detailed explanation comes in this late-1994 article in FOREIGN POLICY magazine, which is available on-line here and here.) All the same, there’s no doubt in my mind that President Trump would be making a big political and substantive mistake if he, as he’s (very obliquely, to be sure) hinted that he might veto the Hong Kong Human Rights and Democracy Act of 2019 just passed overwhelmingly by both the House and Senate.

Don’t get me wrong: I’m under no illusion that the legislation will do anything in the foreseeable future to promote human rights and democracy in Hong Kong – and you shouldn’t be, either. In fact, there’s every reason to believe that it’s a classic example of political virtue-signaling. For example, even the sponsors of the bill don’t seem to believe that any plausible official American words or deeds can affect the fate either of Hong Kong generally or of the huge numbers of protesters who have been challenging China’s determination to keep eating away at the special freedoms enjoyed by its residents since its hand over by the United Kingdom to Beijing in 1997.

If they did, you’d think that they’d have included in the bill some economic sanctions against the Chinese economy. But not only are such provisions entirely missing. The only measures resembling economic sanctions or potential sanctions are directed against the economy of Hong Kong – in the form of requirements that the various ways in which U.S. policies and other laws that treat Hong Kong differently from China (based on the assumption that this “Special Autonomous Region,” as Beijing calls it) really still is autonomous – remain justified by the facts on the ground in Hong Kong.

The bill does contain some sanctions instructions directed at China – but not at any sectors of its economy. Instead, they’re to be applied against “foreign persons” determined to be “knowingly responsible” for any “gross violations of internationally recognized human rights in Hong Kong.”

To which the only serious response is “So what?” The Hong Kong officials who give the specific orders to the police to fire tear gas or crack some heads or shoot rubber bullets into crowds are nothing more than tools of the dictators in Beijing. Concentrating punishment on them amounts – knowingly – to punishing the little fish and letting the prize catches get away. And P.S. – they’re as easily replaceable and interchangeable as any ordinary functionary.

Unless you can think of many U.S. politicians in either party who would back imposing sanctions on Chinese kingpin Xi Jinping or any of his senior cronies? Fat chance – assuming you could even locate any of their assets vulnerable to America’s reach. After all, how many American elected officials genuinely doubt that China’s top leaders are ultimately responsible for the harsh repression of the Hong Kong protests – or for the extradition law that triggered this uprising?

Nonetheless, the politics alone argue compellingly for presidential signing of the Hong Kong measure. It attracted nearly unanimous support on Capitol Hill, so a veto override is likely. And although the President won’t win much praise for enacting the bill into law, he’ll generate a hail of brickbats for any opposition.

And for what? As I argued in the article cited at the beginning, human rights interests generally should take a back seat in U.S. foreign policy for any number of reasons, but chiefly because other interests are usually more important for America’s security or prosperity (since foreign governments’ human rights practices as are almost completely incapable of undermining these objectives). Moreover, American actions can sometimes backfire, and it’s far from far-fetched to worry that a Trump approval of the Hong Kong bill and more frequent and stronger expressions of official outrage will only further convince China’s dictators (and much of the nationalistic Chinese public) that the unrest in Hong Kong stems from foreign meddling, not legitimate concerns.

Yet U.S.-China relations these days are so bad that it’s difficult to imagine a Trump signature on the Hong Kong legislation significantly worsening them. It’s possible that Beijing could retaliate with still higher tariffs or other curbs on American exports, especially farm products, but China remains much more vulnerable to U.S. economic pressure than vice versa. Nor is the President likely to suffer much politically from such measures during the upcoming election year, since nearly all of his political opponents have spoken out much more emphatically against China’s record in Hong Kong than he has. As for “outside agitator” claims – the Chinese are already making them, including against the United States.

Which leaves us with the one stated presidential reason for considering a veto of the Hong Kong bill – that an obstacle could be created to reaching a trade deal. The problem here is that a trade deal that serves U.S. interests (as opposed to a cosmetic deal that, e.g., results in increased American exports to China in exchange for American tariff reductions with no commitments from Beijing to end its most important predatory trade practices) simply isn’t possible. As I’ve written repeatedly, even a complete Chinese cave-in on paper to every demand the administration has ever made can’t possibly be verified adequately – because the Chinese government is so big and so secretive.

In fact, if there’s any relationship between trade policy and Hong Kong policy, it surely works the other way: More human rights pressure from Mr. Trump would be added to the economic pressure that’s already making Xi’s life hard enough. And whatever throws the Chinese off balance by definition helps the United States. For it would force Beijing to spend more time putting out fires and playing defense generally across the board, and leaves less time for pursuing offensive economic and geopolitical goals that undermine American interests.

As I’ve always seen it, claims that these interests (properly defined, of course) and ideals are always ultimately compatible are among the most fatuous made by practitioners, scholars, and historians of American foreign policy. But especially for a country with America’s range of geopolitical and economic choice (by dint of its high degree of built-in security and economic self-sufficiency, and potential for even more), there’s also no question that the United States can afford to promote its admirable values on a regular basis.

Hong Kongers’ struggle for more freedom and democracy represents one such case, meaning that a Trump-ian failure to sign the Hong Kong bill would call into question not only his support for these ideals, but his pragmatic instincts as well.

(What’s Left of) Our Economy: What the Mini-Deal Says About Trump’s China Policy

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agriculture, business investment, censorship, China, decoupling, democracy, Democrats, election 2020, Elizabeth Warren, Hong Kong, Hong Kong protests, human rights, impeachment, Populism, Republicans, tariffs, Trade, trade talks, trade war, Trump, Uighurs, Ukraine, Ukraine Scandal, {What's Left of) Our Economy

The “Phase One” min-deal reached by the United States and China tamping down bilateral trade tensions for the moment, speaks volumes about the three major forces that are now driving President Trump’s China policy, and that will keep shaping it through the next U.S. election – though not always in consistent ways. They are:

>the President’s evident belief that his reelection hopes are being threatened mainly by revived impeachment threats but also by an economic slowdown that has unmistakably been influenced by the so-called trade war with China;

>his consequently increased need for political support from the establishment Republicans so numerous in Congress who have never boarded the Trump Tariff Train and who are worried about their own reelection chances next year; and

>Mr. Trump’s consistent (though generally unstated) belief that no matter how the formal trade talks proceed, America’s national security as well as economic interests require the U.S. economy to continue steadily decoupling from China’s.

The strength of the impeachment drive faced by the president is now indisputable. Some polls are even showing growing Republican support for not only impeachment by the House but removal by the Senate. Moreover, this political challenge comes at a time when the President’s strongest suit by far (at least according to polls) – his economic policy record – is looking somewhat weaker.

Few signs point to a recession breaking out by Election Day, much less during the preceding weeks or months. But growth has been slowing to levels that Mr. Trump himself has deemed unacceptable – in no small measure because they were the rates that prevailed for most of the Obama administration.

The tariff-heavy Trump trade policies hardly deserve all the blame. (See, e.g., this recent post.) But the failure of business investment to stay elevated following passage of major tax cuts for business is especially telling. It buttresses claims that both the President’s various sets of tariffs and the inconsistency with which they’ve been both threatened and applied have inhibited companies from approving big new expenditures on new factories and other facilities.

As a result, nothing that can reasonably be expected from Washington (in other words, ruling out a big infrastructure spending bill) is likelier to boost the economy more than a nerve-calming trade truce with China mainly featuring some Chinese market opening or re-opening (especially for agricultural products) in return for some U.S. tariff cuts, promises to refrain from new levies, or some some combination of such moves. At the least, such an agreement would in theory help growth maintain the momentum it has remaining.

A mini-deal along these lines would also please the Senate Republicans who might ultimately judge the President’s fate, and who generally have lagged far behind the GOP base in turning against pre-Trump China and broader trade policies. Moreover, as I’ve written, impeachment politics have greatly magnified their sway over Mr. Trump before. Despite his sky-high popularity with Republican voters, the President was heavily dependent on their political backing until this spring in order to neutralize any impeachment chances while his Russia ties were being investigated. That’s surely why his early policy initiatives were dominated by traditional Republican priorities, like tax cuts and repeal of former President Barack Obama’s healthcare overhaul, rather than by populist priorities like an infrastructure bill and the prompt imposition to tariffs.

Once the Special Counsel and other investigations flopped for various reasons, Mr. Trump had a much freer hand. But because of the emergence of “UkraineGate,” for now, those days are over. Probes growing out of those events are certain to last for months. Therefore, continued, much less higher, tariffs on China that could further drag on the economy and further frustrate the rural constituencies so crucial to the President and many other Republicans seem out of the question.

The President is so hamstrung that he’s been unable to marshal greater public support for staying the tariff course even though China is antagonizing American public opinion with its harsh suppression of the Hong Kong protests and the Muslim Uighur minority, and with its heavy handed efforts to extend its censorship practices to the National Basketball Association and other U.S. businesses. And don’t forget: These developments have placed China in a much weaker position, too.  

One reason that the President hasn’t been able to capitalize could well be his reluctance to declare publicly the functional equivalent of economic war, or his intent to decouple – presumably because any such statements would prompt the Chinese to crack down even further on American companies even doing business in the PRC that have nothing to do with job and production offshoring aimed at serving the U.S. market from super-cheap and highly subsidized Chinese facilities, as opposed to serving Chinese customers. And that reasoning has been entirely understandable.

Much less understandable – the President’s insistence that a trade war with China would be easy to win and inflict no economic harm on Americans, rather than choosing to challenge his compatriots to endure some sacrifices in order to beat back a mortal threat to their national security as well as prosperity. No wonder public support for so-called hard-line policies remotely strong enough to offset the opposition and reservations of the Congressional Republicans and most Democratic politicians is nowhere to be seen.

And don’t doubt that the Chinese fully understand. Whatever problems they initially experienced in figuring Mr. Trump out, they surely have concluded that they’re best advised to play the waiting game on the broader and deeper so-called structural issues dividing the two countries (e.g., intellectual property theft, technology extortion, massive subsidies) until the President is replaced by a Democrat who’s much easier to deal with.

Indeed, the evidence for this conclusion is abundant. China issues have played a small role in the Democratic primary campaign so far – even when it comes to long-time critics of pre-Trump trade policies like Democratic Socialist Vermont Senator Bernie Sanders, and Massachusetts Senator Elizabeth Warren. One likely explanation: In recent years, Democratic voters and leaners have markedly flipped on those pre-Trump approaches, from deep dislike to general approval. This shift in public opinion (matched in part by a trade flip in the other direction among Republicans and leaners) may also warrant some Chinese confidence that even a President Warren might prove a more acceptable interlocutor than Mr. Trump.

Nonetheless, the formal talks are not the only track on which the Trump administration’s China trade policies are running. And the other track – featuring unilateral U.S. moves to restrict Chinese involvement in the American economy, and thereby foster decoupling – is much less controversial than the trade talks and especially the tariffs and tariff threats clearly required to spur any meaningful progress.

Highly revealing on this score (in terms of the importance attached in Washington to decoupling): Even as a high level Chinese delegation was jetting to Washington, the President approved actions against Chinese tech companies and Chinese officials that were justified by human rights concerns, but that in the first case clearly advanced decoupling. Just as revealing (in terms of possible Chinese acceptance of a more skeptical new bipartisan U.S. consensus on China policy): Despite the provocative timing, the Chinese didn’t turn around and head back home once they heard the announcement.

Reinforcing the new American consensus on decoupling has unmistakably been the growing realization by the U.S. corporate sector that its heavy bets on China have dangerously increased its vulnerability not only to the whims of American politics, but to a Chinese regime that’s turned out to be much less hospitable than expected. As a result, “Phase One” is not only a suspiciously convenient-looking term being used by the President to describe his new deal. It also looks suitable for describing where his administration’s overall China policy stands right now.     

Im-Politic: The NBA’s Not Real Woke on Hong Kong

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Adam Silver, basketball, Bradley Beal, China, Chris Paul, Daryl Morey, David Fizdale, democracy, Draymond Green, Golden State Warriors, Gregg Popovich, Hong Kong, Hong Kong protests, Houston Rockets, human rights, Im-Politic, James Harden, Jaylen Brown, Kevin Durant, LeBron James, National Basektball Association, NBA, Russell Westbrook, Steph Curry, Steve Kerr, Tilman J. Fertitta, Trump, Twitter, Uighurs

In recent years, the National Basketball Association (NBA) has worked hard to earn its reputation as the most socially conscious sports league in America and possibly the world – and certainly its owners and Commissioner Adam Silver have both permitted the players to speak out on various political and policy issues, and demonstrated a pretty high degree of “wokeness” themselves. Nor has American men’s pro basketball’s commitment to social and economic and political justice been limited to words. Time after time, many of the NBA’s biggest stars and most successful franchises and coaches have backed up their rhetoric with actions, ranging from boycotting events with President Trump to supporting social programs in low-income communities and other worthy causes.

What a shame, then, that neither the players’ nor management seem to believe that Hong Kong’s democracy protesters deserve even a syllable of sympathy. Worse, the issue has gotten the silent treatment even from the NBA’s most outspoken figures, and the league itself just made clear that it’s so determined to maximize profits in its current huge and potentially much bigger China market that it’s given the cause of freedom in Hong Kong – and by extension, the mainland – the back of its hand.

Hong Kong has been in turmoil since June, engulfed by massive, angry, and sporadically violent protests – and a more violent government crackdown – triggered by the government’s proposal of a law that would enable the extradition of criminal suspects to China. To be sure, despite Beijing’s promise as part of the 1997 “handover” agreement with the city’s British colonial rulers to permit Hong Kong to retain its largely democratic political system and rule-of-law legal system to remain in place for fifty years, China has steadily encroached on those freedoms practically since Hong Kong became a “Special Administrative Region” of the People’s Republic.

Nonetheless, the extradition measure has apparently convinced many Hong Kong-ers that China has greatly sped up the timetable for replacing the “one country, two systems” arrangement with “one country, one system.”

But although the NBA has been a large and rapidly growing presence on the Chinese sports scene for decades, there’s no record of anyone associated with the league making any remarks on the Hong Kong situation until last Friday – when Houston Rockets General Manager Daryl Morey tweeted “Fight for Freedom. Stand with Hong Kong.”

That long-time silence isn’t necessarily proof of NBA hypocrisy. What does look disgraceful is the U.S. pro basketball world’s reaction. Morey’s boss, Houston owner Tilman J. Fertitta, denounced the tweet, insisting that the Rockets “are NOT a political organization.” The NBA itself expressed “regret” that Morey had deeply offended many of our friends and fans in China” and specified that his backing of freedom in Hong Kong “does not represent…the values of the league.”

It’s important to note that Morey has (so far) kept his job – after deleting the original tweet from his account and sending out a subsequent statement on the network indicating some contrition, albeit seemingly for commenting on Hong Kong in haste, without considering “other perspectives” and not for his Hong Kong views per se. The NBA also pointedly declared that it backs individuals “sharing their views on matters important to them.”

But there can’t be any reasonable doubt that the NBA’s China stance has been much more timid than its position on issues such as rebuking President Trump – which prompted this statement from Silver:  “These players in our league, our coaches, are speaking out on issues that are important to them and important to society. I encourage them to do that.”

Nor can there be much doubt that the league’s Hong Kong timidity stems from China’s sharp reaction – which has so far included decisions by the league’s chief Chinese digital partner and state media (the only kind permitted in China) to remove Rockets games from their broadcasts, and by the country’s official basketball organization to “suspend cooperation” with the Houston franchise.

In fact, the NBA’s record on other China-related issues looks pretty shabby, too. As reported on Slate.com:

“The league runs a training center in Xinjiang, a region where the state has imprisoned and subjugated an entire class of people who are part of the Uighur minority. The NBA’s most progressive coaches, Steve Kerr and Gregg Popovich, have rightfully spoken out against the Trump administration’s Muslim ban. If anyone associated with the league were to bring attention to human rights abuses, it’s them, but neither man publicly addressed the Chinese government’s imprisonment of roughly a million Uighurs while they were in the country with USA Basketball [the private, non-profit organization that, among other responsibilities, supervises American participation in international basketball competitions like the Olympics] for this summer’s FIBA [International Basketball Federation] Championships.”

All the same, the number of ordinarily outspoken star NBA players, prominent teams, and leading coaches who to date have said absolutely nothing about the Hong Kong protests – or the league’s plain vanilla reaction – is stunning, and aside from Kerr and Popovich includes the following (as of early this afternoon):

Lebron James, Steph Curry, the Golden State Warriors, Draymond Green, Kevin Durant, Bradley Beal, Jaylen Brown, David Fizdale, and Chris Paul.

But even their silence looks good next to James Harden’s reaction: He’s apologized for Morey’s original tweet both on his own behalf and that of Houston Rockets teammate Russell Westbrook.

And here’s what’s even weirder about this soft NBA cave-in to China: It apparently hasn’t occurred to anyone associated with the league that it’s astronomical popularity in the People’s Republic is not only an immense cash cow – it gives them considerable leverage, too. Sure, if major American basketball figures decried repression of Hong Kong-ers, or the Uighurs, or any other Chinese, the government could drastically reduce the NBA’s activities in China and reduce the league’s profits. But just how well is that likely to sit with China’s legions of basketball fans? And given the unrest in Hong Kong, would Beijing really be so anxious to antagonize another significant chunk of its citizenry?

The answer might indeed be “Yes.” But wouldn’t it be interesting and important – not to mention courageous and inspiring – if any of pro basketball’s (already incredibly wealthy) social justice warriors decided to put this proposition to the test?

Making News: On National Radio Tonight on the Threat (to Americans) of China’s Social Ratings

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business, China, Gordon G. Chang, human rights, Making News, privacy, social ratings, The John Batchelor Show

I’m pleased to announce that I’m scheduled to return to John Batchelor’s nationally syndicated radio show tonight.  Our likely topic:  China’s totalitarian practice of “social rating” – and how it can turn American businesses into agents of China’s dictators.  The segment is slated to begin at 9:15 PM EST and you can listen live on-line at this link.

As usual, if you can’t tune in this evening to what’s sure to be an important discussion among John, me, and co-host Gordon G. Chang, I’ll be posting a link to the podcast as soon as one’s available.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

Our So-Called Foreign Policy: More Globalist Fantasies from The Times’ Friedman

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Africa, China, climate change, Cold War, democracy, Europe, global norms, global order, global warming, globalism, human rights, international institutions, Italy, migrants, migration, Our So-Called Foreign Policy, The National Interest, The New York Times, Thomas Friedman, World War II

Thomas Friedman’s New York Times column today shows that the uber-pundit continues to perform a crucial dual public service. He both articulates as clearly as possible the usually unspoken assumptions underlying the globalist foreign policy approach pursued by the establishments of the two major American political parties for decades, and (unwittingly, to be sure) he reveals how childish they are. 

In his discussion of the African migrants crisis faced by Italy and other countries of southern Europe, Friedman once again credits “global cooperation and rule-making” with making “America, Europe and the world as a whole steadily freer, more stable and more prosperous since World War II.”

As I’ve pointed out, these successes owed not to any institutions-based “liberal global order” but to the American power and wealth that underwrote the defense of Western Europe, Japan, and South Korea and the recreation of a functioning international economy (until the Cold War ended, of course, one confined to the bounds of the non-communist world).

But what distinguishes today’s article – and pushes it into the realm of fantasy – is the author’s claim that this order and its institutions and procedures have “managed the key global issues after W.W. II — like trade, migration, environment and human rights….”

How do we know this is fantasy? Because Friedman himself emphasizes here that the migrants crisis remains out of control. Moreover, the world trade system is proving woefully unable to handle the challenge of China’s predatory government-private sector hybrid economy. The management claim, meanwhile, is sure hard to square with Friedman’s own nearly innumerable warnings that climate change is about to destroy the planet unless dramatic steps are taken immediately.

And although the world is unmistakably freer than before World War II, again it’s been American power – not any set of worldwide institutions and rules – that’s been primarily responsible. Further, a major elite commentator meme nowadays of course is that freedom has taken some important hits lately – e.g., because of the rise of allegedly authoritarian populists on both sides of the Atlantic, because Russia’s post-Cold War experiment with genuine democracy proved so short-lived, and because China’s widely anticipated evolution toward greater political (and economic) openness never even got started.

I’m also grateful to Friedman for creating another opportunity for me to explain why dismissing the importance of international institutions and rules does not amount to dismissing the importance of international cooperation in addressing the varied and important worldwide problems that transcend borders.

As I’ve most recently written in my June National Interest article on the superiority of a genuine America First foreign policy, there’s no reasonable question that in order to deal with pollution and disease and climate shifts (whether man-made or not, they can create terrible common problems) countries will need to meet and figure out how to respond jointly.

But since the agreed-on solutions will not affect every country equally, or benefit every country equally, it will be vital for the United States to push for the measures that most effectively promote and preserve its own interests. Further, since Washington will not be able to count on persuasion solely or even largely to accomplish this goal, it will need to make sure that it possesses the only other advantages capable of shaping the outcomes favorably – power and wealth. Accept no substitutes.

Our So-Called Foreign Policy: The Case for a “Made in America” Approach

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Africa, AIDS, border security, climate change, corruption, diseases, foreign policy, foreign policy establishment, globalism, HIV, human rights, internationalism, Iran, Iran deal, Islamic terrorism, Israel, Jeffrey Goldberg, Joseph S. Nye, Jr., Middle East, missile defense, nuclear proliferation, oil, Our So-Called Foreign Policy, population control, Project-Syndicate.org, shale, terrorism, The New York Times, Thomas Friedman

I’m picking on New York Times uber-pundit Thomas Friedman again today – not because of any personal animus, but because, as noted yesterday, he’s such an effective, influential creator of and propagandist for the conventional wisdom on so many public policy fronts. And just to underscore that it’s nothing personal, I’ll also put in my cross-hairs another, though lower profile, thought leader: Harvard political scientist Joseph S. Nye, Jr. The reason? Both recently have provided us with quintessential illustrations of how lazy – and indeed juvenile – the justifications for American international activism served up by the bipartisan foreign policy establishment have grown.

The analyses I’m talking about aren’t quite as childishly simplistic as the establishment theme I wrote about last month – the assumption that American involvement in alliances and international organizations and regimes is automatically good, and that withdrawal or avoidance is automatically bad. But because it’s a little more sophisticated, it can be even more harmful. It’s the insistence that whenever the United States faces a problem with an international dimension, the remedy is some form of international engagement.

A recent Friedman column revealed one big weakness with this assumption: It often logically leads to the conclusion that a problem is utterly hopeless, at least for the foreseeable future. Just think about the only sensible implications of this October 31 article, which insists that the apparently metastasizing threat of Islamic terrorism in Africa can’t be adequately dealt with through the military tools on which the Trump administration is relying.

Why not? “Because what is destabilizing all of these countries in the Sahel region of Africa and spawning terrorist groups is a cocktail of climate change, desertification — as the Sahara steadily creeps south — population explosions and misgovernance.

“Desertification is the trigger, and climate change and population explosions are the amplifiers. The result is a widening collapse of small-scale farming, the foundation of societies all over Africa.”

I have no doubt that Friedman is right here. And as a result, he has a point to slam the Trump administration “for sending soldiers to fight a problem that is clearly being exacerbated by climate and population trends….” (That’s of course a prime form of American international activism.)

But he veers wildly off course in suggesting that other forms of such activism – “global contraception programs,” “U.S. government climate research” and the like are going to do much good, especially in the foreseeable future. Unless he supposes that, even if American policies turned on a dime five or even ten years ago, Africa would be much less of a mess? The only adult conclusion possible is that nothing any government can do is going to turn the continent into something other than a major spawning ground for extremism and refugees.

And this conclusion looks especially convincing considering the African problem to which Friedman – and so many other supporters of such approaches – gives short shrift: dreadfully corrupt governments. For this is a problem that has afflicted Africa since the countries south of the Sahara began gaining their independence from European colonialists in the late-1950s. (And the colonialists themselves weren’t paragons of good government, either.)

So I’m happy to agree that we shouldn’t pretend that sending American special forces running around Africa helping local dictators will actually keep the terrorists under control (although as I’ve argued in the case of the Middle East, such deployments could helpfully keep them off balance). But let’s not pretend that anything Friedman supports will help, either – at least in the lifetime of anyone reading this.

Nye has held senior government foreign policy posts in Democratic administrations and, in the interests of full disclosure, we have crossed swords in print – mainly about the proper definition of internationalism and about a review of an anthology he edited that he didn’t like (which doesn’t seem to be on-line). But I hope you agree that there’s still a big problem with his November 1 essay for Project-Syndicate.org about the implications of America’s domestic energy production revolution for the nation’s approach to the Middle East.

In Nye’s words: “Skeptics have argued that lower dependence on energy imports will cause the US to disengage from the Middle East. But this misreads the economics of energy. A major disruption such as a war or terrorist attack that stopped the flow of oil and gas through the Strait of Hormuz would drive prices to very high levels in America and among our allies in Europe and Japan. Besides, the US has many interests other than oil in the region, including nonproliferation of nuclear weapons, protection of Israel, human rights, and counterterrorism.”

Two related aspects of this list of reasons for continued American engagement in the region stand out. First, it’s completely indiscriminate. And second, for this reason, it completely overlooks how some of these unmistakably crucial U.S. interests can be much more effectively promoted or defended not through yet more American intervention in this increasingly dysfunctional region, but through changes in American domestic policies.

For instance, we’re (rightly) worried about nuclear proliferation, especially in Iran? How can today’s engagement policy help? Even if the the current Iran nuclear deal works exactly as intended, what happens when it runs out? Should we simply assume that Tehran will be happy to keep its nuclear genie in a bottle for another fifteen years? Will Iran be persuaded to give up the nuclear option permanently if Washington cultivates even closer ties with its age-old Sunni Muslim enemies, like Saudi Arabia?

Although I’m a missile defense skeptic – especially when it comes to the near-term threat from North Korea – isn’t figuring out a more effective way to repel an Iranian strike more likely to protect the American homeland? It’s certainly a response over which the United States will have much more control – and indeed, any control. In addition, if the United States withdraws militarily from the Persian Gulf region, Iran’s reason for launching such an attack in the first place fades away and, as I’ve argued in the case of North Korea, America’s own vastly superior nuclear forces become a supremely credible deterrent for any other contingencies.

Of course the United States faces a big Middle East-related terrorism problem. But as I’ve argued previously, the keys to America’s defense are serious border security measures. They, too, pass the “control test” with flying colors, and consequently seem much more promising than the status quo approach of trying to shape the region’s future in more constructive ways. But as I’ve also written, it would also make sense to keep in the Middle East small-scale American forces whose mission is continually harassing ISIS and Al Qaeda and whatever other groups of vicious nutballs are certain to appear going forward.

Nye’s point about the integration of global energy markets is a valid one. But in the same article, he acknowledges how the U.S. domestic energy revolution’s “combination of entrepreneurship, property rights, and capital markets” has changed the game for America. Why does he suppose that its effects won’t spread significantly beyond our borders?

As for Nye’s other two reasons for continued U.S. Middle East engagement, the notion that Washington can do anything meaningful to promote the cause of human rights simply isn’t serious, and Israel has amply demonstrated that, with enough American military aid, it can take care of itself.

Moreover, as you may recognize, the arguments for mainly focusing on border security to handle the Middle East terrorist threat applies to the African menace that’s preoccupying Friedman.

The main takeaway here isn’t that U.S. international engagement will never be needed to protect national security, safeguard the nation’s independence, or enhance its prosperity. It’s that Made in America approaches will turn out to be vastly superior in many cases – and certainly in many more cases than the bipartisan globalist foreign policy establishment recognizes. How long will it take for President Trump to get fully on board?

By the way, I first began exploring the idea of Made in America solutions to foreign policy problems and international threats when I read this article by current Atlantic Monthly Editor Jeffrey Goldberg. He argued in 1999 that the nation was making a big mistake ignoring Africa in its diplomacy because the continent was likely to become a source of deadly diseases sure to cross oceans and eventually afflict Americans and others; that “H.I.V., of course, is a particularly vicious warning shot”; and that it was high time for Washington to deal with “poverty, poor sanitation and political instability” as well as put “a global system of public health and disease surveillance in place.”

Not that Goldberg presented a stark either-or choice, but my reaction was “If we do need to figure out whether to place more AIDS-fighting emphasis on promoting African economic development, or on finding a cure through medical research, isn’t the latter much likelier to deliver major results much sooner?”

As is clear from the Friedman article, Africa’s array of problems continues unabated. And according to no less than the (devoutly globalist) Obama administration, as of last year, the United States was “on the right track to reach most of its “National HIV/AIDS Strategy” goals for 2020 – which seek an America that’s “a place where new HIV infections are rare” and where “high quality, life-extending care” is available.