Our So-Called Foreign Policy: Brazen U.S. Corporate Collusion with China

Tags

aerospace, Belt and Road, China, globalization, Honeywell, human rights, manufacturing, multinational companies, multinationals, national security, Our So-Called Foreign Policy, steel, tech, tech transfer, The Wall Street Journal, Uighurs, Xinjiang

Usually, it’s not a terrific idea to begin a piece of writing with a phrase like, “If you want to see something that’ll make you sick to your stomach….” But I think you’ll agree that this recent article from The Wall Street Journal justifies an exception. For its portrayal of the China operations of U.S.-owned multinational manufacturer Honeywell depicts a big company actively helping the dangerous thug dictatorship in Beijing endanger often-intertwined American security and economic interests, and evidently doing so without even a peep of protest from Washington – including during the Trump years.

Journal reporter Trefor Moss’ piece dealt with the question, “How can an American company thrive in China at a time when tensions between the two countries are running high?” His answer: Under Honeywell’s long-time head of China operations, it pursued a strategy of fully immersing “the company in Chinese business and culture—and [not shying] away from helping Chinese companies achieve strategic goals set by Beijing.”

This approach was worrisome enough when this executive, Shane Tedjarati, launched Honeywell China down this path in 2004. By that time, Beijing was not only gutting America’s domestic manufacturing base with a wide range of predatory trade and broader economic practices. But it had also compiled a record of challenging American national security interests through policies like supplying countries like Iran and North Korea with technologies vital to developing weapons of mass destruction and the missiles needed to deliver them.

Now that the People’s Republic has since at least early 2018 been seen as a threat to critical American interests in the Indo-Pacific region requiring a “whole-of-government” response, and that President Biden has declared that “We’re in competition with China and other countries to win the 21st Century. We’re at a great inflection point in history” and that “we’ll maintain a strong military presence in the Indo-Pacific…not to start a conflict, but to prevent one,” activities like Honeywell’s in China look alarmingly like colluding with an enemy.

What else can be made of Tedjarati’s position as “a visiting professor at Shanghai’s China Executive Leadership Academy, an elite school that provides leadership training to the Communist Party’s rising stars.”

Or of Honeywell’s sale of industrial automation equipment to one of the state-owned Chinese steel companies that for years been glutting global markets with dumped and artificially cheap product that’s hammered America’s own sector?

Or of its “open” support for the Belt and Road Initiative, the Chinese global infrastructure plan widely seen as a way for Beijing to expand its worldwide influence, and that’s got the Biden administration concerned enough to be mounting a U.S. response?

Or of these Honeywell actions (which didn’t make the Journal piece) “[T]he company repeatedly, between 2011 and 2018, sent drawings of parts of US military aircraft to suppliers in foreign countries, including China, asking for price quotes, according to a Department of State charging letter. The manufacturer voluntarily disclosed the violations.

“The engineering prints showed layouts, dimensions and geometries for manufacturing castings and finished parts for military aircraft and engines, as well as other hardware and weaponry. Drawings for parts within the Lockheed Martin F-35 and F-22 stealth fighters, Boeing B-1B supersonic bomber and Pratt & Whitney F135 turboshaft engine were included.”

For good measure, Honeywell has also supplied protective equipment to Chinese security forces operating in western Xinjiang province, where Beijing has been harshly persecuting the Muslim Uighur minority group.

Honeywell did pay a (tiny) fine for its seven years of sharing those drawings. But overall, according to Moss, Tedjarati told him that “No U.S. or Chinese officials have ever told him the company should do, or should avoid doing, specific things in China.”

Honeywell has by no means been the only U.S. multinational to enrich China and strengthen it militarily and technologically for decades. (See, e.g., here and here.) But it may have just won the award for the most brazen. And until these kinds of operations are halted completely, it’ll be hard to describe America’s China policy with the word “serious.”

Full disclosure:  I have no financial positions whatever in Honeywell, other than possibly through index funds or exchange-traded funds, and other such vehicles, and have no plans to acquire any.

Glad I Didn’t Say That! So Much for Nike’s China Suck-Up Strategy

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apparel, China, cotton, footwear, Glad I Didn't Say That!, human rights, Nike, sportswear, Uighurs, Xinjiang

“CEO: ‘Nike is a brand that is of China and for China’”

– The Hill, June 26, 2021

 

“Nike Shares Lose Out to Chinese Sneaker Rivals After Xinjiang

Cotton Boycott”

– Bloomberg.com, July 6, 2021

 

(Sources: “CEO: ‘Nike is a brand that is of China and for China,’” by Caroline Vakil, TheHill.com, June 26, 2021, CEO: ‘Nike is a brand that is of China and for China’ | TheHill and “Nike Shares Lose Out to Chinese Sneaker Rivals After Xinjiang Cotton Boycott,” by Olivia Tam, Bloomberg.com, July 6, 2021, Nike Loses to China Sneaker Rivals After Xinjiang Cotton Controversy – Bloomberg)

 

Our So-Called Foreign Policy: A Neglected Lesson of Afghanistan

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Afghanistan, Biden, border security, China, Donald Trump, forever wars, globalism, Immigration, jihadism, Muslims, nation-building, Our So-Called Foreign Policy, Russia, special forces, Tajikistan, Taliban, terrorism, Uighurs, Uzbekistan, Vietnam, women's rights, Xinjiang

Let’s get one matter straight right away: When it comes to the (always important) optics, and to humanitarian considerations, there is no good way for the United States to end its military involvement in Afghanistan that would meet any sensible or decent person’s definition of “good.”

Indeed, much of the news that’s come out of that war-torn country (and I use that term advisedly) is sickeningly reminiscent of the final U.S. pullout from Vietnam in April, 1975 – complete with the almost certain abandonment of many locals who had cast their lot with the Americans in various ways, and therefore face many forms of retaliation if the jihadist Taliban do indeed triumph.

Further, the U.S. departure could produce an Afghan aftermath far worse than that suffered in Vietnam, as the social and economic strides made by many Afghan women of all ages under the umbrella of the American presence seem to be doomed if the country is taken over by a movement wed to Islam’s most misogynistic version.

In fact, a couple of years ago, by which time the American mission’s failure looked inevitable, I came up with the idea of offering all Afghan females asylum in the United States – complete with transportation expenses. I never published it, but wouldn’t it have served the women-haters right to leave them as women-free as possible?

That chance looks to be gone – though I’m still hoping that somehow the interpreters and other U.S. employees can be saved. Otherwise, the best that Americans can hope for now is figuring out what went wrong and how to avoid such fiascoes going forward. There’s been no shortage of post-mortems, and especially encouraging has been the bipartisan globalist U.S. foreign policy establishment’s (belated) agreement that nation-building where no true nation exists is folly. (See, e.g., here.)

Another big lesson, however, remains largely unlearned – even by long-time opponents of the Afghan War like former President Trump: As I’ve written repeatedly, since the only self-interested (and therefore sensible) reason for direct American involvement in the first place was preventing the country’s re-emergence as an officially sponsored and protected base for September 11-like terrorism, Washington should have focused on seriously securing U.S. borders rather than on fighting the jihadis “over there.”

Trump tried in his own characteristically ragged way to beef up border protection, and achieved some impressive progress. But as made clear here, he never seemed to make the connection fully. And now President Biden appears determined to create the worst of all possible worlds from the U.S. standpoint – an Afghanistan policy unlikely to enable the Tailban’s containment through special forces guerilla-type operations until the U.S. border was strengthened adequately, and an immigration policy that actually opens the border still wider.

Meanwhile, a third big lesson hasn’t evidently even made it onto official or unofficial U.S. policy screens (including mine), but it was suggested in this Bloomberg news item on Monday: A Taliban-run Afghanistan could well have been kept off balance – and frustrated in its efforts undertake the major initiatives needed to foster September 11-scale terrorism – by the nearby countries its extremism would surely have alarmed and antagonized. And these regional concerns seem compelling enough to keep the lid on in Afghanistan by hook or by crook from this point on in the American military’s absence.

As the piece makes clear, in the near term, smallish Afghanistan neighbors like Tajikistan and Uzbekistan are anxious to prevent chaos on their borders – including no doubt massive refugee flows. And both countries have long been cooperating with Washington for many years to bolster “overall regional security” – which won’t be helped by a jihadist regime in their midst. (See here and here.)

And don’t forget Russia – whose help those two central Asian countries are seeking. Its own disastrous 1979 invasion and decade-long occupation of much of the country was triggered largely by fears that the rise of Islamic extremism in Iran and elsewhere in the Middle East would infect the Muslim populations of adjacent Soviet “republics” (like Tajikistan and Uzbekistan). Moscow can’t be anxious to repeat that mistake, but the fear of jihadis persists, and like it or not, Russia’s deep reinvolvement in Afghanistan consequently seems inevitable – and bound to cause big problems for the Taliban.

China’s bound to be pulled in, too. All indications are that Beijing hopes to keep post-U.S.-withdrawal Afghanistan stable in a softer way – with big economic development projects that ironically look a lot like nation-building (though apparently lacking its political dimension). More power to Chinese dictator Xi Jinping if he succeeds. But mainly because it’s had its own huge problems (many surely self-created) with its own Muslim population in Xinjiang province (which also shares a short border with Afghanistan) China’s bottom line clearly is maintaining stability and making sure that Afghanistan doesn’t become “a haven or transit corridor” for the Uyghur militants who have aroused its ire. (See the above-linked Economist piece for the quote.)

As a result, it’s more than a little interesting that a Chinese academic recently felt free to tell a Financial Times reporter that “Even though China has for a long time been extremely cautious about sending military forces overseas, if it is supported by a United Nations resolution, China might join an international peacekeeping team to enter Afghanistan.”

Alternatively, the Chinese bet that they can cultivate the Taliban’s pragmatic instincts by financing massive road-building and mining operations could pay off – in which case, the terror-base scenario feared in the United State may not materialize.

But the crucial strategic insight for Americans is that China and all of Afghanistan’s neighbors have compelling stakes in curbing Taliban jihadism and related terrorism, and that these stakes exist precisely because Afghanistan’s in their own neighborhood – and always has been. In other words, however important Afghanistan’s stability, moderation, etc has been for Americans thousands of miles away, it’s always been and remains far more important for the folks right next door. Even better, because some big powers are involved, a strong case can be made not only for their persistence in addressing the problem but their success.

If they fail, however, or get bogged down in their own forever war, that’s OK from the U.S. perspective as well – because they’ll keep the Taliban too busy to concentrate on attacking America. That’s not to say that the United States can therefore forget about sealing the border. After all, Afghanistan is hardly the world’s only concentration of jihadis.

But it does mean that the strategic case for the United States carrying the burden of intervening in Afghanistan specifically is weakening; that the case may have been weak all along – or at least once the Taliban was ousted from power and significantly weakened right after September 11 – and that as long as the neighbors can be relied on to act in their own self-interest (surely a long time), and especially if Washington tends to its border knitting, this case won’t emerge again.

Making News: On National Radio Again – on Nike, China, and Slave Labor

Tags

boycotts, China, forced labor, Gordon G. Chang, human rights, Making News, Nike, The John Batchelor Show, Uighurs, Xinjiang

I’m pleased to announce that the podcast is now on-line of my interview last night on John Batchelor’s nationally syndicated radio show. Click here to listen to a timely segment with John and co-host Gordon G. Chang on Nike, Inc.’s recent brown-nosing statement – amid the controvery over its alleged use of products made by concentration camp labor in China – that the company is “a brand that is of China and for China.”

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

Our So-Called Foreign Policy: Biden’s Aides Show How Not to Deal with China

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Alaska, Antony J. Blinken, Asia-Pacific, Barack Obama, Biden, China, Donald Trump, global norms, globalism, Hong Kong, human rights, Indo-Pacific, international law, Jake Sullivan, liberal global order, Our So-Called Foreign Policy, Reinhold Niebuhr, sanctions, Serenity Prayer, South China Sea, Taiwan, tariffs, tech, Trade, Uighurs, United Nations, Yang Jiechi

You knew (at least I did) that America’s top foreign policy officials were going to step in it when they led off their Alaska meeting yesterday with Chinese counterparts by describing U.S. policy toward the People’s Republic as first and foremost a globalist exercise in strengthening “the rules-based international order” rather than protecting and advancing Americas’ own specific national interests.

This emphasis on the part of Secretary of State Antony J. Blinken and White House national security adviser Jake Sullivan simultaneously made clear that they had no clue on how to communicate effectively to the Chinese or about China’s own aims, and – as was worrisomely true for the Obama administration in which both served – unwittingly conveyed to Beijing that they were more concerned about dreaming up utopian global arrangements than about dealing with the United States’ own most pressing concerns in the here and now.

It’s true that, in his opening remarks at the public portion of yesterday’s event that Blinken initially refered to advancing “the interests of the United States.” But his focus didn’t stay there for long. He immediately pivoted to contending:

“That system is not an abstraction. It helps countries resolve differences peacefully, coordinate multilateral efforts effectively and participate in global commerce with the assurance that everyone is following the same rules. The alternative to a rules-based order is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us. Today, we’ll have an opportunity to discuss key priorities, both domestic and global, so that China can better understand our administration’s intentions and approach.”

Where, however, has been the evidence over…decades that China views the contemporary world as one in which peaceful resolution of differences is standard operating procedure, much less desirable? That multilateral efforts are worth coordinating effectively? That might shouldn’t make right and that China shouldn’t “take all” whenever it can?

Even more important, where is the evidence that China views what globalists like Blinken view as a system to be legitimate in the first place? Indeed, Yang Jiechi, who in real terms outranks China’s foreign minister as the country’s real foreign affairs czar, countered just a few minutes later by dismissing Blinken’s “so-called rules-based international order” as a selfish concoction of “a small number of countries.” He specifically attacked it for enabling the United States in particular to “excercise long-arm jurisdiction and suppression” and “overstretch the national security through the use of force or financial hegemony….”

Shortly afterwards, he added, “I don’t think the overwhelming majority of countries in the world would recognize…that the rules made by a small number of people would serve as the basis for the international order.”

Yang touted as a superior alternative “the United Nations-centered international system and the international order underpinned by international law.” But of course, even if you swallow this Chinese line (and you shouldn’t), it’s been precisely that system’s universality, and resulting need to pretend the existence of an equally universal consensus on acceptable behavior and good faith on the part of all members, that’s resulted in its general uselessness.

Meanwhile, surely striking Beijing as both cynical and utterly hollow were Blinken’s efforts to justify U.S. criticisms of China’s human rights abuses as threats to “the rules-based order that maintains global stability. That’s why they’re not merely internal matters and why we feel an obligation to raise these issues here today.”

After all, whatever any decent person thinks of Beijing’s contemptible crackdown in Hong Kong, arguably genocidal campaigns against the Uighur minority, and brutally totalitarian system generally, what genuinely serious person could believe that the United States, or other democracies, had any intention or capability of halting these practices?

What might have made an actually useful, and credible, impression on the Chinese from a U.S. standpoint would have been blunt declarations that (a) Beijing’s saber-rattling toward (global semiconductor manufacturing leader) Taiwan and sealanes-jeopardizing expansionism in the South China Sea, and cyber-attacks were major threats to American security and prosperity that the United States would keep responding to with all means necessary; and (b) that Washington would continue using a full-range of tariffs and sanctions against predatory Chinese economic practices as long as they continued harming U.S. businesses and their employees. That is, Blinken and Sullivan should have emphasized Chinese actions that hurt and endanger Americans – and against which in the economic sphere, Donald Trump’s policies showed Washington could make a significant difference.

It’s possible that in the private sessions, President Biden’s emissaries will dispense with the grandstanding and zero in on the basics. (Although that shift would raise the question of why this approach was deemed unsuitable for the public.) But the Biden-ites weirdly advertised in advance that China’s economic abuses and the technology development threat it poses wouldn’t be U.S. priorities at any stage of the Alaska meetings.

In the mid-20^th century, American theologian Reinhold Niebuhr popularized (although probably didn’t write) a devotion called the “Serenity Prayer” whose famous first lines read “God grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.” I’m hoping someone puts copies into Blinken’s and Sullivan’s briefcases for their flight back from Alaska.

Im-Politic: Aftershocks

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abortion, African Americans, America First, CCP Virus, China, climate change, coronavirus, COVID 19, Democrats, election 2020, election 2022, election interference, establishment Republicans, Green New Deal, Hispanics, Hong Kong, House of Representatives, human rights, Im-Politic, Immigration, Joe Biden, mail-in ballots, mail-in voting, Mainstream Media, nationalism, polls, Populism, recession, redistricting, regulations, Republicans, Senate, social issues, state legislatures, tariffs, Trade, traditional values, Trump, Uighurs, women, Wuhan virus

I’m calling this post “aftershocks” because, like those geological events, it’s still not clear whether the kind of political upheaval Americans are likely to see in the near future are simply the death rattles of the initial quake or signs of worse to come.

All the same, at the time of this writing, assuming that the final results of Election 2020 will see Democratic nominee Joe Biden win the Presidency, the Republicans keep the Senate, and the Democrats retain control of the House, the following observations and predictions seem reasonable.

First, whatever the outcome, President Trump’s campaign performance and likely vote percentages were still remarkable. In the middle of a re-spreading pandemic, a deep CCP Virus-led economic slump that’s left unemployment at still punishing levels, and, as mentioned before, unremitting hostility from the very beginning on the part of most and possibly all powerful private sector institutions in this country as well as much of Washington’s permanent government, he gave his opponents a monumental scare. If not for the virus, the President could well have won in a near landslide. And will be made clear below, this isn’t just “moral victory” talk.

Second, at the same time, the kinds of needlessly self-inflicted wounds I’ve also discussed seem to have cost him many important advantages of incumbency by combining with pandemic effects to alienate many independents and moderate Republicans who backed him four years ago.

Third, the stronger-than-generally expected Trump showing means that, all else equal, the prospects for a nationalist populist presidential candidate in 2024 look bright. After all, how difficult is it going to be for the Republican Party (whence this candidate is most likely to come) to find a standard-bearer (or six) who champions the basics of the Trump synthesis – major curbs on trade and immigration, low taxes and regulations but more a more generous economic and social safety net, a genuine America First-type foreign policy emphasizing amassing of national power in all its dimensions but using it very cautiously, and a fundamentally commonsense view on social issues (e.g., recognizing the broad support of substantial abortion rights but strongly resisting identify politics) – without regular involvement in Twitter fights with the likes of Rosie O’Donnell?

Fourth, these prospects that what might be called Trump-ism will outlast Mr. Trump means that any hopes for the establishment wing to recapture the Republican Party are worse than dead. Ironically, an outsized nail-in-the-coffin could be produced by the gains the President appears to have made with African Americans and especially Hispanics. After Utah Senator Mitt Romney’s defeat at the hands of Barack Obama in the 2012 presidential election, the Republican conventional wisdom seemed to be that the party needed to adopt markedly more tolerant positions on social issues like gay rights (less so on abortion), and on immigration to become competitive with major elements of the former President’s winning coalition – notably younger voters, women, and Hispanics. The main rationale was that these constituencies were becoming dominant in the U.S. population.

The establishment Republicans pushing this transformation got the raw demographics right – although the short run political impact of these changes was exaggerated, as the Trump victory in 2016 should have made clear. But it looks like they’ve gotten some of the political responses wrong, with immigration the outstanding example. However many Hispanic Americans overall may sympathize with more lenient stances toward newcomers, a notable percentage apparently valued Mr. Trump’s so-called traditional values and pro-business and pro free enterprise positions more highly.

If the current election returns hold, the results will put the GOP – and right-of-center politics in America as a whole – in a completely weird position. Because the party’s establishment wing still figures prominently in its Senate ranks, a wide, deep disconnect seems plausible between the only branch of the federal government still controlled by Republicans on the one hand, and the party’s Trumpist/populist base on the other – at least until the 2022 mid-term vote.

Fifth, as a result, predictions of divided government stemming from Election 2020’s results need some major qualifications. These establishment Senate Republicans could well have the numbers and the backbone to block a Biden administration’s ambitious plans on taxing and spending (including on climate change).

But will they continue supporting Trumpist/populist lines on trade and immigration? That’s much less certain, especially on the former front. Indeed, it’s all too easy to imagine many Senate Republicans acquiescing in the Democratic claims that, notably, the United States needs to “stand up to China,” but that the best strategy is to act in concert with allies – which, as I’ve explained repeatedly, is a recipe for paralysis and even backsliding, given how conflicted economically so many of these allies are. As suggested above, the reactions of the overwhelmingly Trumpist Republican base will be vital to follow.

One reason for optimism (from a populist standpoint) on China in particular – Senate Republican opposition to anything smacking of the Green New Deal should put the kibosh on any Biden/Democratic notions of granting China trade concessions in exchange for promises on climate change that would likely be completely phony. Similar (and similarly dubious) quid pro quos involving China’s repression of Hong Kong and its Uighur Muslim minority could well be off the table, too.

Sixth, their failure to flip the Senate, their apparently small losses in the House, and disappointments at the state level (where they seem likely to wind up remaining a minority party) means that the Democrats’ hoped for Blue Wave was a genuine mirage – and looks more doubtful in future national contests as well. For state governments are the ones that control the process of redrawing Congressional district lines in (very rough) accordance with the results of the latest national Census — like the one that’s winding up. So this is a huge lost opportunity for the Democrats, and a major source of relief for Republicans.

Meanwhile, on a symbolic but nonethless important level, the aforementioned better-than-anyone-had-a-right-to-expect Trump showing means that the desire of many Democrats, most progessives, and other establishmentarians to crush the President (and other Republicans), and therefore consign his brand of politics and policy to oblivion, have been sort of crushed themselves. So it’s an open question as to whether they’ll respond with even more vilification of the President and his supporters, or whether they’ll finally display some ability to learn and seriously address legitimate Trumper grievances.

Seventh, as for Trump Nation and its reaction to defeat, the (so far) closeness of the presidential vote is already aggravating the nation’s continued polarization for one particularly troubling reason: A Biden victory aided by the widespread use of mail-in voting inevitably will raise charges of tampering by Democratic state governments in places like Michigan, Wisconsin, and Pennsylvania. Call it domestic election interference, and the allegations will be just as angry as those of foreign interference that dogged the previous presidential election. As a result, I hope that all Americans of good will agree that, once the pandemic passes, maximizing in-person voting at a polling place needs to return as the norm.

Finally, for now – those polls. What a near-complete botch! And the general consensus that Biden held a strong national lead throughout, and comparable edges in key battleground states may indeed have depressed some Republican turnout. Just as important – a nation that genuinely values accountability will demand convincing explanations from the polling outfits concerned, and ignore their products until their methodologies are totally overhauled. Ditto for a Mainstream Media that put so much stock in their data, in part because so many big news organizations had teamed up with so many pollsters. P.S. – if some of these companies are fired outright, and/or heads roll (including those of some political reporters), so much the better.

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

Tags

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.”

(What’s Left of) Our Economy: Now What in the U.S.-China Trade War?

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agriculture, allies, China, decoupling, Democrats, election 2020, forced technology transfer, Hong Kong, Huawei, impeachment, intellectual property theft, National Basketball Association, Phase One, Steven Mnuchin, subsidies, supply chains, Taiwan, tariffs, Trade, trade talks, Uighurs, verification, {What's Left of) Our Economy

This is the second working day since the United States and China reached what the Trump administration is calling a “Phase One” trade deal with Beijing last Friday, and the questions surrounding the agreement still far outweigh what’s known. That alone should tell you that towering obstacles continue blocking any confident assessment of where the President’s so-called trade war stands, much less where the conflict is likely to go. Even so, here are some observations I hope are useful.  (Teaser:  One major point concerns tonight’s Democratic presidential candidates debate.)

First, the absence of any written statements or documents from the U.S. side describing or even summarizing what’s actually in the agreement justifies big doubts that anything deserving the term “deal” has been reached at all. Further reinforcing legitimate skepticism is China’s long record of broken promises on trade.

Second, especially strong skepticism is warranted about U.S. claims that any meaningful progress has been made on the so-called structural issues focused on from the very beginning by the Trump administration. For it as I’ve long argued, China’s government is so vast and secretive, and leaves such scanty written records of key decisions, that it will simply be impossible for the United States to monitor and enforce even the most promising Chinese commitments on intellectual property theft, technology extortion, discriminatory Chinese government procurement, and Beijing subsidies that shaft U.S.-owned and other foreign businesses vis-a-vis their Chinese rivals.

Third, even if China currently means to keep its alleged promises to binge buy American agricultural products, any number of external events could upset the apple cart. They include the Hong Kong picture becoming uglier (its becoming prettier can’t be totally ruled out, but seems highly unlikely); new Chinese crackdowns on other protests that may emerge (especially among the Uighur Muslim population) or revelations of new Chinese atrocities against the Uighurs or other minorities or other protesters; more attempted Chinese bullying of high-profile U.S. businesses like the National Basketball Association; a major flare-up of tensions over Taiwan or China’s aggressive moves in the South China Sea; a step forward in the Huawei case that increases the chances that the CFO daughter of the founder of this Chinese telecommunications giant will be extradited to the United States from Canada for sanctions-busting; and Chinese moves that persuade Washington that Beijing has no intention of keeping its perceived agriculture or other promises.

Moreover, the longer China takes to ramp up its buys from American farmers, the greater the potential for these kinds of shocks to bring this “Phase One” agreement crashing down.

Fourth, the less impressive the “mini-deal” keeps looking, the more convincing my view that its apparent modesty reflects President Trump’s belief that his domestic political position has weakened significantly – both because of the new impeachment threat and signs of an economic slowdown.

It’s true that Treasury Secretary Steven Mnuchin has suggested that if the deal hasn’t been finalized by December 15, the Trump administration will go ahead with a previously vowed 15 percent increase on $156 billion worth of levies on Chinese imports. But that’s anything but a concrete threat. In addition, it’s important to note this report suggesting (the specifics are really sloppily described) that China wants the sequencing to work in the opposite way:  First, tariffs get rolled back (or frozen in place?), then the agriculture buys begin. 

Moreover, no one in the administration has said anything about reversing its Phase One-related decision to suspend a big tariff increase (to up to a formidable 30 percent on some products) previously announced to begin on October 15. So even though U.S. duties on some $360 billion worth of Chinese goods would still remain in place if China blows Mr. Trump off, there’s a real chance that Beijing won’t incur any further punishment – doubtless because the President believes that tariffs above and beyond current levels and coverage could panic investors again and further soften economic growth.

Some kind of blow-up in Hong Kong or elsewhere could yet change Mr. Trump’s calculations. But the more important point so far is that events, not the President, are now in charge of the trade talks track of his China policy.

Fifth, at the same time, none of the above means that the United States is devoid of leverage versus China and in particular the kind of clout that can keep advancing its economic as well as closely related technology and national security interests, and this is where a second, arguably more important, track of the Trump China policies needs to be remembered. As I’ve written, the President has sought not only to end the threat of China’s economic predation by forcing Chinese policy changes through tariff pressure. Although he rarely speaks of it, he’s also been trying to repel Chinese threats to U.S. security and prosperity through a series of unilateral measures aimed at decoupling the United States from China economically.

By crimping trade, investment, and technology flows, these decoupling steps are reducing America’s vulnerability to China by significantly reducing the access to the U.S. market so crucial to the success of China’s advanced industries; by shrinking the footprint of China’s state-controlled economy in America’s largely free market system; and by cutting off a Chinese tech sector that could be become highly dangerous from critical supplies of U.S. components.

Decoupling has also been advanced by those tariffs so far imposed on $360 billion worth of Chinese products (amounting to nearly 86 percent of all goods imports from China last year). They haven’t done much to achieve their stated aim of improving China’s behavior, but they have decreased China’s importance to the U.S. economy by prompting an exodus of global manufacturing supply chains out of the People’s Republic.

Further, the Trump decoupling campaign has also helped awaken many foreign governments to the China tech and broader economic threat – though because so many other countries (including major American treaty allies), were profiting so handsomely from the pre-Trump globalization status quo, progress on this front has been uneven and disappointing. (See here for why Germany, for example is so conflicted.) 

Sixth and finally, one major set of actors in this drama, though, hasn’t been very woke on China issues:  most of the Democratic presidential candidates. Sure, many have supported a policy of “doing something” on China (though rarely involving tariffs – or any other concrete measures). But so far, none seems to view China’s multi-dimensional challenge to America as a major concern – and all the top-tier contenders and most others now support impeaching the President. 

Consequently, they could greatly strengthen not only Mr. Trump’s position, but the American position, with firm declarations in tonight’s debate that China will stay squarely in Washington’s cross-hairs if they win the White House, and that therefore there’s no point in stonewalling in hopes of easier post-2020 U.S. policies. Not that any confidence looks well founded that any of them will.        

(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?