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CONTENTS

For America to be displaced by an Asian people long despised and dismissed with contempt as decadent, feeble, corrupt and inept, is emotionally very difficult to accept. The sense of cultural supremacy of the Americans will make this adjustment most difficult.  Lee Kwan Yew 

Economy

Above: A huge green hydrogen project in Ordos City, Inner Mongolia, opened Thursday, says Sinopec. It uses the area's abundant solar and wind energy to generate electricity and directly produces 30,000 tons of green H2 p.a., made with with renewable energy and no carbon emissions. Read article →

China's gasoline demand has peaked, two years earlier than expected, due to the number of EVs on the road. Diesel demand for heavier vehicles will keep growing for a bit longer, but electric, fuel cell and battery-swapping account for 12% of light commercial vehicle sales and 4% to 5% of medium and heavy commercial vehicle sales. Ride-hailing EVs are more productive than gasoline, accounting for 50% of the kilometers traveled Didi’s ride-hailing platform in December. Read article →

BYD's profits rose 205%, to $1.5 billion, compared to $493 million last year driven by record deliveries, cementing BYD’s status as China's biggest-selling auto brand. Read article →

China has 1.079 billion netizens, up 11.1 million YoY, representing a 76% Internet penetration rate. Some data :

  • The total number of domain names in China was 30.24 million
  • The number of active users of IPv6 reached 767 million
  • The number of broadband internet access ports has reached 1.11 billion
  • The total length of optical cable lines reached 61.96 million km
  • The cumulative traffic of mobile Internet reached 142.3 billion GB, up 14.6% year-on-year.  Read article →

Finance

Real wages grew 4.7% in 2022 says ILO. British wages grew 0.1%, American 0.3%, France -0.4%, Germany -0.7% and India -1.3%. "Why are real wages rising 18 times faster in China than the U.S., 44 times faster than Britain, while French, German and or Indian real wages are falling?" Read article →

Trade

China + BRICS trade rises 19% to $331 billion YTD, accounting for 10% of China's total foreign trade in . Exports grew 24% while imports rose 14%. Read article →

Deglobalisation is everywhere but in the trade statistics. Goods trade was at an all-time high in 2022, after years of slow growth.  US imports in 2022 were close to 40% above pre-COVID levels, providing little support for the notion of reshoring. Even if we focus just on US-China bilateral trade relations, US merchandise imports from China in 2022 were more than 30% higher than levels in 2017, despite the tensions and the tit-for-tat tariffs imposed during the Trump administration. Read article →

Technology

The new HL-3 plasma current confinement vessel develops a plasma current exceeding 1 million amperes – the largest scale and highest capability ever recorded, and could increase the plasma current capacity to 2.5 million amps and the plasma ion temperature to 150 million degrees. Its core components are designed and manufactured in China.. Read article →

Scientists produced a 12-inch wafer of '2D' material, one atom thick, paving the way to next-generation semiconductors, or a complement to traditional silicon chips. The thinness gives the wafers excellent semiconducting properties, but the team is yet to solve issues around the scaling up of the wafers’ size and being able to produce them at a high capacity and yields. Read article →

The new Giant Rice hybrid's bumper crop. Farmer Lu Xiwan planted 13.3 hectares of it this year and obtained a yield of 2,200-3,000kg (4,850-6,614lbs) more rice per hectare (2.5 acres) than previous years. Giant rice can produce yields 30% higher than conventional rice – up to 9,000 kg/ha. Read article →

Xinjiang's seawater aquafarming (!), including fish, king prawn, abalone and lobsters, as part of efforts to seek technological breakthroughs in agriculture. Local aquaculture firm Xinjiang Shi Shi Xian has developed technology to simulate seawater in its fishery located on the edge of a desert. The saline level – a mixture of salt and water – in southern Xinjiang is naturally “close to the level in seawater”, said project lead Chen Jiazhen. Read article →

Zhou Zhihua has been elected as the latest president of the Board of Trustees at the International Joint Conferences on Artificial Intelligence, IJCAI –  the first person teaching at a mainland Chinese institution to take the helm since its founding more than 50 years ago in California. Read article →
 

Nvidia's A100 and H100 chips have been put on a “no-export” list to prevent UAE or Saudi Arabia transshipping them to Russia and China. However, Huawei's GPU has capabilities and performance are comparable to Nvidia's. Read article →

Huawei's 5nm Kirin chip, designed and manufactured in China, has a 5nm processor; 5G, SoC with 15 billion transistors, does instantly-responsive AI computing. Its CPU adds a 24-core Mali-G78 GPU for unparalleled graphics capture and editing. Read article →

In 2014 China launched 24 satellites on 16 rockets. In 2022, 182 satellites on 63 rockets. 2023 is on pace for at least 70 launches, sending 225 satellites into orbit. Read article →

Galactic Energy continued its impressive year with two Ceres-1 launches in August. Since first launching the Ceres-1 in 2020, Galactic has succeeded in 8 out of 8 attempts, sending 29 satellites into orbit. Read article →
Ningbo unveiled  the first Automated eVTOL battery changing hangar for EVs inspecting power lines. With a retractable vertipad for the take-off and landing of small-sized aircraft, the hangar ensures continuous unmanned inspection along important power lines and grids in remote areas. Read full article →

Medical AI 40% CAGR through 2025, when its total market will $400 million. Chinese groups have produced at least 18 medical AI models and hosted “the world's first ‘double-blind trial’ in which AI doctors and human doctors face real human patients at the same time. Medlinker’s MedGPT scored just .3 points lower than doctors from top tertiary hospitals. Read full article →

At the Gaoyou Duck Group Food Processing Co., found livestream viewers asking if there are less salty salted duck eggs available. But if the pickling time is simply shortened, though the saltiness can be reduced, the egg yolk cannot achieve the desired texture. So Professor Wang Shucai's team, using high temperature and high pressure, let the salt quickly penetrate the egg white into the yolk, ensuring that the egg yolk has the desired texture. They built 10 rapid pickling huts, each for 100,000 "Low-salt salted duck eggs."  Read full article →

OceanEngine, ByteDance's digital marketing platform, has introduced an AI-driven scripting tool for live-streaming to assist Douyin merchants in efficiently creating “high-quality scripts.” This official service aids sellers and short video creators in expanding their influence on Douyin. OceanEngine announced that the new feature is free and has the capability to identify "sensitive words." This move underscores ByteDance's incorporation of artificial intelligence technology across its diverse businesses. According to a statement on its WeChat account, merchants utilizing the script-generation tool witnessed a 13% increase in the value of merchandise sold. Read full article →

Health

35% of Chinese are overweight and 14% are obese. Obesity is more prevalent in men, with 41% vs 28% in women, and higher in the north. In 2020, authorities set a target of reducing childhood obesity by 70% in by 2030. Read article →

Shanghai is piloting a beverage health alert system as part of a countrywide initiative to combat health problems related to excessive sugar intake. Stores are displaying color-coded sugar warning signs on their shelves. Read article →

A five-year plan aims at better prevention and control of birth defects and reducing the incidence of birth defect-related fatalities and disabilities.. Read article →

Doctors from Sun Yat-sen University Ophthalmic Center traveled to the Maldives to inaugurate the first state-funded, standardized ophthalmology center built by China outside its borders. In the six months since, the new center has received over 4,400 patients and performed 402 surgeries; Chinese state media has hailed it as a way to stop “giving people fish” and start “teaching them how to fish.” Read article →

Society

13% of Chinese are scientifically literate, 2.4% above 2020 and 6.7% above 2015. 16% and 8% of urban and rural residents respectively are scientifically literate. 29% of Americans are scientifically literate. Read article →

Zhang Zhizhen became the first Chinese man to beat a top-five opponent since the introduction of the ATP rankings in 1973 by stunning last year's runner-up Casper Ruud 6-4 5-7 6-2 0-6 6-2 in the US Open second round on Wednesday. Zhang, ranked 67th in the world, had come through another five-setter to beat American J.J Wolf in his opener. Read article →

If the bride is 25 or younger, Changshan county, eastern China, is offering couples a ‘reward’ of $200 or 1,000 yuan, as the latest measure to incentivise young people to get married amid rising concern over a declining birth rate.” Read article →

China is debating a draft law prohibiting preschools from teaching at an elementary school level, part of a campaign to foster a more equitable society as parents cope with the rising costs of after-school education. Read article →

Beginning in 1996, the issue of "massification"—if, when and how China send more 15% of 18-22 year-olds to university—became a heated issue. Ji Baocheng stated the MOE's position: "At the turn of the century, (i.e., 2000) the correct choice for Chinese higher education to adopt is the policy guideline of 'steady development'. Although an era of mass higher education will definitely come in China, the time is not yet right." Ji identified two macro-conditions—state education financing and graduates' employment difficulties—as bottlenecks constraining rapid development of higher education. He feared that, if China were to move to mass higher education too quickly, the economy would not be able to absorb the swelling ranks of graduates, and that could endanger social stability. The long-standing Chinese sense that college graduates are members of the elite and should work in the big cities, or at least in county-level work units, also constrained the expansion of enrollment. If college graduates were unwilling to accept positions in grass-roots units or rural areas, the government would be unable to provide elite-status jobs for all graduates. Read article →

The British Museum is facing mounting pressure to return Chinese artifacts, after reporting that around 2,000 items were “missing, stolen or damaged” two weeks ago. The museum is home to the biggest collection of Chinese antiquities in the West. On Chinese social media, related hashtags have more than 50 million views. Read article →

The new Guideline to build a high-quality and balanced basic public education system has two targets, 2027 and 2035. “It focuses on deepening the supply-side reform of basic education, further expanding quality education resources, and accelerating the construction of a high-caliber basic education system. By 2027, a provision and adjustment mechanism for primary, secondary school and kindergarten enrollments will be basically established in alignment with the country's new urbanization drive and demographic changes in the school-aged population. Kindergarten coverage will be further elevated, with the ratio of government-funded kindergartens surpassing 60%. All counties nationwide with a population of more than 200,000 will be equipped with special education schools, and the quality of inclusive education will be substantially raised”. Read article →

Environment

53% of China's desert has been reforested.
82% of days have good air quality in 339 prefecture level Chinese cities, and emissions were down 3% and the average PM 2.5 density recorded in the period was 31 µg/m3, down 3% YoY. Read article →

Jiangsu Province issued the "Pond Aquaculture Wastewater Discharge Standards" two years ago. Now wastewater from aquaculture must meet the standards. "Ecological aquaculture with low stocking density, low-protein feed, and no drainage fishing" is a must. At the Gaoyou Giant Prawn Ecological Aquaculture Demonstration Park in Longqiu Town, I saw that each seedling-raising pool had a production record board hanging on the shed, detailing the values of water temperature, pH, ammonia nitrogen, nitrite, and other values of the aquaculture water body, along with the date and number of seedlings released, daily feeding amount, and growth progress. Water quality monitoring equipment will also be installed at the drainage outlets of each pond one after another, and alarms will sound immediately if the discharge exceeds standards. Read article →

Expats

Expat employees of a 3M wholly owned subsidiary based in China arranged for Chinese government officials employed by state-owned health care facilities to attend overseas conferences, educational events, and health care facility visits, ostensibly as part of the Chinese subsidiary’s marketing and outreach efforts. However, the arrangements to attend the events were often a pretext to provide the Chinese government officials with overseas travel, including tourism activities, to induce them to purchase 3M products. 3M’s Chinese subsidiary provided Chinese government officials overseas travel that included guided tours, shopping visits, day trips to nearby sights, and other leisure activities.
According to the court order, in a number of instances, the tourism activities were scheduled at the same time as the events the officials were supposedly attending, and at times the Chinese officials missed whole days of the events or simply never attended at all. Also, the events were in English and certain trips included Chinese government officials who neither understood English nor had adequate translation services. The order finds that 3M’s Chinese subsidiary paid nearly $1 million to fund at least 24 trips for Chinese government officials that included tourism activities. To obtain approval for the trips, the employees of 3M’s China-based subsidiary created a travel itinerary for the Chinese government officials to attend legitimate events, and the employees provided the itineraries to compliance personnel at the subsidiary for approval. However, the employees, in collusion with Chinese travel agencies, also created alternate itineraries consisting of tourism activities at or near the location of the overseas educational events, which the employees provided to the Chinese officials who went on the trips.
The employees asked the trip participants to keep the alternate agenda hidden and falsified internal compliance documents that affirmatively denied or omitted mention of the tourism activities that they had planned as part of the overseas trip. 3M tracked the cost of these trips (“nearly $1 million to fund at least 24 trips” from 2014 through 2017) and their return (“at least $3.5 million from increased sales”). Is that good? I guess about 29% of the revenue from these deals was paid out in bribes? [7] Bloomberg tells me that 3M’s gross margins were about 48% to 50% in those years, so I suppose the bribes made economic sense, at least before the $6.5 million in fines. Matt Levine. Read article →

Statistics

Governance

New 723 km Yangtze-Huaihe Grand Canal, connecting the Yangtze and Huaihe Rivers, begins trial navigation. 355 km of shipping lane was added to existing watercourses and the main construction was completed last year. With a total length of 723 km, the $12.5 billion project passes through 12 cities in Anhui and two more in Henan province and will benefit more than 50 million people and provide agricultural irrigation, improve the ecology of both Huaihe River and Chaohu Lake, and help integrate transportation in the Yangtze River Delta. It will save $1 billion in annual bulk cargo freight and reduce carbon emissions by nearly 1.8 million tons a year. In the 1950s, Chairman Mao proposed connecting the two rivers during a visit to the Yangtze, but ground was broken only in December 2016. Read more →

A statement by the director of the Economic Development Zone made me instantly solemn, "When it comes down to it, as I often tell my family, we are born and raised in Gaoyou and cannot run away. We will retire here, and if the economy is bad at that time and we cannot receive our salaries, we should not blame future generations. We should first blame ourselves for not doing well now." He explained that the money had been invested in the development zone went mostly to demolition and basic construction,"To be frank, we still need to continue borrow Peak debt has not arrived but, according to the five major industrial planning and production-sales ratios, we can calculate how much general budget revenue can be generated every year , deduct the financing cost, and the remaining amount is enough. The daily operation and maintenance costs are not high, and a virtuous cycle can be formed by then." Read more →

Taiwan judges using generative AI to draft court rulings. The AI model is capable of “automatically filling in the facts of the crime” as well as “composing the rationale for the verdict.” If all goes well, judges will begin using the model to handle drunk driving and fraud cases by the end of September, drug cases by December, and civil cases like car-accident damages and debt cancellation next year. Read more →

24 telecom and internet fraud suspects were brought back from Myanmar. The suspects, who were detained in Myanmar by the police, allegedly operated telecom fraud targeting people in the Chinese mainland. Since the beginning of this year, Chinese police have launched joint operations with police forces from the Philippines, Cambodia, Myanmar and Laos, and captured over 300 suspects.” Read more →

Chinese soccer official taken away for investigation: Senior Chinese soccer official and chairman of the Chinese Super League, Liú Jūn, has been taken away by authorities for investigation, says Beijing Youth Daily. Read more →

Cui Maohu, vice-minister of The United Front Work Department of the Communist Party of China Central Committee and former director of the National Religious Affairs Administration, has been expelled from the Party and removed from public office due to serious violations of discipline and law. He “lost his ideals and beliefs, abandoned his original mission, lacked political awareness, was not resolute in implementing the decision-making and deployment of the Party Central Committee, occupied farmland for vanity projects, and resisted investigations into his performance. The investigation also showed that Cui had been engaging in practices of extravagance and hedonism in disregard of the central Party leadership's eight-point decision on improving Party and government conduct. Cui had, for a long time, accepted invitations to banquets and arranged trips that could have compromised his impartiality in performing official duties. He also failed to report his personal information in accordance with the rules and had been dishonest when asked to explain problems.Cui's other offenses include accepting gifts and money in violation of regulations, using his influence to allow his relatives and others to profit from business contracting, and intervening in judicial proceedings, the statement said. Cui was also accused of taking advantage of his position to seek profit for others in project contracting and in the selection and appointment of officials, while accepting huge amounts of money and property in return.” Read more →

"Two senior officials were held responsible for the Inner Mongolia mine collapse that killed 53 people. “Huang Zhiqiang, a CPC standing committee member, was served a warning by the Party. Dai Qin, another vice chairman. The penalties were imposed by the Standing Committee of the CPC Central Commission for Discipline Inspection (CCDI) and approved by the CPC Central Committee.”  Read more →

Propaganda

What China’s economic woes may mean for the U.S. / NYT 
How China made its housing crisis worse / NYT 
Western companies warn of hit from China’s sluggish rebound / FT 
Communist Party priorities complicate plans to revive China’s economy / WSJ
China’s crisis of confidence in six charts / WSJ
The local government debt that threatens China’s economy / FT 
Factory strikes flare up in China as economic woes deepen / Nikkei Asia 
How the economic crisis is an unparalleled trial by fire for Premier Li / SCMP 
China has fallen into a psycho-political funk / FT
BRICS expansion is no triumph for China / Foreign Policy
China wants to run your internet / Foreign Policy
Foreign investors sell China shares at record pace in August / FT

On August 24 the Defense Minister of Indonesia, Prabowo Subianto, visited the Pentagon, and the meeting the US issued a Joint Press Statement: "Minister Prabowo and Secretary Austin.. shared the view that the People's Republic of China's (PRC) expansive maritime claims in the South China Sea are inconsistent with international law as reflected in the United Nations Convention on the Law of the Sea".
China noticed that the Pentagon was lying and protested, "After comparing the US press statement with the press statement released by the Indonesian Ministry of Defense, the sentence that accuses and corners China only appears in the US Ministry of Defense press release," said the objection response signed by the spokesperson of the Chinese Embassy in Jakarta, Monday (28/8/2023)."
Today the Indonesian defense minister confirmed that the U.S. 'Joint Press Statement' is a lie. Read more →

History

Above: UN Human Rights Committee Findings, 2019 Read more →

Diplomacy

One of the world's leading theoretical physicists, Stanford's Steven Kivelson says, "Much of the physics that I think about is based on experimental work that is done in China. The entire field is highly dependent on and benefits from cooperation with colleagues in China. And on top of that, many of my best graduate students and postdocs come from China. Read more →

Taipei mayor leads delegation to Shanghai. “Taipei Mayor Wayne Chiang Wan-an called for peace and dialogue between Taiwan and the Chinese mainland as he led a delegation to Shanghai on Tuesday for a three-day visit aimed at easing cross-strait hostilities.” Read more →

Foxconn founder Terry Gou's independent leadership bid complicates Taiwan opposition efforts. He's a fourth contender in the already tense political race, challenging (DPP) Lai Ching-te  (KMT) Hóu Yǒuyí, and  (TPP) Ko Wen-je (柯文哲 Kē Wénzhé).” [Ed: Gou is a pragmatist, generally pro-reunification, and the richest candidate by far] Read more →

Geopolitics

The Kingdom of Hawaii is still a nation-state, that it has its own citizens, issues its own passports and conducts its own diplomatic relations. Few people know that Hawaii is not legally a state of the US, and that the Kingdom has been trying for more than 100 years to end the illegal US occupation of Hawaii. Here is the story. Read more →

China sent police experts and equipment to the Pacific nation of Vanuatu in the midst of a political crisis that saw the Supreme Court rule the prime minister lost a no-confidence vote in parliament.” Read more →

LONG READS:
What is BRICS?
BRICS and the Johannesburg declaration 

Jeff Rich
 

The preamble of the Johannesburg Declaration states the principles of the institutions of a plural world order. It announces a new stage of maturity for this now central institution.

We further commit ourselves to strengthening the framework of mutually beneficial BRICS cooperation under the three pillars of political and security, economic and financial, and cultural and people-to-people cooperation and to enhancing our strategic partnership for the benefit of our people through the promotion of peace, a more representative, fairer international order, a reinvigorated and reformed multilateral system, sustainable development and inclusive growth.

This preamble does not call for BRICS or any one country of BRICS to be the new world leader. It calls instead for new ways of peaceful development for the world that genuinely enable all the world to flourish, not just the West, or the golden billion, as Vladimir Putin calls them.

It is a reasoned moral challenge to the leaders of the West. So far, some Western leaders, commentators and media talking heads have responded with some pettiness, as evidenced by the disinformation campaign about divisions within the BRICS in the lead-up to the summit. It would be a grave error to demonise BRICS, especially now that it is expanding to BRICS-11 and soon more. There is a good discussion of this on the recent Multipolarity podcast.

The Declaration's agreements:

  • Preamble (paras 1-3), with the principles quoted above

  • Partnership for Inclusive Multilateralism (paras 3-10), with criticism of “unilateral coercive measures incompatible with the principles of the Charter of the UN” and a focus on reform of the international organisations including the UN, WTO and IMF

  • Fostering an Environment for Peace and Development (paras 11-25), that leads to peaceful resolution of differences and disputes through dialogue and inclusive consultations, and gives more weight to current conflicts in Africa, the Middle East, and Haiti, and more importance to the role of women and prevention of nuclear war, rather than the G7’s focus on Ukraine and its model of democracy.

  • Partnership for Mutually Accelerated Growth (paras 26-51), which discusses multilateral economic cooperation and has decisions on local currencies, payment instruments and platforms, and the National Development Bank

  • Partnership for Sustainable Development (paras 52-74) with declarations on sustainable development goals, climate change, health care, pandemic prevention, preparedness and response, education and skills, science and technology and energy

  • Deepening People-to-People Exchanges (para 75-86) with initiatives to deepen people-people exchanges in business, media, culture, education, sports (including the BRICS Games in October 2023), arts, youth, civil society and academic exchanges

  • Institutional Development (paras 87-94), with decisions on BRICS membership

It is an elegantly constructed declaration. Its rhetoric is of pluralism, generosity between countries with different values, and peaceful development that benefits  the whole world, especially the Global South, which countries have suffered from decisions by the West. This rhetoric is far more appealing than the harsh tones of the NATO Vilnius Summit declaration: shrill militarism, paranoid defence of unique democratic traditions, and denunciation of rivals as uncivilised. 

The two large decisions of consequence for the international order that were widely speculated on before the summit, and led some to anticipate an historic turning point, were BRICS expansion and ‘dedollarization’. On both issues the declaration has revealed a patient method, rather than publicity driven drama.  This patient method demands more respect from Western leaders, commentators and journalists, who turn international diplomacy and world history too often into panel show pantomime.

On BRICS expansion, six countries will become full members in January 2024. These countries are: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. These states may now be considered middle powers, and will participate in next year’s BRICS Summit in Kazan, Russia. Moreover, there is a set of rules, processes and arrangements to agree on expansion of the membership. South African leader and chair of the Summit, Cyril Ramaphosa, emphasised in the press conference that these rules and processes will support a further phase of expansion, perhaps even to be ratified at the 2024 Summit. Leaders also tasked Foreign Ministers to develop a BRICS Partners program By 2025, then, we might project that BRICS may well represent more than 40 per cent of the world economy, and over half of the world’s population.

On ‘dedollarisation’, leaders have strengthened the role of the New Development Bank and the BRICS Contingent Reserve Arrangement. Critically and patiently, Leaders tasked Finance Ministers and Central Bankers to develop a set of proposals by next year’s summit. These proposals will relate to national currencies, payment systems and platforms. In other words, next year the fates of the ‘petrodollar’ and the Western crutch of economic sanctions through the financial system will be decided by a summit comprising major economies subjected to sanctions, and these OPEC, oil-producing powers: Russia, Iran, Saudi Arabia, and the United Arab Emirates. As former Prime Minister Paul Keating once said to an American trained free-marketeer Opposition Leader, “I am going to do you slowly, brother.”

This patient method will broaden the networks governed by BRICS sustainably. The careful husbandry of the energy of these new networks will change world history. The dream of a homogenised world brought together under the monotheistic leadership of the USA, and its liberal rules-based order, has been exposed as a misunderstanding of the history of globalisation. As John Darwin wrote in the conclusion of After Tamerlane: the Rise and Fall of Global Empires, 1400-2000 (2007)

“The magnetic force of the global economy has been too erratic thus far, and too unevenly felt, to impose the cooperative behaviour and cultural fusion to which theorists of free trade have often looked forward. What we call globalisation today might be candidly seen as flowing from a set of recent agreements, some tacit, some formal, between the four great economic ‘empires’ of the contemporary world: America, Europe, Japan and China.” (p. 505)

But the agreements have broken down, and the set of great states has changed. A new plural, diverse world order is taking shape. BRICS Johannesburg is not a turning point but a tolling of the bell of all those bad histories of the West and the disastrous ‘grand strategies’ of the failing American elites. The Burning Archive.

Abnormalization
Abnormalize The Empire

Caitlin Johnstone


The primary job of both Hollywood and the mainstream western press is to put a friendly, normal face on a globe-spanning empire which dominates the world using nonstop violence and coercion. Their job is to continually normalize freakish tyranny.

They do this in a whole host of ways, including the agenda-setting practice of under-reporting inconvenient facts while amplifying convenient ones to preserve the status quo upon which the plutocrats who control the media have built their respective kingdoms. Today we also see these agenda-setting manipulations in the form of Silicon Valley algorithm manipulation dictating what information westerners take in. 

The normalization of the empire also takes the form of the manufacturing of mainstream culture out of New York and Hollywood, which continually depicts an entirely fictional version of life in the United States and an entirely fictional version of the role played by soldiers, police, journalists and politicians. The crushing poverty, the murderous warmongering, the capitalist extraction and corruption which is the real face of the USA gets almost no representation.

As a character in the movie Waking Life puts it, “We all know the function of the media has never been to eliminate the evils of the world, no! Their job is to persuade us to accept those evils and get used to living with them. The powers that be want us to be passive observers.”


This normalization keeps the firewood of revolution perpetually damp. If nobody understands how horrifically abusive the empire is or sees how profoundly unacceptable it is to live under the thumb of murderous tyrants who want to rule the world, forceful demands for meaningful change will never show up. You can continually quash the spirit revolution before it starts, just by setting up an information environment in which people don’t recognize the need for revolution.

It is only because of the limits of human perception that these efforts are successful. If we were capable of taking in all information all around the world all at once, nobody would have any confusion about which power structure is doing the most killing, exploiting, abusing and oppressing in the world. If we were capable of always looking at things with fresh eyes, efforts to habituate us to the abuses of the global bully that is the US-centralized empire wouldn’t work. We would always hold an acute awareness of the horrifying depravity of the power structure we live under.

None of this is new, by the way; all that’s relatively new is the way in which it’s happening. Throughout history there’ve been social engineers making up fake reasons for why people should live under tyranny, why it’s fine for some to have so much while others have so little, and why it’s normal and good to abuse and enslave foreigners who don’t look and speak like we do. The divine right of kings. The Doctrine of Discovery. Phrenology. Blessed are the poor and the meek, but remember to pay your taxes and render unto Caesar what is Caesar’s. The only difference is that instead of being promoted by monarchs, slave owners and high priests, the normalization of today’s empire is done primarily through the mass media.

And if their job is to normalize the empire, then our job is to abnormalize it. 

Anyone who opposes the empire can fight against the pervasive normalization of its abusive nature by highlighting the freakishness of its horrors at every opportunity. Always be watching for opportunities to punch through the veil of habituation by pointing and saying “See? Look what these monsters are doing! Look at it! Really look!” 

Nuclear brinkmanship. Yemen. Iraq. Starvation sanctions deliberately targeting civilians. Deliberately imposed poverty crushing people to death at home and abroad. Arming neo-Nazis, violent jihadists and right wing counterrevolutionaries in foreign conflicts to advance geostrategic interests. Police brutality. The relentless push for online censorship. The nonstop barrage of propaganda to manipulate our minds. The increasingly loud drumbeats for hot war with Russia and China. The ecocidal nature of global capitalism.

All of these things are profoundly horrific, but people don’t really see them, because they’re being conditioned to look past them. 

Our task, then, is to get them to look. Really look, and really see. In this way we can actively abnormalize what has been normalized, one pair of eyes at a time.

I often feel like that’s the main thing I’m doing here in this space: working to get people to see the horrors of the empire with fresh eyes. I find it a very effective use of my time and energy, because all the information’s already right there ready to be seen; all it takes is the insight and moral clarity to frame it in such a way that people look at it and go, “Holy shit. Was that sitting there this whole time?”

Peace is what’s normal. Justice is what’s normal. Health and harmony are what is normal. What we have now under the US empire is wildly abnormal, and it shouldn’t be permitted to misrepresent itself.

Caitlin’s Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
 
BRICCISTAN
US Policy is "War With China"

Dan Lieberman

Two words characterize United States (US) foreign policy — failure and counterproductive. Research US post-World War II foreign policy initiatives and learn of lost wars, unnecessary wars, counterproductive policies, unresolved issues, failed diplomacy, and downright mayhem. US foreign policy toward the People’s Republic of China (PRC) follows the trend.

The US State Department defines its China policy thus: "Strategic competition is the frame through which the United States views its relationship with the People’s Republic of China (PRC). The United States will address its relationship with the PRC from a position of strength in which we work closely with our allies and partners to defend our interests and values. We will advance our economic interests, counter Beijing’s aggressive and coercive actions, sustain key military advantages and vital security partnerships, re-engage robustly in the UN system, and stand up to Beijing when PRC authorities are violating human rights and fundamental freedoms. When it is in our interest, the United States will conduct results-oriented diplomacy with China on shared challenges such as climate change and global public health crises". 

All of this is boilerplate. Strategic competition, defend our interests, advance our economic interests, counter aggressive and coercive actions, stand up to violating human rights and fundamental freedoms, etc., are policies that apply to relations with most nations and often serve as excuses for interfering with another nation’s sovereignty. Left out of the State Department's definition of China policy, which is an agenda rather than foreign policy, are gaining mutual understanding on social, political, economic, and international issues and resolving any issues that may lead to friction, hostilities, and war.

The Department of Defense (DOD)  is more sanguine. In Tailoring U.S. Outreach to Indo-Pacific Allies, Partners, June 15, 2023, Jim Garamone, DOD News, outlines the DOD attitude toward China. “Globally and regionally, China is the pacing threat for the United States. China is actively seeking to overturn the international rules-based order that has kept the peace in the region since World War II.”

Just mentioning the unexplained and ill-defined” international rules-based order” immediately gives the chest-beating United States the moral high ground.

A US State Department  assessmentAddressing China’s Military Aggression in the Indo-Pacific Region, states: Across much of the Indo-Pacific region, the Chinese Communist Party (CCP) is using military and economic coercion to bully its neighbors, advance unlawful maritime claims, threaten maritime shipping lanes, and destabilize territory along the periphery of the People’s Republic of China (PRC). This predatory conduct increases the risk of miscalculation and conflict. The United States stands with its Southeast Asian allies and partners to champion a free and open Indo-Pacific.

Common to these directives: 
(1) China is engaged in aggressive and coercive actions;
(2) China is actively seeking to overturn the international rules-based order that has kept the peace in the region since World War II; and
(3) China threatens maritime shipping lanes and destabilizes territory along its periphery.

I have searched the historical record, examined news reports, and sought wisdom from the almighty and I cannot find any of this to be true. Examination of US policies toward Beijing reveals that US policies are not framed to engage in mutual understanding and are framed to precipitate and engage in eventual hostilities. Bashing China and forcing China to react in a hostile manner is the simple US policy. Look at the record.

China is engaged in aggressive and coercive actions.

Where is China engaged in aggressive and coercive actions?
Skip internal actions. These are a matter of perspective, and all nations can, at times, appear to be aggressive and coercive toward their citizens. Talk to African Americans in the ghettos of America, the Native American population, Mexican-Americans, and even the Jan. 6 insurrectionists and ascertain if they feel that their government is aggressive and coercive. Talk to Rohingyas, Palestinians, Bahrain Shiites, Egyptian Salafists, Saudi Shiites, Indian Muslims, Mexican and Guatemalan Mayans, and a host of other threatened minorities in nations where the US has friendly relations and does not strongly criticize the governments for aggressive and coercive actions toward their citizens.

Search around and find only two places where China might be accused of engaging in aggressive and coercive actions — Taiwan and the South China Sea. The latter charge appears in item (3) “China threatens maritime shipping lanes, and destabilizes territory along its periphery,” and will be covered in a discussion of that item. Aggressive and coercive behavior by China is reduced to one place, Taiwan. Only one Place? Is the charge true in that one place?

History has Taiwan as a legally recognized part of China since the 17thcentury. The island of Taiwan has the trappings of a state but only several small countries — Belize, Guatemala, Haiti, Marshall Islands, Nauru, Palau, Paraguay, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, São Tomé and Príncipe, and Vatican City — and no major country, recognize Taiwan as a nation. Even the nation of Taiwan is a misnomer; there is no nation called Taiwan. According to its current Constitution, the official name for Taiwan is the Republic of China (ROC) and it is not independent of mainland China. Although present-generation Taiwanese imagine Taiwan as a country independent of the People’s Republic of China (PRC), the definition of ROC territories in its constitution includes mainland China. In the "One China Policy," first stated in the Shanghai Communiqué of 1972, the United States acknowledged that the Chinese on both sides of the Taiwan Strait are part of one China and that Taiwan is a part of China.    

From a legal view, Taiwan has never claimed independence. Both the PRC and the ROC agree there is only one China. The ROC claims the mainland is part of the ROC and the PRC claims Taiwan is part of the PRC. Who is more correct?

The two parties fought a Civil War. The communists won and formed the PRC. China encompasses an area of about 10 million Kms 2, has a population of 1.4 billion, and a GDP of $18T. The counterclaiming  ROC encompasses an area of about 36 thousand Kms 2,  has a population of 24 million, and a GDP of $800B.  

Shanghai, only one city in China, has a population and GDP almost equal to that of Taiwan. From my discernment of the facts, the entity that won the civil war and has a size, population, and economy that dwarfs the opposition is entitled to rule the whole ball of wax. China is not engaged in aggressive and coercive actions against Taiwan; Taiwan is engaged in aggressive and coercive actions against the Chinese people. The Chinese people from the People’s Republic of China own the maritime coastline, fisheries, minerals, mountains, rivers, lakes, and public places of Taiwan and its ownership is denied to them by the Taiwan government.

China is actively seeking to overturn the international rules-based order that has kept the peace in the region since World War II.
The international rules-based order has no agreed-upon definition. From China’s, as well as other nations’ perspectives, it means an order that assures US hegemony in the region. With that definition, China, assuredly, would actively seek to overturn it, and China would overturn it if China could identify the order. Where is there an international rules-based order in East Asia that has kept the peace in the region since World War II?

Peace in the region? Haven’t we had the Korean War, French Indo-China War, Vietnam War, Cambodian War, Pol Pot reign, Vietnam overthrow of Pol Pot, China annexation of Tibet, China/Vietnam War, China/Soviet War, General Suharto, with CIA assistance, overthrow of President Sukarno in Indonesia, where an estimated  500,000 to 1.2 million people were killed, East Timor insurrection,  Myanmar military takeovers, massacre of Rohingyas, massacres of Sikhs, Muslims, and Hindus in India/Pakistan violence, massacres of Tamil and terrorism against Sinhalese in Sri Lanka civil War, and…many more acts of violence, which have occurred almost every year after World War II and continue in contemporary times.  Where has the international rules-based order been applicable and where has there been peace in the region since World War II?

China threatens maritime shipping lanes and destabilizes territory along its periphery.

China has been aggressive in establishing sovereignty in the South China Sea. This is the one area where it must answer to its aggressiveness. For a fundamental reason, Beijing cannot threaten maritime shipping lanes; there are no major shipping lanes in the South China Sea. The following map describes the western Pacific shipping lanes and shows that the South China Sea has only two maritime lanes, both feeding Vietnam, a country that has no sizeable navy. US shipping from Pacific ports does not pass through the South China Sea, and, except for Vietnam, only vessels to and from Hong Kong navigate through that Sea.

As for “destabilizing territory along its periphery,” where does this happen? A border conflict with India exists and will never end. This is an ongoing problem but how is this destabilizing and where is there another place that can be described as destabilizing?

Conclusion

The US State and Defense Departments continue to speak “white men” words, saying anything they want against the East Asians, bashing China to advance their agendas and fomenting hatred against the Chinese people. They hope to have the distortions convince others to build alliances and subdue the PRC. Why subdue the PRC? The US fears that more of the PRC forebodes less of the USA. To US officials, the international arena is a zero-sum game, and what the PRC gains, the USA loses. A stronger China also forecasts a stronger challenge to US hegemony. This portentous prophesy does not have to happen and China has shown it does not want it to happen. After years of the “debase China strategy,” the US has little to show for its efforts and, by another counterproductive foreign policy, has assured China will grow economically and militarily stronger and will challenge US hegemony.

The first alliance is the enhanced trilateral security partnership, AUKUS, established in September 2021 with other white men from Australia and faraway United Kingdom. AUKUS “is intended to strengthen the ability of each government to support security and defense interests, building on longstanding and ongoing bilateral ties. It will promote deeper information sharing and technology sharing; and foster deeper integration of security and defense-related science, technology, industrial bases and supply chains.”

The initial initiatives demonstrate the true reason for the white men alliance The first initiative commits the US and UK to support Australia in acquiring nuclear-powered submarines for the Royal Australian Navy. The second initiative “intends to enhance joint capabilities and interoperability, focusing on cyber capabilities, artificial intelligence, quantum technologies and additional undersea capabilities.” The true reason for AUKUS is to militarily challenge China.

The Quadrilateral Security Dialogue (Quad,) brings the United States, Australia, India, and Japan together in maritime cooperation. The dialogue has expanded to a broader agenda and includes security, economic, and health issues. The Quad’s dialogue has not moved forward smoothly and is now a loose grouping rather than a formal alliance. From the Council of Foreign Relations:

Japan initially emphasized the democratic identity of the four nations, whereas India seemed more comfortable emphasizing functional cooperation. Australian leaders have been reluctant about creating the impression that the group is a formal alliance.

A US proposal for a 14-nation economic initiative known as the Indo-Pacific Economic Framework for Prosperity is at an early stage. The US hopes this economic initiative will rectify ex-President Trump’s abandonment of the Trans-Pacific Partnership and the inability of the US to join The Association of Southeast Asian Nations, ASEAN.

US rhetoric, alliances, and military moves have disturbed China but have not deterred Beijing from its objectives. The Communist Party remains the central governing body for 1.3 billion people; the International Monetary Fund estimates that China’s GDP/PPP reached $33.01T in 2022, far ahead of US GDP/PPP of $26.85T; and economically and politically, China exhibits an increasing role in international affairs.

China provides funds for more than 100 countries for road, railway, power plants, ports, and other infrastructure projects. In the volatile Middle East, once the region where the United States exerted its most influence, the Shanghai International Port Group obtained a lease to operate a port in Haifa, Israel, and the PRC brokered a Saudi-Iran normalization agreement. Most of the impetus for the  BRICS, a group that is developing into a new global force able to challenge Western hegemony comes from its most powerful member, China. Original members — Brazil, Russia, India, China, and South Africa — have met periodically and proposed several economic and financial issues for the bloc to consider. Their August 2023 summit still has not set direction or proposed action; instead the bloc extended invitations to Iran, Saudi Arabia, United Arab Emirates, Argentina, Egypt, and Ethiopia to join BRICS on Jan. 1, 2024. Four statistics express the global power contained in the expanded BRICS, in which China is the leading power.

  • GDP of about $30.8 trillion, a 29.3% global share.

  • Total population will reach 3.6 bln people, or 45% of the global population.

  • Share of oil production will be about 43.1%.

  • Share of global exports will be about 25.1%.

The fact that US foreign policy toward the People’s Republic of China has accomplished nothing beneficial to America and follows the trend of US foreign policies — failure and counterproductive — raises the question: What did the United States expect to accomplish with its retrograde policies? Did it expect the Chinese government, which is solidly entrenched and has no opposition, to change its policies and supplicate to US directives? Zero possibility in that happening.

History, from the Barbary Pirates War off the coast in Libya in 1803 to the NATO war against Libya in 2011, shows that the United States almost always eschews diplomacy and settles its imaginary and real disputes by war. In almost every year from its founding to today, the United States has been either directly or indirectly engaged in strife. 

Accustomed to being the world’s leading economy since 1893 and the world’s leading military power since World War II, the American government and its people find it difficult to share the royal position or be classified as second-rate. Combine the jingoist military superiority attitude with the intensive utterances of China being guilty of aggressive and coercive actions and gross violations of human rights and fundamental freedoms and we have the development of a mindset that prefers “better dead than red.” Unless the US State Department and Defense establishment change their policies toward China, the inevitable result is war. 

With American politics becoming more incoherent, more extreme, and more polarized, a consensus that avoids war becomes more difficult. Hopefully, the new generation that seeks war no more will apply pressure and develop a strong and effective pacifist movement. Read more by Dan Lieberman.

REVIEWS

Political Economy of China’s Sovereign Leveraged Funds

Zongyuan Zoe Liu

China's sovereign wealth funds comprises two leading funds with dozens of affiliated investment funds that collectively managed more than $2 trillion in assets at the end of 2019 [and almost $16 trillion 2023]. No similar fund exists in the United States. Although several other countries have established funds using the same model, none can compare to the Chinese sovereign funds in scale. Among China’s sovereign funds, China Investment Corporation (CIC) has received the most scholarly interest and media attention. Besides CIC, China has several other, more obscure investment funds affiliated with the State Administration of Foreign Exchange (SAFE), the foreign exchange management arm of the People’s Bank of China (PBoC). Although these SAFE-affiliated investment funds are not as well known as CIC, they have established a global network that collectively managed at least $1 trillion in assets as of 2019. Over the past decade, China’s sovereign funds have injected capital into several state-owned policy-oriented investment institutions, such as the China Development Bank, Export-Import Bank of China, and the Silk Road Fund. These policy-financing institutions have played an instrumental role in directly financing the Belt and Road Initiative (BRI), the center-piece of President Xi Jinping’s foreign policy that aims to construct a new global trade network aligned with China’s vision for the world.

China’s sovereign funds are outliers among the world’s SWFs, which are primarily commodity-based funds established in oil-rich states, including Norway and countries throughout the Middle East and Africa. As the world’s largest importer of commodities, China has relatively little in common with the countries traditionally associated with SWFs. It is perplexing that China should have such massive sovereign funds in the first place. Researchers have pointed to China’s excess foreign exchange reserves as the impetus for China’s sovereign funds, but this is an insufficient explanation. A new framework is required to properly understand the origins of China’s sovereign funds and their political-economic functions. This book analyzes China’s sovereign funds by following a simple research principle: follow the money, find the politics. This approach is operationalized by using financial statement analysis to investigate the capital structures and asset allocations of China’s sovereign funds, including the sources of their capital, the conditions for capital transfer into the funds, their balance sheet strength and risk exposures, and the individuals involved in the funds’ most consequential investments. By closely following the money, one is able to uncover the politics that steered the flow of capital into China’s sovereign funds and the geopolitical motivations that drive the funds’ asset allocation.

Before introducing this book’s framework for analyzing China’s sovereign funds, some explanation of SWFs in general is necessary. The term “sovereign wealth fund” was first used in 2005 by Andrew Rozanov in his article “Who Holds the Wealth of Nations?” Rozanov defined SWFs as “sovereign-owned asset pools, which are neither traditional public pension funds nor reserve assets supporting national currencies.” According to this definition, commodity-based SWFs have existed for more than six decades. The first government-owned investment fund that would later be labeled a SWF was the Kuwait Investment Authority, established in 1953 and capitalized by the monetization of oil wealth found in the state. The 1970s saw the launch of a few more resource-based funds, but most present-day SWFs emerged after 1990. These commodity-based SWFs were capitalized by natural resource revenues and act as a national savings account; their investment revenues help smooth out the effects of commodity price fluctuations and stabilize national fiscal budgets. Such fiscal buffers are crucial to insulating these economies from the vagaries of global commodities markets. By 2007, SWFs had already achieved an impressive scale, managing more than $3.1 trillion in assets—about the same size as the entire US money market fund industry. Despite their size, SWFs have historically maintained a relatively low public profile.

China’s sovereign funds are unlike commodity-based SWFs and represent an entirely new class, which I term sovereign leveraged funds (SLFs). A distinctive feature of SLFs is their funding scheme, which relies upon a series of complicated transactions, including debt issuances and other forms of implicit financial leverage. SLFs are a political-economic innovation because they are the product of the state leveraging its financial and political resources to make it possible to capitalize a fund without relying upon a high-profit revenue stream like the export of commodities. To fully understand the political economy of SLFs, one must also understand how the state takes on financial leverage. The state can assume either explicit leverage, by issuing debts, or implicit leverage, by recharacterizing the risk profile of existing low-risk assets. A stylized balance sheet of the state can most clearly illustrate the difference between these two approaches. The key point is that explicit leverage and the issuance of new debt leads the state to expand its balance sheet. In contrast, implicit leverage increases the state’s overall risk profile without expanding its balance sheet. Unlike traditional commodity-based SWFs, neither of these approaches to leverage relies in any way upon natural resource revenues. A state without significant natural resource revenues can take on explicit or implicit leverage to source the seed capital for the founding of a sovereign leveraged fund.

The most straightforward way for the state to raise capital for its sovereign leveraged fund is to issue new government bonds or some other form of government debt. This allows the government to raise new capital from private markets, add it to the existing stock of available capital, and deploy the combined lot via a SLF as investments in risky assets. From an accounting perspective, the state has expanded its balance sheet and increased its use of financial leverage. The result of such financial engineering is that the state becomes explicitly leveraged because the newly issued debt remains on its balance sheet. The decisions about how the newly issued debt will be underwritten and who will ultimately control the resultant SLF are the product of intensive political negotiation and aggressive bureaucratic competition. Chapter 3 discusses China Investment Corporation as a case of the state taking on explicit leverage to establish a sovereign leveraged fund.

An alternative approach for the state to obtain investment capital is to convert existing pools of low-risk capital, or state-owned assets like foreign exchange reserves, into high-risk-bearing capital that is subsequently transferred to the management of the SLF. How this process constitutes an increase in the state’s financial leverage can be understood by considering the typical investment made by a SLF. In general, the fund uses its capital to make an equity investment in a target company that is itself internally leveraged—that is, carrying debt on its own balance sheet. The sovereign fund’s equity interest is subordinate to the debt of the target company. The state is implicitly leveraged because the debt of the company stays off the balance sheet of the state, but the state still bears the risk of losing its entire equity stake if the company’s debt cannot be repaid. In other words, the leverage is external to the state’s balance sheet. In this way, the state itself does not issue any new debt or expand its balance sheet, but it still increases its financial leverage. Economically, there is no difference between explicit (internal) and implicit (external) leverage: the only distinction is the accounting treatment and awareness among the general public of its existence.

Regardless of which type of leverage the state chooses when raising capital, the outcome is the same: it will inevitably precipitate a political conflict among those that aspire to control the resultant capital. Implicit leverage is usually the more politically expedient choice because the associated liabilities are usually not recorded in official accounts. Both Central Huijin and SAFE-affiliated investment companies serve as examples of how the state takes on implicit leverage and then political conflict ensues. These two cases are discussed in Chapter 2 and Chapter 4, respectively.

To summarize, SLFs are created by the state taking on financial leverage in either of two ways: one is to take on explicit leverage by issuing new debts; the other is to take on implicit leverage by raising the risk exposure of existing low-risk-bearing capital. Whether a SLF is capitalized from the proceeds of debt issuance (explicit leverage) or by reallocating idle reserve capital (implicit leverage), the positive gearing effects are the same, with the practical difference being the degree of transparency. Both approaches require the state to leverage its capital resources, financial assets, and political power. In other words, SLFs are the product of the state’s financial engineering and political engineering. Before a county’s leaders can establish such a fund, a political negotiation must occur between the state bureaucracies to determine where to source the fund’s seed capital and who will ultimately exercise control over the investment decisions. This process of negotiation firmly embeds SLFs in the politics of the state. SLFs use financial leverage to gather the capital necessary to implement the state’s strategic priorities without relying upon politically unpopular conventional means of raising money like tax policy or trimming budgets.

The experience of China’s SLFs demonstrates that although the state cannot always impose its will on markets, it can create new institutions that reshape the incentives that guide markets. SLFs are state-capitalist instruments for market governance. They are powerful tools that allow states to engage with markets and represent a new middle path between the prevailing dichotomy of the liberalist proposal to “remove state intervention” and the market institutionalist proposition to “bring the state back in.”

SLFs reconcile the seemingly opposite perspectives of liberalists and market institutionalists. The state’s control over the market cannot extend beyond its own borders, even in the extreme case of a centrally planned economy. Sovereign funds do not “administer or regulate” their portfolio companies. SLFs reduce the state’s reliance on non-market measures when engaging with the market. These funds can use equity participation to become direct participants in the market and provide capital to companies in the industries prioritized by the state. Well-known funds can also influence the market via their pure brand effect. Other institutional investors perceive investments made alongside prestigious sovereign funds to be inherently safer, imparting a higher risk–reward ratio compared to other investments. This effect is sometimes called the “Buffet Effect” because it was first observed in reference to investor Warren Buffet and his company Berkshire Hathaway, but it can also be seen with increasing frequency in the investments made by the Government Pension Fund of Norway, Abu Dhabi Investment Authority, Temasek, and China Investment Corporation. This is to say that SLFs empower the state to move and even shake the market by making selective equity investments that promote its industrial policies and geoeconomic interests. This is a fundamentally dif­ferent approach to the traditional model of the state guiding markets by administrative directives. 

SLFs are agents of the state in the exercise of noncoercive economic and financial statecraft. The creation of these state agents is firmly embedded in domestic politics, but their global activities are grounded in international geopolitics. How these agents interact with global markets is a function of the state’s own geopolitical aspirations and structural constraints in global markets. SLFs act as a noncoercive means for the state to advance its strategic interests in the global marketplace. They do so by establishing connections to influential foreign actors and gaining access to global networks of sophisticated investors and political elites. SLFs form partnerships and establish joint ventures with other prestigious investment institutions to mobilize global capital for the state’s prioritized goals. They also participate in multilateral institutions that set standards for global financial governance, effectuating the state’s sway over global finance. SLFs offer companies and other capital-seekers compelling financial incentives to comply with the state’s direction, allowing the state to forgo the more blunt tools of economic statecraft like tariffs and sanctions.

SLFs also allow the state to practice coercion by exercising their equity voting rights in firms across strategic sectors or at critical junctures in globalized supply chains. Armed with abundant capital, SLFs can choose to either finance the founding of a new firm that may eventually grow into a monopoly or acquire a controlling stake in mature companies that already have monopolistic power. SLFs influence their portfolio companies through the exercise of equity voting rights and can gain cooperation from even reluctant stakeholders by threatening to withdraw their capital support and sink the company’s valuation. As the first line of discipline, a SLF may cast its proxy vote against the management team as punishment for not keeping the company’s corporate behavior aligned with the state’s national interests. Later, if management refuses to adhere to the SLF’s guidance, it can divest its position and reinvest in a more pliable competitor. The equity capital of SLFs buys more than just a stream of dividends and a seat on the board; it acquires for the state the strategic option of responding to geopolitical conflict with geoeconomic reprisals. This was demonstrated during the early days of the COVID-19 pandemic when many governments cajoled private companies into limiting exports or redirecting shipments of medical personal protective equipment (PPE) to domestic hospitals. By investing in companies at critical junctures in global supply chains, a SLF can ensure that the state’s interests will be given first consideration in all decisions over supplies while its rivals will only receive short shrift.
 

Born from Crisis: China’s Sovereign Leveraged Funds

The evolution of China’s SLFs has unfolded against the backdrop of China’s domestic financial reform and the globalization of Chinese capital. Once a backward country, China has caught up with Western powers on gross economic terms by relying upon its ability to mobilize capital. No other country in history has so rapidly transformed its economy from being among the world’s poorest and most isolated to one of the world’s largest economies, at the heart of the global supply chain, and a leading source of international investment capital. For the last two decades, SLFs have played a significant role in China’s economy,

mitigating financial crises and tempering exogenous shocks. SLFs have supported China’s industrial policies by financing the state’s procurement of strategic overseas assets, bankrolling Chinese enterprises’ mergers and acquisitions abroad, and sponsoring the development of indigenous Chinese technology startups. As China’s state-owned capital has gone global, the scope of China’s geoeconomic influence has duly expanded.

Although SLFs have become essential tools of China’s economic statecraft, their creation did not arise from some grand strategy of the CPC. Like most innovations, China’s SLFs were born out of necessity amid a state of crisis. Two exogenous shocks formed critical junctures in the evolution of China’s SLFs. The first was the Asian financial crisis in 1997; the second was the global financial crisis in 2008. At each of these critical junctures, the Chinese economy was at a starkly dif­ferent level of integration and embeddedness within global markets. The CPC leadership responded to these shocks by reexamining the boundaries of state–market relations in China and reinterpreting the Party’s commitment to reform and opening up. Among the results of this process, the CPC changed its approach to managing state-owned capital, especially China’s foreign exchange reserves.

Excerpted from SOVEREIGN FUNDS: HOW THE COMMUNIST PARTY OF  CHINA FINANCES ITS GLOBAL AMBITIONS by Zongyuan Zoe Liu, published by The Belknap Press of Harvard University Press.  Copyright © 2023 by the President and Fellows of Harvard College. All rights reserved. 

Audible China!

 
The 2023 edition is out and, with it, the new Audible version. Listen and wonder!

It's the only book that explains all three elements of China's success:
 
  1. Talent at the Top: Only the brightest, most idealistic people are are admitted to politics–a policy unchanged in 2200 years.
  2. Data in the Middle: policies are implemented, tracked, and optimized based on terabytes of data. The PRC is the world's largest consumer of public surveys.
  3. Democracy at the Bottom: ordinary people, all unpaid amateurs, assemble twice a year to check the stats and sign off on new legislation. Policies need a minimum of 66% support to become law. That's why 95% of Chinese say the country is on the right track.
The proof? There are more hungry children, more poor, homeless, drug addicted, and imprisoned people in America than in China.  

Why China Leads the World
investigates why the epidemic accelerated the change of global leadership from America to China and examines China’s bigger, steadier economy, its science leadership, stronger military, more powerful allies, and wider international support.

Crammed with charts, footnotes, and lengthy quotes, Why China Leads the World is a profoundly disturbing book that helps readers understand the tectonic shift and adapt to this new era–and even thrive in it.
***
The size of China's displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world. Lee Kuan Yew: The Future of US-China Relations. The Atlantic.  
***
The Coronavirus accelerated the pace of change of global leadership from America to China. There are now more hungry children, more poor, homeless, drug addicted, and imprisoned people in America than in China. 

Suddenly, China's larger, steadier economy, its leadership in science, its stronger military, more powerful allies, and wider international support have handed it a lead that widens every day.  Crammed with direct quotes from its movers and shakers, charts, and footnotes, Why China Leads the World tells a remarkable tale, explains a tectonic shift, and helps you adapt to this new era, and even thrive in it. 
 ***
If we could just be China for one day we could actually authorize the right decisions. Thomas L. Friedman. The New York Times  

300 pages, 27 charts and graphs. $9.99 on Amazon and in bookstores worldwide.

Atrocities?

 

For decades, Western media have been narrating the same story about China being this brutal “dictatorship” whose people are killed at the hands of the criminal communist regime, giving the Tiananmen Square massacre as a prime example of the brutality of the Chinese government, wherein supposedly scores of students were killed at the hands of the People’s Liberation Army. However, a new book emerged proving that these claims are false and have no foundation to them except for Washington’s aspirations to tarnish the image of the Chinese Communist Party.

Atrocity Fabrication and Its Consequences: How Fake News Shapes World Order, a new book by A. B. Abrams, highlights that there never were any killings in the infamous Tiananmen Square back in 1989 as had been spread by Western propaganda for decades, and it was revealed that the entire affair was but a mere attempt at showing China as the villain in the geopolitical arena. The book underlines that no killings, let alone a massacre as is proclaimed, took place in Tiananmen Square.

How did the U.S. succeed in manipulating the mainstream narrative and have millions upon millions of people believe that China initiated a mass murder of its own people—young college students—crushing them with tanks and shooting them down with machine guns? The answer is simple: the manipulation of public perception through the press. This could be done using media out of context and providing an incomplete version of the truth.

For example, the most infamous piece of media “documenting” the crime to ever exist is a video showing a tank marching onto a person alleged to have been a student, and right as the tank gets close enough to the young man and stops, the video is cut, with there being some text accompanying the video hinting or proclaiming that the tank went on to run over the protester. However, that could not be further from the truth. In reality, other protesters rushed to the scene and accompanied him from there as the tank was standing in place waiting for him to comply and get out of its way.

The book argues that all the acts committed by the United States were in a bid to “justify wars of conquest and exploitation” and generate multi-billion-dollar profits for the notorious military-industrial complex, as reported by CovertAction Magazine.

Abrams highlighted that the Tiananmen Square protests initially took place not as a push for Westernization or the downfall of the Chinese government. Instead, their primary focus was on reinforcing the principles of China’s 1949 Communist Revolution and addressing the issue of corrupt officials who had deviated from Maoist principles.

This movement encompassed not only students but also a significant number of workers, who exhibited a stronger anti-CCP stance. Their collective objective aimed at the establishment of a socialist democracy within the framework of the movement.

The book cited a cable from the U.S. Embassy in Beijing that WikiLeaks published in 2016. The leak included reports on the eyewitness account of a Chilean diplomat and his wife who were present when the PLA made it to Tiananmen Square to disperse the protesters. The pair made it in and out of the square numerous times without any harassment and observed no mass firing of weapons into the crowds. They never saw any use of lethal force, to begin with.

Moreover, the book cited former Washington Post Beijing Bureau chief Jay Mathews who, in 1998, admitted that “all verified eyewitness accounts say that the students who remained in the square when troops arrived were allowed to leave peacefully.”

It also cited Reuters  correspondent Graham Earnshaw, who spent the night of June 3-4 at the center of Tiananmen Square and reported that most of the students left the square peacefully with the remainder of them being persuaded to do the same.

As is customary, the main source the Western media used to claim that a massacre took place was an anonymous student from Qinghua University making claims to the Hong Kong press, who then made it to the British media.

Still, BBC‘s Beijing correspondent James Miles said there was no massacre.

Western reporting had conveyed the wrong impression and protesters who were still in the square when the army reached it were allowed to leave after negotiations.

The narrative was also completely spun out of proportion, with the perpetrators being painted as the victims of a crime that was never committed in the first place. The book underlined that those who did die in Beijing during the events lost their lives in street battles between the PLA and insurgents far from the square. Reports from the U.S. Department of State underlined that the unarmed PLA officers were attacked with petrol bombs, burning many alive.

Uyghurs, another ‘crime’ China committed

The hoax built around Tiananmen Square was a blueprint for U.S. media campaigns aimed at showing the Chinese government in a bad light, as Washington went on to accuse Beijing of perpetrating a genocide against the Uyghur people in Xinjiang province.

The book stressed that the claims about the so-called Uyghur genocide relied on nothing but hardline extremist U.S.-funded anti-China groups. Namely, they were funded by the CIA-affiliated National Endowment for Democracy, which was tasked with carrying out what the notorious spy agency had done alone under the covers for decades.

Amid the claims of Beijing genociding the Uyghurs, the Uyghur population in Xinjiang saw an increase of 25% between 2010 and 2018 instead of the population experiencing a contraction. Even facilities the West claimed to have been “concentration camps” in which Uyghurs were killed en masse and “brainwashed” or “indoctrinated” appeared to have been a logistics park, a regular detention center, and elementary and middle schools.

Xinjiang looks good, safe, and secure, and all the people I spoke with seemed happy about it, former London Metropolitan Police Officer Jerry Grey, who spent a lot of time traveling in Xinjiang, said.

“Uyghurs in China have been growing faster than the majority Han Chinese in part because they weren’t subject to the one-child policy, they have 20,000 mosques built […] Uyghur children can get into top universities easier than Han Chinese, and have halal foods prepared for them in canteens and they have a prayer area on campus,” Daniel Dumbrill, a Canadian businessman and Chinese political analyst said.

“Portraying an adversary as committing particularly egregious crimes, especially when one intends to initiate military action or other hostile measures against the adversary, has consistently provided an effective means of moving public and international opinion and justifying [US imperial] actions,” Abrams said in his book.

Yugoslavia

The book also shed light on the U.S. propaganda focused in the 1990s on Serb leader Slobodan Milosevic, a socialist who sought to keep Yugoslavia together, accusing him of genocide in Kosovo and elsewhere.

Milosevic, a socialist, aimed to maintain the unity of Yugoslavia and prevent its fragmentation. This effort was driven by his desire to counteract Western nations’ potential expansion of influence and the establishment of U.S. military bases in a strategically vital area.

Interestingly, the most severe instances of ethnic cleansing during the war were actually executed by the Croats through Operation Storm, a plan devised by the CIA.

The Clinton administration additionally provided support to the Kosovo Liberation Army (KLA), which sought to establish an ethnically homogeneous Albanian state. This endeavor involved targeting Serbs and other minority groups.

Financing from the drug trade played a significant role in sustaining the KLA, leading the State Department to label it a “terrorist organization”. The NATO North Atlantic Council identified the KLA as the primary instigator of violence in Kosovo.

The narrative of genocide and the Serbs running concentration camps once again heavily relied on the testimony of an individual who openly admitted to not witnessing any killings—propagandist reporter Roy Gutman. This account was eventually discredited when a British journalist visited an alleged death camp, discovering that the inmates had voluntarily sought refuge from the nearby conflict in surrounding villages.

Yugoslavia was a highly successful state that united numerous contemporary Baltic nations under the banner of communism, and it met its demise when the United States and NATO waged a war against it, killing hundreds of civilians in the notorious bombing campaign it launched on the country in order to “sow democracy” there.

Syria

The same man who was one of the main reasons behind the collapse of Yugoslavia was almost able to do the same with Syria. Gutman played a major role in another similar war launched over a decade later against Syrian President Bashar Al-Assad.

The propaganda effort pushed by Gutman was similar to the one he peddled earlier, with it including the mass murder of people at the hands of the government without any evidence backing up these claims.

Western media and regimes falsely accused Al-Assad of carrying out attacks with chemical weapons against his own people while the attacks were likely carried out by U.S.-backed terrorists.

Back in November, the Grayzone website published a series of leaks that expose how senior officials of the OPCW censored this explosive finding in the Syrian city of Douma.

In its investigation, the website stated that “in the early days of the OPCW’s investigation of an alleged chemical attack in Douma, Syria, expert toxicologists ruled out chlorine gas as the cause of death for more than 40 civilians reported at the scene.”

The Korean War: Another ‘atrocity’

The Korean War, a war peddled by the United States that wound up splitting one people into two, was presented to the public as a “humanitarian intervention” aimed at rescuing the local population from communist forces. To establish this narrative, the Pentagon sponsored a propaganda film, titled The Crime of Korea narrated by Humphrey Bogart. This film falsely attributed atrocities committed by the South Korean government, with U.S. support, to the Democratic People’s Republic of Korea.

This narrative gained traction within the U.S. media and significantly bolstered the perception of the war as “morally justified”. An influential Timemagazine column titled “Barbarity” furthered this perspective by describing a communist massacre in Taejon, which subsequent investigations revealed was actually perpetrated by South Korean troops allied with the U.S.

Charles E. Potter, Chairman of the Senate Subcommittee on Korean Atrocities and appointed by Senator Joseph McCarthy, notorious for McCarthyism, which was responsible for the persecution of anyone even thought to be affiliated with any leftist organization or held any left-wing beliefs, emphasized the inhumane acts committed by U.S. adversaries. He recounted gruesome incidents, such as a “Red Chinese” nurse using garden shears to sever a GI’s toes without anesthesia and American POWs being subjected to torture with bamboo spears and confinement in small iron cages until death, with maggots infesting their eye sockets.

However, the accounts presented by Potter contradicted the testimonies of American and British POWs, who indicated that their treatment by captors was generally decent, although they had to attend lectures on communism.

Meanwhile, U.S.-run POW camps subjected DPRK and Chinese prisoners to severe brutality. These inmates were massacred for singing revolutionary songs and subjected to violent coercion to renounce repatriation to their homelands. This strategy aimed to score Cold War propaganda points by portraying defection to the West as a desire born out of the perceived superiority of its political-economic system.

The campaign of propaganda against the DPRK extended well into the 21st century, with increasingly extravagant made-up tales to portray the country in a negative light. Many of these stories were propagated by DPRK defectors, some of whom were influenced or incentivized by South Korea and possibly the CIA.

Shin Dong-hyuk, a defector, collaborated with Washington Postcorrespondent Blaine Harden to write a highly successful book Escape From Camp 14: One Man’s Remarkable Odyssey from North Korea to Freedom in the West. However, this account was later revealed to be a fabrication.

Yeonmi Park, another defector, who charges a speaking fee of $12,500 on Western media outlets, even made the ludicrous claim that her friend’s mother was executed for watching a Hollywood movie.

Lee Soon-ok, yet another defector, testified before a House committee in 2004 that she had witnessed Christians being tortured and burned to death in DPRK political prisons. However, the head of the North Korean Defectors’ Association, Chang In-suk, contradicted this, asserting that Lee was never a political prisoner.

Abrams noted that fabricated reports about DPRK state executions of prominent figures often coincided with the surprising reappearance of these supposedly deceased individuals on camera.

In a CNN report from May 2015, it was alleged that DPRK leader Kim Jong Un had ordered the poisoning and killing of his aunt, Kim Kyong Hui. However, Mrs. Kim appeared in public in January 2020, highlighting the inaccuracy of the claim.

Abrams suggested that these false defector testimonies and biased media coverage were embraced in the West due to the “self-gratification” they provided, seemingly affirming the notion of Western superiority over the least Westernized state. Additionally, they often served as justifications for hostile policies, including economic sanctions, against the DPRK.

The book talks about the demonization of the Russian and Vietnamese governments, as well as that of Libya and Iraq in a bid to validate the Gulf War, while also revisiting numerous cases of U.S. propaganda aimed at subverting its foes while giving impetus to itself and its beliefs in a bid to uphold the unipolar system that it has been trying so hard to keep propped up—to no avail. The recounting of the countless crimes committed by the United States comes as no surprise to many as the latter has done so for decades, and continues to do so, exploiting its hold on the media to give itself the moral high ground over its geopolitical enemies. Monthly ReviewAmazon.

For years, China’s transformation from one of the world’s poorest nations was lauded as a triumph that lifted hundreds of millions of people out of poverty. There were always questions about data reliability and growth sustainability, but the general views on China have recently taken a decidedly sour turn. Concerns abound about state interference in the economy, an ageing population, and high debt level. Making Sense of China's Economy untangles China’s complex economic structure, evolving issues and curious contradictions, and explains some key features of this most puzzling of global economic powerhouses.

This book reveals how factors such as demographics, the initial stage of development in 1978, the transition away from full state ownership and central planning, the dual urban-rural society, and a decentralised governance structure have combined to shape the economy, its development and its reforms. It shows how the pragmatic and adaptive nature of China’s policymaking upends familiar perspectives and hinders simple cross-country comparisons. The book also explores crucial topics including the property market, debt accumulation and environmental challenges.

In this book, Tao Wang innovatively weaves the multiple strands of China’s economy into a holistic and organic tapestry that gives us unique insights from both a Chinese and an international perspective.

This book is critical reading for business leaders, investors, policymakers, students, and anyone else hoping to understand China’s economy and its future evolution and impact, written by a specialist who has studied the country from both inside and out. Amazon.
Is the West prepared for a world where power is shared with China? A world in which China asserts the same level of global leadership that the USA currently assumes? And can we learn to embrace Chinese political culture, as China learned to embrace ours?

Here, one of the world's leading voices on China, Kerry Brown, takes us past the tired cliches and inside the Chinese leadership - as they lay out a roadmap for working in a world in which China shares dominance with the West.

From how, and why, China as a dominant superpower has been inevitable for many years, to how the attempts to fight the old battles are over, Brown digs deeper into the problematic nature of China's current situation - its treatment of dissent, of Xinjiang, Hong Kong, and the severe limitations on its management of relations with other cultures and values. These issues impact the way the West sees China, China sees the West, and how both see themselves.

There are obstacles to the West accepting a more prominent place for China in the world – but just because this will be a difficult process does not mean that it should not happen. As Kerry Brown writes: history is indeed ending, but not how the West thought it would. Amazon

The ISC Report

The ISC (Needham) Report


The Report of the International Scientific Commission for the Investigation of Facts Concerning Bacteriological Warfare in Korea and China (the ISC report), published at the height of the Korean War, validated claims by North Korea and China that the US had launched bacteriological warfare (biological warfare, BW) attacks against both troops and civilian targets in those two countries over a period of several months in 1952.
   

The most vilified document of the 20th Century.

The report’s release in September, 1952, brought a withering international attack. It was roundly denounced by American and British politicians of the highest rank, ridiculed by four star generals, accused of fraud by celebrated pundits, misquoted by notable scientists, and scorned by a compliant Western press. Charges were made against the quality and truthfulness of its science. Its “unstated” political agenda was denounced. The ethics of interviewing captured US pilots was excoriated and its authors were publicly flayed as communist dupes. The report was red baited in the US halls of Congress and deemed unpatriotic to read, and therefore went unread and deliberately forgotten over the years, which has been the fate of Korean War history in general. In subsequent decades, volumes placed in American university library collections were quietly and permanently removed from circulation.
   
When the rare copy came up for auction, it was discretely purchased and disappeared from public view. This critical 67 year old truth commission document from the Korean War was slipping towards oblivion. For these very reasons, historians and truth seekers should exalt the wondrous rebirth of the ISC Report from near extinction with the publication of this new electronic edition. We welcome the sunshine that re-publication brings to a shadowy and suppressed chapter of American Cold War history. (from the introduction by Thomas Powell) 800 pages.  $9.99.

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