Our Japanese sources are worried about the increase in China’s defense budget and military capabilities, as well as Beijing’s growing aggression toward its neighbors. Their worries have been confirmed by China’s furious reaction to Takaichi’s speech. Beijing has demanded that Japan “fully repent for its war crimes” and “stop playing with fire on the Taiwan question.” Note that this over-the-top reaction comes after almost two years of deteriorating relations:

The Chinese Communist Party (CCP) has launched a global diplomatic against Japan. Beijing is also putting immense pressure on Tokyo to hurt Japanese businesses and taxpayers. The tensions have escalated to limited military actions, which are short of clashes but are increasingly dangerous.

Diplomatically, China is painting Japan as an aggressor. They point to Japan’s brutal colonization of Taiwan and parts of China as evidence of mala fide intentions. The CCP is peddling the narrative that Takaichi is an aggressive nationalist who aims to undermine Chinese sovereignty. They also paint her to be an unqualified, inexperienced and irresponsible leader. This Chinese narrative seeks to weaken Takaichi’s ability to govern Japan and damage her international reputation.

In a now-deleted social , a Chinese diplomat in Osaka commented that “the dirty neck that sticks itself in must be cut off.” This post was seemingly directed at Takaichi, as the post was linked to a news article on the prime minister’s Taiwan remarks. The various arms of the Chinese government have been singing in one chorus condemning Takaichi for launching a new era of aggressive Japanese nationalism. Foreign Minister Wang Yi’s claim that Japan has crossed a red line and that all countries have the responsibility to “prevent the resurgence of Japanese militarism” has upped the diplomatic ante.

FOI Senior Partner Glenn Carle, a retired CIA officer who now advises companies, governments and organizations on geopolitical risk, believes China’s diplomatic outrage to be “a tempest in a Beijing-made teapot.” He points that China has been pushing nearly all its Asian neighbors around, notably in the South and East China Seas. Most recently, the PLA conducted large-scale military exercises against Taiwan at the end of 2025. In a threatening two-day exercise, the PLA simulated a blockade of Taiwan for the second time in the year, increasing anxieties in both Taipei and Tokyo.

Carle holds that this bullying of neighbors, other states and even foreign citizens who do not adhere to the CCP party line makes Japan rightly nervous. He argues that Beijing’s constant refrains to historic wrongs and use of the “Japanese militarism” card is self-serving, hypocritical and dishonest. The CCP uses this narrative cynically, often to divert attention from a domestic problem or to put pressure on Japan. Carle believes that Beijing damning Tokyo is akin to “blaming the person being bullied for going to the gym to get in shape so that he can stand up better to bullying in the future.”

Undeterred by such concerns, Beijing is tooting its diplomatic horn as loudly as it can. In a large-scale coordinated campaign, China has sent two letters to the UN criticizing Japan, accusing it of threatening “an armed intervention” over Taiwan and conducting “a grave violation of international law.” Beijing has also leaned on Russia and North Korea to publicly denounce Japan. China is also signaling South Korea’s claim to the Takeshima/Dokdo islets, which is disputed by Japan. 

Analysts suggest that Beijing has also managed to come to some form of a backroom deal with Washington, which has led to the absence of high-level backing for Takaichi. Notably, the Japanese feel some angst over the lack of a forceful statement from the White House. Secretary of State Marco Rubio’s delicate balancing act — he has that the US will find ways to work with China without undermining Washington’s security commitments to Japan — has not reassured Tokyo.

Tensions between the two nations are at a high point. China is not only turning the diplomatic ratchet but is also using economic leverage and military maneuvers to pressure Japan to backtrack. 

Tensions go beyond diplomacy

Beijing has issued an advisory to its citizens against traveling to Japan. This has reduced the number of Chinese tourists to Japan. Sales of goods and services have suffered. Over the last few years, Chinese shoppers have provided a big boost to the Japanese economy. Now, department stores and the retail industry are hurting. Hotels have suffered from cancellations. From January to November, tourists from Mainland China and Hong Kong accounted for of all tourists to Japan. The number of Chinese tourists during this period grew by 37.5% since last year.

Recently, Japan has emerged as a key destination for Chinese students. Not only do they come to study at universities in Tokyo and Osaka, but they also flock to private boarding schools. Rugby School Japan (RSJ) and Harrow International School Appi are two examples of posh destinations for rich Chinese students. The CCP has asked Chinese students to reconsider studying in Japan, hurting a growing sector of the Japanese economy.

China has also reinstated a de facto import on Japanese seafood. After the Fukushima nuclear disaster, Beijing imposed this ban on August 24, 2023, and only lifted it in of this year. Although Japanese exports a record in 2024, the lack of Chinese demand has slowed their growth. China is a valuable export market for Japan, and Beijing’s ban hurts Japanese exporters.

China has also Japanese film releases and canceled cultural events. Demon Slayer: Kimetsu no Yaiba — Infinity Castle, a Japanese anime, was China’s top-grossing foreign film of the year. China is the second-largest cinema market in the world, and Japanese anime has enjoyed a breakout year in this market in 2025. Now, six Japanese anime productions, which would have been otherwise released, find themselves in cold storage. Japanese cultural performances such as and anime events have been gaining in popularity in China. They are also on hold.

Notably, China has not yet restricted rare earth exports to Japan this year as it did with the US in 2025. Most other Chinese products are still coming to Japanese markets as well. In earlier crises, Beijing called for boycotts of Japanese products. This time, it has . In private, Chinese officials have been assuaging concerns of Japanese executives running their operations in China. 

Yet Japanese investor confidence has been falling in recent years. According to Japan’s Ministry of Finance, the country’s net foreign direct investment into mainland China fell by in the first three quarters of 2023, reaching the lowest amount since the data series began. That year, in a poll by the Japanese Chamber of Commerce in China, only 10% of the 8,300 firms surveyed said they planned to increase investments. Our business sources in Tokyo confirm this trend. China-Japan trade relations have suffered because of the latest crisis, but tensions have been increasing in recent years.

Both nations ramped up military actions, but there are limits

Military maneuvers have caused greater concern. On December 11, two American B-52 bombers with Japanese fighters over the Sea of Japan. That very day, US Defense Secretary Pete Hegseth and Japanese Defense Minister Shinjirō Koizumi their commitment to deterring aggression in the Asia-Pacific in a call and reaffirmed the US-Japan Alliance. 

This followed an alarming incident on the first weekend of December when Chinese J-15 fighter jets twice targets on Japanese F-15 fighters. The Japanese jets were monitoring the People’s Liberation Army Navy aircraft carrier CNS Liaoning in international waters near Japan’s Okinawa Islands. 

In addition, two Russian Tu-95 nuclear-capable strategic bombers from the Sea of Japan toward the East China Sea to rendezvous with two Chinese H-6 bombers. The Russian and Chinese bombers performed a “long-distance joint flight” in the Pacific. Four Chinese J-16 fighter jets joined them “as they made a flight between Japan’s Okinawa and Miyako islands.” The Miyako Strait between the two islands is classified as international waters, but a joint Russian-Chinese operation here is seen by Tokyo as highly provocative. Japan also simultaneous Russian air force activity in the Sea of Japan, consisting of one early-warning aircraft A-50 and two Su-30 fighters. Clearly, Beijing has decided to increase pressure on Tokyo and has the support of Moscow to do so.

Our sources in China, not only in the government but also in the private sector, suspect Japan plans to remilitarize. They fear Japanese military support for Taiwan and Tokyo strengthening claims on disputed islands. They also fear the Japanese military fortifying positions in islands currently under its control, such as the Senkaku Islands and the Yonaguni Island. Yonaguni marks the tail end of an archipelago stretching north to Japan’s main islands. Since Speaker of the House of Representatives Nancy Pelosi Taipei in 2022, China has increased the pressure on Taiwan and strenuously to Japanese plans for Yonaguni.

The Japan Times us that “up and down the 160-strong Ryukyu island chain, Japan is putting in place missile batteries, radar towers, ammunition storage sites and other combat facilities.” Tokyo is also deploying major military assets on Kyushu, the southernmost of Japan’s four main islands. These include F-35 fighter jets and long-range missiles. Tokyo is also increasing the presence of the Amphibious Rapid Deployment Brigade, Japan’s version of the US Marine Corps.

Chinese suspicions about Japan’s intentions are also fed by Tokyo’s rapid increase in defense spending. In 1976, Prime Minister Miki Takeo capped Japan’s defense spending at 1% of GNP. In 1987, Prime Minister Nakasone Yasuhiro abolished this official limit but Japan did not cross the 1% mark for decades. In December 2022, Prime Minister Kishida Fumio announced Japan would increase its defense budget from 1% to 2% by the 2027 fiscal year. To Chinese eyes, Japan is abandoning its postwar pacifism and embracing militarism again. However, it is important to remember that the increase in the Japanese budget has occurred over a period when the yen has depreciated substantially against the dollar. While the Japanese have been able to increase purchases of domestic weapons, higher budgets have not translated into proportionately more US arms: 

Yet despite higher defence spending, demography and politics mean Japan faces barriers to military development. In common with Germany, Japan is a major country looking to build a realistic military capability to face a larger potential adversary. Both have shrinking native populations and more attractive civilian opportunities for potential recruits. The Japan Self-Defense Forces regularly fall short of recruitment goals, often by 50%. Technology cannot, at present, fully compensate for major shortfalls in personnel.

Politically, Japanese leaders are becoming increasingly concerned about their reliance upon the US for defence needs. Our military sources in Tokyo share that a growing segment of these leaders expect Japan to become more capable of and more willing to engage in military actions without US support.

Even if recruitment shortfalls are overcome, and disquiet over US reliability wanes, military strength now requires advanced capabilities that remain in short supply in Japan. Just as in Germany, there are not enough skilled personnel in AI and machine learning, cybersecurity, data analytics and cloud computing. Indeed, Japan faces a general shortage of IT skills: In 2021, the Ministry of Economy, Trade and Industry (METI) reported a deficit of 220,000 IT personnel in 2018, rising to 790,000 by 2030. Japan simply does not have enough people, including those with much-needed skillsets, to prosecute a major war.

In a nutshell, China’s real and imagined fears about Japanese remilitarization are grossly exaggerated. Note that Beijing’s own defense spending has 13-fold in 30 years. The Center for Strategic and International Studies points out that China’s official defense spending was nearly $247 billion in 2025, but other estimates are much higher. One study places this figure to be $471 billion. More importantly, China has manufacturing muscle. Its navy, air force and missiles have expanded dramatically. China has dual-use satellites and technologies, and can churn out drones by the millions as well. Some analysts even argue that China is a more powerful version of pre-World War II Japan. Unsurprisingly, as Carle points out, Tokyo is hitting the military gym.

The dark shadow of history

Even though China has emerged as a global superpower, it still carries burning resentments. Our Chinese sources constantly point out that Taiwan was Japan’s first colony and Tokyo ruled the island for years until the end of World War II. Imperial Japan beat Qing China in the Sino-Japanese War, which ended with the 1895 of Shimonoseki. This inaugurated the era of , the Southern Expansion Strategy, which held that Southeast Asia and the Pacific Islands were Japan’s sphere of influence. Similar to the 1823 Monroe Doctrine that regarded Latin America as lying in the US sphere of influence, Nanshin-ron led to the creation and then expansion of the Japanese empire in Asia. 

Imperial Japan tried to turn Taiwan into a showpiece “model colony,” establishing order, eradicating disease, building infrastructure and creating a modern economy. Thanks to these , “Taiwan soon became the most-advanced place in East Asia outside Japan itself.” On the flip side, the Japanese ruthlessly crushed local rebellions and forced the Taiwanese to learn Japanese as well as absorb Japanese culture. Nevertheless, many of our Taiwanese sources say that Taiwan’s experience of Japanese rule was much better than the experience of their Chinese relatives in the 1950s and 1960s under the CCP.

In Mainland China, many still bitter memories of the period of Japanese imperial expansion after Japan’s 1931 invasion of Manchuria. On December 13, the CCP an annual national memorial ceremony — this began in 2014 after Chinese President Xi Jinping came to power and inaugurated a period of more aggressive nationalism —  for the victims of the Nanjing Massacre. In 1937, 88 years ago, Japanese troops infamously tortured, looted, raped and 100,000 to 200,000 Chinese civilians, which the country remembers to this day.

China is also emotional about another seemingly trivial and largely symbolic issue. Our Chinese sources are unhappy with Japanese leaders visiting Yasukuni Shrine. This shrine honors about 2.46 million people who died in wars from the late Edo period (1800s to 1868) to World War II. Of these, 14 were held to be “Class A war criminals” by victorious allies. They were enshrined in 1978, kicking off a diplomatic and political controversy that rages to this day. Takaichi is a nationalist who has regularly paid respects at Yasukuni in the past. Koizumi, her defense minister, , “It’s true I have paid respect there every year on the anniversary of the end of the war.” As you can expect, this has kicked off a furor in Chinese nationalist circles.

Our Japanese sources are tired of China’s constant harping on the past. They politely point out that the CCP conveniently forgets the tens of millions who died in Mao Zedong’s Great Leap Forward and the complete chaos of the Cultural Revolution. Since World War II, Japan has abided by its US-imposed pacifist , invested hugely in China and funded schemes around the world, especially in the Global South. Note that Japan is still the financial contributor to the UN.

Besides, the Japanese think that the CCP is using history as a weapon to cut the nationalist Takaichi down to size at the very start of her prime ministership. An examination of Japan’s recent history vindicates their argument. Shinzo Abe, Takaichi’s political godfather and Japan’s longest-serving prime minister, Beijing that attacking Taiwan would be “economic suicide.” In a virtual keynote on December 1, 2021, Abe said, “A Taiwan contingency is a Japanese contingency, and therefore a contingency for the Japan-U.S. alliance.” 

When he made the speech, Abe was no longer prime minister, but he was still the leading light of the ruling Liberal Democratic Party (LDP). He was echoing the 1972 US-China Joint , also known as the Shanghai ��dz����ܲԾ����é, which adopted a “One China” policy and called for “a peaceful settlement of the Taiwan question.” In the communiqué, both the US and China agreed that “international disputes should be settled on this basis, without resorting to the use or threat of force.” That is precisely what Abe and Takaichi want in relation to Taiwan.

Note that other Japanese politicians have also taken a similar view to Abe’s. In 2021, Nobuo Kishi, the then defense minister, claimed, “The peace and stability of Taiwan are directly connected to Japan.” The same year, his LDP colleague Tarō Asō, the then deputy prime minister, said, “If a major problem took place in Taiwan, it would not be too much to say that it could relate to a survival-threatening situation” for Japan. After the Russian invasion of Ukraine in 2022, Kishida, prime minister from October 2021 to October 2024, repeatedly asserted that “Ukraine today may be East Asia tomorrow,” which was clearly alluding to a potential Chinese invasion of Taiwan. Takaichi is not as out of line with her Japanese predecessors as the CCP and Chinese nationalist outrage would suggest.

Takaichi’s Taiwan remarks are viewed differently by both sides

Takaichi’s comments on Taiwan were not part of a speech or statement. She was merely responding to a question in parliament from Katsuya Okada of the Constitutional Democratic Party. The prime minister did not say that Japan would use military force to defend Taiwan or commit to any specific action in aid of Taipei in the case of a Chinese invasion. After mentioning the possibility of a “survival-threatening situation” for Japan in the case of a Taiwan contingency, Takaichi said that the Japanese government would make its judgment by synthesizing all information based on the specific circumstances of the actual situation.

Japanese diplomats painfully point out that their prime minister’s language reflects Tokyo’s consistent position on the issue. Saya Kiba, one of our Japanese authors, explains “how Japan’s strategic ambiguity, security law and US alliance constrain direct defense of Taiwan.” She points out that, while Takaichi’s explanation did not formally violate Japan’s existing Taiwan policy, it went further than previous prime ministers had dared to go in the past.

Beijing takes a different view and sees  Takaichi as a potential threat. The first female prime minister of Japan is the daughter of a policeman and is perceived as a security hawk. Takaichi has positioned herself as Abe’s heir and Beijing has no love lost for the late leader who “from Japan’s pacifist policies to confront China’s nationalistic designs.” Abe visited Yasukuni and fathered the Quadrilateral Security Dialogue (Quad) in 2007 to keep the Indo-Pacific “free and open”. The CCP has not forgotten or forgiven these actions.

China Daily, an English-language newspaper owned by the Central Propaganda Department of the CCP, has that Takaichi is hyping up the “China threat” to consolidate her right-wing political base and accelerate military expansion. In 2024, the China Institute for International Studies (CIIS) objected to the 2022 Japanese National Security Strategy that its communist neighbor to be “an unprecedented and the greatest strategic challenge” to Japan. Per CIIS, Japan these words only to rationalize and legitimize its remilitarization.

In addition, US President Donald Trump’s October visit to Japan has not gone down well with China. The dealmaker-in-chief and Takaichi that Japan would invest $550 billion into American industries and pay a baseline 15% tariff rate, apart from buying energy and weapons from the US. Beijing believes that Takaichi is appeasing Trump to win American support against China.

On the other hand, Tokyo is increasingly nervous about Beijing’s increasing belligerence. Shrill nationalist condemnation in the media, diplomatic actions, economic pressure and military actions rightly make Japan anxious. The end-of-year military drills around Taiwan described earlier rightly raise security concerns in both Taipei and Taiwan. Note that Carle and this author raised the alarm about a joint Russian and Chinese fleet Japan’s main island of Honshu in October 2021. In our eyes, this was a watershed moment and we took the view that Tokyo would have no choice but to boost its defense. As we predicted, Japan has done so since.

Today, the stage is set for rising tensions between China and Japan. At the heart of the China-Japan dispute are two contrasting worldviews. The “One China” policy is sacred for the CCP, which views a Taiwanese declaration of independence and third-party support for Taiwan’s independence as a direct threat to China’s sovereignty. Popular opinion in China patriotically supports the CCP position on Taiwan, and Chinese rhetoric on social media is increasingly jingoistic. In contrast, Japan views Taiwan as a de facto independent state and China as an increasingly aggressive revisionist power. Also, Tokyo views a Chinese threat to Taiwan as a risk to Japan’s national security. Chinese control over Taiwan would facilitate Beijing’s ability to take over islands both China and Japan claim as their own. 

China’s belligerence and Japan’s response has set into motion a chain of events that could end dangerously. Even though Japan recently its post-World War II pledge never to possess nuclear weapons, talk of acquiring its own nuclear deterrent is now in the public domain. This is a first since Japan surrendered to the US after suffering the twin nuclear disasters of Hiroshima and Nagasaki. Japanese leaders seem to be heeding the advice Carle gave them when he visited Tokyo: “Hold America as close as possible, but Japan should count only on itself.”

As a result, East Asia is increasingly dangerous. Both Japan and China are quietly preparing for a potential armed conflict. A slight misjudgment, miscalculation or misstep by leaders in Beijing or Tokyo, or even a pilot or sailor, could lead to far-reaching global consequences.

[ assisted the author in researching for and editing this article.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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Recent events illustrate the rising tensions of the new Cold War in the Pacific. From June to September of this year, the Chinese and Russian militaries conducted joint maneuvers that ranged from live-fire in the South China Sea to air patrols circling Japan and even US airspace in . To respond to what Moscow “rising geopolitical tension around the world,” such actions culminated last month in a joint Chinese–Russian that mobilized 400 ships, 120 aircraft and 90,000 troops in a vast arc from the Baltic Sea across the Arctic to the northern Pacific Ocean. While kicking off such monumental maneuvers with China, Russian President Vladimir Putin accused the US of “trying to maintain its global military and political dominance at any cost” by “increasing [its] military presence… in the Asia-Pacific region.”

“China is not a future threat,” US Secretary of the Air Force Frank Kendall in September. “China is a threat today.” Over the past 15 years, Beijing’s ability to project power in the Western Pacific, he claimed, had risen to alarming levels. He said the likelihood of war was “increasing” and, he predicted, it will only “continue to do so.” An anonymous senior Pentagon official that China “continues to be the only U.S. competitor with the intent and… the capability to overturn the rules-based infrastructure that has kept peace in the Indo-Pacific since the end of the Second World War.”

Indeed, regional tensions in the Pacific have profound global implications. For the past 80 years, an island chain of military bastions running from Japan to Australia has served as a crucial fulcrum for US global power. To ensure that it will be able to continue to anchor its “defense” on that strategic shoal, Washington has recently added new overlapping alliances while encouraging a massive militarization of the Indo–Pacific region. Though bristling with armaments and seemingly strong, this ad hoc Western coalition may yet prove, like NATO in Europe, vulnerable to sudden setbacks from rising partisan pressures, both in the US and among its allies.

Building a Pacific bastion

For well over a century, the US has struggled to secure its vulnerable western frontier from Pacific threats. During the early decades of the 20th century, Washington maneuvered against a rising Japanese presence in the region. These actions produced geopolitical tensions that led to Tokyo’s attack on the US naval bastion at Pearl Harbor that began World War II in the Pacific. After fighting for four years and suffering nearly 300,000 casualties, the US defeated Japan and won unchallenged control of the entire region.

Aware that the advent of the long-range bomber and the future possibility of atomic warfare had rendered the historic concept of coastal defense irrelevant, in the post-war years Washington extended its North American “defenses” deep into the Western Pacific. Starting with the expropriation of 100 Japanese military bases, the US built its initial postwar Pacific naval bastions at Okinawa and, thanks to a 1947 agreement, at Subic Bay in the Philippines. As the Cold War engulfed Asia in 1950 with the beginning of the Korean conflict, the US extended those bases for 5,000 miles along the entire Pacific littoral through mutual-defense agreements with five Asia–Pacific allies: Japan, South Korea, Taiwan, the Philippines and Australia.

For the next 40 years to the very end of the Cold War, the Pacific littoral remained the geopolitical fulcrum of US global power, allowing it to defend North America and dominate Eurasia. In many ways, the US geopolitical position astride the axial ends of Eurasia would prove the key to its ultimate victory in the Cold War.

After the Cold War

Once the Soviet Union collapsed in 1991 and the Cold War ended, Washington cashed in its peace dividend, weakening that once-strong island chain. Between 1998 and 2014, the US Navy from 333 ships to 271. That 20% reduction, combined with a shift to long-term deployments in the Middle East, degraded the Navy’s position in the Pacific. Even so, for the 20 years following the Cold War, the US would enjoy what the Pentagon “uncontested or dominant superiority in every operating domain. We could generally deploy our forces when we wanted, assemble them where we wanted, operate how we wanted.”

After the September 11 terrorist attacks on the US, Washington turned from heavy-metal strategic forces to mobile infantry readily deployed for counterterror operations against lightly armed guerrillas. After a decade of fighting misbegotten wars in Afghanistan and Iraq, Washington was stunned when a rising China began to turn its economic gains into a serious bid for global power. As its opening gambit, Beijing started in the South China Sea, where oil and natural gas deposits are . It also began expanding its navy, an unexpected challenge that the once-all-powerful US Pacific command was remarkably ill-prepared to meet.

In response, in 2011, President Barack Obama a strategic “pivot to Asia” before the Australian parliament and began rebuilding the US military position on the Pacific littoral. After withdrawing some forces from Iraq in 2012 and refusing to commit significant numbers of troops for regime change in Syria, the Obama White House a battalion of Marines to Darwin in northern Australia in 2014. In quick succession, Washington gained access to five near the South China Sea and a new South Korean naval base at on the Yellow Sea. According to Secretary of Defense Chuck Hagel, to operate those installations, the Pentagon to “forward base 60 percent of our naval assets in the Pacific by 2020.” Nonetheless, the unending insurgency in Iraq continued to slow the pace of that strategic pivot to the Pacific.

Despite such setbacks, senior diplomatic and military officials, working under three different administrations, launched a long-term effort to slowly rebuild the US military posture in the Asia–Pacific region. After “a return to great power competition” in 2016, Chief of Naval Operations Admiral John Richardson that China’s “growing and modernized fleet” was “shrinking” the traditional US advantage in the region. “The competition is on,” the admiral warned, adding, “We must shake off any vestiges of comfort or complacency.”

Responding to such pressure, the administration of President Donald Trump added the construction of 46 new ships to the Pentagon , which was to raise the total fleet to 326 vessels by 2023. Support ships aside, when it came to an actual “fighting force,” by 2024 China had the world’s with 234 “warships.” The US deployed only 219, with Chinese combat capacity, according to US Naval Intelligence, “increasingly of comparable quality to U.S. ships.”

Paralleling the military build-up, the State Department reinforced the US position on the Pacific littoral by negotiating three relatively new diplomatic agreements with Asia–Pacific allies Australia, Britain, India and the Philippines. Though those ententes added some depth and resilience to the US posture, the truth is that this Pacific network may ultimately prove more susceptible to political rupture than a formal multilateral alliance like NATO.

Military cooperation with the Philippines

After nearly a century as close allies through decades of colonial rule, two world wars and the Cold War, US relations with the Philippines suffered a severe setback in 1991. That country’s senate refused to renew a long-term military bases agreement, forcing the US 7th Fleet out of its massive naval base at Subic Bay.

After just three years, however, China occupied some shoals also claimed by the Philippines in the South China Sea during a raging typhoon. Within a decade, the Chinese had started transforming them into a network of military bases, while pressing their claims to most of the rest of the South China Sea. Manila’s only response was to a rusting World War II naval vessel on Ayungin shoal in the Spratly Islands, where Filipino soldiers had to fish for their supper. With its external defense in tatters, in April 2014 the Philippines an Enhanced Defense Cooperation Agreement with Washington. This allowed the US military quasi-permanent facilities at five Filipino bases, including two on the shores of the South China Sea.

Although Manila won a from the Permanent Court of Arbitration at the Hague that Beijing’s claims to the South China Sea were “,” China dismissed that decision and continued to build its bases there. And when Rodrigo Duterte became president of the Philippines in 2016, he revealed a new policy that included a “separation” from the US and a toward China. That country rewarded the policy with promises of massive developmental aid. By 2018, however, China’s army was anti-aircraft missiles, mobile missile launchers and military radar on five artificial “islands” in the Spratly archipelago that it had built from sand its dredgers sucked from the seabed.

Once Duterte left office, as China’s Coast Guard harassed Filipino fishermen and blasted Philippine naval vessels with water cannons in their own territory, Manila once again started calling on Washington for help. Soon, US Navy vessels were conducting “freedom of navigation” patrols in Philippine waters and the two nations had staged their biggest ever. In the April 2024 edition of that exercise, the US deployed its mobile Typhon Mid-Range capable of hitting China’s coast, sparking a bitter from Beijing that such weaponry “intensifies geopolitical confrontation.”

Manila has matched its new commitment to the US alliance with an unprecedented rearmament program of its own. Just last spring, it signed a $400 million deal with Tokyo to five new Coast Guard cutters, started receiving Brahmos from India under a $375 million contract and continued a billion-dollar deal with South Korea’s Hyundai Heavy Industries that will produce ten new naval vessels. After the government a $35 billion military modernization plan, Manila has been negotiating with Korean to procure modern jet fighters. This is a far cry from a decade earlier when it had no operational .

Showing the scope of the country’s reintegration into the Western alliance, just last month Manila hosted joint freedom of navigation in the South China Sea with ships from five allied nations: Australia, Japan, New Zealand, the Philippines and the US.

Quadrilateral Security Dialogue and the AUKUS alliance

While the Philippine Defense Agreement renewed US relations with an old Pacific ally, the Quadrilateral Security Dialogue involving Australia, India, Japan and the US, first launched in 2007, has now extended US military power into the Indian Ocean. At the 2017 Association of Southeast Asian Nations (ASEAN) Summit in Manila, four conservative national leaders led by Japanese Prime Minister Shinzo Abe, Indian Prime Minister Narendra Modi and Trump decided to the “Quad” entente (after a decade-long hiatus while Australia’s Labour Party governments cozied up to China).

Just last month, President Joe Biden hosted a “” where the four leaders agreed to expand joint air operations. In a hot-mike moment, Biden bluntly : “China continues to behave aggressively, testing us all across the region. It is true in the South China Sea, the East China Sea, South Asia, and the Taiwan Straits.” China’s Foreign Ministry : “The U.S. is lying through its teeth” and needs to “get rid of its obsession with perpetuating its supremacy and containing China.”

Since 2020, however, the Quad has made the annual Malabar in India into an elaborate four-power drill in which aircraft carrier battle groups maneuver in waters ranging from the Arabian Sea to the East China Sea. To contest “China’s growing assertiveness in the Indo-Pacific region,” India that the latest exercise this October would feature live-fire maneuvers in the Bay of Bengal, led by its flagship aircraft carrier and a complement of MiG-29K all-weather jet fighters. Clearly, as Modi it, the Quad is “here to stay.”

While the Trump administration revived the Quad, the Biden White House has promoted a complementary and controversial AUKUS defense compact between Australia, the United Kingdom and the US (part of what Michael Klare has called the “” of US foreign and military policy). After months of secret negotiations, their leaders that agreement in September 2021 as a way to fulfill “a shared ambition to support Australia in acquiring nuclear-powered submarines for the Royal Australian Navy.”

Such a goal sparked howls of diplomatic protests. Angry over the sudden loss of a $90 billion contract to supply 12 French submarines to Australia, France the decision “a stab in the back” and immediately its ambassadors from both Canberra and Washington. With equal speed, China’s Foreign Ministry the new alliance for “severely damaging regional peace… and intensifying the arms race.” In a pointed remark, Beijing’s official Global Times newspaper said Australia had now “turned itself into an adversary of China.”

To achieve extraordinary prosperity, thanks in significant part to its iron ore and other exports to China, Australia had exited the Quad entente for nearly a decade. Through this single defense decision, Australia has allied itself firmly with the US. It will to British submarine designs and top-secret US nuclear propulsion, joining the elite ranks of just six powers with such complex technology.

Australia will spend a monumental to build eight nuclear submarines at its Adelaide shipyards over a decade. Additionally, it will host four US Virginia-class nuclear subs at a naval base in Western Australia and buy as many as five of those stealthy submarines from the US in the early 2030s. Under the tripartite alliance with the US and Britain, Canberra will also face additional costs for the joint development of undersea drones, hypersonic missiles and quantum sensing. Through that stealthy arms deal, Washington has seemingly won a major geopolitical and military ally in any future conflict with China.

Stand-off along the Pacific littoral

Just as Russia’s aggression in Ukraine strengthened the NATO alliance, so China’s challenge in the fossil-fuel-rich South China Sea and elsewhere has helped the US rebuild its island bastions along the Pacific littoral. Through a sedulous courtship under three successive administrations, Washington has won back two wayward allies: Australia and the Philippines. They are once again anchors for an island chain that remains the geopolitical fulcrum for US global power in the Pacific.

Still, with more than 200 times the ship-building capacity of the US, China’s in warships will almost certainly continue to grow. In compensating for such a future deficit, the US’s four active allies along the Pacific littoral will likely play a critical role. (Japan’s navy has more than 50 warships and South Korea’s 30 more.)

Despite such renewed strength in what is distinctly becoming a new cold war, the US’s Asia–Pacific alliances face both immediate challenges and a fraught future. Beijing is already putting relentless pressure on Taiwan’s sovereignty, breaching that island’s airspace and crossing the median line in the Taiwan Straits monthly. If Beijing turns those breaches into a crippling embargo of Taiwan, the US Navy will face a hard choice between losing a carrier or two in a confrontation with China or backing off. Either way, the loss of Taiwan would sever the US’s island chain in the Pacific littoral, pushing it back to a “second island chain” in the mid-Pacific.

As for that fraught future, the maintenance of such alliances requires a kind of national political will that is by no means assured in an age of populist nationalism. In the Philippines, the anti-US nationalism that Duterte personified retains its appeal and may well be adopted by some future leader. More immediately in Australia, the current has already faced strong dissent from members blasting the AUKUS entente as a dangerous transgression of their country’s sovereignty. And in the US, Republican populism, whether Trump’s or that of a future leader like J.D. Vance could curtail cooperation with such Asia–Pacific allies, simply walk away from a costly conflict over Taiwan or deal directly with China in a way that would undercut that web of hard-won alliances.

And that, of course, might be the good news given the possibility that growing Chinese aggressiveness in the region and a US urge to strengthen a military alliance ominously encircling that country could threaten to turn the latest Cold War ever hotter. This would transform the Pacific into a genuine powder keg and could lead to a war that would, in our present world, be almost unimaginably destructive.

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— Antonio Gramsci, Selections from the Prison Notebooks.

On September 22, 2024, a from CNN reverberated across Sri Lanka: “Sri Lankans elect Marxist-leaning Dissanayake as president to fix the economy.” The deceptively simple headline conceals the hope, frustration and the persistent change that characterize today’s Sri Lanka. National People’s Power (NPP) party leader Anura Kumara Dissanayake now stands at the helm. Yet questions echo in the collective consciousness: Is this the dawn of genuine transformation, or merely another chapter in Sri Lanka’s lengthy political saga? This time, the air feels charged with an unsettling potential.

What does the new president represent?

The Sri Lankan people’s yearning to disrupt the status quo has eclipsed their fear of the unknown — the nebulous movement embodied by AKD, a leader emerging from the rural hinterlands to topple the established order represented by the seasoned Ranil Wickremesinghe, a six-time president.

From his inaugural moment, AKD’s presidency marks an audacious experiment for the country. His NPP is a heterogeneous ranging from radical leftists rooted in the Janatha Vimukthi Peramuna (JVP) to progressive elements. Here, we witness a -esque experiment in adapting Marxist movements to the ever-shifting landscape of social conditions.

Gramsci, a thinker who grappled with the nuances of ideological purity, argued for the necessity of pragmatism to forge a broader appeal. AKD’s own pragmatic turn has inspired a tentative optimism not only within Sri Lanka but also in the cautious hearts of its neighbors, especially India. The pivotal question persists: Can AKD balance reform with pragmatism during his presidency, or will he become ensnared in the very contradictions he seeks to transcend?

The NPP positions itself as a reformist entity distinct from its traditional Marxist roots, seeking to redefine its identity within the broader historical panoply of leftist movements. Yet — as with all revolutions — the shadow of past dogmas hovers, threatening to undermine the delicate foundations of reform.

AKD’s election symbolizes a profound shift in Sri Lankan politics and Sri Lankan socialism. In the 1970s, the JVP’s rigid adherence to Marxist orthodoxy privileged revolutionary fervor over pragmatic reform. Today, while the NPP acknowledges its origins, it has redefined itself as prioritizing governance and systemic reform over ideological purity. This evolution, however, is fraught with uncertainty and internal conflict, for the pull of old-guard sentiments within the JVP may clash with the drive for pragmatic governance.

How are Sri Lanka’s neighbors reacting?

As he navigates these turbulent waters, AKD faces formidable geopolitical challenges in the competing interests of India and China. Scholars  Harsh Pant and Aditya Gowdara Shivamurthy , “Given the economic and geopolitical scenario, pragmatism is likely to take precedence — Sri Lanka will continue to balance between India and China.” Their insights reveal a landscape shaped by competing aspirations, where AKD’s focus on governance could forge a path toward stability — though whether this is a hopeful vision or an illusory one remains an open question.

However, India’s apprehension looms large as AKD’s presidency unfolds. The strength of the NPP, particularly in its connections to Beijing, raises alarms in New Delhi, which views the burgeoning partnership as a potential threat to its own regional influence. This fear is not unfounded, since India faces the possibility that Sri Lanka under AKD might continue the economic tango with China — trading closer alignment for survival. India fears that AKD might inadvertently lean toward China. The previous Rajapaksa regime did so, which cultivated ties with Beijing, allowing increased Chinese influence through infrastructure projects like the Hambantota Port. India’s security apparatus remains vigilant; some warn that AKD’s presidency could herald a recalibration of Sri Lanka’s foreign policy that may favor China at India’s expense.

As New Delhi grapples with these fears, it remains intent on countering any perceived drift of Kotte towards Beijing. Indian officials are likely to engage with AKD’s administration to promote stability and cooperation while subtly exerting pressure to ensure Sri Lanka does not slip further into China’s orbit.

This geopolitical backdrop complicates AKD’s administration, as he must navigate the intricate balance between fostering relationships with both powers while maintaining domestic support. At the heart of this precarious experiment lies a pressing challenge: addressing the that shadows AKD’s ascent.

AKD’s ability to navigate the labyrinthine reforms required by the International Monetary Fund (IMF) and the intricate dance of debt restructuring will define the early chapters of his presidency. To secure the fourth tranche of the $3 billion IMF program, Sri Lanka must demonstrate measurable progress in fiscal reforms and debt sustainability. The urgency of these reforms is palpable, for the threat of further financial deterioration looms large, threatening the very fabric of the nation.

Debt restructuring is a particularly thorny issue, fraught with the weight of a massive external debt burden and exacerbated by years of mismanagement. AKD inherits a complex negotiation landscape, where cooperation from key creditors — China, India and private bondholders — will be critical. In the days preceding the election, Wickremesinghe that “any move to alter the basics of the agreement could delay a fourth tranche of nearly $3 billion from the IMF package, which is crucial for economic stability.” Such warnings echo in the corridors of power, reminding us of the fragile balancing act AKD must perform.

While China has already in the form of debt rollovers, the way toward more comprehensive restructuring deals still needs to be discovered. Beijing’s strategic interests, particularly regarding infrastructure projects under the Belt and Road Initiative (BRI), complicate the process. India, eager to witness stability in Sri Lanka, stands ready to support AKD’s reformist agenda, yet the shadows of previous projects, like the initiative, loom large, casting a shadow of uncertainty on future collaboration.

How will AKD move forward?

AKD’s administration must navigate the treacherous waters of fiscal consolidation, implementing IMF-mandated measures that include tax reforms, public revenue generation and enhanced governance in public enterprises. While these reforms are crucial for economic stabilization, they are not without risks. Public discontent could rise as the specter of austerity measures threatens to exacerbate inflation and unemployment.

The balancing act between India and China constitutes one of AKD’s most formidable challenges. On the one hand, India anticipates that his rise could distance Sri Lanka from the Rajapaksa-era ties to Beijing, marred by allegations of corruption. Conversely, AKD’s historical ties to China and the NPP’s pragmatic stance suggest that Beijing may still see him as a favorable partner. As a Chinese journalist candidly expressed, BRI projects could gain momentum under AKD’s presidency, perhaps even surpassing the ambitions of his predecessors.

This intricate balancing act will inevitably dominate AKD’s foreign policy. His early promise to cancel the controversial , while unlikely to fracture relations with India immediately, signals a willingness to make bold decisions that challenge external powers. Yet, whether such actions will tilt the balance in Sri Lanka’s favor or further entangle it in diplomatic complexities remains shrouded in uncertainty — much like his earlier campaign against the US , which revealed a readiness to confront foreign influence when politically expedient.

Amidst these challenges, AKD’s presidency offers a flicker of hope. The ravaged economy, scarred by years of mismanagement, yearns for bold reform. AKD’s election embodies the public’s longing for something new, a desire to transcend the failures of the past. His presidency will be defined by how he navigates internal reforms and his capacity to traverse a complex geopolitical landscape deftly. The stakes are high, and the potential for failure looms large, yet the possibility of transformation lies within this uncertainty.

Sri Lanka has seen political experiments before; many leaders have succumbed to the very establishment they once vowed to dismantle. But AKD’s presidency symbolizes a nascent possibility — a collective aspiration for a better future. Success will not merely depend on policy but on forging unity in a nation long fractured by political and economic strife.

As AKD prepares for parliamentary elections in November — an event that could define his capacity to enact reforms — the lingering questions remain: Will the Sri Lankan people, civil society and international partners rally behind arduous yet necessary changes? And can AKD maintain the delicate equilibrium between ideology and pragmatism while steering Sri Lanka through the turbulence of geopolitical rivalries? Only time will unveil the true nature of this bold new experiment, a venture into the unknown where hope and despair coexist in a fragile embrace. The future, like Gramsci’s modernity, hangs between hope and uncertainty, awaiting its verdict in a world without illusions.

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Everything may seem unchanged–Josep Borrell Fontenes, The High Representative of the European Union for Foreign Affairs and Security Policy, continues to focus on his prominent political issues. The leaders of France, Germany, and the UK remain in the primetime news spotlight. European media produce a considerable amount of content featuring prominent European leaders. Sadly, all of this is just a beautiful facade.

In reality, things are quite bleak for Europeans. Borrell seems unable to become the voice of a unified Europe on the international stage, although he still desires it greatly. It was well-highlighted by POLITICO-Europe, “Borrell has always condemned the Hamas attacks, called for the unconditional liberation of all hostages, for a humanitarian pause leading to a sustainable cease-fire, for the humanitarian provision and a two-state solution, along the same line of the European Council conclusions that leaders unanimously agreed in March.” Nevertheless “during a meeting of EU leaders, German Chancellor and his Austrian counterpart Karl Nehammer confronted Josep Borrell on his months-long outspoken critique of Israel as the death toll in Gaza mounted, according to two officials briefed on the exchange.”

It looks like the euro bureaucracy restricts Borrell’s freedom. He always feels free to give . E.g. he is notorious for his “garden vs. jungle” metaphor that made him the EU’s top diplomat.  Many times, he ends up in awkward situations. Now, hardly anyone can take him seriously and perceive him as an influential politician following his own policy. On the contrary, his behavior represents what the global West will become – noisy but increasingly irrelevant.

One after another, new nationally oriented African leaders asked France to leave the region. Following coups in those countries, neighboring Mali and Burkina Faso have already kicked out France’s forces. This has weakened its influence in its amid a wave of anti-French sentiment.

Paris does it without resistance, not even formally attempting to negotiate its interests. For more than two months, French President Emmanuel Macron took a defiant stance, ignoring the ultimatum set by the junta in Niger, who came to power in July after a military coup. France refused to engage with the junta leaders or move on their demands to remove stationed in the country to fight terrorism.   

It withdrew its military contingents. Meanwhile, President Macron is trying to make history calling for an “” during the Olympics scheduled to take place from July 26 to August 11, 2024, in Paris.“We will do everything to have an Olympic truce, we will work on it,” Macron said in an interview with BFM television. But his voice is still weak and Europe is reluctant to listen to him, let alone Moscow. Macron pleads for an Olympic truce but suffers . What happens now does not align well with France’s international reputation and Macron’s ego.

Half of the opposes China’s influence. At the dawn of a new political era, the German population’s growing mistrust of China has significant implications for the country’s foreign policy. The other half “dreams” of Beijing coming to their country and “taking it over as an investor.” associations widely welcome China’s economic strategy.  

However, when Scholz arrived in China on an official visit this April, he faced a change in attitude toward him by the Chinese officials. Scholz was forced to deal with the low-level diplomatic reception. The Vice Mayor Zhang Guozhi was the only official who met him upon arriving at the airport. It was a flagrant breach of to receive foreign leaders or diplomats at the wrong level. It sends a negative message when you receive or offer to receive another country leader at a lower level. The MFAs of any country know that, but Scholz had no choice but to accept this reality. 

At Tel Aviv airport, air sirens forced Chancellor Scholz to lie on the ground due to a missile attack threat from Hezbollah. That was a severe blow to the image of the head of one of Europe’s leading countries. People in the Middle East will remember this episode for a long time. Video showed panicked German officials fleeing a plane amid a missile threat in Israel became top news. It is challenging to follow up the tough guy position during future contacts after such public experience, especially in the Middle East, where value leaders and individuals who uphold personal strength are challenging.

Despite Britain not being a part of the EU anymore, it maintains the first-line position among the leaders of Europe. London nowadays took a wait-and-see approach and preferred not to stick its neck out unnecessarily. The English have always been characterized by a healthy sense of caution. Prime Minister Rishi Sunak is formally active and visible, traveling the world and talking even more. He says the right things, but they are not his thoughts and ideas. He repeats everything already said at various levels in Washington, not adding personal insight into the situation. This wise behavior allows him to avoid taking responsibility and escape unnecessary scrutiny of his personality.

The above is just a small part of what people in Asia and the Global South observe. And they are not at all happy about it. What these countries need is and development. Alongside North America, Asia is where the European Union and its member states are most deeply economically intertwined – through trade, supply chains, investment, financial flows, and mutual reliance on market demand.  

But it is only possible when a partner, even a stronger one, behaves consistently and predictably. As even Prince Michael of Liechtenstein admits, European countries say they base their on values – but doing so has led to inconsistency in how they treat international partners.  Europe is these qualities in the eyes of people living on other continents.

Many people in Asia have come to perceive Europe as a political open space leaning towards its decline. They still have money and technology, but long-term investors and manufacturing capacity are steadily moving to other world regions. The stability of the European economy depends more and more on China and Asia. The leaders of Europe are already rushing to the region and are looking back and forth at each other.

Europeans still influence global politics, e.g. as a global actor, the EU and the UK inspire countries worldwide and strengthen international development in many ways. At the same time, they have continued to fail to influence the end of the war in Ukraine. The conflict has been going on for three years, and European approaches still oscillate from bravado to panic. It is unlikely that Moscow or Kyiv will take such a political approach seriously. Europe should be more persistent and figure out its goals, ways and means more unambiguously, speaking with one voice to clarify its position for everybody.

Human rights continue to represent one of the core values of Europe. But in the face of the conflict in Gaza, many European countries are losing the moral right to lecture others on the issue. Although this is not just a European problem, the Europeans are not able to come up with an effective formula to stop the endless and merciless bloodshed on both sides.

The results of the European elections held over the past month — notably, the significant of right-wing parties — have sent another clear message. Europeans are tired of dealing with the consequences of current social and economic policies and want change. 

Calling snap elections in France for June 9, Macron described his decision as an “act of confidence.” However, his centrist Renaissance party showed a significant lag (21.27%) behind the far-right Rassemblement National (31.4%) in the first round. While he managed to of total defeat by with the Left to exclude Rassemblement National, his position is seriously compromised. This suggests that Macron’s “confidence” stemmed from his erratic policies, which lost touch with the real issues faced by the French people. 

On July 4, Britain’s ruling Conservative Party was thrown out of government after 14 years of rule. Here, unlike on the continent, the establishment belongs to the Right, and it was to the Left that the people turned to express their discontent. The Labour Party won a landslide victory with 411 out of the House of Commons’ 650 seats. Voters deserted the Sunak-led ruling Conservative Party due to his numerous mistakes, which have led the country to its current state.  

Considering what is happening now, it would be understandable for Asian countries to seek more stable and predictable relations. That’s why so many governments are willing to join . Countries from Iran to Saudi Arabia, Argentina, Algeria, Indonesia, Egypt, Ethiopia, Cuba and Kazakhstan have considered joining.

China’s One Belt, One Road initiative also attracts an increasing number of supporters. There are 150 countries formally affiliated with the Initiative, and six more are considering joining it shortly. Cooperation within the Association of Southeast Asian Nations (ASEAN) and the Comprehensive Regional Economic Partnership is gaining momentum. Europe and Western countries participated insignificantly in all of this. Once again, in its history, Europe has faced the need to clearly understand itself and its role in the rapidly changing modern world. The emerging confrontation between the West and the East requires an adequate and balanced response.

Europe has to stop reflecting on the past. The old international world order is already fading into the past. The Global South is developing rapidly and demands fair consideration of its interests. Asia is closely watching Europe lose its power but dreams of its colonialism-based part of the US-led rule-based order. Europeans need to accept the new reality as quickly as possible and keep up with the times.

[ edited this piece.]

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The DPP’s main rival is the Chinese nationalist Kuomintang party. The Kuomintang once ruled mainland China but evacuated to the island of Taiwan in 1949 after losing the Chinese Civil War to Mao Zedong’s Chinese Communist Party (CCP). The Kuomintang claimed to be the rightful government of the entire Republic of China (RoC) and vowed one day to return to the mainland. To this day, the official name of Taiwan is still “Republic of China.”

The Kuomintang established an authoritarian rule over their new island home which lasted for decades. During the 1980s and 1990s, however, Taiwan democratized. Unlike the CCP-ruled mainland, Taiwan today boasts a robust multiparty democracy.

The Kuomintang has long since abandoned dreams of rescuing the mainland from communism by force. Still, they see themselves as Chinese, hope one day to achieve a peaceful reunification of China and seek to maintain cordial relations with the mainland.

In contrast, the DPP believes that Taiwan and China are two separate nations. In the mainstream DPP view, the Republic of China is Taiwan, an independent nation distinct from mainland China. They favor closer ties with Washington and seek to distance Taipei from Beijing. Thus, Zhongnanhai views the DPP, and Lai in particular, with hostility.

Taiwan’s new president is weaker

Lai identifies himself as a “pragmatic worker for Taiwanese independence.” In his May 20, 2024 inauguration speech, Lai demonstrated a departure from Tsai’s approach, signaling a more assertive stance on Taiwanese sovereignty.

Beijing saw Lai’s speech as a provocation and, three days later, launched two days of intensive military exercises around Taiwan. These maneuvers, labeled by the Chinese military as “strong punishment” for Taiwan’s “separatist acts,” marked a significant escalation in cross-strait tensions. The exercises were not limited to the vicinity of Taiwan’s main island but extended to target Taipei-controlled islands such as Kinmen, Matsu, Wuqiu, and Dongyin for the first time. These islands lie close to the Chinese coast, according to maps released by China’s People’s Liberation Army (PLA). The Chinese Communist Party (CCP) distrusts Lai and is using these exercises to send Lai a clear signal. 

Despite Beijing’s firm stance, immediate escalation appears unlikely. Although the DPP kept control of the presidency in this year’s elections, it lost its majority in the legislature. The Kuomintang now controls three more seats than the DPP does. Thus, Beijing perceives Lai as potentially wielding less influence than Tsai.

Lai is clearly weaker than his predecessor. He took the presidency with 40% of the vote; in 2016 and 2020, Tsai had dominated with 56% and 57%, respectively.

With the DPP losing its majority in the Legislative Yuan, Lai confronts significant challenges in advancing his agenda. In May, the Kuomintang joined with the third party, the Taiwan People’s Party, to pass a controversial reform bill. This legislation significantly enhances the Legislative Yuan’s authority to oversee the executive; to interrogate officials, military figures and citizens; and to demand documentation. Tens of thousands of protestors filled the streets of Taipei, calling the reforms unconstitutional. Lawmakers engaged in scuffles on the Legislative Yuan floor. Amid incidents of inter-party violence on the street, Taiwan’s future political trajectory remains uncertain.

[ wrote the first draft of this piece.]

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Xi has cleverly cast China as a defender of the status quo, pledging support for “” guided by the UN Charter. Ultimately, however, the Chinese Communist Party (CCP) wants to preserve only those elements of the existing order that helped China to rise over the past two generations — such as the world trade rules that enabled it to become the manufacturing epicenter of the world by encouraging inflows of foreign capital and technology.

Beijing instead shuns or undermines those principles that do not directly benefit China or that stand in the way of its rise. Xi’s declarations for a “global security ” or a “ of shared future for mankind” are really more of a call for the continued rise of the CCP and China. “Shared future” is another way of saying ‘“development first” while rejecting any order guided by universal values.

Rejecting the West’s moral high ground

Defenders of Chinese ambition would argue that communist leaders have a justifiable right to reject or reshape global rules written decades ago when they were not part of the discussion. Other analysts question just how disruptive China could actually be. But China does not need to replace every current rule in order to make its mark. What is important is that China is undermining the legitimacy upon which those rules are based. According to Chinese rhetoric, the international rules-based order touted by the United States is nothing more than power politics, a bid to replace commonly accepted international laws and norms with the rules of a few countries.

Xi rejects the premise that World War II granted liberal democracies a mandate to create the world in their image. arguing that Western advocacy of universal human rights — in  and elsewhere — is a new form of colonialism.

In 2022, Xi gave Western leaders an insight into China’s human rights outlook. President of the European Council Charles Michel had argued that Europe’s dark past, notably the Holocaust, obliges its leaders to call out human rights abuses across the world, including, of course, in China. Xi that the Chinese have even stronger memories of suffering at the hands of colonial powers. He cited treaties forcing China to open its markets and cede territory in the nineteenth and early twentieth centuries, and racist banning Chinese people and dogs from parks in European-run enclaves. Xi recalled the massacre of civilians at Nanjing by Japanese invaders in 1937. He claimed that such aggression left the Chinese people with strong feelings about human rights and foreigners who employ double standards to criticize other countries. The Chinese government seeks to reopen old arguments about how to balance sovereignty with individual freedoms.

That is an important aspect of the human rights debate — China has indeed suffered at the hands of foreign powers. And the US government is indeed in the habit of lecturing to other governments about human rights when it has its own litany of human rights abuses, from the slaughter of American Indians and slavery to racism, alleged war crimes, and the treatment of immigrants under Trump.

A Machiavellian strategy

Xi believes in the inexorable decline of the American-led world order, with its professed concern for rules and human rights. He would like to see world order become a more transactional system of bilateral agreements between great powers.

We can see how this outlook plays out in practice by looking at China’s response to the Russia–Ukraine war. There, China has played an awkward hand . In short, its goals are to ensure that Russia is subordinate to China, but not so weak that Putin’s regime implodes; burnish its own credentials as a peacemaker in the eyes of the Global South; and undermine the perceived legitimacy of Western sanctions and military support as a tool of foreign policy. 

Xi’s campaign extends to the Middle East as well. In 2023, China skillfully brokered a detente between Iran and Saudi Arabia that served to emphasize the West’s  in the region over the past two decades. Xi the Global Civilization Initiative, which argues that countries should “refrain from imposing their own values or models on others and from stoking ideological confrontation.”

Xi’s slogans seek to subvert the normative language of the twentieth century so that multilateralism becomes synonymous with a world that rejects universal values and is run by balancing great-power interests. By doing so, China is pushing back against efforts to contain the perceived military threat it poses as well as promoting an economic growth model which embraces autocratic states without imposing conditions on them.

Of course, the real point of Xi’s approach to foreign policy is to ensure the supremacy and permanence of the CCP. Yet the agglomeration of China’s bilateral relationships with some of the world’s most reprehensible regimes creates contradictions. For example, China supports Iran but chooses to ignore its ongoing nuclear escalation which threatens China’s other client states in the region.

China sees itself as superpower that can attain influence without winning affection, obtain power without trust, and have a global vision without universal human rights. Most of the world’s people do not identify with such a vision, but that has not prevented the Chinese government from proceeding apace with its warped orientation to the rest of the world.

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The overarching of Xi Jinping Thought, or Xi’ism, is “upholding and developing socialism with Chinese characteristics to realize socialist modernization and national rejuvenation.” Xi’ism promotes 14 fundamental principles, which include “a people-centered approach,” “law-based governance,” “upholding core socialist values,” “ensuring harmony between humans and nature,” “upholding absolute Party leadership over the people’s forces,” and “promoting the building of a community with a shared future for humanity” amongst others.

While most of these principles seem worth pursuing, their implementation results in stringent restrictions on individual freedoms.

China’s ethnic policy

Western governments and media have extensively criticized President Xi and the Communist Party of China (CPC) for their forceful assimilation of ethnic Uyghurs, Tibetans and Mongolians into China’s majority Han culture. In recent years, Beijing has indeed intensified the pressure on Chinese ethnic minorities not just to integrate, but to fully assimilate into the Han culture. Those who resist are forcefully assimilated using any means deemed necessary by the CPC.

The West’s central contention is that ethnic minorities should be granted the right to preserve their distinct cultural, religious and social identities. They should be also allowed to manage their own regions as real autonomies, with only limited intervention from the central government in Beijing. While these ethnic and political rights are enshrined in the Constitution of China, the fact is that Beijing has ignored them for the sake of engineering a new .

What is less well-known in the in the West is that one central objective of Xi’ism is to assimilate the approximately 1.2 billion culturally eclectic ethnic Hans into a new Chinese national identity. The values, objectives and structure of this new nation are meticulously defined by Xi’ism and implemented in a country-wide social engineering program supervised of the CPC. By implementing this social engineering program, Beijing intends to strengthen the social cohesion of the 1.4 billion Chinese to ensure that the country will continue prospering as a nation-state. In turn, this prosperity should safeguard the legitimacy of the CPC’s absolute leadership in the eyes of the Chinese people.

Xi’ism has had its share of success

So far, the CPC leadership has been successful in turning a failed country into a prosperous one. As per the World Bank’s , “Since China began to open up and reform its economy in 1978, GDP growth has averaged almost 10 percent a year, and more than 800 million people have been lifted out of poverty.” This growth continued under Xi’s tenure, which began in 2013. From 2013 until the beginning of the COVID-19 pandemic, Chinese economic growth averaged around .

Without question, Xi’s program has numerous individual and social rights, such as freedom of expression and assembly. Nevertheless, the CPC’s success in providing a prosperous life for most of the 1.4 billion Chinese cannot be denied.

It is Xi’s belief that one of the cornerstones on which to build this success is China’s social cohesion To achieve this, Beijing is implementing a social engineering program. Every society, in reality, is a construct. Still, the idea of socially engineering a society is not welcomed in Western societies. This is because of deep-rooted Western beliefs and values such as the assumption that each individual should be allowed to freely define his identity and choose his way of life. Still, much like any structure, every society has to be engineered.

Western societies are engineered, too. Otherwise, they would not be societies at all. An obvious fact showing that this is the case is the public education systems that for 15 years brainwash — benignly or not — our younger generations with homogeneous values, objectives and ways of thinking. Additionally, the fact that Western national or regional societies gravitate around common ideologies, values and objectives indicates that they have been engineered. So, the question is not whether it is necessary to social engineer a society, but how to do it to maximize its prosperity.

How can the West approach social engineering consciously and productively?

There are numerous problems with the current Western social engineering paradigm. Among them is the fact that Western political elites do not explicitly acknowledge the use of social engineering, making it difficult to engage in public and academic debates to analyze and improve it. Another problem results from some of the deeply rooted values and beliefs common in the West that grant almost unrestricted individual freedoms and the right to everyone to have a say in almost everything. Yet another problem is the common fallacy of attributing most of Western prosperity to freedom and democracy, rather than to scientific and technological development, discipline and commitment. These beliefs and values are not only weakening Western societies’ social cohesion and robustness, but are also masking the need for a fundamental change in the current social paradigm.

Guided by Xi’ism, the CPC is socially engineering a new Chinese national identity by forcefully assimilating ethnic minorities and homogenizing the eclectic Hans. This does not mean, of course, that the West should follow China’s lead and attempt to stamp out ethnic diversity. What it does mean is that the West needs to be open about the need to be proactive in socially engineering its own societies based on values and objectives that are not always popular.

It is time for the West to take a honest look at its current social engineering paradigm and fundamentally redesign it to build a society that will be in a strong position to overcome the challenges of this century and ensure the future prosperity of its peoples.

[ edited this piece.]

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Then there are borders, the cement that holds together the international order. Nation-states are the building blocks of that order, so the borders that separate them function as a mysterious force that keeps countries apart and yet allows them to come together in the United Nations and other global institutions.

Borders are essential to trade, transport and tourism. They are hostile to migrants and refugees. And they also a collectively agreed-upon fiction. All borders are artificial, forged through war, colonialism and domination.

Yet if borders suddenly had no meaning, powerful countries would invade their neighbors and seize the land they covet. Of course, some countries haven’t waited for the international order to collapse to make this happen.

Russia’s invasion of Ukraine in 2022 was, among other things, a blatant violation of an international border. The October 7 raid by Hamas and the subsequent war unleashed by the Israeli army in Gaza both violated a border, which technically divides two entities, not two separate countries. Near the end of 2023, it even looked as though Venezuela were a part of Guyana that it has long considered its own territory.

It’s no surprise, then, that the recent election of Lai Ching-te as Taiwan’s new president has been greeted by some observers as a triggering event. This year, they say, mainland China will finally follow through on its persistent threats and an all-out invasion of Taiwan. According to this scenario, Beijing has noted that while the Russian and Israeli aggressions have generated international outcry and even some serious global pushback, it’s nothing that either country can’t withstand.

In the lead-up to Taiwan’s elections this month, tensions in fact have been mounting across the Taiwan Strait. Should Taiwan declare sovereign independence from the mainland, effectively establishing a de jure border between the two, Beijing may well respond aggressively. “Many American officials believe that Beijing would indeed launch an invasion of the island should the Taiwanese declare their independence and that, in turn, could easily result in U.S. military intervention and a full-scale war,” military affairs analyst Michael Klare.

For the time being, however, the game of pretend continues. The international community treats Taiwan in many ways as a sovereign country but pretends that there is only “one China.” Although it continues to lose diplomatic support — Nauru just recognition to Beijing, which brings the total for Taipei down to a meager dozen — Taiwan continues to press for membership in global institutions as though it were a sovereign entity. Beijing treats Taiwan as simply an unincorporated territory with delusions of grandeur.

The wars currently dominating the headlines were not exactly surprises. Russia gave plenty of notice of its intentions to intervene in Ukraine and indeed had already absorbed the Crimean peninsula and parts of the Donbas back in 2014. Israel launched four significant attacks on Gaza in 2008, 2012, 2014 and 2021.

Mainland China, for its part, has that reunification is “inevitable” and that the two sides face a stark choice between war and peace. Military drills near Taiwan last year were designed, to Beijing officials, to counter the “arrogance” of separatists, and numerous aircraft from the mainland have the informal border that runs down the middle of the Taiwan Strait.

So, will the erosion of international norms and escalation of threats from Beijing necessarily lead to war with China in 2024?

The recent elections

In Taiwan’s flourishing democracy, two main parties have contested for power over the last few decades. The Kuomintang (KMT) prefers closer rapprochement with the mainland, while the Democratic Progressive Party (DPP) edges more toward independence. With Lai Ching-te as its presidential candidate, the DPP just won an unprecedented third consecutive presidential term.

You’d think that the mainland would have gotten used to the DPP at this point, after eight years in power. But for some reason, Beijing looks at Lai Ching-te differently.

A former doctor who became in rapid succession a legislator, mayor and vice-president, Lai is now a political veteran. When he started out in politics, he was an ardent supporter of Taiwanese independence. But that as he rose through the ranks. He now says that he’s comfortable with the current status quo, by which he means his country’s de facto independence.

This is a pragmatic approach not only with respect to Beijing but domestic politics as well. Although the DPP won the presidential election this month, it lost its parliamentary majority. It now has one fewer seat than the KMT. This means that a third party with 8 seats will hold a pivotal position in determining actual policies.

This third party, the relatively new center-left Taiwan People’s Party (TPP), takes a position somewhere between the DPP and the KMT on the question of sovereignty. Indeed, the party’s official color is turquoise, a pointed reference to the longstanding struggle between the forces of green (KMT) and blue (DPP). TPP leader and presidential candidate Ko Wen-je himself during the election campaign as “the only person who is acceptable to both China and the United States. This is currently my biggest advantage.”

Generally, Washington and Taipei see eye to eye. After all, the United States has long shipped arms to the island, with the latest package from August totaling . Between 1980 and 2010, Taiwan received in arms shipments.

At the same time, the United States has adhered to the “one China” policy, which Joe Biden just after the election when he said, “We do not support Taiwan independence.” At the same time, however, US politicians have been traveling to Taiwan more often, with even Ed Markey leading a delegation there to warn Beijing of US support for the island.

The lion’s share of the Pentagon’s budget is devoted to buying the big weapons systems — jets, carriers, space weapons — to counter a major rival like China. But that doesn’t mean that Washington wants a war with China. Quite the opposite, given military commitments to Ukraine, the increased demands from Israel and now the on the Houthis in and around the Red Sea.

But, of course, most wars are not planned in advance.

What Taiwan wants

Taiwanese identity has changed dramatically in the last two decades. Back in 1992, only 17% of the population as “Taiwanese,” compared to 25% who called themselves “Chinese.” Another 46% said that they were “both Chinese and Taiwanese.”

Today, more than 62% of those surveyed say that they’re “Taiwanese.” And the number who call themselves “Chinese” has dropped all the way to 2.5%. A strong driver of this transformation is demographic, with the dying off of the generation that either came over from the mainland with the Kuomintang forces or still harbored hopes of returning there at some point.

Despite this greater sense of a separate identity, Taiwan’s fate is still inextricably tied to the mainland. Consider the economic interdependence of the two. As the Taiwan government itself likes to boast, the country invested into the mainland between 1991 and 2022 while cross-strait trade in 2022 totaled $205 billion. The mainland is actually Taiwan’s trade partner, responsible for 22% of total trade.

However, as with the decoupling taking place between the United States and China, cross-strait economic relations seem to be changing as well. Taiwanese investments in the mainland to a 20-year low in 2023, though this reflects more the rising costs of labor in China than any specifically political decision to invest elsewhere.

The mainland remains dependent on one key Taiwanese export: semiconductors. Taiwan has practically cornered the market, particularly on the most advanced chips used for AI and quantum computing, where it controls of the trade. US controls on technology transfer to China have ensured that the mainland, though it would prefer to achieve self-sufficiency in this regard, still needs to import these chips from Taiwan.

The Taiwanese, meanwhile, are well aware of the fate of Hong Kong. The residents of this ��Գٰ����ô��, which reverted to China’s control in 1997, thought they would be able to run their own democratic institutions until at least 2047, according to provisions in the handover agreement. The on the Hong Kong protest movement in 2021, sending protesters to jail or to exile in places like Taiwan, called into question Beijing’s commitment to “one country, two systems.” The forced absorption of Hong Kong has strengthened the independence movement in Taiwan and, on top of the consolidation of a distinct Taiwanese identity, led to the three-term success of the DPP.

The current status quo, for Taiwan, has translated into a stable democracy, a vibrant civil society, a per-capita GDP to South Korea and Japan and a mutually prosperous arrangement with Beijing. On the negative side, Taiwan spends a lot on its military — of GDP with a record expenditure in 2023 — and has to endure a steady diet of threats from Beijing.

Plus, only a dozen other countries, most of them miniscule, treat Taiwan like an authentic nation. No seat in the UN, no membership in the World Bank, no participation in the World Health Organization: That’s the price Taiwan has to pay for this belittling status quo.

The meaning of those land grabs

Although Beijing might dismiss the international outcry against Russia and Israel as relatively insignificant, it has paid close attention to how effectively Ukraine has fought back against Russian occupiers. Although Taiwan is tiny compared to Ukraine and China’s military is considerably more sophisticated than Russia’s, it would be no easy task for China to gobble up Taiwan.

Sending a sufficient force across the Taiwan Strait, for instance, would be extraordinarily , particularly under a rain of missiles from Taiwan. The terrain makes landings difficult, and there are few routes from the east coast to the rest of the island. The preparations for such an amphibious assault would be relatively easy to monitor. Also, China hasn’t fought a war in many decades; who knows how its troops would fare under hostile conditions. The embarrassing retreat of the Russian army after it failed to seize Kyiv serves as a warning to hawks in Beijing.

But leaders sometimes do crazy things. And China has the option of threatening a devastating aerial assault, up to and including nuclear weapons, to force Taiwan to capitulate without a shot fired.

China’s ultimate calculation may come down to what’s happening around other border conflicts and whether the world is on the verge of a land grab free-for-all. In addition to what’s happening in Ukraine and Gaza, Saudi Arabia is territory in Yemen, Turkey to remain militarily active in northern Syria, and countries desperate to soil for growing food or their carbon credit accounts are engaged in numerous mercantile land grabs.

Climate change is also contributing to the general feeling that “the world is going to the dogs, so I’m going to get what I can while I can.” As it disappears under the rising waves, land has become a more valuable commodity. Land hunger was behind the terrifying settler movements of the past — the westward expansion and dispossession of Native Americans in the United States, the colonial enterprises of the nineteenth century throughout the Global South, the Nazi attempt to create a larger lebensraum for Germans. Today, the hunger remains, though the rationales have shifted to securing food supplies, sufficient “critical raw materials” for energy transitions and carbon sinks to balance high levels of emissions in the home countries.

Taiwan faces a number of challenges that have nothing to do with the mainland. Its population in 2019, and it has the fertility rate in the world. As an island, it is particularly vulnerable to sea-level rise, alongside increasing fresh-water as a result of changing monsoon patterns.

Cooperation with the mainland and the international community on these issues is essential. The status quo — little engagement across the Taiwan Straits and low levels of Taiwanese participation in international institutions — has no future in a volatile world. But can Beijing suspend its territorial claims that currently exceed its grasp in favor of peace, justice and mutual economic benefit?

Rationality says yes. Nationalism says no.

[ first published this piece.]

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On March 10, in Beijing, Iran and Saudi Arabia an agreement restoring their diplomatic relations. This will have ramifications for the : That action was not in line with US policy, which sees China as a competitor and adversary. The Saudi action surprised the US since Saudi Arabia has been a client of the US since 1945. The Saudi move could have only happened in the changing world. 

The US can get clues from Saudi Arabia’s choice and face reality by adjusting its foreign policy. The US could stop interferences, coups and invasions in other countries, particularly Iran. It could give up on “regime change” in Iran and apologize for the 1953 coup that overthrew Iran’s first-ever democratic government. It must stop supporting ethnic cleansing and genocide against other people, especially the native Palestinians. By taking those vital steps, the US would improve relations with Iran and decrease tensions in the world. 

Iran’s mullahs, or religious leaders, can also take crucial steps to restore the economy and pacify the country’s young generation. Presently, the mullahs do not walk the talk. The father of the 1979 Iranian revolution, Ayatollah Ruhollah Khomeini, purportedly the mullahs: “Clergy, wake up; now, it is not time to talk … think about people’s problems! Discussion by itself is of no use.” Mullahs have a responsibility within the state of Iran: to listen to the people and adjust their policies accordingly.

Mullahs live in a fantasy world

In my recent visit to Iran, I noticed that the mullahs keep ignoring the advice from the Islamic Revolution’s father. They continue competing with one another for high political positions while the country faces serious economic issues. They claim that the main culprit for poverty is the US’ brutal economic sanctions against the nation that violate the UN Charter. Although that is partially true, the real threats to the regime are the mullahs who have failed to do what they say, listen to the people and address domestic issues. 

During my visit, Iranians kept saying that they get paid in local currency, rials, but buy in dollars. At the time, I could not understand their complaints after seeing perishable foods at low prices. 

However, when I returned to the US and looked further into the matter, I recognized the reasons why the youth are protesting in Iran. I that the government privatized most national industries, including refineries, petrochemicals and steel. It is still subsidizing them and providing them with cheap crude oil and other raw materials, expecting the finished products to include reasonable profit for sale in the country. However, those outfits have been exporting their products and selling them in dollar values in a country where the wages are low and labor is very cheap. The companies have no regulatory oversight. Their shareholders are profiting incredibly while contributing immensely to the nation’s inflation and poverty.

Despite the arduous efforts of the new President Ibrahim Raisi, the of Iran is still in shambles with an inflation rate below . Corruption and nepotism are widespread, the country 147 among 180 countries in transparency. Women are still widely discriminated against by the government despite great women’s strides in law, medicine, journalism, engineering and other scientific fields. Ethnic groups such as the Baluchis and Kurds remain among the least educated. Thus, indigenous groups like them are easy prey to terrorist groups like and , armed and financed by the US and allies.

How could Iran’s religious leaders let this issue grow so large? Due to their lack of knowledge of the modern world, the mullahs have entrusted running the government chiefly on their staff, ministers and supporting personnel, mostly educated in the West. The staff have pushed for free enterprise in a laissez-faire way without regulatory oversight. They have pressed to privatize the national industries, particularly oil and steel. Once these industries are , they and their relatives and friends buy large shares, aiming for low production costs and maximal profits. They have formed Iran’s oligarchs. Like in Russia, the oligarchs manipulate the market. Consequently, Iran’s inflation has hit the roof and poverty is fast expanding!

On the surface, Iranians think that the mullahs are ruling the country. In reality, the oligarchs are running the nation. In the 1950s, Mohammad Mosaddegh fought with Britain for Iran’s oil nationalization. For that effort, he lost his power and was forced into exile in his house until his death. Sadly, the mullahs have foolishly given away the national treasures to a selected group who have emerged as Iran’s oligarchs. 

The oligarchs convert much of their profits into gold and foreign currencies. Those actions have further devalued the local currency, causing public panic. With the money made in Iran, they buy properties in Istanbul, London, Montreal, Los Angeles and other popular foreign cities. In those foreign cities, their children whose mere existence and liberal lifestyle are indebted to the mullahs, are often among the instigators against the mullahs. 

The oligarchs own private banks that invest and operate commercial facilities across the country, unavailable for sale or rent, counting on higher profits in the future. This is when millions of families are looking for residence. 

Under the mullahs, it never occurred to the oligarchs that the investments were not earned by them or their parents but entrusted to them by the nation. Thus, they should make their products affordable to buy by Iranians. 

Seven simple steps for mullahs to save Iran

The for Iran’s future is gloomy. Execution and imprisonment are not the answers to domestic issues. For Iran to survive in its present form, drastic actions must be taken. As Mosaddeq brought the oil back to Iran from the British, the mullahs must bring back the economy to Iranians from the oligarchs. To start, they could take these seven steps. 

First, stop vying for power. Clean up corruption and nepotism. Choose qualified personnel who are clean from bribery, embezzlement, peddling, or any other activity financially benefiting them or people close to them. Learn how Singapore corruption under control.

Second, implement effective management, accountability and transparency programs. Train managers on how to use the resources effectively to meet the targets before deadlines. Learn how Switzerland affairs.

Third, address inflation by tightening government spending, overseeing banks and controlling trade. ownership of foreign currency and precious metals like gold. Require the use of only national currency in domestic dealings. Ensure banks are involved in only banking (accepting deposits from the people with a guarantee that the funds will be there when needed and making loans available to them, based on certain reasonable conditions). Learn from Russia on how to manage the inflation rate. Despite facing tough sanctions, Russia managed an inflation rate of , and even Afghanistan under the Taliban controlled an inflation rate of in December 2022. 

Fourth, temporarily take over imports and exports for all essential goods and services. When the products are sold to distributors, define the profit margin clearly. Increase trade with neighboring countries. Implement regulatory oversight on at least all oil and steel industry production. Give to China’s trade regulations.

Fifth, attend to women’s issues and include more in decision-making processes. Remove all barriers that prevent women from rising to power. On , learn from Sweden.

Sixth, help the ethnic groups such as Baluchis and Kurds and address their economic and other issues. Promote ethnic diversity in all workplaces with an objective of ethnic equality. Sweden provides a good .

Seventh, get away from depending on oil revenues for the budget. Promote investments and increase domestic production for exports. Look into the world’s top exporters.

Despite the benefits of these necessary steps, they are merely bandages on wounds. Above all, culture must be changed. Until the 1979 fall of the monarchy, the Shah made law at his will. He was accountable to no one. People adopted sycophancy to get royal attention. Powerful families practiced nepotism to strengthen their hold on power and demanded bribes to keep their living status. People lied to safeguard their lives and honors. Although Iranians finally got a constitution about 100 years ago, the monarch gave that little attention. Naturally, people followed the king, giving little attention to law and order. The long-term solution is to change the thoughts and false beliefs. From an early age in school, pupils must be taught to practice honesty and respect law and order. Overcoming poor habits takes a generation.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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At her Defense News Conference in August, US Deputy Secretary of Defense Kathleen Hicks explained the urgency of the initiative. Beijing “has spent the last 20 years building a modern military carefully crafted to blunt the operational advantages we’ve enjoyed for decades.” Interestingly, it isn’t about the fear that China will surpass the US, but that it might ”blunt” its traditional sharpness.

Hicks’s blunt remarks referred to an ambitious called the “Replicator initiative.” She reassuringly explains that the innovative program will require no new appropriations. This of course means, among other things, that it will be shielded from congressional oversight.

The Pentagon describes Replicator as “designed to produce swarms of AI-powered drones and flying or swimming craft to attack targets.” These autonomous weapons will be “connected through a computerized mainframe to synchronize and command units.” Aware of the fact that this is all about competition, Hicks described this as “a ‘game-changing’ initiative that will counter China’s growing ambitions and larger fleet of military resources.” 

Hicks desperately wants to leave the impression that, for all its murderous autonomy, Replicator is not the apocalyptic beast some people imagine. We must understand that the whole program is in good hands and will succeed thanks to “American ingenuity,” an “advantage that they,” the Chinese, “can never blunt, steal, or copy.”

The author of The Hill’s article, Brad Dress, dares to demur. He reminds us that not everyone is so confident about where this may lead, citing Anna Hehir at the Future of Life Institute who says that this is “a Pandora’s box that we’re starting to see open, and it will be very hard to go back.” We learn that “human rights groups are uneasy about Washington’s ethical guidelines on AI-powered systems and whether they will offer any protection against an array of humanitarian concerns.”

�մǻ岹��’s Weekly Devil’s Dictionary definition:

Humanitarian concerns:

Ephemeral doubts that occasionally arise in the minds of a minority of conscientious people skilled in detecting moral risk that, in any environment sufficiently focused on security, will inevitably be dismissed as irrelevant because of an overriding economic logic that is guided by the pressing need to preserve a competitive advantage.

Contextual note

Hicks insists it’s not just about killing; it’s also about improving the Pentagon’s culture. She’s an adept of modern management theory. “This is about driving culture change just as much as technology change — and about replicating best practice just as much as products, so we can gain military advantage faster.”

A sharp observer whose human intelligence has not been blunted by Hicks’s taste for business management jargon might find it useful to understand what “military advantage” actually means and what the implications may be of making it happen “faster.” Hicks, however, wants her audience to have confidence in the Department of Defense (DoD). She insists “the initiative will remain within ethical guidelines for fully autonomous systems.”

Dress isn’t taken in by her rhetoric. He begins by focusing on the guidelines themselves. They stipulate that there should be an “‘appropriate level of human judgment’ before an AI weapon system can use force.” But then Dress cites the analysis of the Congressional Research Service. It notes that “the phrase was a ‘flexible term’ that does not apply in every situation, and that another phrase, ‘human judgment over the use of force,’ does not mean direct human control but refers to broad decisions about deployment.” Could the Pentagon, for the first time in its history, be distorting the meaning of its own words?

More worryingly, Dress also informs us that there exists “a waiver throughout the policy that appears to allow for the bypassing of the requirement for senior-level review of AI weapons before deployment.” This “flexibility” of interpretation may help to explain why Hicks has proudly announced that there will be no need for new allocations from Congress to carry out this initiative.

Although the dimension of this weaponry is not quite on the nuclear scale, the conditions described eerily resemble the plot of Stanley Kubrick’s Dr. Strangelove. General Jack D. Ripper’s psychic algorithm that turned around “purity of essence” was at least discoverable, albeit belatedly. AI’s algorithms are notoriously opaque.

Aware of the risk, DoD spokesperson Eric Pahon reassuringly proclaimed that there is nothing to fear. The US is the “world leader in ethical AI standards.” We can be assured that Washington will do everything in its power to make sure that no one will be in a position to blunt that advantage.

Historical note

Though the DoD still hasn’t passed an audit, even after the discovery back in 2019 of a $21 trillion over two decades of accounting, it has now apparently adopted the language, if not the skills, of modern management. Hicks cites concepts such as “culture change” and “best practice” at the same time that she bandies about jargon such as “exerting leadership focus” and “maturing solutions.”

In 1935, the decorated war hero Brigadier General Smedley Butler wrote a book called War is a Racket. Things have clearly evolved. Butler saw resemblances between the military’s culture of war in the first half of the 20th century and the methods of Al Capone; Hicks has chosen more respectable models for today’s military culture, like McKinsey or Harvard Business School. War is now a business — a complex business — and indeed the work of a complex itself, as President Eisenhower warned.

But Hicks may be one step behind in her modernity. The idea of “best practice” she cites became a trendy mantra of modern management around the time when Total Quality was all the rage in the 1980s. In 2005, MIT’s Sloan Management Review published an with the title “Beyond Best Practice,” pointing out that “ high-performing companies do more: They also embrace unique ‘signature processes’ that reflect their values.”

The notion of best practice turned out to be a late 20th-century version of Frederick Winslow Taylor’s notion, earlier in the century, of “Scientific Management.” It produced two generations of “efficiency experts.” Hicks, for all her proclaimed modernity, appears to identify with that culture. The DoD clearly hasn’t reached full modernity and probably will never do so, at least not until the day it manages to pass an audit.

Dress’s fairly lengthy article is worth reading to the end. It challenges the unaccountable Replicator initiative on moral grounds. Morality cannot be reduced to guidelines or even laws, however elaborate. It must be an effort to produce and manage the values that appear to be a key component of a notion such as signature processes. Those who practice the process leave their signature. They sign their work. It becomes a commitment, a shared commitment.

The questions Dress examines right up to the end of the article concern shared values and not just the stale management techniques Hicks appears to relish. The DoD doesn’t seem to feel any need to go “beyond best practice.” The term “signature” in signature values conveys the idea of human accountability. The idea that it reflects values conveys a sense of collective responsibility.

AI, for all its capacity to imitate human thoughts and actions, cannot have a signature because it has neither a hand to produce the signature nor an organic identity to associate with it. AI is what it knows, not what it is in its environment and even less who it is within its environment. It will always be a prisoner of the data it has been fed, driven by the algorithms it is supplied with or that it may generate on its own through machine learning.

The very idea of elaborating best practices for a war machine should give us all pause. The DoD is itself a war machine that produces war machines. Its “swarms of AI-powered drones” eerily evoke Goethe’s, whose concern for efficiency led him to produce an unwanted catastrophe.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of 51�Թ� Devil’s Dictionary.]

[Thomas Isackson edited this piece.]

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Despite the addition of South Africa in 2010 and the establishment of the in 2014 and the in 2015, BRICS lay becalmed for years. It has only really been energized by Russia’s invasion of Ukraine. The way in which the war has bolstered relations between the US and its allies in Europe and Asia has spurred Beijing to see BRICS as the best available vehicle to pull some more firmly into its orbit. As Steve Tsang of the School of Oriental and African Studies, London, has :

What the Chinese are offering is an alternative world order for which autocrats can feel safe and secure in their own countries. They can find an alternative direction of development without having to accept the conditionalities imposed by the democratic Americans and European powers.

In its summit this August, BRICS invited six states to join the grouping on January 1, 2024. Among these are three Arab states: Egypt, the United Arab Emirates (UAE) and Saudi Arabia.

What’s motivating the Arab states?

By any reasonable definition, all three countries qualify as autocracies. However, beyond this and the shared objective of closer economic ties with China as a counterweight to the US, they exhibit important differences in their motives.

For Egypt, it is a case of “cleft stick.” On the one hand, it has long been a top recipient of US aid. On the other, its on the dollar has exacerbated the dire of Russia’s invasion of Ukraine, thanks to its dependency on imported energy and food. Foreign investors have withdrawn billions of dollars as the currency has , the Gulf countries that provided support in the early days of the Sisi coup have lately imposed tougher conditions and a $3 billion from the IMF comes with stringent reform requirements. BRICS membership would facilitate trading with other members in local currencies and should help to attract more investment from them.

In contrast, although the UAE has benefitted enormously from and has burgeoning trade relations with , and (with which it has just finalized a deal to trade in ), the main driver behind its BRICS application is political. It remains close with the US as far as security guarantees are concerned; but its confidence in US bankability has declined to the point where, as Vivian Nereim in The New York Times last month, “Emirati leaders … fear a decline in American interest in the region — and the military defense that comes with it — and argue that Washington has not done enough to deter threats from Iran.” This dates back at least a decade, so joining BRICS would arguably be no more than the latest example of how, as Nereim notes, “a Middle Eastern leader viewed by the US government as an important partner,” Sheikh Mohammed bin Zayed, “is increasingly striking out on his own path.”

Saudi Arabia is, perhaps, the most interesting of the three. As has been well documented, relations between Washington and Riyadh have been rocky during the Biden presidency. Although they would improve significantly were Donald Trump to win the 2024 election, even this would be unlikely to reassure the Saudis over US security guarantees, particularly given Trump’s failure to act on the on Aramco facilities in Saudi Arabia’s Eastern Province. Hence, Riyadh’s openness to Beijing-brokered earlier this year which has helped open the BRICS door for both the kingdom and Iran.

Nevertheless, in the margins of the BRICS summit the Saudi foreign minister, Prince Faisal bin Farhan, claimed that his country was not committed to joining BRICS before it had had time to consider the terms. As there are no laid-down criteria for membership beyond unanimous agreement among existing members, this is, in itself, sensible. However, it may also mean that Riyadh is using the prospect of BRICS membership as leverage to try to extract more concessions from Washington in their talks over a grand bargain sweeping in the kingdom’s civil nuclear aspirations, arms sales and relations with Israel.

Middle East expert Bruce Riedel ( in The Guardian on July 27) is correct that Riyadh is unlikely to want to give Biden an election boost if he could get both the Netanyahu government and the US Senate on board too. However, from a Saudi perspective, there is no downside to testing the waters. Especially since, as Gideon Rachman in Financial Times on September 4 (and Jon Hoffman made the same point even more forcefully in Arab Digest’s September 6 ), even if a grand bargain were to be struck, it would likely “turn out to be a grand illusion” for Washington.

China is not as available as it seems

All this being said, the biggest illusion of all may be the belief among BRICS candidates that membership would be a major boon to economic ties with China. As I wrote in the Arab Digest’s April 20 , Beijing is struggling with its own economic headwinds. Furthermore, its dominant role at the BRICS summit notwithstanding, China has been turning increasingly inwards since Xi Jinping first started his drive for in the overarching quest to sustain in perpetuity the CCP’s grip on power. Beijing’s principal aim in its promotion of BRICS is therefore to work with other autocracies in promoting its governance model internationally, the better to defend it domestically.

None of this is to say that BRICS is doomed to fail. As opined in a in The Economist, “the BRICS grouping is here to stay.” Nevertheless:

BRICS expansion … would not be a sign of the group’s growing diplomatic clout — quite the opposite, in fact, since finding a common denominator would become more difficult. Expansion would, rather, be a reflection of China’s growing influence when defining the future of the bloc.

From the perspective of the three Arab aspirants, it is therefore worth reflecting carefully if membership could all too easily turn out to be a Faustian pact.

[ first published this piece.]

[ edited this piece.]

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The country’s economic growth is flagging. China’s central bank has been lowering interest rates in a feeble attempt to stir investment. The real estate sector, one of China’s main drivers of growth, is very weak. Loans made for unsuccessful real estate ventures now fill the books of many Chinese banks. The bubble is just waiting to pop, which would be a catastrophe in an economy where a whopping 70% of individual investors’ portfolios are tied up in real estate.

China knows that its economy is weakening. Expectations are no longer so strong (at least in the medium term), that a rising Middle Kingdom will vanquish its adversaries and replace the US as the dominant power in the region. Beijing seems to be taking a different tack, and it is calming down its aggressive rhetoric against the US. It is beginning, indeed, to seek rapprochement.

Really, Rapprochement with the US? 

After so many years of wolf warrior diplomacy, this new-found reasonableness is hard to believe. Atul Singh and Glenn Carle explain how such a surprising change in direction may be coming about.

Underneath it all, Atul reminds us, is the “very simple social contract” which the Chinese Communist Party (CCP) has with its citizens. The communist regime’s credibility doesn’t rest on any democratic legitimacy but on its sheer ability to get results—prosperity. If it cannot provide that, its very existence is in question.

Without a crystal ball, no one can predict what will happen to China when the bubble inevitably bursts. Glenn refers to conversations he has had with Indian leaders who are watching developments in China with keen interest. They suggest that their northern neighbor may well weather the storm. Glenn is not so sure.

It is far more uncertain how China will navigate the middle income trap: the natural stagnation of growth that occurs when economies attempt to move from manufacturing into services. It will not be nearly as easy for China to repeat its strong growth of the last few decades, no matter how clever the CCP’s economic policy tsars may be.

All this has led Chinese leaders to come to terms with reality and look to the US for cooperation. Despite hawkish rhetoric from partisan ideologues on both sides, cooler heads among policymakers seem to be signaling rapprochement. However, this may not be possible.

The problem, as Glenn explains, is that China wants to put aside economic and trade disagreements with the US while leaving political issues outstanding. This may be too much of an ask. It seems doubtful that the US and China will be able to successfully work together while they maintain mutually incompatible goals in Taiwan and in the South China Sea. 

At the heart of the matter is a fundamental disagreement. The ruling power wants to remain top dog. The rising power wants to usurp that position. The Thucidides trap remains strong and the risk of conflict high.

[ wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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Breakdown of the US’s ability to talk to and think about China

Under Presidents George W Bush, Barack Obama and, partly, Donald Trump, the US had institutionalized large-scale communications with China, especially through the strategic economic dialogue (Bush), strategic and economic dialogue (Obama), and comprehensive economic dialogue (Trump). Dozens of senior officials regularly met. Those dialogues could not resolve the great issues like Taiwan or intellectual property, but officials came to understand each other and render differences manageable.

When Donald Trump became President, Xi Jinping was determined to keep communications open and relations constructive. Chinese scholars say the lavish welcome Trump was given was historically exceptional.

As with other relationships, Trump responded initially with admiration: “President Xi is a brilliant man. If you went all over Hollywood to look for somebody to play the role of President Xi, you couldn’t find it. There’s nobody like that. The look, the brain, the whole thing.” Likewise, at Davos in 2020: “Our relationship with China has now probably never, ever been better … He’s for China, I’m for the US but, other than that, we love each other.” But Trump’s mood changed and the dialogue lapsed. Biden chose to permanently abandon institutionalized dialogue permanently. Blinken’s trip marginally walks back that decision and marginally walks back the coldness Blinken deliberately instilled at his initial meeting with the Chinese in Anchorage.

US Presidents traditionally ensure the presence of some cabinet-level officials with expertise and experience on the most vital national security issue of the time, once the Soviet Union and now China. No Cold War president would have been without the top-level expertise brought to the task by a Kissinger, Brzezinski or Scowcroft.

George W. Bush was a foreign policy failure in many respects but, guided by Hank Paulsen in the Treasury and brilliant CIA China expert Dennis Wilder in the National Security Council (NSC), he balanced his strong support for Taiwan’s security with strong support for the 1970s peace agreements and ended up admired by both Taipei and Beijing.

Obama ended the tradition of having cabinet-level China expertise. Trump followed suit. Biden has been exceptionally striking in declaring that China is America’s ultimate foreign policy threat but hiring no top-level expertise on China. His Secretary of State, National Security Advisor and CIA Director spent their careers on the Middle East and Europe; his Secretary of Defense on the Middle East. Even Biden’s ambassador to China is a career Middle East and Europe official. His NSC Asia czar has no direct experience with China and became famous for demanding disengagement based on the false assertion that US engagement with China presumed engagement would democratize China.  

Some of these officials, like CIA Director William J Burns, are outstanding and have deployed their European expertise to resist Russian aggression. Regarding China, though, it is another story. Imagine the CEO of a giant food company announcing that cereals constitute the greatest opportunity and the greatest competitive threat, then announcing that the heads of the Wheaties division, the Cheerios division, the oatmeal division and all others would be hamburger experts.

Below the leadership level, things are even worse. Intelligence and Defense Department officials say that it has become so difficult for anyone with China expertise and experience to get security clearance that the US has partially blinded itself. Scholars and business executives who bridge the two countries are frightened, and vast numbers are considering departure to China. Some visiting Chinese professors, including two of the most pro-American international relations scholars and one invited personally by Jimmy Carter, have been treated very badly by US immigration authorities.

In short, Biden has continued and worsened the Trump disjunction between strategic imperatives and leadership skills, the Trump contempt for expertise and the Trump (late, partial, possibly temporary) dismissal of institutionalized dialogue. No weekend trip can ameliorate these fundamental realities.

The US fumes against China because it no longer understands it

Magnifying the consequences is a vital difference between Trump and Biden. Trump always sought the deal, albeit a misconceived deal: The trade war was about trade disparities, and if Beijing took specific actions, the trade war would proportionately ease. Biden proposes no deal, just escalated sanctions.

Given the overwhelming evidence that steel and aluminum tariffs hurt the US more than China, raise prices and cost many tens of thousands of US jobs, most economists assumed that the President whose slogan is “a foreign policy for the middle class” would lift them. But, no: US Trade Representative Katherine Tai says they are necessary to maintain “leverage” over China. There is of course no leverage from policies that damage America more than China.

The Biden administration has totally repudiated the peace compromise so successfully negotiated by Kissinger and Brzezinski.

Lacking expertise, Washington frequently seems clueless about how the world views its China policies. For instance, Blinken and Biden often broadcast versions of Biden’s June 9 statement that China’s Belt and Road Initiative is a “debt and confiscation program.” Trump’s Secretary of State Mike Pompeo  Belt & Road similarly. Developing world leaders, who frequently contrast China’s development offers with Washington’s lectures or its omnipresent Special Forces teams, know that is false. Every China specialist knows the study of 1100 Chinese loans that found there was not a single instance of China using debt problems to seize collateral.

Does the US President have no idea what he is talking about, or is he systematically spreading disinformation? Either way, developing countries can dismiss much of US policy. For instance, many give credence to the argument that the problem in both Europe and Asia is US efforts to encircle and destabilize its adversaries. Hence, all of Latin America, Africa and the Middle East align with China regarding US sanctions on Russia.

The big problem is Taiwan. Henry Kissinger warns that we are sliding toward war over Taiwan. The Biden administration has totally repudiated the peace compromise so successfully negotiated by Kissinger and Brzezinski. Washington promised to abstain from official relations or an alliance with Taiwan. But President Biden has promised four times to defend Taiwan; that is an alliance.

Speaker Pelosi was emphatic that her August trip to Taipei was an “official” trip; immediately after her meeting with President Tsai, the presidential spokeswoman went on island-wide TV and proclaimed, “We are a sovereign and independent country.”

Responding to lesser provocations, George W Bush, his secretary of state, and his deputy secretary of state, no panda-hugging liberals, distanced the US and warned Taipei to stop. Instead, Secretary Blinken continues to welcome such official relations and tell the Chinese not to “overreact.” 

The angry popular reaction inside China to Xi’s failure to respond decisively to such US initiatives is the one risk that could topple Xi Jinping from power. Concern about that is the one thing that could trigger him to launch a direct attack on Taiwan.

Biden has no senior advisor who understands such things. Blinken and Sullivan act on how they believe theoretically China should react, not on knowledge of actual Chinese politics.

If war comes, it will not be the limited conflict of US war games. China will hit Okinawa immediately or lose. The US will hit mainland Chinese bases immediately or lose. China will respond against the US.

The common denominator of Trump’s MAGA policies, Biden’s MAGA-plus policies, and Representative ultra-MAGA policies is a repudiation of the promises and norms the US accepted when Nixon, Carter, Mao and Deng compromised to eliminate what had been a terrible risk of conflict over Taiwan.

The cover for that repudiation is an endless repetition of the assertion that China is planning an invasion of Taiwan, an assertion for which the US intelligence community says there is no evidence.

The fact of the matter is that Washington’s hard left and the hard right always despised compromise. The pragmatic center has evaporated, for domestic reasons, and the self-righteous ideologues rule Congress. No quick visit, no fog of diplomatic niceties will arrest the resultant reversion to the pre-1972 risk of war.

(China took an equally dangerous turn, also for domestic reasons. Hong Kong, Xinjiang, Canadian hostages, economic war on Australia, and much else are serious issues. But this article is about the US; previous US administrations handled middle-sized issues without sliding toward war.)

Biden was elected by the pragmatic center, but he has no China team, no China policy, no strategic vision. He should be wary of taking even a small risk that history will remember him for the first inadvertent world war of choice. Weekend trips for marginal changes of tone do not address the problem.

[ first published this piece.]

[ edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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With Beijing acting more assertively as an international actor and challenging the US-centered world order, questions arise as to what might happen if China becomes the global hegemon and whether democracy will survive worldwide when that happens.

Some experts refer to the 21st century as the,” because Beijing has shown the material potential, strategic patience and determination to become a hegemon. China has subtleties that its closest allies, namely Iran and Russia, lack. Without firing a shot or starting a war so far, China has projected its power on the world stage through diplomacy, economy and technology, albeit with a lot of political arm-twisting, military muscle, infiltration and espionage behind that conventional façade.

More recently, China has raised its profile by grafting itself into peacemaking efforts within several longstanding conflicts across the globe. Beijing has a Saudi-Iranian rapprochement, and is doing a great deal to resolve the conflict between Riyadh and Tehran over the civil war in Yemen. China’s successes in peacemaking deal a blow to the prestige of the US and the United Nations (UN), whose joint efforts to put an end to the decade-long bloody conflict have proved fruitless so far.

In the absence of a strong American presence in the region, more neutral or Western-friendly nations are likely to lean towards China for security. Since the stability of the Middle East is aligned with the newfound interests of Beijing, we can expect that the China-centered emerging order will calm the turbulent waters in the Arab-Iranian theater of conflict for a while, of course with the obvious exclusion of Israel.

China’s Role in the Russia-Ukraine War

After the end of World War II, the Middle East was primarily an American sphere of influence. However, since the end of the Cold War, the US has been gradually withdrawing from the region. For many in Washington, the Middle East simply does not have the strategic value that it did during the Cold War. That’s why the US has been trying to pivot to Asia to counter the rise of China in the Far East. Ironically, Beijing looks eager to fill the “vacuum of superpower” in the Middle East.

China has also been trying tobroker a deal between Ukraine and Russia. So far, Beijing has only been paying lip service to peace. For example, while claiming to mediate between Kyiv and Moscow, China has reportedly been providing Moscow with arms, drones, and economic aid. But if it perceives that playing the role of the peacemaker in the European theater of war will further raise its global profile, China might act accordingly. Especially if the West backs off from the Russia-Ukraine war, as suggests, China’s role as a global peacemaker could further grow.

The peace that Beijing establishes between Russia and Ukraine will naturally bein Moscow’s, but it might not be so unfair as to kill any incentive for Kyiv to come to the table. After all, Russian President Vladimir Putin is now relying heavily on Chinese President Xi Jinping. Therefore, Beijing can demand concessions for Ukraine that the Kremlin cannot ignore. It should be noted that China’s intentions here go far beyond appeasing Russia, its long-time ally. Beijing is keen on presenting itself as a fair and reasonable superpower that the West and the rest of the world can trust as the new sheriff in town.

As for a head-on confrontation with America, China is currently trying to avoid that, for the US is the world’s leading military and economic power and still holds a significant edge over China. Currently, the US and China are in a new Cold War, while discussions over are also intensifying between the two global superpowers. But, this will not necessarily lead to a military conflict. However, as America’s global engagementcontinues to , things might take a different turn in the future.

The Erosion of Democracy

Judging by what we see today, democracy is at risk of deteriorating worldwide. In today’s&�Բ�����; world, authoritarian regimes are willing to invest heavily in their ideological and material war on democracy. On the other hand, democratic countries generally refrain from standing up for their values, and instead resort to the myopic and short-term logic of “cost-benefit” to avoid an imminent conflict. As a result, democratic countries are leaving much less of an assertive mark on global events. If this continues, democracy is bound to decline.

So far, China has restrained itself from explicitly interfering in the internal affairs of the countries under its influence. However, there is no guarantee that China will stick to that policy once it has achieved global hegemony. Indeed, it will likely try to cast its satellite states in the same mold. This can already be seen in , which is already aligned with China. But Beijing will likely try to do the same in many South Asian, Middle Eastern, African, and South American countries as well.

The rise of China and its allies on the world stage is also partly predicated on some of the internal workings of the West. Far-right, populist politics have already contributed to the erosion of democracy in the West. An increase in right-wing, isolationist tendencies in the US and the EU is likely to lead to a power vacuum around the globe that China will race to fill. 

Right-wing politicians in the West tend to adopt a conciliatory approach to dictators around the world. This is due to their strong bias in favor of local and national concerns over global matters. As a result, they tend to de-prioritize human rights and democracy elsewhere. As such, the West, both in its conservative and progressive manifestations, is becoming less interventionist and more isolationist with each passing day.

The prospect of an inexorable onslaught of authoritarianism against an entrenched and West does not bode well for the future of democracy worldwide. However, the West cannot continue on this regressive trajectory forever. When it becomes apparent that the existential threat of authoritarianism is inescapable, a paradigm shift is likely to occur. This will lead to a recalibration of forces towards an all-out confrontation with China and its allies.

There is also a growing demand for democracy among the oppressed people living under the yoke of despotic regimes. Many people in China, Russia and Iran are now seeking freedom and democracy. The same is true for people living under Chinese and Russian influence in places such as Hong Kong, Ukraine, Afghanistan and Central Asia. The West must organize all-out efforts to counter despots. When these efforts coalesce with the resistance and inevitable revolt of the oppressed against their oppressors, then and only then will it be possible for liberalism and democracy to emerge victorious worldwide.

[ edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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Both India and Vietnam face a security dilemma because of China’s regional power ambitions. They fear Asian domination by a single power. Being China’s neighbors, India and Vietnam are rightly insecure about their borders. China has invaded both countries in the past: India in 1962 and Vietnam in . 

Han and Hindu Nationalism Come Face to Face

To raise the cost of another Chinese military aggression, India and Vietnam are joining hands to counter Beijing. New Delhi and Hanoi completed 50 years of diplomatic engagement last year. It is the last five years that have been the most consequential in their diplomatic history though. During this period, the countries have been intensifying cooperation and are in a position to act in concert on many fronts.

The Dragon Spits Fire

Assertive Chinese behavior in the last few years has rattled India and Vietnam. Be it in the Himalayas or expansive territorial claims in the South East China Sea, Beijing has upped the ante. 

Countries on China’s periphery have borne the brunt of the dragon’s fire. For example, China claims portions of Indian territory in the western and eastern sectors of its border with India. Beijing also frequently crosses into the Indian side of the disputed border. 

Similarly, Beijing continues to claim all of the South China Sea, disregarding the sovereign rights and of Vietnam, the Philippines, Indonesia, Taiwan, Malaysia and Brunei. China has also repeatedly targeted Vietnamese fishing boats and carried out maritime activities in disputed areas in the chain. Vietnam claims these islands as its territory. So does Taiwan. However, Beijing exercises de facto over the island chain. China also controls the Spratly Islands and Woody Island. Beijing is turning these disputed territories into military installations in the South China Sea. 

The roots of China’s assertive behavior lie in its self-perception. Beijing views itself as a natural Asian hegemon with great power status. Now, China is seeking to become a and challenge the US for the top of the global totem pole.

New Delhi and Hanoi, like Tokyo and Canberra, do not accept China’s self-proclaimed hegemony. These countries do not see themselves as subordinate to Beijing. Naturally, they are critical of any attempts by China to dominate the post-World War II regional order. 

This is also true of the other players in the region. They might not admit it openly, but Malaysia, Indonesia, Singapore and South Korea are uncomfortable with Beijing’s unilateral attempts to dominate the region. However, the fear of a backlash from Beijing, a sizable number of citizens of Chinese origin in their own territories and economic dependence on China prevent these countries from voicing their worries. 

Even in 1978, Lee Kuan Yew, the then prime minister of Singapore, caught the Chinese leader Deng Xiaoping by surprise, that he was more concerned about Beijing than about Hanoi. Deng had gone to Singapore to mobilize Lee Kuan Yew’s support against an ambitious Vietnam. The canny Singaporean statesman perceptively understood that the long-term challenge emanated from Beijing. Since then, it is clear that Beijing has aroused feelings of insecurity amongst its neighbors in Southeast and East Asia.

The fear of outright dominance by a single power compels Asian nations like India, Japan, Malaysia, Indonesia, Singapore and Vietnam to seek multipolarity. These nations believe that multipolarity will maintain a stable regional order. Therefore, their geopolitical and diplomatic strategy aims to counter China. These Asian nations are only following what eminent theorists like Henry Kissinger and John Mearsheimer have long posited about achieving a balance of power in international relations. 

Coalescing around shared interests such as respect for sovereignty and territorial integrity, and freedom of navigation of the seas helps regional powers build a coalition against China. Like other Asian countries, both and have concerns about China’s Belt and Road Initiative. Both want a multipolar, rules-based regional order that  constricts the space for unilateral adventures by Beijing. Therefore, the recent “” announced by Hanoi and New Delhi seeks to make structural and institutional changes that make multipolarity a reality. 

From the mid-1970s, New Delhi and Hanoi were on the same side of the geopolitical and ideological fault lines in Asia. Vietnam was communist and India was socialist. Both were of the Soviet Union and harbored a deep distrust of the United States. 

Communist Vietnam soon found that ideological similarities could not avoid geopolitical rivalries. Deng was deeply about the deepening Soviet-Vietnamese relations. Deng sought to teach the Vietnamese a lesson for “” Beijing and siding with Moscow. Deng believed that Hanoi sought regional dominance in Southeast Asia and he wanted China to have that privilege.

Vietnam’s invasion of Cambodia to overthrow the Pol Pot regime further poisoned its relations with Beijing. China was Pol Pot’s benefactor. Beijing saw Pol Pot’s regime as a bulwark against Soviet influence in Southeast Asia. Once Vietnam got rid of Pol Pot in Cambodia, Deng attacked Vietnam in 1979. stood by Vietnam. Moraji Desai, the then Indian prime minister, issued a statement calling for an immediate withdrawal of Chinese troops from Vietnam as the first step towards ensuring peace in Southeast Asia. Atal Bihari Vajpayee, India’s then foreign minister, shortened his visit to China in protest against this invasion. 

Polygamous Foreign Policy

Over the years, New Delhi and Hanoi have followed a multidirectional foreign policy. Neither wanted to anger their giant northern neighbor. Both regularly championed the idea of “strategic autonomy” that focuses on avoiding sclerotic alliances and security commitments. Given the structural changes in due to China’s rise, both India and Vietnam are moving closer.

Yet there are limits to Vietnam’s relationship with India. Retired Singaporean diplomat Bilahari Kausikan believes that given their relatively small sizes and strategic location, major Southeast Asian countries have no choice but to pursue a foreign policy. As a result, these countries seek friendship with all and confrontation with none. Vietnam is no exception.

By simultaneously juggling many relationships and contradictions, Vietnam aims to diversify its partners. Fundamentally, Vietnam uses these partnerships to pursue its national interests. India is following the same . India buys oil from Russia, conducts military exercises with the US and welcomes investment from Japan. It is friends with Israel and, at the same time, maintains relationships with Iran. Like India, Vietnam also has meaningful in place with all five members of the UN Security Council. Both India and Vietnam have defied conventional Cold-War era wisdom of making binary choices. 

Indo-Vietnamese Push for Multipolarity

Over the last few years, Vietnam has become a focal part of India’s “.” As a result, defense and security have improved. This includes joint exercises and training programs, cooperation and trade in defense equipment. New Delhi has also given $600 million of defense lines of credit to Hanoi. 

Increasing trade and have brought both countries together. Bilateral trade has ballooned from $200 million in 2000 to $14.114 billion in 2021-2022. Several Indian are investing in Vietnam. They are in diverse sectors such as IT, education, real estate, textiles and garments, healthcare, solar technology, consumer goods, and agricultural products. India is Vietnam with infrastructure and connectivity projects, development and capacity-building assistance, and . Despite Chinese apprehensions, India also has oil exploration projects with PetroVietnam in the South China Sea. Cooperation in has also grown at a healthy pace. 

Slowly and surely, a silent change is unfolding in Asian waters. China’s increasing aggression is no longer going unanswered. The Indo-Pacific will not become a Chinese lake. Regional powers are responding. Not only the US and Japan but also India and Vietnam are working more closely together to preserve a multipolar Asia. 

[Contributing Editor and CFO Ti Ngo edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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The headlines in the United States have all been about Ukraine, inflation, and gun violence. Biden’s trip was designed to prove that the United States is in fact focused on one thing above all: China, China, China.

The strengthened alliance with South Korea is a signal to Beijing that the more accommodating era of the Moon Jae-in administration is over. The Quad meetings are part of a strategy of countering China’s ambitions in the region including its ports and bases along the Asian littoral. And the Indo-Pacific Economic Framework is a deliberate effort to roll back China’s considerable economic ties with its neighbors.

If you believe that China is the most important threat to US interests, all of these moves make perfect sense. Indeed, Biden’s trip to Asia generally from the foreign policy elite in Washington, DC. Virtually the entire US expert class believes that it is necessary to confront China.

Push Reset Button with Beijing

This fear of China, however, has created a certain blindness. By , the United States is missing a golden opportunity. The Biden administration should be taking advantage of the war in Ukraine to push the reset button with Beijing. Closer relations with China would serve to isolate Russia, reorient the global economy in a more sustainable direction, and even reduce inflation in the United States.

The easiest and most obvious policy change the Biden administration should make involves the Trump-era tariffs on Chinese products. Indeed, some members of the administration, notably Treasury Secretary Janet Yellen, have indicated for reducing the tariffs. Tariff reductions could bring inflation down within a year by a full percentage . That would be good news for US consumers and businesses—and for the Democratic Party’s political prospects.

Beijing would obviously welcome this move. It would also provide an opening for US negotiators to try an even bolder gambit, one that recalls an earlier geopolitical venture by the administration of Richard Nixon. In the 1970s, Nixon and his top advisor Henry Kissinger orchestrated an opening with Communist China. It was not a particularly happy time in China. The country was still in the midst of its murderous Cultural Revolution, and the elderly Mao Zedong was an increasingly erratic leader.

But Nixon and Kissinger saw an opportunity to drive a wedge between the two chief communist powers: China and the Soviet Union. It was of utmost importance for the United States to prevent any serious rapprochement between Moscow and Beijing. Moreover, Kissinger wanted to put pressure on the Soviets to be more compromising in arms control negotiations. Also driving the opening was a US business community that was cautiously optimistic about the profits that could be made in the Chinese market.

In many ways, the gamble worked perfectly. The United States was able to negotiate a détente with the Soviet Union that lasted, more or less, until the end of the 1970s. The Nixon-Kissinger policy also helped guide China out of its Cultural Revolution and into a more sensible engagement with the outside world.

Of course, the United States is now angry that China has proven so successful in engaging with its neighbors and the global economy. Beijing is no longer content to play a subordinate role. It is challenging the US position as the world’s top economy. It is also flexing its muscles near its borders—in the South China Sea and perennially with Taiwan—and challenging US claims that it is the preeminent Pacific power.

Go Back to the Future

But, as in the 1970s, there are still some very good reasons why the United States should open the door once again to China. Russia and China have formed an energy partnership based on their mutual fossil fuel needs (Russia to export, China to import). They have a shared distrust of certain liberal tenets concerning, for instance, free elections and freedom of speech. They have both aligned themselves with other authoritarian governments for their own security interests. If push comes to shove, Russia and China could form the basis of an anti-Western alliance.

But such an alliance is not inevitable. The Kremlin has long worried about Chinese designs on the Russian Far East. China is appalled at the way Russia has violated the sovereignty of its neighbors like Ukraine. Most importantly, China wants to preserve its more-or-less good economic relations with the West, while Russia seems to have given up on any potential rapprochement by doubling down with its invasion of Ukraine.

To further isolate Putin, the Biden administration should step in to offer Beijing a wide-ranging set of negotiations to normalize trade, address outstanding questions like intellectual property rights, and come to some shared understanding of the rules of the road in places like the South China Sea.

Perhaps most importantly, the United States has to offer China a different kind of energy partnership than what the Kremlin is promising. Instead of fossil fuels, Washington should expand the clean energy collaboration that the Obama administration began with Beijing. Together, the United States and China can lead the world into a new era of renewables that is far and away more compelling—and urgently needed—than the dirty energy paradigm that Russia is offering.

Is it too hard to imagine Biden turning his back on the foreign policy consensus in Washington in order to push the reset button on relations with China?

Perhaps.

But Biden as a presidential candidate to make Saudi Arabia a “pariah.” Now, President Biden is this month to Riyadh, despite Crown Prince Mohammed bin Salman’s assassination of a US journalist and the multiple war crimes the Saudi leader has committed in his war in Yemen. The reason for this reconciliation is quite simple and quite narrow: Biden wants to persuade the Saudis to put more oil into global markets to drive down the price of gas in the United States.

Surely if Biden is willing to make friends with the assassin of Riyadh, he can mend fences with Beijing for a much larger set of benefits and the prospect of a much more advantageous peace.

*[This article was originally published by .]

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I’m boycotting these games in Beijing. Doing so does not come easy for me. As a life-long sports enthusiast, I have always looked forward to the Olympics. Watching the world’s preeminent athletes compete on the world stage and rooting for my own national team and others who seem to defy the oddsmakers never failed to excite me. As a kid, I even once dreamed of becoming an Olympic competitor myself. (Alas, my 1.7-meter frame was simply not up to the task of throwing the shot put or discus on the world, or any other, stage!)

Why Democratic Nations Must Boycott the Beijing Winter Olympics

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Here in the United States, NBC television is broadcasting the Winter Olympics, devoting at least six hours per day of coverage. Traditionally, its broadcasts dominate the ratings as Americans gather in front of their TV sets and computer and phone screens to watch and cheer on US athletes. I will be cheering on our athletes, too. But I won’t be watching.

The IOC’s Charter

I will not watch these games because they betray the very values enshrined in the IOC’s&�Բ�����; and its definition of “Olympism.” That is, it “seeks to create a way of life based on the joy of effort, the educational value of good example, social responsibility and respect for universal fundamental ethical principles.” It further states its goal “to place sport at the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity.”

Based on its charter, the IOC should have flatly denied China’s petition to host the 2022 Winter Games. How could the IOC have been so blind to its values in awarding the games to Beijing? How was it possible to allow China to host the Olympic Games when the government of the People’s Republic of China has systematically persecuted, incarcerated, shackled and tortured up to 2 million Uyghurs, sterilized their women and sought to snuff out their Muslim faith? Uyghurs, a Muslim-majority, Turkic-speaking people, have inhabited China’s western Xinjiang province for at least 1,000 years.

But the suffering of the Uyghurs at the hands of an overbearing, intolerant Beijing isn’t a one-off. The Chinese have been doing largely the same thing for decades to the people of Tibet, effectively carrying out a campaign of cultural genocide.

Several years ago, the world again witnessed China’s notion of “respect for universal fundamental ethical principles” and “promoting a peaceful society concerned with the preservation of human dignity.” Beijing-directed henchmen attacked the people and institutions of Hong Kong, decimating the last vestiges of democracy in the enclave. The government has been arresting and trying any and all opponents, dissidents, and human rights advocates unwilling to buckle under Beijing’s iron-fisted, authoritarian order.

More recently, the world has observed Beijing turn its aggression to the island of Taiwan, the lone democratic outpost today within China’s one-party, one-man “Asian Reich.” Taiwan presents an unquestionably complex and difficult issue. But the inhabitants of Taiwan have embraced democracy and the freedoms that come with it. Resolving Beijing’s differences with the island and its people with menacing and aggressive behavior — dozens of mass warplane , repeated threats and belligerent bombast — cannot possibly lead to a solution. Rather, a threatened invasion of the island would not only likely crush its democracy, but also inject enormous instability in Asia and torpedo the global economy in a manner unseen since World War II.

To the IOC, however, none of this mattered. Its president, Thomas Bach, and even UN Secretary-General Antonio Guterres traveled to Beijing for the opening ceremony of the games with nary a word about China’s abysmal human rights policies in Xinjiang, Hong Kong or Tibet. Instead, the IOC wants to see another “successful” games, which typically means an Olympics that makes money. Lots of it.

The IOC, NBC and Sponsors

Enter the American media giant, NBC. For exclusive broadcast rights to the Olympics through 2023, the network has paid the IOC $7.75 billion. That comes out to roughly $1.8 billion for the Beijing Games alone, or about 20% of the cost of the games. Tragically, revenues trump rights for China and for the IOC.

One would think that with that kind of leverage, NBC and the IOC’s numerous  and advertisers — globally recognized names like Allianz, Toyota, Bridgestone, Panasonic, Coca-Cola, Airbnb, Intel, Proctor & Gamble, Visa, Samsung and others — would have stood up to the IOC, explaining the harm to their brands of awarding the games to Beijing.

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And what about NBC itself? The Chinese government has imposed restrictions on journalists covering the games. The sort of 360-type coverage that is traditionally featured in its coverage of the Olympics — not just the events themselves but also the athletes, their lives and backgrounds, the host country and its people — is being severely . One Dutch journalist has already experienced China’s intolerance, having been  away while reporting live on camera.

Are the dollar earnings so great that NBC will sacrifice its journalistic ethics and responsibilities, all while other members of the profession  under Beijing’s crackdown on truth and free journalism?

China is not Nazi Germany. But Germany in 1936 was not yet the depraved hell of human suffering — the tens of millions of destroyed lives of Jews, Slavs, Roma and so many others — that it would become under Nazi rule. But we might have seen it, given the way the Nazis and Adolf Hitler engaged in over-the-top self-promotion and outward, sensational displays of Aryan superiority and Nazi rule.

The IOC, NBC and their many sponsors and advertisers have given China center stage to arrogantly parade and shamelessly hawk its own brand of unyielding, intolerant authoritarian rule. In China, the power of the state, its ruling Communist Party and great leader, XI Jinping, vitiate Olympism’s concepts of “social responsibility and respect for universal fundamental ethical principles” and “basic human dignity.”

If they won’t recognize this contemptible undertaking for what it is, I will. I will miss the world’s best athletes and the great ritual of the world coming together for 17 days to celebrate individual struggle and achievement. I won’t be watching these Winter Olympic Games.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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The choice is straightforward. Boycotting the Games in Beijing offers a rare, peaceful and relatively painless opportunity to send an unmistakable signal of disapproval to the Chinese elite, the people and the world at large.

China, the Bogeyman of the New Cold War

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In 1979, the city of Philadelphia entered a sister city relationship with Tianjin, China. Things have changed since those heady days for US-China relations, when every concession was offered to induce a weak, isolated and impoverished China to join the community of nations that abide by the rules of international law, trade and commerce. At the time, the hope was that China would introduce reforms and liberalize its economy and polity.

This turned out to be wishful thinking. Rulers of the Chinese Communist Party (CCP) have shown time and again that their main interest is strengthening their rule, revising the international order in their favor, suppression at home and aggression abroad.

Sounding the Alarm

Finally paying heed to the mounting evidence of an aggressive China bent on global dominance, the US administrations led by Donald Trump and Joe Biden labeled China the number-one national security . 

China’s actions and ambitions alarm and unite an otherwise deeply polarized US Congress. Growing numbers of China’s neighbors and other countries around the world are joining hands to reduce Beijing’s malign influence on international institutions before it is too late. As Senator Jim Risch, ranking member of the Senate Foreign Relations Committee,  in March, “The Chinese Communist Party presents an unprecedented threat to not only U.S. values and interests, but also to the free and open international system characterized by individual freedom and the rule of law — something the United States has carefully built over seven decades.”

So, it is interesting that on October 27, a hundred days before the start of the Winter Olympics in February, China’s consul general in New York, Huang Ping, took out a full-page ad in the Philadelphia Inquirer (“Together for a Shared Future”) and the deputy consul general, Qian Jin, wrote a letter to the editor (“Meet in Beijing for 2022 Winter Olympics”). It is a safe bet that other major American news outlets also received similar appeals to boost awareness and attendance at the upcoming Games.

From 1936 to 2022

China’s anxiety to host a successful Winter Olympics is understandable. Consider the 1936 Summer Olympics, which was awarded to Germany in 1931, two years before Adolf Hitler rose to power. Predictably, Nazi Germany used the Games for propaganda purposes, promoting an image of a new, strong, united Germany while masking the regime’s policies of racial supremacy, anti-Semitism and growing militarism.

Eager to impress, Hitler built a new 100,000-seater, track-and-field stadium and six gymnasiums. In the tense, politically charged atmosphere of 1936, the International Olympic Committee, fearing a mass boycott, pressed the German government and received assurances that qualified Jewish athletes could participate and that the Games would not be used to promote Nazi ideology. (These assurances, of course, were largely ignored.) The boycott movement narrowly failed, handing Hitler his propaganda coup and legitimizing his regime domestically and internationally, with 49 nations participating.

China would like to enjoy similar success, hoping that the world will focus on the shiny object (12 new competition venues) and ignore the brutality of the CCP’s single-party rule. But objections are being raised.

On July 27, the bipartisan Congressional-Executive Commission on China held a  on corporate sponsorship of the Games, questioning representatives from Airbnb, Coca-Cola, Intel, Visa and Procter & Gamble. Senator Jeff Merkley, the commission’s chair, said, “Holding the 2022 Winter Olympics in China and allowing its authoritarian government to reap the rewards in its prestige and propaganda of hosting this globally-beloved event does not uphold the Olympic spirit.” Merkley is right.  

China Will Not Cooperate

Still, some argue that engagement with China is the best path forward and that we need Beijing’s cooperation on issues of mutual interest, such as pandemic control and climate change. The folly of this view is exposed by China’s stonewalling of an independent investigation into the origins of COVID-19; Beijing refuses to provide samples, records, and personnel. Hopes of figuring out how to prevent future, potentially even more catastrophic pandemics remain just that: hopes.

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Likewise, do not expect help on climate change from China, the world’s biggest polluter. Voicing his opposition to the US strategy of competing with China in some areas but keeping an “oasis” for climate cooperation, Chinese Foreign Minister Wang Yi , “surrounding the oasis is a desert, and the oasis could be desertified very soon.” In other words, even on a matter as fundamental as the planet’s future, China intends to push forward with its Sinocentric worldview, no matter the consequences for humanity’s welfare.

The fact is that the CCP has used China’s immense economic, technological, military and diplomatic power not in ways that help its 1.4 billion citizens achieve political freedom or to work constructively with other countries. Beijing intends to perpetuate the CCP’s single-party rule, violate international agreements (the takeover of Hong Kong) and laws (militarization of the South China Sea), commit atrocities in Xinjiang, bully Taiwan and export to other countries its toxic surveillance-state model of controlling its own citizens.

We must not repeat the tragic mistake of 1936. We must deny the CCP the undeserved honor of hosting the Games. We must demand a boycott of the Winter Olympics in Beijing.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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Coverage by Western media of the street battles that took place generally condemned what was perceived to be a betrayal by Beijing of “pledges to allow Hong Kong’s governance to remain semiautonomous until at least 2047.” Western politicians and pundits seized on China’s aggressive crackdown on the protesters as a pretext for denouncing the People’s Republic for its anti-democratic, authoritarian methods.

Ken Burns’ Misunderstanding of Pronouns

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With the help of the coronavirus pandemic that helped to clear the streets, the government finally managed to quell the protests. Profiting from the calm, the Chinese are now planning a number of reforms. The WSJ quotes Bernard Chan, a member of Hong Kong‘s cabinet, on the nature of the intended effort: “What Beijing ultimately wants to address in Hong Kong is ‘not the politics, but the deep-seated issues’ including the lack of affordable housing and the city’s deeply polarizing income gaps.”

�մǻ岹��’s Daily Devil’s Dictionary definition:

Deep-seated issues:

The kind of issues that developed nations with a modern, free market economy refuse to address directly due to their belief that private enterprise will step up as soon as they discover how solving such problems can become profitable

Contextual Note

Chan distinguishes between “politics” that fascinate the elite (as well as the media) and “deep-seated issues” that affect all citizens. The WSJ provides some indication of the nature of the struggle to come, particularly concerning housing: “Land-policy reforms can help improve access to cheaper homes, although officials must overcome the entrenched influence of local property tycoons whom Beijing regards as too passive in their support of government goals.”

With its focus on how the economy works, The WSJ is well placed to understand the impact of “entrenched influence” exercised by “property tycoons.” For the past four years, the US itself was governed by a property tycoon specialized in wielding influence. The example of Donald Trump, the former president, may serve to demonstrate that the only effective way to “overcome” tycoons’ influence is to eject them from their position of power. But when the tycoons are legion and anonymous, as they are in Hong Kong, the struggle will be bound to last a certain time. 

The debate this has provoked in Hong Kong is fraught with the hypocrisy everyone would expect when the stakes are so high. The Chinese government appears to be focusing on soft power as it promises relief for a struggling population to distract from the issue of democratic representation. The policy may reflect the Marshall Plan approach that worked so well to consolidate America’s soft power in Europe following World War II.

The Beijing government’s narrative attributes the discontent of the protests to the very concrete social issues, deviating attention from the political issues the protesters themselves highlighted. Chan bluntly explains: “They want us to fix it.” He may be right. Just as the Americans fixed Europe with the Marshall Plan and nobody complained about their encroaching power.

Not everyone is convinced. Opposition politicians have expressed skepticism “that Beijing can overcome the decades of policy inertia and infighting that beset Hong Kong‘s political and business elite.” So long as those by virtue of their assets and cash wield actual power, the inertia is likely to continue.

Emily Lau, a former chairwoman of Hong Kong‘s Democratic Party, complains that former leaders appointed by Beijing in the face of the social challenge “never bothered to solve it.” She believes the new ones appointed after the showdown with protesters are unlikely to do any better. This could be interpreted as an excuse for maintaining the status quo. But there are reasons to believe the new policy will force change. One member of a think tank dedicated to Hong Kong policy claims that if those in charge “can’t serve the people well, they must step down.”

Historical Note

Keith Zhai and Chun Han Wong remind readers of what Western media prefer to ignore: that Hong Kong is not just a glamorous, glitzy coastal resort, but has a history. Without returning to the dramatic historical events that made it a British colony, they cite examples of how things worked during the colonial period that only ended in 1997. Hong Kong has maintained a “low-tax regime, largely unchanged since British rule,” with no “duties on sales, consumption, capital gains, dividends or inheritance,” the journalists write. The British designed this to draw Western finance, multinational companies and tourists to the enclave, turning it into a free-wheeling platform for global capitalism with a commanding seaside view over all of eastern Asia.

The writers also cite Hong Kong’s “land policies, another legacy of British rule, which have long been criticized for artificially inflating real-estate prices that boost government coffers and developers’ profits.” This system “effectively imposes shadow taxes on residents through sky-high housing prices and rent.” As in practically every modern democracy run less by representatives of the voters than by the forces of the free market, assets are privileged long before governments can even begin to consider the people’s needs. The journalists give the details of some of the proposed reforms but conclude by evoking a potential battle to come: “Such changes could see officials take on the city’s influential property tycoons, who have wielded outsize influence over land policy.”

An article in The South China Morning Post the real motives behind China’s new policy. The author cites “a historical moment rooted in the Chinese collective consciousness, and central to the very concept of national identity, that set the trend of that relationship [between Beijing and Hong Kong].” The historical narrative “cuts across various layers of society and is shared by both opponents and supporters of the Communist government.” The Chinese remember it as the “century of humiliation.”

The Opium Wars stand as one of the most shameful episodes in the annals of British imperialism, an act of aggression that saw London apply the proverb, “to kill two birds with one stone.” The two birds were China and India, which together now represent approximately a third of the world’s population. Under British direction, India produced the opium that the Brits themselves, playing the role of the neighborhood drug dealer, incited the Chinese to get hooked on, which, according to mercantilist logic, produced the means to pay for the Chinese exports of silk, porcelain and tea that the British themselves were increasingly addicted to.

A major prize in the settlement of the First Opium War was the cession of Hong Kong to the British in 1841. That marked the beginning of the century of humiliation. For the British, the acquisition of a delicious Asian bauble was the reward for their military planning and valor. Contemplating the spoils of war, Queen Victoria famously that her husband, Prince Consort Albert, “is so amused at my having got the Island of Hong Kong.”

The South China Morning Post article explains the sense of injustice felt by the Chinese after their treatment by the British. Many of them, and not just the government, see the question of Hong Kong as a question of national pride and part of their anti-colonial mission. “Deep down, Chinese nationalist sentiment is based on the hope of correcting and overcoming the legacy of imperialist invasion of Chinese lands,” The Morning Post reports.

When the Chinese speak of “deep-seated” issues, their notion of depth includes the reality of the lives of working people in Hong Kong, many of whom can no longer afford rent even for a few square meters of living space. The issue no longer concerns preferences or superficial claims. It is even less about being “amused” at possessing a piece of coastal territory with a strategically situated harbor. These are indeed deep matters. The Western powers and their media, as they attempt to deal with the rise of China, would be well advised to break free from their addiction to shallow reasoning as they seek to defend their waning hegemony.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on 51�Թ�.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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The Last British Governor of Hong Kong

The present troubles are rooted in the snake oil peddled before 1997 by what is now, very largely, an English Conservative Party that was then in office. Like all British governments, they scattered appointments about like golden corn to clucking hens.

Chris Patten, the last governor of Hong Kong before the end of the British administration, was a parochial politician for one of the most parochial constituencies in England: Bath. He was no statesman. But he was good at presenting arguments clearly — and himself as thoughtful, intelligent, intellectual, self-deprecating and wise — irrespective of the truth. Patten ran in a successful general election for the Conservatives in 1992, though he lost his own seat in the UK Parliament. For this, he was rewarded and compensated with Hong Kong.

Once there, his thinking didn’t change. He took the view that the Beijing leadership — responsible for the well-being of 1.16 billion people at the time and for lifting hundreds of millions from poverty — ought to make exceptions for an Englishman who still had his mind on home and what it would think of him after the handover of Hong Kong to Chinese authorities. Patten created the impression that he and the British cared about Hong Kong, and that Hongkongers (just like the good people of Bath) would control their own destiny through local democratic mechanisms that he would introduce. He advertised himself and his reforms shamelessly. It was an exhibition in self-delusion and sentimentality only now matched by Prime Minister Boris Johnson’s desire for Brexit, no ifs, no buts.

True, Patten was dealt a poor hand. Although the colonial administration could be effective when its military-style simplicity and self-imposed limitations were at their best, Hong Kong never had good government, let alone democracy. The majority of people had always lived in cramped accommodation as they do today, struggling to make ends meet through work, work, work and still more work. There was corruption in the administration, in the universities, in the judiciary and in business. The police worked hand in glove with gangsters. Everyone from the poorest immigrant to the highest colonial officer had to pay their way somehow.

Those insulated by money or a passport to another world might have found life in Hong Kong to be an “experience,” exciting and even romantic. For the rest, it was a grubby, dog-eat-dog existence. But Patten made a bad situation worse by foisting on it the democratic pretentions of an English market town.

Consequently, Hong Kong was left with no tradition of good government and no pool of committed and effective public servants. There was just a collection of tycoons and merchants, intellectuals and professionals, only some of whom might conceivably oversee Hong Kong’s gradual integration with China. The field was narrowed further after many of them — hooing and cooing at the world in what D.H. Lawrence called an “Oxford voice” or, worse still, a “would-be Oxford voice” — wrapped themselves in Patten’s democratic cloak. They were the ones upholding democracy and defending the people’s “unique” way of life.

So, don’t blame them if they were incompetent; if they were unable to agree on anything or do anything; if they failed the people through maladministration and petty bickering; if they had no imagination or foresight or just did not care; or if they spent their time grandstanding while others scratched out a living in tiny rooms amongst the skyscrapers.

Blame the outsiders instead. Blame the day-trippers who pack the shops, stuff their wheelies full of Gucci and Yves Saint Laurent, pour through the streets, clog up the trains and buses, fill the parking lots, push up prices and are generally “there” in too great a number. Blame the outsiders who are picking up jobs, buying up apartments, fouling up the bureaucracy and public services and who, in just about every other sense, are behaving rather badly. Just blame the outsiders.

For the last two decades, these writhing factions have preferred to engage in whatever shabby tactic is needed to get one up on their opponents. Having grown up in this morass, it is unsurprising that today’s politicians and “influencers,” professional dissenters and career activists (many of whom are still only in their 20s and 30s) are just as uncompromisingly bitter, ambitious and moralistic as their mentors. If things should go badly wrong in Hong Kong, well that will only give these careerists the profile they need and another entry for their résumé. They might even be able to scoop up a stipend as a “scholar” at a prestigious university overseas and write books about the crisis they saw coming.

The Mainland

The most critical problem confronting Hong Kong, and the source of the despondency eating away at its soul, is second-rate political leadership by Hongkongers, for Hongkongers. The solution lies just across the border. If absorbed by Shenzhen, Hongkongers would quickly see an improvement in their living standards. The high-quality government that the city so desperately needs would be forthcoming immediately, the political and physical constraints on the territory would be relieved, living spaces opened up, corruption expunged, businesses controlled and inequalities finally tackled as subventions are pushed toward those who need it most.

Beijing is certain to act positively because its long-term survival, just like that of any other leadership the world over, depends upon how well it looks after those it governs. Moreover, Beijing will want China to look good. And there is the simple fact that the Shenzhen government really does know what it’s doing.

The solution might seem radical, even unthinkable in the present circumstances. Yet full integration by 2047 will take place come what may. I suspect it will be necessary sooner rather than later. At the moment, Hong Kong’s government probably has neither the will to make such a proposal, nor the ability to win enough support for it after 22 years of misrule.

The most likely scenario is that Beijing will increase pressure on Hong Kong’s tycoons to govern properly and look after its own people rather than just administer them. Equally likely, however, is that Hong Kong’s youth, seduced by that Oxford voice breathing gently and languishingly on the back of their necks, will cling to the hope that they can unmix Hong Kong from mainland China. Beijing will then have no choice but to conclude that the slow path to integration is taking Hong Kong over a cliff. Unity will come sooner rather than later but in a different and extremely unhelpful atmosphere — one, it will be said, that all along could have been avoided.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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Often feeling insecure from Western-induced barbs, the Chinese Community Party (CCP) is taking its turn for viewing the other side from a pedestal. The rise of Donald Trump and Brexit have allowed the CCP a renewed sense of confidence, given that these two phenomena demonstrate the fallbacks of liberal democracy—and, by default, the success of China’s one-party state.

, a state-owned newspaper, wrote that the rise of Trump opened a “Pandora’s box,” after which the “US faces the prospect of an institutional failure.” Comparing Trump to fascists of the 1930s, the party mouthpiece reminded readers that “Mussolini and Hitler came to power through elections, a heavy lesson for Western democracy.”

And then there is Brexit: the victory of an inward-looking, Little England mindset. Though Beijing will regret the loss of its best ally in Europe, the disastrous impact of Brexit on the British economy—as well as the exposure of exaggerations and lies from the Vote Leave camp—adds to China’s argument that Western-liberal democracy is inefficient and destructive.

Beijing’s case for a one-party state is, of course, self-serving. Since China began getting rich in the 1980s, the CCP sought to legitimize its rule through its economic successes. Now the economy is faltering, the party will inevitably seek other sources of legitimacy. One of these is the failure of Western democracy to prevent self-destructive and nationalist leaders coming to power. Paradoxically, the other source of legitimacy is its own Chinese nationalism.

China’s criticism of liberal democracy is more a finger-wagging exercise against nationalist forces that inevitably arise within liberal frameworks. But China, too, is guilty of exploiting and encouraging these forces. China calls out nationalism elsewhere but actively fosters its own.

The Hague Ruling

To distract ordinary Chinese from the economic slowdown, the party has diverted their attention to the South China Sea. Based on , it uses a “nine-dash line” to mark its territory and seeks to control 90% of the South China Sea, including its encompassing strategic islets and reefs. Chinese state media has aggressively pursued a campaign to reiterate these claims to the population.

On July 12, an international tribunal in The Hague ruled in favor of claims by the Philippines over control of disputed waters in the South China Sea, which Chinese state-owned media were quick to . China’s state news agency, Xinhua, said that “as the panel has no jurisdiction, its decision is naturally null and void.”

, too, joined the nationalist chorus by hastily posting a map of China and the “nine-dash line” on Chinese social media using a viral hashtag that roughly translates to “China, not a single part can be taken out.” It is reasonable to believe some of these celebrities may have been coerced by the government, given that others have seen their .

When asking ordinary Chinese about the ruling, this author found they were likely to reiterate the party line.

“The South China Sea is China’s inseparable territory. Every fish is China’s,” said Liu Lijuan, a journalism student from Tianjin.

Some took an uglier nationalist approach. Lu Miyuan, a nurse from Hebei province, threatened: “If the Philippines claims the South China Sea, then China will claim the Philippines.”

By using nationalism, Beijing is, to use the Chinese idiom, riding a tiger and unable to get off. The use of nationalism may help prop up the CCP in the short term, but the party will find itself unable to quell the increasingly hostile sentiments of its citizenry.

Just like how Brexiters made unrealistic claims about a life outside the European Union, Beijing may disappoint the nationalist forces on which it is riding. If the Chinese government cannot secure territory and meet its citizens’ unrealistic nationalist aspirations, the CCP will lose a source of legitimacy. The people may turn against it.

And beyond the South China Sea, China is having other territorial problems, again thanks to its heavy handedness. Relations with Taiwan—which is included in China’s territorial claims but enjoys de-facto independence—are , with Taiwan showing no appetite to rejoin the mainland. , unthinkable before Xi Jinping’s premiership, are growing. The supposedly autonomous region of Xinjiang is descending into civil war, and .

It is unlikely that China will not be able to secure all these territorial claims and calm nationalist sentiment. Warning against the rise of Trump, : “The US had better watch itself for not being a source of destructive forces against world peace, more than pointing fingers at other countries for their so-called nationalism and tyranny.”

Perhaps China should take its own advice.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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In April, a new security doctrine proposing an international system for security governance based on Asian features, which included openness and inclusiveness. The Chinese leader emphasized that the US pivot to Asia has not brought peace to the region. “Hence, the U.S.-led alliance system is not the right option to safeguard the peace and stability of Asia.”

From the Chinese president’s comments, it seems this new strategy is mainly to counter US efforts to rebalance power and address rising security tensions in the Asia Pacific.

President Xi also to work together with China to safeguard peace and stability. The policy envisions a regional security model with a “dual-track approach,” integrating the Chinese dream of national rejuvenation with the Asian dream for a brighter future.

The United States, however, has continued its involvement in the Asia Pacific, and on May 10, Washington . The matter further escalated when two a US military reconnaissance plane on May 17.

The Standoff

China has territorial disputes with multiple countries that surround it, including Japan, Brunei, Malaysia, the Philippines, Taiwan and Vietnam. The issues are mainly related to claims over three clusters of tiny islands—one in the East China Sea and two others, Paracel and Spratly, in the South China Sea.

The dispute in the East China Sea is with Japan over an uninhabited 7-kilometer-wide island known as Senkaku by the Japanese and Diaoyu by the Chinese. This island has been . The Paracel islands have been held by China but claimed by both Taiwan and Vietnam as their own. A cluster of 100 small islands called Spratly is part of a larger contention, with the Philippines, Malaysia, Vietnam, Brunei and China all staking their claims.

Control of the uninhabited islands is important for four reasons. First, about . Second, the Asia Pacific is rich in natural resources. Third, it offers rich fishing waters. Fourth, the key reason behind the territorial dispute surrounds geopolitics, especially due to the dominating nature of China. Beijing’s presence in the area raises not only sovereignty issues, but also security concerns to these nations.

By the end of May, an on a case filed by the Philippines, disputing China’s claim on the entire South China Sea. Beijing has not only rejected the procedure, but also rushed into expanding its territorial claim by building islands, including an area falling in the Philippine economic zone and within 200 miles of that country.

Since the case was first filed in 2013, China has built seven islets in sea water to its south by piling sand on reefs. In 2015, Beijing also , the Fiery Cross Reef. in at least two other islands in the Spratly Islands.

Rising Tension in the region

These activities have become a point of international contention, resulting in rising tension that is clearly seen from the increased military budgets of countries in the region. According to the , military spending has risen by 167% in China, 30% in the Philippines and 170% in Vietnam. To put pressure on China, the US sent a Navy destroyer to the area in late 2015 and again in January 2016 before the latest episode in May.

Sino-Japanese tensions have escalated since 2013 when China announced the , requiring all aircraft flying over the zone to comply with rules laid down by Beijing, which was seen as “unilateral escalation” by Japan and the US.

Diplomatic Efforts and Counter Efforts

To provide support to countries in the region, US President Barack Obama sought to cement closer ties between Washington and the in February. During the conference, a joint statement was issued emphasizing the need for respecting sovereignty and international law in the Asia Pacific. While it was good for symbolic support, it fell short on expectations of nations having territorial disputes with China, especially did not specifically name that country.

Considering the hostility in the region and the US intervention in it, China has launched aggressive diplomatic efforts aimed at influencing other countries to limit “outsider” influence and resolve territorial issues in the South China Sea.

During his recent visits to Cambodia, Laos and Brunei, Chinese Foreign Minister Wang Yi tried to , and he declared that the island issues should not impact their relations. In April, President Xi went further with an offer to have “.”

Long-Term Impact

Developments in the South China Sea have implications beyond the region. Some analysts believe that China is building military bases across the Indian Ocean as part of a “.” After the completion of such bases, there would be further international danger if China moves its dredgers and equipment to other places in the region. For instance, China may build and use islands to form a logistics chain in the Indian Ocean Rim (IOR).

India has been looked upon by smaller countries in the region for support, similar to what the US gives in the Asia Pacific. Even the US expects India to play an important role for balancing China. IOR countries have hosted talks at summits for regional security and economic development. Significantly, India, the US and Japan hold an annual joint naval exercise called Exercise Malabar, while in 2015, an Indian warship .

Responsibility for Peace

With China as an emerging superpower, Filipino President Benigno Acquino has a valid question: “?”

Over the past 100 years, we have seen two devastating world wars resulting in large-scale destruction and loss of life. Meanwhile, two competing superpowers, the US and the Soviet Union, had decades of diplomatic tension and waged a Cold War. However, both countries succeeded in proving to be a counterbalance for the other.

After the Soviet collapse, the US unilaterally took over the responsibility of being the global peace administrator. Fortunately, the world has managed to avoid a major international war by containing conflicts to smaller regions and avoiding direct violence between two superpowers.

But while Russia has suffered an erosion of its superpower status, China is fast emerging as a new superpower. The current military escalations in the Asia Pacific have not triggered any serious war, however, we must learn from history that expansionist agendas of superpowers often lead to destruction.

Hopefully, as announced President Xi, China is genuinely interested in a peaceful resolution of disputes by direct and pressure-free talks between regional countries. It is important for the aspiring superpower to show more restraint for the benefit of world peace.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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The economy has been breathing fire since Deng Xiaoping initiated market-oriented reforms in 1979. Since 2015, the Chinese economy has sputtered. Its growth rate was a mere 6.9%, a 25-year low. This author predicted that the Chinese slowdown would make the world economy wobble and “.” The wobbling global economy in turn is inflicting much pain on China as “” increase.

Thousands of workers are losing their jobs. Those lucky to retain employment find their wages slashed. Naturally, China is experiencing labor unrest. As per , strikes have increased from eight in January 2011 to 503 in January 2016.

Needless to say, Chinese leaders are nervous. This week, China’s National People’s Congress began its annual meeting. Premier Li Keqiang made global headlines by announcing that China would target a growth between 6.5% and 7% for 2016. It is the first time Chinese leaders are targeting a range instead of a specific figure. Yet most informed observers believe that this figure is a touch too high.

In January, . In the same month, this author explained how the . Ballooning debts, vanishing jobs and growing inequality are leading to turmoil across the world. The rise of Donald Trump and Marine Le Pen reflects the economic malaise afflicting the rich world. Debt-fueled consumption can no longer go on.

Chinese leaders have recognized this fact by setting no trade target. Last year, they set a target of 6% growth only to face humiliation when both exports and imports contracted. Yet Li is guilty of hubris for declaring that . He has gone on to say: “By that time, our economy’s size will have exceeded 90 trillion yuan.” True to form, The Economist remarked with damning irony: “Omniscience is a wonderful thing.”

Chinese growth targets and figures have long been fishy. Since 1990, . This implies either extraordinary foresight on the part of policymakers or crafty massaging of economic data. This time, Chinese leaders are setting a high bar when the global economy is floundering. This means they will have an incentive to overestimate growth to save face.

Such a high target range reveals that Chinese leaders have reposed absolute faith in . They are making big fiscal and monetary decisions to keep growth going. The deficit will increase from 2.3% to 3% of gross domestic product (GDP) that is . This is a huge $330 billion stimulus to keep the economy going.

This stimulus follows hard on the heels of the one after the 2008 Great Recession. On November 9, 2008, . Ten sectors, including health care, education, transport, roads, railways and other infrastructure projects, were earmarked for this largesse. The government opened credit taps for these sectors and China’s rapid growth continued.

Now, growth is slowing down and the party has come to an end. This terrifies the Middle Kingdom where emperors have long been dethroned by rebellions from to . These two rebel forces overthrew emperors roughly 2,000 and 650 years ago. Mao Zedong’s Red Army itself captured power because of peasant support. The in the Chinese Politburo vividly remember what their grandfathers did to those in power.

The new stimulus is an attempt to keep China’s economic engines whirring and avoid unrest. China’s leaders are abandoning grand projects and embracing tax breaks to boost the economy. Supply side economics posits that people spend more when they have more money in their pockets. This will boost entrepreneurial and efficient private companies instead of slothful state behemoths. The only trouble with this assumption is that animal spirits in China are ebbing low.

China’s addiction to stimulus packages has roots in its past. Its leaders are haunted by the failures of Mao, the collapse of the Soviet Union and Tiananmen Square. The princelings know too well that they lack the moral authority of Mao and Deng. They are not revolutionary veterans of . The princelings have led cushy lives, studied at elite universities like Tsinghua and are as privileged as Old Etonians like British Prime Minister David Cameron. Unlike Cameron, they do not preside over the Conservative Party. They are the big bosses of the Chinese Communist Party (CCP) and heirs to a revolution that aimed to create an egalitarian society in a deeply unequal land.

Today, hardly anyone in China believes in that egalitarian ideal. In an , a young girl rebuffed a poor suitor with a quip that she would rather cry in the back of a BMW than smile sitting on a bicycle. Materialism rages in the Middle Kingdom now that Karl Marx’s materialistic philosophy promised a classless society that has failed to materialize. Instead, even the in the Middle Kingdom. Once upon a time, Deng declared that to be rich is glorious and, by some estimates, . Those who are left behind do not feel so glorious.

All the perfumes of Christian Dior still fail to stir Chinese souls. The Cultural Revolution decimated Confucian traditions and there is a spiritual void in Chinese society. Christianity, the supposedly evolved religion of Europe and the US, is filling this void. Devout Christians are starting to throw a gauntlet to the atheists who rule China. This is making CCP leaders nervous.

On February 26, for refusing to remove the cross from his church. This pastor in Zhejiang province was found guilty of embezzling money from his congregation and of inciting people to disturb social order. His wife was also sentenced to prison for 12 years. For many, white Jesus is replacing native Mao as the new god of salvation. The leaders of the CCP have no clue as to what to do.

In an increasingly uncertain world, Chinese leaders are like . Last year, they . They did the same when they bailed out real estate companies, mirroring bank bailouts in the US. In both countries, robber barons took risks and walked away with big profits, while taxpayers provided these barons insurance and absorbed private losses.

In any case, in the land of , those connected to CCP leaders are in pole position to reap rich rewards. If party bosses seize land from peasants for development, their relatives are likely to profit from ensuing construction projects. At its essence, China is suffering from a massive transfer of wealth from the many to the few because of corruption and crony capitalism.

. They are the Middle Kingdom’s worst kept secret and a real threat to the country’s financial system. Those with guanxi with officials and bank bosses are able to get loans easily and then default on them with impunity. The rest of the country lives frugally and saves diligently only for banks to spray its money wastefully. In January, . This is madness. China might end up with just like Japan and Europe.

China has made catastrophic economic choices before. Mao’s Great Leap Forward led to economic regression from 1958 to 1962. Forced collectivization of farms and harebrained schemes of industrialization led to a famine that killed millions. As Beijing-based , even Chinese history textbooks call this time Three Years of Natural Disaster. China’s new stimulus is another economic blunder albeit not quite of the scale of Mao’s.

In 2007, this author observed that . Today this is truer than ever. Air, water and soil pollution are imposing a cost on future generations that cannot be quantified or measured. The catastrophic environmental damage that economists dismiss as externalities is threatening people’s health and wellbeing. Last year, . They demonstrated the dire risks accompanying the biggest and fastest industrialization in human history.

Chinese leaders have to realize that their debt-fueled stimulus is dangerous. They cannot keep kicking the can down the road and delaying the readjustment of China’s economy. To avoid the fate of Chinese dynasties that crumbled in the past, the princelings have to be bold. The Middle Kingdom needs innovative economic models and new political institutions. Only then can the dragon keep breathing fire.

*[You can receive “The World This Week” directly in your inbox by subscribing to our mailing list. Simply visit  and enter your email address in the space provided. Meanwhile, please find below five of our finest articles for the week.]

The Presidential Race We Deserve

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Super Tuesday results on the Republican side show how little attention Americans pay to public policy.

The political discourse of shouting, speaking in platitudes, making vague and nebulous claims, blatant lies, misinformation and xenophobia has dominated the Republican side of this election cycle. Individually, none of this is new or unique in politics, but they are combined and accentuated to create the worst political discourse that I can remember. While it is easy to blame particular candidates, demographics or industries, the blame for the degradation of our national politics lies with we the people.

First, political campaigns react to nothing more strongly than polls, perception and donations. No political candidate could afford repetitious lying or unapologetic scapegoating if there were either financial or electoral consequences.

Relatedly, the ubiquitously vilified American media are largely, at the bottom line, private corporations that aim to turn profits. Contemporary coverage and narratives are more often driven by our desires than by civic…

Maduro’s Time is Running Out in Venezuela

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Faced with electoral setback and rising popular discontent, the Venezuelan president just announced a number of economic reforms.

In Venezuela’s most recent parliamentary elections on December 6, 2015, Chavismo experienced its first political setback since coming to power 17 years ago. The Venezuelan opposition won 112 of the 169 seats in the National Assembly, the country’s legislative branch. According to several analyses, nearly 1.9 million self-identified supporters of the “Bolivarian Revolution” abstained, and the number of opposition voters increased by only 343,000 compared to the presidential election of 2013, when the winner was the current president, Nicolas Maduro.

The results of the parliamentary elections were described as a “punishment vote” due to a lack of effective action by the government to combat the economic and social crisis that has worsened since the second half of 2014, when the price of oil—Venezuela’s main and almost its only export—began to plummet. The crisis, according to President Maduro…

Donald Trump Speaks for the Speechless

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The Republican frontrunner has managed to channel the inner fascist that lurks at the core of conservative America.

For those of you who continue to believe that America is a great nation deserving of the respect and admiration that much of the rest of the world seems to have forgotten about, the 2016 presidential race to the sewer will provide a plethora of feel good moments.

Mexicans and Muslims are already cowering as campaign crowds acclaim an impenetrable great wall of the Rio Grande and cheer for a search and destroy regimen to keep suspicious religious adherents from our shores and out of our communities. If you think this isn’t quite good enough, there has been and will be much more.

For some it is uncomfortable, but for me it is rewarding to see America’s conservative inner core exposed. It seems that a significant segment of that populace has been waiting for someone to come along who loudly…

More Puzzling Decision-Making From Saudi Arabia

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The latest move by Saudi Arabia will do little to curb Hezbollah’s actions in Syria.

Saudi Arabia’s decision to ban its citizens from traveling to Lebanon only raises more questions about the kingdom’s foreign policy in the Middle East. The travel ban comes on the heels of previous decisions to cut off aid to Beirut and withdraw deposits with the Lebanese central bank. Riyadh’s move was followed by similar actions from other members of the Gulf Cooperation Council (GCC), including Bahrain, Qatar, Kuwait and the United Arab Emirates.

These actions come at a bad time for the battered Levantine nation. With its population swelled by nearly 25% by Syrian refugees, the concomitant Syrian Civil War on its eastern border raging into its sixth year, and its presidential selection saga still undecided, Lebanon cannot afford to lose either the GCC funds on which it has depended for so long, nor the many Gulf travelers who come to enjoy and…

Diaspora Offers Nigeria Hope in Fight Against Boko Haram

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With many middle-class professionals in the diaspora, Nigeria should look to expats on how to combat Boko Haram.

Terrorism is a global phenomenon, but the way it is manifested is regional, local and culturally specific. In Nigeria, Boko Haram has been most deadly in the Muslim north. For some in the Christian south, a desire to be free from the terrorist group’s tarnishing of the country’s image has led to an “othering” of the north. It has brought back the feelings of some who always thought that Nigeria should not be one, but two: a Muslim north and a Christian south.

Nevertheless, it is important to explore why the Nigerian diaspora’s involvement in jihadist activity in Europe has been very limited. Reports about Nigerians affiliated with Boko Haram and the susceptibility of jihadist cells have been moderate.

Supporters of Boko Haram are poor, marginalized and disenfranchised; people are divided on religious lines; and the domination of Muslim minorities…

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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On April 15, Chinese troops of about a platoon’s strength crossed the Line of Actual Control that separates India from Tibet, and penetrated ten kms into India with helicopter support and set up a frontier post. Not surprisingly, China denied the entire , accusing India instead of “aggressive patrolling.” The pattern is familiar, seen around China’s peripheries in its conflicts with Japan, the Philippines, Vietnam, and India.

This pattern is played out not only geographically, but also chronologically. China has always raised tensions along its border to keep other powers off-balance in their relationship with Beijing. This habit serves a dual purpose in that it also diverts its people from internal dissatisfaction. While Chinese territorial claims remain outrageous, the actual incursions on the ground are always small enough to tempt observers into arguing that the change from status quo is insignificant.

Creating Small Incidents

It is this seeming insignificance that is most worrisome. The Chinese leadership has mastered the art of creating small incidents at the most opportune time. The 1962 Sino-Indian War, for example, started in the midst of a very tense Cuban Missile Crisis, and the Second Taiwan Crisis in 1958 took place in the middle of US intervention in Lebanon. Chinese motives for continually stoking the tension along its borders has rarely had anything to do with actual possession of territory and more to do with creating leverage, both domestically and internationally.

One incident in this pattern, the Taiwan Straits Crisis of 1958, was orchestrated by China to signal its arrival upon the world stage. After living in the shadow of the Soviet Union under Joseph Stalin, Beijing took the opportunity of Nikita Khrushchev’s de-Stalinization to set itself up as another locus in the communist brotherhood and non-aligned world. While Beijing’s commitment to a single China may be serious, its posture over Taiwan in 1958 certainly was not. Diplomatic documents reveal that: “Chairman Mao said that the bombardment of Jinmen [Quemoy], frankly speaking, was our turn to create international tension for a purpose. We intended to teach the Americans a lesson. America had bullied us for many years, so now that we had a chance, why not give it a hard time?” In another meeting, Mao explained: “[Our bombardment] was merely aimed at testing and scaring the Americans, but we would land if circumstances allowed. Why should we not take over Jinmen-Mazu [Quemoy-Matsu] if there came an opportunity?”

This is not to imply that China had little concern over US shipment of state-of-the-art military hardware to Chiang Kai-shek from 1955 to 1958. Mao was certainly reacting to American attempts to redress the balance of power situation in Taiwan, but the bombings were merely meant as a probing of American attitudes, given that the United States had not signed a formal treaty obligating it to come to the defence of Taiwan in the case of a Chinese invasion.

A similar modus operandi is seen in another event in the pattern: the prelude to China’s invasion of India in 1962. New Delhi’s stubborn refusal to declassify diplomatic documents has made an already difficult issue controversial as well, with some scholars heaping the blame for the conflict on Jawaharlal Nehru and India. Nonetheless, China’s behaviour with India has interesting parallels with the Taiwan crisis. As Nehru saw the Himalayan Crisis, the question of a few square miles of barren wasteland was not merely a question of sovereignty or international prestige, but one of whether Chinese belligerence could be allowed to intimidate smaller, non-aligned countries, and whether they could survive free from a mantle of Chinese leadership.

Beijing carefully maintained Nehru’s faith in diplomacy throughout the 1950s and early 1960s; Chinese praise of India’s role in the Korean War, the warmth Mao showed towards Nehru, and the signing of the Panchsheel Treaty between the two Asian giants were markers of a positive relationship. Chou Enlai had explicitly stated that China had no territorial claims against India in 1951, a claim that was reiterated by other senior officials even as late as 1960. In a high-level meeting between the two countries in April 1960, Marshall Chen Yi and Chou Enlai assured India’s ambassador to Beijing, RK Nehru, that war between India and China was inconceivable. In another meeting, Chou Enlai repeated to the Indian vice president, Sarvepalli Radhakrishnan, his earlier assertion that China had no claims south of the MacMahon Line and that China had no intention of laying claim either. However, the very next day, both Chen Yi and Chou Enlai told the Indian finance minister, Morarji Desai, that they had no intention of ever accepting the McMahon Line.

As the British Foreign and Commonwealth Office noted:

“It looks as if the Chinese intended one day to challenge the McMahon Line, quite apart from the Tibetan disturbances. Otherwise why did not Chou ever let Mr. Nehru have anything in writing recognising the Line and why did[n't] the Chinese Government do anything about the maps? It seemed… that this was deliberate, that Chou’s reassurances to Mr. Nehru about the Line were purely tactical.”

The Same Pattern

There is another dimension to the Sino-Indian War that is usually overlooked in India: the contribution of Sino-Soviet rivalry. The Indian Embassy in Beijing reported back to New Delhi in late 1960 that: “In their ideological battle with the Communist Party of the Soviet Union (CPSU), India’s non-alignment had become a target for the [Chinese Communist Party].” While Chou Enlai opposed the aggressive tone of Chinese policy towards India, Liu Shaoqi pursued it relentlessly. These “leftist dogmatists” in the CCP saw Nehru not as a nationalist leader, but as a reactionary bourgeoisie. Therefore, they argued, non-alignment was just a ploy and it was only a matter of time before India joined the Western Bloc. Chinese brinkmanship in the Himalayas was, thus, meant to expose the weakness of Indian neutrality and the duplicity of Soviet peaceful coexistence, and had much less to do with Nehru’s “aggressive forward patrolling” or Tibet as many believe.

The same pattern is observed in 1965 and 1971 (albeit with some US encouragement), when China threatened the use of force against India’s “aggressive patrolling” of the border region, and in 1979 during the Third Sino-Vietnamese War, when the supposed and actual reason for the initiation of hostilities didn’t line up.

Returning to 2013, these patterns from the past are immediately visible: proclamations of the desire for peaceful coexistence; feigned anger at a supposed slight; ambiguous diplomatic positioning; and military risk-taking with the hope of usurping territory and rights undefended. Enough ink has already been spilled on how the Indian military might better defend the country’s frontiers, how India lacks a coherent China policy, and how Indians need to calm down about an incident that is more routine than one would like. However, it might also behoove policy makers to take a step back and see the larger pattern of Chinese behaviour with its neighbours: duplicity, opacity, and belligerence when they can get away with it. The recent border skirmish is not an isolated incident but fits uncomfortably well with Chinese strategy over the past few decades. India needs to consider the entirety of Chinese strategy and not restrict its response to a singular event but develop a range of options by which to undermine China’s game.

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On Wednesday, June 19, US Federal Reserve chairman Ben Bernanke announced that the US central bank planned to end its five-year quantitative easing program later in 2013, when the US economy is expected to pick up. That day, the Standard & Poor's 500 stock index tumbled by more than 1%, and all major US indexes continued falling through the following week.

The Fed's intentions reverberated around the globe, as prospects for higher US interest rates and the end of easy money prompted capital outflows from China and other emerging markets. Indeed, Bernanke's speech helped catalyze a surprising liquidity squeeze in China — one that signals more change to come in that country's financial system and carries broad implications for the global economy, experts say.

On Thursday, June 20, China's overnight interbank lending rates — the rates at which banks borrow from each other — spiked to their highest levels ever. The seven-day repurchase rate reached a record 12.45%, closing at 11.62%, triple the year's average of 3.85%, according to Bloomberg. China's central bank, the People's Bank of China (PBOC), declined to inject liquidity to calm the markets. On Monday, June 24, the Shanghai Composite Index witnessed its biggest decline in four years and continued to drop the following day until the PBOC said finally that it would infuse more money to stabilize the system.

Gradually, an explanation emerged. The central bank allowed the squeeze on bank credit to rein in irresponsible bank lending to the so-called shadow banking industry. With trillions of dollars in reserves and money supply growing at 15.8% during the last year, China has no real liquidity shortage. Yet, small- to medium-sized enterprises are starving for capital, while bank loans fund speculative shadow banking wealth management products and questionable local government-backed projects instead, according to Xinhua, China's official news agency.  

The PBOC's hard-line approach was a wake-up call, signaling that China's new leadership under President Xi Jinping and Premier Li Keqiang is preparing to undertake potentially significant structural reform of the economy, replacing fast growth — driven by low-cost, state-directed investment — with slower growth driven more by market forces, private sector enterprises and consumption. With the PBOC's attempt to rein in credit overexpansion, analysts are now lowering expectations that China will reach this year's 7.5% GDP growth target, already well below the average annual 10% rate of the last 30 years.

"The recent [liquidity] incident has really done lots of damage to global investors' confidence in the outlook for China," says Xianfeng Ren, Beijing-based senior economist for IHS Global Insight, a market research firm. According to Horst Loechel, professor of economics at Germany's Frankfurt School of Finance and Management and visiting professor at Shanghai's China-European International Business School: "When one-third of the global economy is driven by China, this means slower growth for the world."

Adjusting Expectations

Yet, slower but more sustainable Chinese growth — through structural reform — can be positive for China and the world, say experts. China's new leadership is preparing a slate of big reforms for discussion at the plenary of the Central Committee this fall, according to top business Chinese publication Caixin. Given the changes afoot, GDP growth rates should no longer be the hallmark by which investors evaluate China. "The rest of the world has accepted for so long the inevitable rapid Chinese GDP growth, that we need to adjust expectations," says Wharton management professor . "Even if growth rates go down, it's for the better, because useless investment will cease."

In his June newsletter, Michael Pettis, professor of finance at Peking University's Guanghua School of Management, agrees: "…China's growth model, which is not at all unique and for which there are many historical precedents, is usually wealth enhancing in its early stages, and then becomes wealth destroying once capital is systematically misallocated."

Indeed, with outstanding bank credit at double GDP levels, China now requires more investment to generate the same amount of growth. In the last decade, one renminbi (RMB) of investment created an equivalent amount of nominal GDP growth, but now, it takes three RMB of investment to create one RMB of GDP growth, according to IHS Global Insights. The declining impact is due in part to the larger size of the economy itself, and also to the expansion of stimulus spending and credit after the global financial crisis. In a November 2012 paper, the International Monetary Fund concludes that China needs to lower its investment by 10 percentage points of GDP to ensure its most productive use. The cost of the high investment has been borne by households, estimated at almost 4% of GDP per year, the paper notes. Meanwhile, small- and medium-sized enterprises — often the engines of economic growth — face high costs of capital, because low-cost bank lending is available only to large state-owned enterprises.

In the Shadows

Shadow banking, or lending that takes place beyond China's regulated banking industry, illustrates some of this phenomenon. Shadow banking totaled $6 trillion at the end of last year, or 69% of Chinese GDP, according to JPMorgan Chase. In a popular practice, shadow bankers raise funds from investors through wealth management products (WMPs), often offering 6% annual interest, compared to ordinary bank deposits carrying a low, government-set 3% rate. The shadow bankers, in turn, lend the proceeds from WMPs to small- to medium-sized enterprises or local government projects otherwise unable to get bank loans. The problem: WMPs are short-term, often maturing in three or six months, but are funded by these longer-term loans. To pay off investors when the WMPs come due, WMP lenders borrow from banks, which get their funds through the interbank lending market. The Chinese liquidity shortage in June was the PBOC's attempt to squelch the growth of WMPs.

Yet, shadow banking itself is not necessarily bad for China and may actually serve to apply "backdoor pressure to liberalize the financial system," says Pieter Bottelier, senior adjunct professor of China Studies at the Johns Hopkins University School of Advanced International Studies in Washington DC. "Many top financial leaders have wanted to liberalize interest rates, especially bank deposit rates, for a long time, but they have been met with political resistance, because control of interest rates is an instrument used by the [Communist] Party to provide hidden subsidies to state-owned enterprises."

Bottelier notes that China used a similar bifurcated market approach to reform the agricultural market starting in 1979, when the government allowed free market pricing of agricultural goods to coexist with controlled prices, and then liberalized prices when the free market grew to 80% of the total market. "My conjecture is that authorities are deliberately allowing dual pricing in the financial market to make it easier to abandon controlled interest rates once 80% of the market is at free market prices," he says. But with only about 50% of financial market intermediation at uncontrolled prices, it may take some time, he adds.

Necessary Risk

Raising bank deposit rates would provide a market-driven mechanism by which to introduce more lending discipline, experts say. The low cost of money now guarantees banks a 300 basis point profit for every loan, compared to 100 to 150 basis points for their Western counterparts, says Loechel. Low deposit rates enable Chinese banks to make loans often without regard to creditworthiness, including to inefficient state-owned enterprises.

To create an economy driven by more innovative and productive enterprises, China "really needs to develop banks willing to lend to the private sector and to undertake the credit risk that's necessary," notes Wharton finance professor . Of course, Meyer adds, "once you liberalize those interest rates, the ability of the government to allocate resources to state-owned enterprises (SOEs) and projects that are priorities in the economic plan is diminished. Then, in effect, SOEs compete on a level playing field with private sector. If you're a manager of a traditional SOE accustomed to very low cost capital, and you have a very strong interest in preserving cheap money, you're going to lobby like hell against liberalization of rates."

Last year, the PBOC started liberalizing rates, giving banks the flexibility to set 10% plus-or-minus benchmark lending and deposit rates, and the next step could be to widen that band by 20%, says Loechel. [Editor's note: Following the publication of this story, on July 19, the PBOC eliminated the lower limit on loan rates, given the economic slowdown.] In addition, the government is likely to develop a corporate bond market, to privatize further at least one of the biggest Chinese banks, and to open the sector to foreigners to provide more competition to domestic banks, he notes. Financial sector reform is a necessity before China can internationalize the RMB — a natural step to take given the country's huge dollar reserves. "The contradiction between pressures to internationalize the RMB and a still immature financial system is one of the most interesting challenges facing the new leadership," according to Loechel.

The impact on the global economy of interest rate and financial sector reform in China will be far-reaching, Allen predicts. "That will underline the start of a significant change in the way that the international financial system operates," he says. "In China, lots of entrepreneurs and firms are willing to pay high interest rates, but at the moment, that demand doesn't see through to the global system. As the Chinese open their capital account, that's going to happen. As China starts playing a role in determining global interest rates, that will make it harder for the Federal Reserve and the European Central Bank to control things as they've done so far."

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“It is not in the stars to hold our destiny but in ourselves.”

Several developments related to India call to mind William Shakespeare’s famous line in Julius Caesar. The first are the tours of the United States that Finance Minister Palaniappan Chidambaram and Commerce and Industry Minister Anand Sharma undertook a few weeks ago, aimed at drumming up foreign investment. The second is the continuing hue and cry in New Delhi over Beijing’s energetic efforts to create a sphere of influence in the strategically important Indian Ocean basin. In both cases, Indian leaders would be well advised to spend more of their energy getting their country’s act together before looking abroad.

An Economic Pariah

India’s fall from grace among global investors has been striking. Just a few years ago, it was regarded, along with China, as an engine of the dawning Asian century. It was the as well as the inspiration for such fashionable concepts as , economic “” and the . Leaders in New Delhi even spoke about the coming “,” and how the country would inevitably eclipse China as the center of gravity in Asia.

But nowadays, India is something of an economic pariah. Foreign direct investment inflows were , compared to the previous year, and some $7 billion in portfolio investment fled the country last month alone. The flight of foreign capital is depressing the rupee’s value to record lows vis-à-vis the US dollar, and the rupee is now the worst performing currency in emerging Asia. India is experiencing the weakest economic growth in a decade, along with a record-setting current account deficit. International ratings agencies are the country’s sovereign credit rating to “junk” status. And further denting India’s image are announcements by global steel giants ArcelorMittal and Posco that they are abandoning high-profile steel projects due to the land-acquisition problems that derail many large-scale foreign investment plans in India.

Against this background, one wonders why Chidambaram and Sharma even thought to leave New Delhi. After all, how could they possibly hope to woo foreign investors when Indian business leaders increasingly disparage inside the and Prime Minister Manmohan Singh is forced to plead with them to “.” Moreover, on the eve of Chidambaram’s departure, his cabinet colleagues undermined the sales pitch by publicly rebuffing his proposals for relaxing rules on FDI in a number of key sectors. As a senior finance ministry official as saying, “the fall of the rupee and delay in policy reforms could affect our credibility.”* The US audiences the Indian tag team addressed .

A year ago, Prime Minister Singh that enacting the economic reforms the country desperately requires would entail “courage and some risks.” Chidambaram and Sharma would have done more good staying at home and pressing this point on their Congress Party compatriots. And if they need to bolster their case, they can point to the that the heads of the Asian Development Bank and the International Finance Corporation (the World Bank’s private-sector arm) recently directed New Delhi’s way.

China: Playing the Field

Taking good care of business at home is also how Indian leaders should address China’s diligent efforts at building up its strategic presence in South Asia. Over the past decade, Beijing has made major investments in building and managing a network of maritime facilities throughout the Indian Ocean that promise to reshape the regional economy. These efforts include constructing one of the world’s largest container ports in Colombo in Sri Lanka, as well as developing the on that country’s south coast. They also entail major port projects in Pakistan ( and Karachi), as well as at Chittagong in Bangladesh and at . In many cases, these facilities are part of even larger initiatives to build rail, road and pipeline networks that connect directly with Chinese territory.

Beijing is busy courting the region’s tiny but strategically placed island nations of and . It is even trying to of the port development project in Chabahar, Iran (located at the mouth of the Persian Gulf) that New Delhi has agreed to fund. And last month, Beijing gathered together leaders from India’s neighbors to to deepen economic engagement with South Asia. 

China has exhibited an impressive degree of industriousness, one that contrasts vividly with India’s languid approach to regional leadership. The level of activity has raised strategic hackles in New Delhi, since it not only enables China to make deep commercial inroads in an area of the world where it has largely been absent since six centuries ago, but also furnishes possible platforms for extending the into India’s backyard. An that was leaked two months ago warns that the increasing patrols undertaken by Chinese attack submarines in the Indian Ocean are aimed at gaining control of “highly-sensitive sea lines of communication.” And that one reason why Chinese exertions in Sri Lanka worry Indian strategists is because:

“…Colombo is a “transhipment” hub for India: big ships unload containers there and feeder boats take these to India’s often crummy ports. About 13% of India’s container traffic travels via Colombo. If the new terminal ran at full capacity and dedicated itself to transhipping containers to India, that could rise to 28%, leaving the country dependent on a foreign-run choke point. ”

The concern in New Delhi is natural enough, though the reaction so far – grousing about nefarious Chinese designs – has mainly served to highlight India’s inadequacies. A much better reaction would be to declare emphatically that India will step up to the challenge by transforming itself into the driving force powering South Asia’s economic integration. This would entail a concerted high-priority effort at developing world-class ports of its own, as well as fostering robust trade and transportation linkages throughout the region and beyond.

Indeed, New Delhi policymakers regularly make noises to this effect. A Cabinet-level committee was recently set up to fast-track approvals for large-scale infrastructure projects. And with Japanese funding, are being constructed that will link Delhi with Mumbai and Chennai with Bangalore. Still, anarchic land-acquisition laws and bureaucratic inertia are allowed more often than not to impede infrastructure development. A good is the continuing in building a modern highway network, despite repeated promises by political officials to accelerate construction. As one Indian business leader involved in infrastructure development : “The reality lags behind the ambitions.”

Externally, the “Look East” policy launched two decades ago has led to some success in deepening commercial ties with Southeast Asia, though many opportunities continue to slip away due to domestic infrastructure deficiencies. And while New Delhi is developing the deep-water port of Sittwe in Myanmar in a  to directly link India’s isolated northeastern states to the booming markets of Southeast Asia, the project has fallen behind schedule.

Words into Actions

New Delhi is long on rhetoric, but what is missing is a real sense of urgency. Hard questions need to be continuously raised and addressed. Instead of the handwringing over Chinese involvement in Colombo’s port expansion, political leaders should ask why large container ships with cargo bound for India are forced to use Sri Lanka for transshipment in the first place. Likewise, why are Indian port facilities so notoriously inefficient, with turnaround times on the other side of the Palk Strait? Why is the quality of port infrastructure in India ranked at 80 (out of 144 countries) in the World Economic Forum’s latest , when Sri Lanka is pegged at 45 and Pakistan at 60?

Another good question: Kolkata was once the headquarters of the British East India Company, one of the mightiest agents for economic globalization in world history. So why does it lack a modern port and been allowed to become a backwater not only in the global economy, but also the Indian economy?

In short, Indian leaders should ponder the fundamental reasons why, despite the common civilizational and historical links that permeate South Asia, New Delhi has been unable to integrate the area in the same way that Beijing has economically stitched together the much more culturally diverse and geographically disperse East Asian region. The answer, of course, is that China’s domestic economy possesses far greater clout. In turn, this leads back to the vital importance of the economic reform project in India. Policymakers in New Delhi occasionally make rhetorical nods to the reform agenda but rarely act upon it in a serious, convincing way. Until they do, all the overseas publicity tours will not amount to much.

*That the Indian government has the lifting of FDI caps, following Chidambaram and Sharma’s arrival back in New Delhi, only reinforces this point. Instead of trying to impress foreign investors with an empty hand, their time would have been better spent rallying political will at home.

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As China and India continue to show some of the world’s fastest GDP growth rates, both are also undergoing huge demographic changes. In some ways, there are similarities between the two, yet in others, completely opposite positions exist. Understanding these subtleties is key to working out where future innovation, talent and growth will come from.

In terms of similarities, it is interesting to note that 20 years ago, the average age of a worker in China was 23. That is now the age of the average worker in India today, while the average age of a worker in China has risen to 37. So India’s current young, dynamic, and maybe somewhat undisciplined, workforce is at the same age and in similar numbers to China’s 20 years ago; the very same demographics that propelled China from 11th position in global GDP rankings 20 years ago, to the 2nd spot today behind only the United States.

While India may be 15 years behind China in its infrastructure development, it has now inherited that worker demographic dividend. Given the right set of policies, India should start to rise along similar growth curves that China has shown over the past two decades.

Also 20 years ago, in China, over 60 percent of the country’s workforce was employed by massive state-owned enterprises (SOEs). At the time, many of these SOEs were unprofitable behemoths pouring out shoddy products with employees given little incentive to change under the iron rice bowl system. China modified that system and relaxed labor laws, making it easier to offload working staff. Although labor laws were re-tightened a couple of years ago as China’s workforce aged and the state needed to protect pensions and employment, the effect was a reduction in the number of Chinese workers employed by SOEs to around 20 percent today. China, in effect, has a huge latent entrepreneurial class.

The Drawbacks

But there are problems. While much of the work force has been shed from China’s SOEs – the state’s funding of them has not caught up. China’s banks continue to pour billions of dollars into its SOEs, and are likely to continue to do so as many government officials are far from impartial when it comes to their financial involvement in these same companies. That is bad news for that group of potential Chinese entrepreneurs – they are denied access to funds.

Indicative of this is the situation concerning China’s mainland stock markets. On both the Shanghai and Shenzhen bourses, 90 percent of the listed companies are either partially or wholly state owned. Private entrepreneurship in China is still unofficially discouraged by means of denying them access to funds. China’s SOEs – and the officials who control them – certainly don’t want domestic competition springing up to challenge this cozy relationship between banks and state owned companies. Why would they?

Dealing with this is probably the toughest part of Xi Jinping’s mandate over the next 10 years. China needs economic reform to get the state-owned enterprises off state funding and move them to being funded on a more competitive, financial market model. If that doesn’t happen – and I suspect we’ll know within the next five years whether he will succeed or not – China’s bubble will very quickly start to deflate.

Business therefore, in China, is politicized. This has been aptly demonstrated on numerous occasions, especially against the Japanese. A diplomatic spat over some islands? China’s factories “forget” to process orders bound for Japan in certain strategic industries. Consumers are warned of buying Japanese products. China uses trade as a weapon, and Chinese businessmen, in order to succeed, need to know how to play by the rules set in China. Connections, subterfuge and opaqueness over who is really doing what, remains the best way to conceal illicit or dubious commercial behavior.

China as a university for learning how to develop as an international business is not a suitable environment from which to develop a bona fide multinational corporation. While China may be investing massive amounts overseas, much remains the preserve of the SOEs; of those, it is only Haier in my opinion that seems to have grasped the true nature of international business, ethics and transparency. If I am right, for China to have only developed one company to global standards of compliance is a very poor showing indeed.

Meanwhile, the thousands of potential entrepreneurs in China remain devoid of funding – in fact, many young people are now actively seeking careers back in China’s SOEs as they seek more protection and state assurances. This bodes ill for the ability for future generations being able to provide China with innovations that could turn it into a global leader. China as an innovator? Not unless the Chinese banks start to encourage and fund the nation’s entrepreneurs, and China gets its politics out of business.

Meanwhile, India sits in complete contrast. Looking at the Bombay Stock Exchange (Asia’s oldest) and the benchmark Sensex Index, one notes that 90 percent of Indian companies are owned and run by Indian entrepreneurs. The government, with the exception of key strategic industries, just does not get involved in commerce, and encourages its citizens instead to take the lead. The banking system — while like all could be somewhat more risk friendly — is not tethered to huge loans having to be made to state-owned giants and can, will, and does lend to small businesses and start-ups.

The Auto Industry

The top selling, most desirable autos in China right now? Either Land Rover or a Jaguar. Both owned by Tata, an Indian company. Volvo, purchased by China’s Geely, has yet to make even a dent in the domestic market. While it remains true that China sold more cars last year, most were produced and funded by the state. For an Indian company to break into that market, in China, would have been unheard of even five years ago. Yet, that is exactly what has happened. Jaguar and Land Rover sales increased in China by 48 percent in 2012 at some 77,000 units. While small in the grand scheme of things, that’s still an impressive figure for a luxury marque. Geely’s Volvo sales in China fell 11 percent in the same period to just 42,000 units. The bottom line message is this: once you strip out the Chinese state-owned monopolies, an Indian entrepreneur is doing a better job of selling cars in China than the Chinese can.

It’s a message I have been delivering over the past year across the United States and Europe. Meeting with city mayors, state governors and the occasional congressman, mindful of my 20 plus years in China they ask me: “Chris, please send us some Chinese investors!”

I tell them they’re looking at the wrong country. While China will invest in commodities, resources and infrastructure, the Indians will invest wherever they see a profit. It drives a different breed of business mentality – one that leads to a dynamic entrepreneurial class and, with an independent judiciary in India, one that knows if they run an opaque, corrupt or poor business that they will go under one way or another. Indian entrepreneurs, therefore, are buying into the global standards of transparency that the United States and Europe enforce. It is making them globally savvy – which is why Indian MNCs are now making serious inroads into global markets. There are numerous Indian MNCs operating worldwide to international standards, and they are being innovative and successful. Reliance, Infosys, Tata, Mittel — the list goes on.

India may be 15 years behind China in terms of what needs to be done in that country to get its infrastructure up to scratch. And yes, as the world’s largest democracy, and 1.3 billion people all wanting a say in decisions, progress can appear slow compared to China’s one party model. But in terms of developing an entrepreneurial class, and one that will in the future provide the innovative products that will shape our future world, my bet is firmly on the Indians to take that crown, and it is my belief that they are already significantly ahead of China in doing so.

*[Note: Chris Devonshire-Ellis is the Founder of Dezan Shira & Associates and Chairman of the firm's International Board of Equity Partners & Directors. This article was originally published by .]

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If North Korea is the hysterical child that Western news media — aided by the north’s own apocalyptic rhetoric — portrays it to be, then China is often cast as the doting grandparent, indulgent to a fault. In 2013, however, this indulgence appears to have come to an abrupt end. After North Korea proceeded with a nuclear test in February, despite China’s pleas for restraint, the Chinese approved the UN-imposed sanctions passed in March, even helping to draft the resolution.

Where this remarkable change in tack has been noted, it has been with optimism; though the basis for this optimism seems unclear. While China has moved, unusually, to align with the international community and isolate its ally, it remains unclear that this is a lasting change in attitude; and it remains unlikely that this change in attitude reflects a fundamental shift in China’s view of North Korea.

Plus ça Change?

In itself, there is very little that is novel about the most recent North Korean crisis; any difference has been in degree rather than form. Warnings have been issued, from subtle ones about the safety of foreign diplomatic stuff to all-out apocalyptic threats of nuclear war. To back up those threats, North Korea’s medium range missile arsenal is being wheeled out and prepared for launch, the Kaesong Industrial Park — token of an earlier, sunnier age in the Korean peninsula – has been closed, while the Yongbyon reactor, cornerstone of Pyongyang’s nuclear program, is back in operation. The subsequent course of this escalation, with a plateau and eventually some easing, is also predictable; as of writing, “progress” is being made on returning South Korean managers trapped in Kaesong, and the Korean crisis has fallen off the headlines again.

Even China’s willingness to apply pressure on Pyongyang is not very surprising. Where North Korea’s nuclear and missile arsenal is concerned, the Chinese line of disagreement has been relatively consistent. President Xi Jinping has said that no state should “throw a region and even the whole world into chaos for selfish gains.” Moreover, the chief of staff of the People’s Liberation Army (PLA) has expressed a willingness to “work…with all sides to make the North Koreans suspend nuclear testing.”

These statements, and of course the pro-sanction turn in the UN Security Council, have been tempting augurs for those who see a coming split between North Korea and China, completing the rogue state’s international isolation. Kurt Campbell, former assistant secretary of state and an Asia expert, has identified a “recognition in China that their previous approach to North Korea is not bearing fruit,” and therefore that they need to be “clearer and more direct…that what Pyongyang is doing is undermining Chinese security.” It is as if China has finally seen the light, and that their fundamental interests in the Korean Peninsula have therefore shifted, albeit slightly.

Besides being rather patronizing, however, such statements overlook what underlies the Chinese-North Korean alliance. To say that what Pyongyang does now undermines Chinese security, ignores that North Korean escapees, a government-controlled drug trading network, and mistreatment of Chinese traders and workers in North Korea have long been a source of migraines for Chinese authorities. Besides, Chinese trade and aid to North Korea, which provides little economic gain in return for considerable tensions with far more useful economic partners like South Korea and Japan, hardly makes it worth the while. If China’s concern stood solely on the basis of North Korea’s crises and brinksmanship, they would have abandoned their ally years ago.

Therefore, perhaps uniquely, greed is not a driving force for China’s relationship with North Korea — instead, it’s fear. Here it is useful to compare the current crisis with previous incidents, the better to specify China’s fears. In 2010, a series of incidents — the sinking of the Cheonan, a South Korean corvette, and the shelling of Yeonpyeong Island — actually led to 50 South Korean deaths and another ramping up of external pressure and tension. China’s response to this actually lethal crisis was muted, to put it kindly. Surely, inter-Korean rivalry or more shelling in the Yellow Sea (a crucially important transport lane for Northern China) undermined China’s security. The Chinese, however, saw fit to do nothing.

Two differences stand out between the crises of 2010 and 2013. Firstly, Kim Jong-Un has since replaced his long-ailing father as leader. Secondly, instead of conventional shells and torpedoes, North Korea has brandished its nuclear weapons. These two differences provide an explanation for why China has chosen to act in 2013. More importantly, they also serve to highlight the unique threat calculus which China applies to North Korea, and why this threat calculus does not warrant optimism.

A Sum of Different Fears

It is easy to see that North Korea is a threat to all its neighbors, but this threat is posed in very different ways. To South Korea and Japan, and via them the United States, the north’s threat lies in what it can do — not just with its nuclear weapons, but with its artillery, missiles and the fifth largest army in the world. A fifth of the south’s population lives in Seoul, which is within shelling range; even a victory over the north would be Pyrrhic at best. And as the 2010 crisis shows, the Pyongyang is not shy to use what means it has aggressively.

To China, however, the threat from North Korea is not what it can do but what could happen to it — the collapse of its government, further breakdown of its already parlous economy, and the consequences of these breakdowns. This is what makes the 2013 crisis different to the Chinese. Instead of a known quantity, they face in the younger Kim an untested leader, with a power base of uncertain resilience — and a nuclear arsenal. North Korea’s imposing of itself in the region parallels the younger Kim imposing himself on North Korea, using brinkmanship not just as an external strategy but also to assert his own control over the levers of power in his country — namely the Party and the Korean People’s Army.

This is to be expected of any new leader, but it is a risky strategy. Northern overreach could lead not only to external pressure, as is happening now, but also to internal discontent and conflict. This makes China’s nightmare scenario more likely — not just a humanitarian catastrophe in the short term, but also the possibility of an American-allied Korean state, with its historical suspicion of Chinese intentions and a land border with China’s northeastern industrial heartlands. The presence of nuclear weapons in the mix only deepens the nightmare; their use would be too awful to contemplate. But their falling into the hands of South Korea would be cold comfort indeed to the Chinese.

In this light, China’s decision to drive the sanctions process forward has a new logic. It is a potent means of signaling displeasure to Pyongyang, warning it against overreach. It is also a means to ease the pressure, not only on North Korea but also on its leader, by providing a ramp for de-escalation. It is one thing for Kim Jong-Un to buckle under enemy pressure, but it would be far more acceptable to be restrained by an ally. If these are taken to be the aims of Chinese policy, they do seem to be working; the threats have quieted, and North  Korea is now clear to move on to its usual requests for negotiations, albeit on unacceptable terms. Meanwhile, Chinese-North Korean trade appears to be continuing apace despite the sanctions, which would make sense if China’s policy is to restrain, as opposed to undermine, its buffer state.

Is this situation sustainable? Perhaps not. What isn’t certain is that, even assuming everyone’s attendance at the negotiating table, there can be much common ground between China and the other stakeholders on what to do with North Korea. The threats posed by the north must be ‘stopped’; there must be ‘resolution’ — but how is this to be done, and what sort of resolution is the aim? If Iraq and Afghanistan have taught the Chinese anything about how the West ‘resolves’ its perceived threats, one can hardly fault them for being indulgent with its neighbor and ally, even a neighbor and ally as aggressive and unpredictable as the Kim dynasty. It seems a lot more likely that China’s change of heart is instrumental, not fundamental — certainly not as fundamental as its reasons for supporting North Korea.

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Almost exactly four years ago, the outgoing UPA-I government’s Cabinet Committee on Security (CCS) was meeting for the last time before the results of the 2009 general elections were to be announced. The sole item on the agenda: enhancing India’s military preparedness against China.

According to insiders present at that meeting, some of the members of the CCS wanted to leave the decision to the next government. But better sense prevailed and days before, Prime Minister Manmohan Singh’s first UPA government went ahead and sanctioned the raising of two new Mountain Divisions for deployment in India’s north-eastern State of Arunachal Pradesh, an area claimed by China as South Tibet. In addition, the Indian Air Force was given the go ahead to reactivate half a dozen Advance Landing Grounds (ALGs) spread all along the Arunachal-Tibet portion of the Line of Actual Control (LAC) between the two countries, and base additional squadrons of Sukhoi-30 combat jets in Assam.

The goal was to plug existing gaps in India’s preparedness along the Arunachal Pradesh-China frontier. The two new divisions were to include a squadron of India’s armoured spearhead — Soviet-built T-90 tanks — and a regiment of artillery.

Now, four years later, the two mountain divisions have completed their recruitment, equipping and orbiting in the north-east. After being raised in Nagaland’s Zakhama area, one of them — the 56 Mountain Division —  has been placed at Lekhabali, north of the Brahmaputra, adding teeth to Indian Army’s presence in East and Central Arunachal Pradesh. The other new Division–71 — headquartered at Missamari in the plains of Assam, will enhance troop deployment beyond Tawang in West Arunachal Pradesh, in addition to the 5 Mountain Division already stationed at Tenga.

However, one lacunae continues to persist. Road links to forward areas remain tenuous. The China Study Group (CSG), which controls India’s policy on China, had sanctioned 72 tactically important roads to be built in the tough, mountainous terrain along the China border in the eastern and the western sectors. The roads are being built by the quasi-military Border Roads Organisation to enhance connectivity. But a combination of lethargic BRO, obstructionist state governments, and the ministry of environment and forests has meant that these roads are nowhere near completion. Similarly, the half a dozen ALGs in are also stuck in red tape.

The recent incursion by Chinese troops in Ladakh’s Depsang area should serve as a timely reminder to the government that timelines for infrastructure development along the Chinese frontier and plans to boost military capability, do not have the luxury of slippages.

Diplomacy and timing (cancellation of Chinese Premier’s visit over the border standoff would have been a loss of face for Beijing) helped end the face off this time. But New Delhi will do well to remember that such an incident is not going to be a one-off. The Chinese will continue to nibble at the undemarcated border and as they have done for over 50 years.

In this context, it is necessary to take a peep into what happened in the late 1950s in Ladakh and in the first seven months of 1962, the year both sides fought a bloody war in the high Himalaya.

The Past Experience

On December 26, 1959, Peking (as Beijing was then known) sends a note to India talking about Aksai Chin. It says: “This area is the only traffic artery linking Singkiang to Western Tibet because to its north-east lies the great Gobi of Sinkiang through which direct traffic with Tibet is practically impossible…The area all along belonged to China.” Any move by India to improve its military posture close to Aksai Chin will always invite Chinese ire, as it has been doing since the late 1950s.

As Peking and New Delhi continued to exchange protest notes, 1962 began with fresh tension.

Consider this:

• Feb 22, 1962: India protests to China against advance patrolling by Chinese troops
• March: New Delhi protests against the establishment of a military post by China 6 miles west of Sumdo
• April-May 1962: Chinese troops step up advance patrolling in Chip Chap area
• April 30, 1962: Peking orders patrolling in the sector from Karakoram Pass to Kongka Pass, and demands India withdraw two posts in the area
• May 2, 1962: China-Pakistan announce an agreement to enter into “negotiations to locate and align” the portion of India-China border west of Karakoram Pass in Kashmiri territory under Pakistan’s unlawful occupation
• Mid-May, 1962: China sets up a new post in Indian territory, 10 miles south-east of Spanggur

Events of 1962 will repeat themselves, however. Half a century later, the world has changed: India’s military capability is far better than it was then, and there is too much at stake for Beijing to launch any overt aggression.

However, what has not changed is the Chinese tendency of bullying weaker neighbours and its policy to keep redefining “core” interests according to circumstances. Policy making in China is one continuous process. In India, on the other hand, it varies according to personalities and political parties in power.

While the military in India has overcome the trauma of the 1962 defeat, civilian policy makers appear to be still bogged down by the burdens of the past in dealing with China.

Of course, these mandarins get their act together only under pressure of a crisis like they did in the post-1986 Sumdorong Chu faceoff. The 2009 sanction for additional forces and the speeding up of infrastructure development projects also came after increasing reports of Chinese belligerence along the LAC.

Therefore, it is essential to push for another round of capability-enhancing drive. The pending financial clearance for the Mountain Strike Corps must come quickly, even if it means brushing aside the rather silly query from the finance ministry which asked: “would the Chinese threat persist after 2015?”

Simultaneously, India must re-look and re-tweak its China policy. For instance:

• Insist with Beijing on the need for exchanging maps for all sectors immediately, so that each side knows the other’s claimed LAC, and border negotiations can resume
• Bring the Indo-Tibetan Border Police (ITBP) under the operational control of the army to ensure uniformity in border management
• Ensure a timely and effective information sharing mechanism with Indian media, and through them the Indian people, rather than let different stake holders speak in different, and at times, discordant voices during crises
• Educate and prepare the Indian people on the need for give and take on border negotiations in the future

Policy makers in India must  be mindful of the fact that military preparedness and trying to improve diplomatic relations are not necessarily mutually exclusive.

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Historically speaking, China has problems with the law. The older generation does not see laws as rights but rather as rules that are thrust upon them, to be obeyed without question. Chinese proverbs such as “the one who creates the law dies by the law” or “turbulent times demand harsh laws” make laws sound negative but necessary without any notion of justice. It was the wise judges who interpreted the laws that were praised in literature and folklore instead of the law itself. That’s because the laws were made for and by the ruling elite; so the person who actually interpreted them was the one wielding power.

In the Past

My father once told me: “The rest of the world follows rule of law but in China people make the rules.” That is true. China has never put the rule of law above anyone, even those who make decisions in matters of life and death. What is needed is higher importance to be placed on the enforcement of written law, as opposed to favoritism towards the powerful elite that wield its power. The concept that nobody is above the law – including the emperor himself — dates back thousands of years, but has hardly ever been put to practice. Ironically, in China, only the strong and powerful can push reforms forward effectively; a reality also reflected in  history.

When Doctor Sun Yat Sen was named provisional president of the new Chinese Republic in December 1911, he had great difficulty in reminding people that he wasn't the new emperor and had to refuse the traditional kneeling and kowtow tributes usually reserved for such a dignitary. For nearly 5,000 years, Chinese politics served to preserve dominant and powerful men; only recently did the country introduce a party system of governance, politics and constitutional law. Even then it was a single party with complete control of the country’s reins. Sun was quickly replaced by another mighty challenger, Yuen Sai Hoi. However, after Yuen's unsuccessful bid to crown himself the emperor, China plunged into a period of competing warlords until Chiang Kai Shek was able to unite the Chinese government under his control.

China again changed hands when the Chinese Communist Party, under the leadership of Mao Tse Dong, defeated the nationalists and emerged as the new sun on the country’s political horizon. Under Mao, China made great leaps and introduced reforms, although most of them ended disastrously. Nonetheless, he remained firmly in control of the communist nation. Under the tutelage of Deng Xiaoping, who rose from the ashes of the Cultural Revolution and pushed for open-market reform over the late 1970s to 1980s, the foundation of modern China’s prosperity and growth was laid.

Egypt and the US

In 2012, months before he was to step down from power, Premier Wen Jia Bao gave a speech on how political reforms should be the main theme in the coming years, for the current economic prosperity could not be sustained without taking steps to remedy the present situation. Most people viewed this as a call for democratizing the ancient country through open elections. They all missed the boat. The most important component of all reforms should be to first establish the rule of law.

In this context, Egypt stands as a powerful example of quasi democracy. Even though President Mohammed Morsi of Egypt was elected democratically, his recent disregard for the rule of law by pushing his own mandate reveals how the absence of a robust constitutional framework can still undermine the idea of democracy. On the flip side, the United States has remained powerful, prosperous and innovative much due to its strong foundations based on rule of the law, regardless of ethnicities or religions involved.

Professor He Weifang of Beijing University, an expert in law, understands this and has championed the rule of law in China. In his first book, “In The Name Of Justice: Striving for the Rule of Law in China,” he lays down necessary components in his plan that could pave the way for China to eventually achieve a separate and independent judicial system. He suggests the country must first set up an independent reform committee. Secondly, the government should only nominate judges rather than appointing them directly. This is necessary to set the courts apart from the official reporting system in the government. Judges and lawyers in mainland China have long complained of interference in trials by government officials.

A separation between the government and the judiciary must be established before respect for rule of law can permeate society. It is not just for the benefit of Chinese citizens; it will also instill faith among foreign investors who feel legal contracts signed in the country do not safeguards their interests adequately (although the situation has improved since China joined the WTO). There is no doubt that a more independent judicial system would boost confidence in China's further forays into the international arena. The economic success and models of law in both Hong Kong and Taiwan could serve as a test model for China to move forward.

However it remains to be seen if the ruling party is going to have the will to achieve such a phenomenal change. For example, Professor He's first step is to establish a committee consisting of scholars and law experts to study the existing legal framework. But his proposition cannot take off unless it is supported whole-heartedly by the ruling Communist Party or backed by the collective will of the ruling class. That takes us back to the idea that China needs a determined leader if it is to undertake bold reforms; urgent advice echoed by both Wen Jiabao and Hu Jintao in their last address to the party before leaving office. The examples of Sun Yet Sen and early civilian presidents of nationalist China, who failed to push forth reforms due to lack of political and military will, act as a caution to future Chinese leaders. That was the exact reason why Chiang Zhimin attempted to hold on to his military office a bit longer before passing it on to Hu Jintau.

Xi Jinping

Can Xi Jinping emulate Deng Xiaoping and steer the country towards much-needed reforms? Or will he be like Hu Jintau and opt for the status quo and preserve the harmony of the party? The present signs look promising, for change seems to be on the agenda, even though a recent reshuffle in the standing committee, which left out a few high-profile reformists, does not reflect this sentiment.

There is a great need for reform in China. Words of caution from both Hu and Wen indicate that the Communist Party of China has taken note of the impending action. Also, Hu Juntao's voluntary relinquishment of all his posts to his successor Xi, unlike his predecessor Chiang Zhimin, indicates a willingness to give Xi the opportunity to move forward. Although some noted reformers were not included in the standing committee, there seemed to be consensus among the party on the reform front. Xi was given the mandate to move ahead and secure any reforms to keep the party in power and the country moving forward. The fact that, unlike in the past, high-level party members readily acknowledge the importance of the challenges facing China and the need for change means that they will heed to them. Xi Jinping may not appear as powerful a leader as is required to take China forward, but he will have to play that role nevertheless in order to achieve what China needs.

The most urgent reform he needs to address is the current Chinese judicial systems, because a robust and transparent legal structure is the cornerstone of every just and stable government. The present structure, riddled with abuse and corruption, is not only bad for China’s prospering economy, but also may undermine its global position and hurt strategic partners like the US in the long run. Despite its rhetoric on China’s questionable human rights and lack of democracy, Washington relies on Beijing’s cooperation on a great number of global issues, such as reining in North Korea. There is no doubt that reforms in judiciary and governance to stamp out evils like corruption and abuse of power are long overdue in China. The question, however, is how far and how fast they would be achieved under the new leadership. The answer alone will determine how serious China is about protecting its prosperity and relationship with the rest of the world.

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For Nisar Ahmed, the sudden arrival of television crews into Leh, Ladakh’s capital, last week was disconcerting. As a top hotelier, he was sprucing up his two properties to get ready for domestic tourists who start flocking in droves to this high altitude desert. But last week he also had a small worry. A border incident in which Chinese troops had entered 19 km deep in the Indian Territory and stayed put, created quite an international stir.  For Ahmed, however, this was not new. What worried him, thought, was the hype.

“The tension that we see these days on the border is not new. In the past too, such incidents have happened but it has no affect on the local business. As far as the business in Leh and the tourism is concerned, it is quite smooth. However we would like that nothing more happens because the backbone of the economy of the Leh Ladhaki people is tourism, and [any] escalation of tensions might cause some decline in tourism which will affect the economy of the local people. I urge the media not to blow this out of proportion,” Ahmed said.

Ahmed and his fellow hoteliers are looking at the issue from a personal perspective but in the rest of India, China’s blatant act of aggression has caused outrage and anger. Predictably, political leaders in India have accused the government of Prime Minister Manmohan Singh of being soft and indecisive. Mulayam Singh Yadav, a former defence minister and an ally of the ruling United Progressive Alliance (UPA) roared: "This government is cowardly, incompetent and good for nothing," he said, while objecting to the upcoming visit of External Affairs Minister Salman Khurshid to China. Khurshid, who is expected to visit Beijing on May 9, is scheduled to meet his counterpart to finalise the agenda for new the Chinese Premier’s India visit in late May.

Describing  as the "", Mulayam Singh said in Lok Sabha (lower House of Parliament): "We have been warning that China has started occupying our territory. But [the] government is not listening to all this." 

Singh perhaps reflected the majority view in the country. China is seen as an aggressor by ordinary citizens; the perception mainly born out of the brief but brutal war the two countries fought way back in 1962 and the one India lost. Half a century later, the 4,000 km long boundary between the two across the Himalayas remains undemarcated, leading to frequent misunderstandings and intrusions by troops into each other’s perceived area.

Both sides have put in place several mechanisms to ensure that small incidents on the border do not get out of hand. In a break from the pattern, however, the Chinese troops have pitched tents and stayed on for more than two weeks, and thus posing a dilemma for Indian decision makers.

The latest flare up may, in fact, test the patience and resolve on both sides. On April 23, Syed Akbaruddin, spokesman for India's External Affairs Ministry, asked China to agree to a status quo even as he sought "time and space" for satisfactory resolution of the latest impasse on the border. His counterpart in Beijing, Hua Chunying, resorted to the usual rhetoric: "The two sides should work together to properly solve this issue left over from history through peaceful negotiations, so as to create good conditions for sound development of bilateral relations,’’ she said.

However, when the Chinese military put forward two pre-conditions at the flag meeting on April 23, it was clear that the PLA had intruded and camped in the Depsang area of the Daulat Beg Oldie (DBO) sector with a definite plan. The Chinese military wanted India to stop building outposts and logistics depots in the vicinity and stop patrolling areas close to the perceived border before its troops went back; terms that India is unlikely to agree to. India, on the other hand, wants China to restore status quo as it existed in the area before April 15.

Srikanth Kondapalli, a foremost China watcher in India, and professor in Chinese Studies at the Jawaharlal Nehru University, says: “The transgression incident and the bilateral responses indicated to the inability of the current mechanisms to deal effectively with any flare-ups on the borders. Indian responses to such incidents are pitched at three levels: political leaderships’ intervention; invoking diplomatic-bureaucratic procedures; and tactical conventional military preparations.”

Eventually, both sides may decide on a face saving compromise by agreeing to some of the points, but Beijing will use the latest episode to push for yet another bilateral mechanism for border management. Officers on the ground in Ladakh, say the present stand-off does not reflect any new policy but is part of the standard Chinese patrolling philosophy along the borders including the DBO. The Chinese will use this opportunity to revive a proposal put forward during Chinese Defence Minister Liang Guanglie's visit last November, that to avoid such confrontations, the troops at the borders should advise each other of their patrolling programmes/schedules.

But why did the Chinese choose to come and camp in the DBO area? The DBO is an important area for India's defences, and was known even before the 1962 border war between the two nations. Located right in the middle of what is officially known as Sub Sector North (SSN), the DBO had a rough and ready airstrip available to Indian forces even before 1962. Located east of the Siachen glacier, the region is seen as strategically crucial for the Chinese, since the road that connects the two restive provinces in China — Tibet and Xingkiang — are very close to the area. China clearly wants to secure strategic depth to its civilian and military projects in the vicinity by pushing the Indian troops far away. 

Despite its strategic location, Indian defence planners have tended to ignore infrastructure development of the area. Until recently, the DBO could be reached only by air. Troops deployed in the forward areas had to march for three days from Sasoma in Nubra Valley or along the Shyok River before reaching the DBO. Sources say, however, that recently a road along the Shyok River has been constructed to enable vehicular movement. The DBO airstrip, reactivated in 2008, is now able to handle AN 32 and hopefully the newly inducted C130 J medium lift aircraft. So far, the Indian Army deployment in the DBO area has been negligible. Instead, it is the Indo-Tibetan Border Police (ITBP) which has been entrusted with the task of guarding this stretch of the Line of Actual Control (LAC).

What next?

The army assesses that the stand-off might continue for weeks without either side blinking and, more importantly, without further escalation. Sources have ruled out any sort of military response to the incursion, but the Indian Army has ordered a re-assessment of vulnerable areas. But the longer the face off persists, the worse it is for the government since the perception that New Delhi is unable to deal with Beijing’s bullying tactics will only get reinforced with time.

The views expressed in this article are the author's own and do not necessarily reflect 51�Թ�’s editorial policy.

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For the past six decades, conventional wisdom has correctly deemed the China-Taiwan dispute the most dangerous potential military crisis involving China, Taiwan, Japan, and the United States. A Chinese military attack on Taiwan would bring the United States to the defence of its security partner, Taiwan. Japan, as a US ally and neighbour of Taiwan, would contribute as well.

The Senkaku/Diaoyu islands bring Japan and China, East Asia’s two largest economies and navies, into direct sovereign dispute. The Senkaku islands are covered by the US-Japan security alliance due to Japan’s administration of these islands. There is no US-Taiwan alliance treaty. This presently active dispute brings Japan and Taiwan into direct dispute as Taiwan makes the same claim to these islands as China.

For the first decade of this century, domestic politics in Taiwan, Japan and China contributed to cross-strait relations being the most likely trigger of a major power conflict in East Asia.

In 2000, Taiwan’s independence-leaning Democratic Progressive Party (DPP) took power from the Kuomintang (KMT) for the first time when Chen Shui-bian won the presidential election. President Chen infuriated Beijing by promoting Taiwan’s separate sovereign identity, including after winning re-election with a greater share of the vote in 2004. Taiwan’s constitution, written by the KMT, claims that the Republic of China (Taiwan) is the “real China”.

In 2001, Junichiro Koizumi became Prime Minister of Japan, a position he held until 2006 when Shinzo Abe replaced him. Both embraced stronger ties with Taiwan, a hard-line approach towards China, and a more positive interpretation of Japan’s modern history. The 2006 visit by former Taiwan president and independence firebrand Lee Teng-hui to the Yasukuni Shrine to honour his elder brother entombed there symbolised this new era in Japan-China-Taiwan relations.

In 2002, China’s fourth generation leaders ascended to the top of the Chinese Communist Party as the first set of leaders with the military capacity to implement a forceed reunification of Taiwan. They were also the first generation lacking the legitimacy of fighting in the Communist Revolution against the KMT and the Japanese. In 2005, in response to President Chen’s campaign, Beijing passed the Anti-Secession Law requiring the forceful reunification of Taiwan with China if Taiwan declares independence. Post-war Japan-China relations also suffered that year when thousands of Chinese demonstrated against Japanese revisionist history textbooks.

In the second decade of the 21^st century, domestic politics in China, Japan and Taiwan is threatening to elevate the Senkaku/Diaoyu dispute above cross-strait tensions as East Asia’s most likely (though still unlikely) trigger for a great power conflict.

In September 2010 the dispute flared up when a Chinese fishing trawler collided with a Japanese coast guard vessel leading to the arrest of the Chinese crew. Beijing reacted by limiting crucial rare earth mineral exports to Japan, demanding the immediate release of the captain and crew, and requesting compensation for damage caused to the trawler (the captain and crew were eventually released). The present flare up started when groups of nationalists from Hong Kong, China, Taiwan and Japan visited the islands and heated up further from September 11 when the Japanese government purchased three of the four islands from their Japanese private owners and nationalised them. This sparked hundreds of protests across China, Hong Kong, Taiwan and in countries with large overseas Chinese communities. Chinese authorities banned Japanese companies from a major trade fair in Sichuan province while Japanese businesses have experienced slower customs clearance and visa processing in China.

Since 2010 Chinese domestic politics has increasingly focused on the transition to the fifth generation of leaders with Xi Jinping expected to take over from Hu Jintao as Party Secretary General later this year. In this same period, China, with its ever-growing military capabilities, has become more assertive in prosecuting its disputed sovereign claims from the Spratly and Paracel Islands in the South China Sea to the Ieo island and the Senkaku/Diaoyu islands in the East China Sea.

With Hu Jintao attempting to guarantee his influence over the party after he steps down and Xi Jinping doing the same for when he steps up, the timing of the present flare up is particularly sensitive. In 2010, Hu Jintao remained largely quiet, leaving it to Premier Wen Jiabao to criticise Japan. This time both Hu and Xi have publicly lambasted Japan’s position. Xi and the other fifth generation leaders will unlikely ever be in a strong enough position to take a more conciliatory approach to the dispute and Japan-China relations as Deng Xiaoping did in 1978 that China would do nothing to contest Japan’s claim to the islands while he was in power

Japan-China relations appeared to be on the mend in 2009 when the Democratic Party of Japan (DPJ) won power from the conservative Liberal Democratic Party (LDP). The victors called for closer relations with China and more autonomoy from the United States. The 2010 collision between the Chinese trawler and Japanese Coast Guard vessel and the release of the captain and crew though inflamed Japanese public opinion. Prime Minister Naoto Kan was harshly criticised for bowing to Chinese pressure and conservative nationalist voices in Japan gained in influence. Partially in response to the 2010 Senkaku crisis, Japan’s 2011 National Defence Policy Guidelines call for enhanced naval and air capabilities, a rebalancing of forces from the north of Japan to the south and a focus on the defence of Japan’s remote islands.

With Prime Minister Noda and the DPJ expected to lose the next election to the LDP, Tokyo is in no position to compromise over the present dispute. Conservative voices in Japan have taken advantage of the present flare up. Tokyo’s nationalist mayor, Shintaro Ishihara, forced Noda’s administration to purchase the three Senkaku islands to stop the Tokyo Metropolitan government from doing so. Both major parties in Japan now are committed to a stronger US-Japan alliance, a steadfast position on Japan’s sovereignty over the Senkakus and a military doctrine focused on the threat from China.

The 2008 return to power of the KMT in Taiwan means that Taipei is committed to closer relations with China and a return to the “1992 Consensus”, in which China and Taiwan both recognise that there is “one China with differing interpretations.” The DPP does not recognise this “Consensus”. The flare ups in the Senkaku/Diaoyu islands’ dispute have provided Taipei the opportunity to reinforce, in line with the 1992 Consensus, the common territorial claims of China and Taiwan to their domestic Taiwan, mainland Chinese, Japanese and wider international audiences.

In 2010, Taipei backed Beijing’s criticism of Japan’s arrest of the trawler crew. On 25 September this year, Taiwan sent 12 Coast Guard vessels to protect 75 fishing vessels from Taiwan that entered the waters of the disputed islands. These coast guard vessels engaged their Japanese counterparts in a bout of water cannoning before the flotilla from Taiwan departed. The Taiwan flotilla gained wide and positive coverage in China becoming the second most visited news story on China’s Baidu search engine onthat day.

The increasingly tense security relationship between China and Japan is transforming the Senkaku/Diaoyu islands’ dispute from a latent problem into a continuing bilateral crisis with frequent flare-ups and more acrimonious responses. It is also pushing Japan to seek closer security ties with the United States and greater national military capabilities. A very similar story of increased tension and acrimony is developing in the South China Sea. China’s growing military might and wealth and its unresolved territorial disputes are combining to undermine its strategic goals of a “harmonious region” supporting China’s economic development and a declining role for the United States in East Asia.

Cross-strait relations remain the most significant of these disputes. Yet, the Senkaku/Diayou one brings China into direct dispute with its wealthiest and strongest neighbour and the one that is the most important for China’s economy. While cross-strait relation may be eased in the future by a political agreement between Beijing and Taipei, it is very hard to see how Tokyo and Beijing could reach a political agreement over the Senkaku/Diaoyu islands’ dispute. These uninhabited islands and rocks will continue to play a large role in East Asian insecurity and place the leaders of Japan and China at loggerheads. 

The views expressed in this article are the author's own and do not necessarily reflect 51�Թ�’s editorial policy.

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