Saturday 23rd of October 2021

the new china...


The Trump administration has made the Chinese industrial transformation strategy, “Made in China: 2025,” or simply China 2025 the explicit target of its current trade war offensive against the Peoples’ Republic. Western industrial leading countries, including Germany, are understandably alarmed. Only they are ten years late, and until now have foolishly refused to collaborate with China in key developments, including of the new economic Silk Road or Belt Road Initiative. Here I want to briefly indicate what China is doing. In future reports I will discuss some fundamental flaws in their industrial strategy. Here it is important to understand what China 2025 signals to Western industrial domination. 

When he took office, China President Xi Jinping moved to propose what is now the Belt and Road Initiative, a comprehensive network of new infrastructure projects going from China across Asia and Eurasia to the Middle East and the European Union. Xi proposed the BRI at a meeting in Kazakhstan in 2013. Then in 2015, after little more than two years in office, Xi Jinping endorsed a comprehensive national industrial strategy, Made in China: 2025. China 2025 replaced an earlier document that had been formulated with the World Bank and the USA under Robert Zoellick.

One quality I’ve come to appreciate from first hand observation over the course of numerous visits and discussions across China since 2008 is the remarkable determination of Chinese institutions and people, once a national strategy consensus is agreed, to realize that with almost a ruthless determination. Mistakes have been made, in the rush to go from one of the world’s most impoverished peasant economies to the world’s largest industrial producer. Quality control often has been secondary priority. However, step by step since Deng’s 1979 “Socialism with Chinese Characteristics” policy turn, China has emerged to become the literal workshop of the world. Until now it has been producing on license for Western multinationals such as VW or Buick GM cars, iPhones or MacBooks, or countless other products for Western multinationals.


“Rejuvenating Chinese manufacturing”

Now China is changing that. Much as Japan did after 1952 then later South Korea embracing the Japanese example, and more relevantly Germany after 1871, China is going to what they describe as “rejuvenating Chinese manufacturing.” This, translated, means instead of being the workshop assembling components for foreign giants like Apple, China will develop its own Apple, or BMW or G5. They have begun a new phase in development of their own world leading industry. Now as China 2025 says, the national industry and government institutions supporting that is undergoing a “transformation from Made in China to Created in China, from China Speed to China Quality, and from Chinese products to Chinese brands.” The broad concept for China 2025 has been modelled on the German “Industry 4.0” strategy which some call the 4th Industrial Revolution. It aims to utilize technological advances in key technologies such as artificial intelligence, internet of things, machine learning, cloud systems, cybersecurity, adaptive robotics to cause radical changes in the business processes of organizations. China has now made such concepts national strategic priority in its economic future development. It is no minor deal. And that is precisely why Trump advisers with their trade war actions are targeting precisely the key vulnerabilities and links to western technologies such as those of China telecom giants Huawei or ZTE Telecommunications which are still dependent on US chips and other sensitive technologies.


‘Post Industrial’ USA

Beginning in the 1970’s there was a deliberate strategy among major US multinational companies to move their manufacture abroad in search of cheap labor, low costs. US think tanks and journals praised the nonsensical idea that the West had entered a “post-industrial era,” a promised nirvana where instead of “dirty” industrial jobs in steel, autos and such, the future would be a services economy. In reality it was outsourcing of America’s manufacturing base.

Beginning especially in the 1990’s with China’s negotiations to join the Western industrial “club” by negotiating for WTO membership, corporate America and their bankers flooded into China, the world’s most populous country with some of the lowest wages. For more than three decades, US companies from GE to Nike to Apple have banked huge profits based on that China production, a fact conveniently ignored today by Washington.

China has used that foreign input to build the world’s largest industrial goliath. However, as they state, one in urgent need of serious transformation if China is to become a “world competitor” and no longer merely a screw-driver assembly for Western or Japanese multinationals. As the official preface to China 2025 states, “Chinese manufacturing is facing new challenges. With resource and environmental constraints growing, costs of labor and production inputs rising, and investment and export growth slowing, a resource and intensive development model that is driven by expansion cannot be sustained.

We must immediately adjust the development structure and raise the quality of development. Manufacturing is the engine that will drive the new Chinese economy.”

As the policy document correctly points out, “Since the beginning of industrial civilization in the Middle of the 18th century, it has been proven repeatedly by the rise and fall of world powers that without strong manufacturing, there is no national prosperity.” The conclusion they draw is that, “Building internationally competitive manufacturing is the only way China can enhance its strength, protect state security and become a world power.”

The China State Council policy blueprint correctly points to a major transformation of global manufacturing after the financial crisis of 2008 where giant Western corporations are revolutionizing manufacture with developments including 3D printing, cloud computing, big data, bio-engineering, and new materials, intelligent manufacturing, such as plants based on cyber-physical systems. This is what China 2025 is all about, to as the official policy document states, “capture the manufacturing high ground in the new competitive landscape.”

They are frank about their present capabilities in manufacture: “Chinese manufacturing is large but not yet strong. The capability for independent innovation is weak and external dependence for key technologies and advanced equipment is high. Enterprise-led manufacturing innovation systems have yet to be perfected. Product quality is not high and China has few world-famous brands. Resource and energy efficiency remains low, while environmental pollution is severe. The industrial structure and industry services remain immature.”

This is how Beijing describes its present challenge. They will not remain a quasi-colonial industrial assembly platform for foreign companies. They now are building their own version, made in China, to compete as world class industry competitors. This is what has set alarm bells ringing all across the West.


The three steps

They lay out three clear steps: by 2025, by 2035 and by the centennial of creation of the Peoples’ Republic of China in 2049. By 2025 China plans to be a “major manufacturing power,” ten years after onset of China 2025. For that the plan is that China will have consolidated its manufacturing power, increased manufacturing digitalization, master core technologies and become competitive in areas such as high-speed rail or other areas where China is already a global leader, while improving production quality. Energy use and pollutant levels will reach that of advanced industrial countries.

Step 2 by 2035 sees China manufacturing reach an “intermediate level among world manufacturing powers,” with greatly improved innovation ability to make key breakthroughs and “significantly increase overall competitiveness.”

Then in Step 3, by the 100-year anniversary in 2049, China expects to “become the leader among the world’s manufacturing powers. We will have the capability to lead innovation and possess competitive advantages in major manufacturing areas, and will develop advanced technology and industrial systems.”

And they mean it. What the 38 page blueprint lays out is a complex of supporting agencies and funding entities that is dedicated to making this national priority happen. For more than four decades the elites of China have sent their sons and daughters to study at the finest engineering and science universities in the USA and Europe. Now the graduate PhDs in science, IT, engineering are returning to China where the promise of major industrial transformation is far greater than anything they find in the US or EU today.

The state is creating the support system to make China 2025 happen. It includes supporting priority research through support research through the National Science and Technology

Plan; building “innovation coalitions” between government, production, education, research and operations. Further they are creating Industrial Technology Research Bases to do basic research and training in key areas as “next generation IT, intelligent manufacturing, additive manufacturing, new materials, and bio-medicine.”

By 2020 there will be 15 such Industrial Technology Research Bases, and 40 such centers around the nation by 2025. These centers are to develop such key components of the industrial transformation as “high-end, digitally controlled machine tools, industrial robots and additive manufacturing equipment, which feature depth perception, intelligent decision-making, and automation.”

As the national plan states, “By 2025, major manufacturing areas will become fully digitalized. Operation costs of pilot demonstration projects will decrease by 50%. Production cycle will decrease by 50% and faulty product rates will decrease by 50%.” And the entire transformation is tied to development of China’s ambitious New Silk Road or Belt and Road Initiative.

In short, China is serious about transforming itself from assembling for Western companies who re-export back to North America or Europe to exporting their own products, “made in China.”

Basic Washington geopolitics, as admitted clearly by the late Zbigniew Brzezinski back two decades ago when the USA was unchallenged as sole superpower, is to prevent the rise of a Eurasian economic challenge. He wrote, “it is imperative that no Eurasian challenger emerges, capable of dominating Eurasia and thus of also challenging America.”

As Brzezinski stated in his Grand Chess Board book in 1997, “A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions… control over Eurasia would almost automatically entail Africa’s subordination, rendering the Western Hemisphere and Oceania (Australia) geopolitically peripheral to the world’s central continent. About 75 per cent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for about three-fourths of the world’s known energy resources.”

Current Washington strategy is to target both the growing cooperation between China, Russia and Iran, ironically a result of inept US geopolitics since the past decade, and most especially target the great industrial “rejuvenation” of Chinese manufacturing. The problem is that China 2025 is the very basis of China’s strategy for future existence. Beijing does not see it as an option but rather as the plan.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.


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meanwhile in orstraya...


a rule of dishonest hypocrisy ...

So, Prime Minister Malcolm Turnbull would have China believe that Australia is wedded to an “international order based on the rule of law, where might is not right”?

Such hypocritical arrogance blatantly ignores Australia’s historic behaviour of openly encouraging & supporting economic & military aggression by its patron & “special friend” America against any government, state or people who would dare to pursue self-determination; be it Russia, Syria, Iraq, Nicaragua, Venezuela, Cuba, Indonesia, the Philippines, Vietnam, North Korea, Palestine, East Timor or more than 60 other nations over the past century.

China’s scepticism about Australia’s real intentions are unlikely to abate as long as it interprets its real message as being “do as we say & not as we do”.


the more the merrier...



He stressed that in July, Chinese exports to the US had grown by 12.2 percent despite the US tariff war. Mei added that in the first seven months China's exports to the US had increased by 13.3 percent.


"So, the impact of American tariffs on China is very limited, the maximum effect they could have only at the very beginning of the trade war," the scholar said. "However, for the United States, its consequences will become more tangible and heavy in due course."

Meanwhile, Russia's LNG supplies to China are growing steadily. In July, two Arc7 ice-class tankers "Vladimir Rusanov" and "Eduard Tolle" delivered the first batch of Russian LNG to China within the framework of the Yamal LNG project.


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The more the merrier... More tariffs means more cash flowing into the US treasury... Increase in trade? More more cash into the coffers. It's a way to reduce the American deficit... while the US citizens PAY FOR THE more expensive prices. So in fact, trade tariifs are not harming the Chinese, only the ordinary US folks who buy Chinese made products...

taking the bullet...

In August, China has marked the 10th anniversary of its high-speed railway endeavors. Speaking to Sputnik, Tom McGregor, a Beijing-based CCTV commentator and editor, explained how the country's bullet trains are bringing the nation together and facilitating China's economic growth regardless of the US tariff spree.

"China's high-speed railways have played a pivotal role in the nation's development in the past 10 years: China Railway Corporation (CRC) has become one of the world's leaders in introducing major new high-tech advancements in the international railroads sector," said Tom McGregor, a Beijing-based political analyst and senior editor for China's national TV broadcaster CCTV.

On August 1, the People's Republic of China (PRC) marked the 10th anniversary of its high-speed railway project. Ten years ago the 118-km high-speed line between Beijing South and Tianjin became operational paving the way for the new era of China's infrastructural development. By 2017, the country had built a network of 25,000-km-long high-speed rail tracks seeking to hit 38,000 km by 2025.


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learning to share...

One of the US’ top medical schools has put a halt to its visiting scientist program due to fears that the university’s research is being funneled back to foreign governments - China’s, in particular. But the real fear is that the US’ ability to funnel the world’s talent into its own institutions is under threat.

At the advice of the US National Institutes of Health (NIH), the Johns Hopkins University School of Medicine in Baltimore, Maryland, has placed on hold all appointments for scientists visiting from foreign countries until the NIH "feels we can safely allow foreign nationals to be involved with government-sponsored research," according to an email to school faculty last month that was obtained by the South China Morning Post.

"Effective immediately, the Johns Hopkins School of Medicine is temporarily halting the appointment of visiting scientists due to concerns voiced by the National Institutes of Health [NIH] about threats to biomedical research and loss of intellectual property," the email continues.

Cancellation of the program could affect 1,000 visiting scientists if it lasts for a year, a US-based Chinese biomedical researcher told the Post.

While it affects visiting scientists from all countries, the measure is aimed primarily at Chinese researchers, who the US government has claimed are stealing government-funded research and taking it back to their home country through a program called the Thousand Talents Plan that aims to attract expatriate Chinese academics back to China.

US Intelligence Fears Tech Theft

US intelligence leaders sounded the tocsin over Thousand Talents earlier in 2018, when the National Intelligence Council produced a report on the program in April. A June House Armed Services Committee meeting with Pentagon and intelligence officials further increased scrutiny over the growing danger of the program, which the US National Intelligence Council concluded had a more surreptitious goal than stated: "to facilitate the legal and illicit transfer of US technology, intellectual property and know-how," Bloomberg reported at the time.


Sharing knowledge has always been at the forefront of improving the human condition. This was the way nuclear sciences advanced in the 1920s through exploring the theory of relativity and quantum mechanics. China is only the latest of the many nations that have benefited from such sharing. The USA, the UK, France, Germany have share many important scientific developments. Placing restrictions under the umbrella of "spying" is ugly and short-sighted, because it's China. And you never know, the Chinese students might "teach you something" you did not think of in the first place...


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see also:

on the pavement of learning something...

revenge for huavei?...

One of China’s biggest ports has banned imports of Australian coal and will cap overall coal imports for 2019 through its harbours at 12m tonnes, an official at Dalian Port Group has said.

The indefinite ban on imports from Australia, which is China’s top coal supplier, comes as major ports elsewhere in China prolong clearing times for Australian coal to at least 40 days, Reuters has reported.

Coal is Australia’s biggest export earner and the Australian dollar tumbled more than 1% to as low as US70.86 on the news.

The Australian trade minister, Simon Birmingham, has acknowledged the “unconfirmed and unsourced” reports and said the government had asked its ambassador in Beijing “to urgently clarify their veracity”.


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Gus would suggest that this move could be revenge for the bad treatment of Huavei, but being more sarcastically minded, Gus thinks that China is forcing Australia to honour its "global warming obligations"...

NOTE: in fact China does not need more Aussie coal as well. China is trying to slow down its economy and has more domestic coal (of all kinds) than Australia can provide. 


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white supremacy afraid of china...


By Andre Vitchek

The second Belt and Road Forum for International Cooperation is about to open in Beijing. It will take place from 25th to 27th April, 2019. The Chinese President Xi Jinping is expected to deliver the keynote address.

It is expected to be an event of tremendous proportions and importance: leaders from 37 countries will participate, including Russia’s President Vladimir Putin and President Duterte of the Philippines. Beijing will host 5,000 guests from 150 countries, as well as 90 international organizations.

The Belt and Road Initiative (BRI) has already been reshaping the world, fundamentally. Previously at the mercy of the Western imperialist powers, their armies, propaganda apparatuses and brutal financial institutions; Africa, the Middle East, Central and Southeast Asia have suddenly discovered that they have alternatives and choices. For various parts of the world, decades and centuries of stagnation and humiliation under colonialist and post-colonialist regimes have begun to come to an end. Entire nations have been freeing themselves, realizing their great hidden potential.

All this because of BRI; because of China as well as its close ally, Russia.

Entire huge railroad projects in East Africa as well as in the once devastated Laos (devastated by the insanely brutal Western carpet-bombing campaigns, which are still called a “Secret War”) are now connecting continents. Along the railway lines, schools are growing, and so are medical facilities, community learning centers and cultural institutions.

The BRI is not only about the economy, not only about infrastructure and development, it also about the well-being of the people, about the culture, health and knowledge. It is aiming at connecting people of different races, life philosophies, and beliefs.

And the rulers in the West are horrified. Nothing outrages them more than the prospect of losing absolute control over the world. For them, it is not (and never was) about improving the lives of hundreds of millions of impoverished people. They had centuries of absolute power over the planet, and all they did was to enrich themselves, murdering and robbing in all corners of the globe. For them, it is about ‘winning or losing’, about maintaining its colonies and ‘client’ states; by all means, even by the most brutal ones.

For China, (through BRI), it is all about spreading wealth everywhere. The firm belief in Beijing was and is: If the world is doing well, China will prosper, too.



And so, in Washington and London, and in so many other centers of Western might, thousands of ‘professionals’ are now employed and busy smearing China and its most ambitious international (and internationalist) projects. Smearing and spreading nihilism is an extremely well-paid job, and for as long as China is rising and the West declining, it appears to be a permanent one. There will be no deficit when it comes to funding all those anti-Chinese ‘academic reports’, fake analyses and articles. The more of them, the better; the more ridiculous they get, the better remunerated they are.

Take this one, for instance: “Grading China’s Belt and Road”.

With all those footnotes and ‘references’, it looks professional and academic. It can impress millions of China-phobes and China-bashers in Europe and North America. Suffering from complexes of superiority and “Yellow-Peril mentality”, they are searching for, and then welcoming all vicious attacks against Beijing and its initiatives.

Look closer, and it is ‘reports’ like this that are clearly nothing more than thinly disguised propaganda work ordered by those who are aiming at discrediting China and its internationalist efforts.

In its Executive Summary, the report states:


Since its launch in 2013, what China calls “One Belt, One Road” has emerged as the corner- stone of Beijing’s economic statecraft. Under the umbrella of the Belt and Road, Beijing seeks to promote a more connected world brought together by a web of Chinese-funded physical and digital infrastructure. The infrastructure needs in Asia and beyond are significant, but the Belt and Road is more than just an economic initiative; it is a central tool for advancing China’s geo-political ambitions. Through the economic activities bundled under the Belt and Road, Beijing is pursuing a vision of the 21st century defined by great power spheres of influence, state-directed economic interactions, and creeping authoritarianism.

As Beijing prepares to host the second Belt and Road Forum in late April 2019, countries that once welcomed Chinese investment have become increasingly vocal about the downsides. This report is intended to serve as a resource for governments, corporations, journalists, and civil society groups now re-evaluating the costs and benefits of Belt and Road projects…


In brief, it is propaganda; anti-Chinese propaganda, anti-Communist (or call it “anti-central-planning” propaganda).

It is also a tool for all those who are ready to criticize China, defining its marvelous efforts as a ‘debt trap’, among various other derogatory terms.

A leading academic at the University of the Philippines (U.P.), Roland G. Simbulan, agreed to analyze the origin of the CNAS report for this essay:


The April 2019 Report “Grading China’s Belt and Road” by the Center for a New American Security (CNAS) seems to be one of the latest findings and studies of American conservative think tanks which are in fact aimed at discrediting China’s economic thrusts through China-financed infrastructure, land and sea transport, investments, etc. These are China’s answer to the U.S.’ global military build-up and encirclement of its fast rising rival superpower. China is trying to avoid the mistakes of the Western powers including the U.S. and the former USSR by not engaging in a tit for tat arms race. Instead, it is answering back with its Belt Road Initiative as well as other economic and market initiatives aimed at reinforcing China’s strengths while avoiding a direct attack on where the U.S. is strongest and has more advantage: the U.S. global military forces.

It is obvious from the backgrounds of the CNAS fellows who are authors of the report that they are all connected with the U.S. Department of Defense, the U.S. Department of State and the U.S. National Security Council. The American Enterprise Institute is a quasi-U.S. federal government think tank composed of recycled officials of the U.S. Department of Defense and U.S. Department of State. It is also obvious that they have consolidated the economic and political reports of all the U.S. intelligence community which are coordinated by the U.S. National Security Adviser.


And obviously, CNAS is not hiding where it stands, ideologically. It quotes such right-wing warriors as the French President, Emmanuel Macron, the International Monetary Fund Managing Director Christine Lagarde, the Minister of Energy in the defunct and discredited Ecuadorian government, Carlos Perez, and other unsavory figures.

Roland G. Simbulan continues:


While the CNAS Report may indeed have identified some of China’s vulnerabilities in the management of its China-funded projects which can easily merit criticism, i.e., sovereignty eroding, non-transparent, unsustainable financial burdens, locally disengaged, geopolitically risky, environmentally unsustainable, and corruption-prone), let us remember that China’s BRI was only launched in 2013. The U.S. and its Western Allies, including the multilateral institutions that they have created to assure U.S. neoliberal control of national economies since 1945 have engaged in practicing these “challenges” and dangers that it accuses China of initiating through BRI projects “for China’s geopolitical ambitions.”

These may be valid as in the case of the 10 case studies identified by the CNAS Report. But it is too soon to make conclusions in such a short time from 2013-2018. For these are also practices that have long been inflicted by the U.S. Empire and its allies since the end of World War 2 to assure economic, political and military hegemony. Unintentionally, the seven (7) challenges or dangers of China’s BRI identified by the CNAS are really challenges that are continually being inflicted by the U.S. Empire and its Western allies on weaker and smaller countries. Precisely, many countries in Asia, Africa and Latin America are turning towards alternative international institutions such as ALBA in Latin America and BRI BECAUSE of the onslaught that they have long experienced with the PAX AMERICANA i.e. the U.S. and its allies.

Can the CNAS show that their sponsors and patrons are doing better, or can do better? The best way for the U.S. to counter the Belt Road Initiative (BRI) is to show AND prove that they can offer a better deal with developing countries in need of assistance for their infrastructure and development projects.



Mr. Sidqy LP Suyitno, an Indonesian high government official and former State Finance and Monetary Analysis Director of the Ministry of National Development Planning, is also puzzled by some of the wording in the report. When asked about the BRI project to build the bullet train from the Indonesian capital Jakarta to its city of Bandung, he contradicted the report:


Geopolitically Risky? It seems NOT to be. It seems more like making bilateral relations with Japan uncomfortable. The Japanese have been enjoying the benefits when it comes to relations with Indonesia, ever since Suharto’s dictatorship: the automotive industry is more like an oligopoly for Japanese cars in Indonesia. And what do we get back? We still don’t have our own car industry, our national car or our own national motorcycles production. Even though we have a very large “captive market”; in 2018, 1.1 million cars & 6.5 million motorcycles were sold in Indonesia.”


Apparently, what he is referring to, is that while Japanese car industry flooded Indonesia with its cars and badly polluting scooters, there were no benefits to the state or to the people of Indonesia. I can go much further and point out that according to my investigation, Japanese car industry corrupted the government officials in most of the Southeast Asian countries, “convincing them” not to build public transportation, instead choking both cities and the countryside with outdated models of private motor vehicles, consequently bankrupting citizens in the process.

In brief: Japan has managed to ruin Southeast Asian cities, preventing them from developing public transportation. And now should it be trusted in such places like Indonesia to develop a high-speed rail system? Indonesia, Laos and Thailand do not think they should trust Japan too much. They trust China much more. And the same goes for the Philippines. Malaysian Prime Minister, Mahathir Mohamad, when re-elected last year, stopped several high-profile projects with China, but now, it seems, has been discovering an appetite for cooperation with Beijing.

But the report speaks (using unacademic language, suddenly) about how China poached the high speed train project from the Japanese.

Professor Mira Lubis, from Tanjungpura University in Pontianak, West Kalimantan, Indonesia, stated for this essay, her hope that BRI could improve life and environment on her devastated island:


“From what I know about BRI, I believe that its efforts would be mutually beneficial for both Indonesia and PRC. In Southeast Asia, the focus of BRI will be what could be described as the Maritime Silk Road. Indonesia is an archipelago with over 17,000 islands. Since 2014, our government is aiming at transforming Indonesia into what it calls the ‘Global Maritime Axis’. It means, developing ports and shipping lanes among other vital projects. This would be in synergy with BRI; BRI could strengthen Indonesia as a maritime power.

My island, Borneo, is ecologically damaged. I hope that it could directly benefit from the cooperation with China and its BRI. China is at the forefront of the struggle for ecological civilization, and I believe in its wisdom. I’m optimistic that BRI might help tobring sustainable development to Borneo.”



The CNAS report is ‘all over the place’, selectively attacking BRI and China for its involvement in Africa, South and Southeast Asia, the Middle East and South Pacific (Oceania).

In his essay “China’s road to a win-win ahead of BRI forum” published by the Asia Times, renowned Brazilian analyst Pepe Escobar wrote:


Relentless reports that the New Silk Roads, or the Belt and Road Initiative (BRI), are a perfidious neo-imperial debt trap set up by Yellow Peril 2.0 are vastly exaggerated.

Beijing clinched a proverbial showering of BRI deals with 17 Arab nations, including Egypt, Lebanon and Oman. Not by accident, the forum this year was called Build the Belt and Road, Share Development and Prosperity. Up to 2018, 21 Arab nations had signed BRI memoranda of understanding.

These nations are not only BRI partners, but 12 of them also went for strategic partnerships with China…”


Little wonder why!


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Gus note: China will be the only country able to defeat political Islam... see: macron's republic...

chinese loans bigger than the world bank or the IMF...

After five years of construction, the line is set to go into service in 2021. And the Chinese head of one of the sections has no doubt that it will be finished on time. "Our office alone employs 4,000 workers," he says. There is also no lack of money: The Chinese government in Beijing has earmarked around 6 billion dollars for the project and has recently become both Laos's largest creditor and most significant provider of development aid. 

China, after all, isn't just directly financing 70 percent of the new train lain, it is also building dams, schools, military hospitals and has even launched a communications satellite into space for the country. In April, Beijing loaned Laos another 40 million dollars for road construction -- a credit that was provided through the multilateral Asian Infrastructure Investment Bank based in Beijing, a financial institution that China established as an alternative to Western development banks.

If Hong Kong is included, China isn't just the largest creditor in Laos, but in the entire world. Beijing's foreign loans dominate global markets almost to the same degree as its toys, smartphones and electric scooters do. From Kenya to Montenegro, from Ecuador to Djibouti, roads, dams and power plants are being built with billions in loans from Beijing. And all of those countries will have to pay back those loans in the years to come. With interest.

The flood of capital from China helped prevent the global economy from plunging into depression following the bankruptcy of Lehman Brothers and the ensuing financial crisis. But it isn't without controversy.

For some, the billions of dollars from China are a welcome contribution to helping many underdeveloped regions in Asia and Africa expand infrastructure. For others, the loans from Beijing have forced half the world into economic and political dependency on Beijing. Some have described the situation as "debt bondage," while a group of U.S. senators wrote a letter to Secretary of State Mike Pompeo last summer warning of China's "attempt to weaponize capital."

A Lack of Transparency

Furthermore, little is actually known about the loans. China's foreign assets are now worth $6 trillion, but outside of the government in Beijing, nobody knows much about where that money has been invested and what conditions and risks are attached. Because China doesn't completely open its books to international organizations like the World Bank and the International Monetary Fund (IMF), there is a lack of needed transparency, says IMF head Christine Lagarde.

Now, though, with the release of a new study by a German-American team of academics under the leadership of Harvard professor Carmen Reinhart, Largarde will have a clearer picture. For months, the economists dug through both known and unknown source material, compiling the most comprehensive analysis yet of Chinese foreign loans. And the image that has resulted does nothing to assuage concerns about the financial power being exerted by Beijing.


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if you hit the bigger guy, you'll get hurt... — confucius...


Senators Marco Rubio (Florida-R) and Bob Menendez (New Jersey-D) have launched a parliamentary group spanning both sides of the Atlantic, the Inter-Parliamentary Alliance on China (IPAC).

It brings together over a hundred representatives from 12 countries (United States, Canada, Australia, Japan, United Kingdom, Germany, Italy, Sweden, Norway, Netherlands, Czech Republic and Lithuania), in addition to members of the European Parliament. The most highly represented are the Germans, Australians, Canadians and British.

The project promoted by this decidedly anti-Chinese pressure group was presented at the Munich Security Conference. Its advisory committee includes opponents from Hong Kong and the former Chinese policy adviser of Presidents Bill Clinton and George W. Bush.

IPAC will be sure to relay the new anti-Chinese policy of the US through the national and European parliaments.


Shiwei Ding spent a year finding the perfect location for his malatang restaurant — a hotpot-style Chinese street food. 

Key points:
  • China has warned students about risks due to "racist incidents targeting Asians"
  • Chinese-owned businesses fear they could be hardest-hit by a drop in students
  • Community members say Australia needs to address racism in a systematic way

The 29-year-old chose a spot in the heart of Melbourne's education precinct, near RMIT and Melbourne University and surrounded by student apartment buildings, in the hopes of serving up the spicy signature dish to international students. 

But the timing couldn't have been worse — he opened on Boxing Day of 2019, unaware the looming coronavirus pandemic would put a stop to Chinese travellers and students — his key clientele.

Now, with the Chinese Government's warning to tourists and students due to both the risk of COVID-19 and "racist incidents targeting Asians" in Australia, Mr Ding's fledging business has been dealt another blow. 

"I expected Chinese students to come back in February, after the Lunar New Year celebration at home. But the outbreak in Wuhan … and the travel ban has prevented them from coming back," he told the ABC. 

He said Chinese restaurants were already under strain before the economic lockdown in Australia, as some diners chose to avoid them since January when news of the virus spread.

Mr Ding estimates a loss of over $20,000 every month. His wife has been working two jobs to meet the needs of their family.

"The persistent volatility drove me to despair ... there was one point that I thought I can't survive anymore," he said. 

"I reached a breaking point when I heard about [China's warning] because the [political tension] could be a consistent damage, much worse than COVID-19."

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china saving china this time around...


China wants to invest heavily like it did during the global financial crisis. But unlike then, the measures are "not geared at big infrastructure projects," says Prime Minister Li. Instead of new railway lines and airports, the money will this time go primarily into digital infrastructure like 5G networks, data centers or artificial intelligence. This could widen the lead that China, in part, already enjoys over the West in some of these sectors. To this end, Beijing plans to issue bonds worth 470 billion euros this year, an increase of 200 billion euros over the previous year. Chinese IT companies and network equipment suppliers will likely be the main beneficiaries. The rest of the world will have to wait.

The investment program is unlikely to diffuse China's trade conflict with the U.S., which has long since developed into a tech war. This is especially true now that the antagonism is more than just atmospheric. U.S. President Donald Trump recently announced that Hong Kong would be stripped of its trade privileges because, from his perspective, the city can no longer be considered autonomous from China. Beijing is said to have already retaliated by instructing several state buyers to cancel orders for U.S. soybeans and pork. China buying more agricultural products from the U.S. was a fundamental part of the Phase 1 trade deal that was concluded in January. Nevertheless: Of the $36.5 billion in purchases promised for 2020, the Chinese only ordered $3.4 billion in the first quarter, their lowest amount since 2007.

This time around, China won't be a driver of global growth. After all, the fear of a second wave of coronavirus infections still looms.

One of the passengers on Lufthansa flight LH342 to Tianjin last Friday was a 34-year-old engineer. Like all of his fellow travelers, he was tested for SARS-CoV-2 and the result came back negative. The man from the small town of Blaustein in the state of Baden-Württemberg exhibited no symptoms and his body temperature was 36.3 degrees Celsius (97.3 degrees Fahrenheit), as the Tianjin Health Commission would later announce.

Shortly after arrival, at around noon on Saturday, he was separated from the other Germans and tested again, this time producing a positive result The man is apparently the carrier of an asymptomatic infection. The Chinese took him to a local hospital where they put him under medical observation.

Some of his fellow travelers had hoped to be allowed to leave the central quarantine hotel after only 48 hours, thanks to a special arrangement. The authorities, however, quashed that hope. Everyone is now stuck in their rooms for two weeks. The virus has yet to be defeated.




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the chicken run run run...

I HAD THE uncanny sense of reading science fiction when I began Blockchain Chicken Farm — technically a work of nonfiction, thoroughly researched and intricately pieced together. On the surface, it’s a mind-boggling survey of how technology is shaping and creating economies across China, particularly in its countryside. Or as author Xiaowei Wang writes, inverting that influencer-influencee trope: “Rather than seeing the way technology has shifted or produced new livelihoods in rural China, I have been humbled to see the ways rural China fuels the technology we use every day, around the world.

In the book’s loose travelogue framework, we find ourselves in unexpected places. There’s Dinglou village, which has improbably transformed itself into a global costume manufacturing hub, with family homes doubling as fulfillment centers. In the namesake “blockchain chicken farm,” located in the mountainous village of Sanqiao, we’re introduced to a supply chain that provides for affluent urbanites, who view online videos to verify the authenticity of their free-range poultry. There’s even the virtual space of Facebook Live pearl parties, where prepaid oysters from the “pearl city” of Zhuji are pried open to reveal their treasures—a more surreal, celebratory version of YouTube unboxing videos. If Blockchain reads like sci-fi, that’s because, in overlooked parts of the world, the future is already here. I can’t think of any other recent work that comes close to capturing the alternate reality that is China today.

As our narrator, Wang is generous with hyperspecific details, while periodically zooming out to give us the fuller picture. They are a writer, artist, and programmer, as well as the creative director of Logic magazine. Recently I spoke with them over email about their travels, the concept of shanzhai, Chinese dishes, skincare gadgetry, and shopping.

Ling Ma: This book spans a great deal of territory, both geographically and in its wide range of subjects. How did you realize that all of these belonged in the same book?

Xiaowei Wang: The subjects and places throughout the book have a mood that I like to term “modernity gone off the rails.” For example, Dinglou village was a boomtown—it had developed really fast, from farmland to a bustling center. Dinglou and the neighboring village had high-speed internet, lots of money flowing in, hot pot restaurants, but at the same time large craters on the side of the road and some really bizarre, uncomfortable interior architecture. The buildings had been constructed to aspire to some image of being “cosmopolitan” or “modern,” but falling short in an absurd way. There were dazzling light fixtures and shiny granite floors at the hotel where I stayed, but no hot water for a good chunk of the day.

“Modernity gone off the rails” is, to me, the combination of mundane and inspiring, the absurd and creative. It connects people on opposite sides of the world in unexpected ways that remain hidden to them, most of the time. It’s a little punk rock. It’s the messiness that happens in the day-to-day while both learning to live in an interconnected, technologically rich world and at the same time pushing against the prescribed instruction manual. It’s also a willfulness, to keep hustling, keep trying, whether you’re a young pearl entrepreneur in Zhuji or a Facebook livestreamer involved in a multilevel marketing scheme...


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third-generation semiconductors...


Support for silicon carbide will boost 3rd-generation semiconductor tech


China's top industry regulator will include silicon carbide, or SiC, an important semiconductor base material, into a five-year plan for industrial technological innovation development.

The move is part of broader efforts by the Ministry of Industry and Information Technology to guide development of carbon-based materials to support chip innovation and development, experts said.

Carbon-based materials can be good substitutes for silicon-based semiconductor materials, and they form an important part of the third-generation semiconductor technologies where China aims to achieve breakthroughs, experts said.

The MIIT said it will include carbon-based materials in the 14th five-year plan (2021-25) for raw material industrial development, and also include SiC and carbon matrix composites in the 14th five-year plan for industrial technological innovation development. The larger goal is to support the industry to tackle technology barriers, so as to improve product quality and promote modernization of industry chains.

Dongxing Securities said in a research note that silicon, which is found in large natural reserves, has become the most important raw material for the manufacture of chips and devices. More than 90 percent of semiconductor products are made of silicon as a substrate.

But limited by the characteristics of the material itself, silicon-based power devices are gradually unable to meet the requirements for high-power and high-frequency devices in emerging applications like 5G, new energy vehicles, and high-speed rail.

So, SiC is expected to partially replace silicon and become a new substrate material for the preparation of high-voltage and high-frequency devices, Dongxing Securities said.

SiC is an important material of the third-generation semiconductor technologies, as China seeks breakthroughs in the third-generation chips for the "post-Moore Era". In 1975, Intel co-founder Gordon Moore formulated a rule that the number of transistors on a silicon chip doubles roughly every two years. But rapid technological advancements may make the rule obsolete in the future.

In May, a government meeting attended by Vice-Premier Liu He discussed the potential disruptive technologies of integrated circuits, or ICs, in the post-Moore era.

Yuekai Securities said in a research note it is clear the third-generation semiconductor technologies are an important development direction, with their downstream applications focusing on 5G base stations, new energy charging piles, intercity high-speed rail transit and other areas.

The third-generation semiconductor technologies offer a good opportunity for Chinese chipmakers to catch up with their foreign counterparts. Third-generation semiconductor products mainly use mature manufacturing and processing technologies, where domestic manufacturers will face fewer obstacles than in the traditional silicon-based semiconductor technologies, Yuekai Securities added.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said: "The main battlefield of the applications of third-generation semiconductor technologies is in China, but it will take a long time for domestic companies to address a string of challenges before widely popularizing these technologies."


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Presently most of the computer chip base material is manufactured in... Taiwan. See what comes next...