Download
1 / 90
900 likes | 904 Vues
President Trump will declare a national emergency while signing the interim budget bill to redirect funds for the border wall. Republicans are concerned about the precedent it sets. Lawmakers have two paths to block the president - one in Congress and the other in the courts. Updates on Brexit, US elections, and the US-China trade wars also included.
E N D
Updates • Trump to declare a national emergency at the same time as signing the interim budget bill. This will allow him to redirect funds to pay for the wall or garner unused money so far Republicans not happy because of the precedent it sets. A future Democrat President could invoke it for Climate Change. • Lawmakers seeking to block the president have two paths — one in Congress, the other in the courts. • Democrats could get a majority in the H of R to vote this down and may even get a few Republicans to defect in the Senate. Trump could then issue a presidential veto. Congress could then over turn that but it would take a two – thirds majority of both houses. • The money would come from either Defence or disaster relief and could use troops to help construction. • Mike Pence criticises Europe over their reluctance to sanction Iran. The UK, France and Germany do not attend. No peace in the Middle East while Iran is there? Or is Iran necessary for a peace? • Trump – I deserve the Nobel Peace prize for North Korea and Syria.
Brexit updates • The Brexit clock keeps ticking away. Theresa May loses another vote in the House Of Commons. Because many n her own party abstained • The EU is not ready to compromise as they assume if they do Mrs may will come back repeatedly for a bit more to keep people in her won party happy till march 29. • They see the UK arguing, debating and negotiating with itself again - as it has done so often during the Brexit process - rather than engaging with Brussels. • There will be a meeting of EU leaders on march the 21st. • Little enthusiasm in the EU for extending the time on Article 50 but that probably will happen. • Frustration and despondency with the Brexit process is widespread, and EU leaders (think Spain with the Catalan issue and wobbly minority government, France with the "yellow vest" protest movement; Italy in recession again and with its infighting coalition government) face other dilemmas screaming for their attention.
Brexit updates • Why do people oppose the deal? • There are a broad range of complaints, many of which claim the deal fails to give back to the UK control of its own affairs from the EU. • One of the biggest sticking points has been over what happens at the Irish border. The backstop arrangement. • Both the EU and UK want to avoid the return of guard posts and checks. • 7 Labour Party MPS resign to sit as independents as protest over Corbyn leadership and his refusal to back a second referendum. • 3 leave the Conservatives this morning as well.
the Democrats go left – the Republicans call it socialism • Elisabeth Warren proposes a wealth tax of 2% for those over $50 million and 3% over $1 billion (every year). 74% support among Democrats – and even 50% among Republicans. • Green New Deal - would centre around creating new jobs and lessening inequality. Aiming to virtually eliminate US greenhouse gas pollution in a decade, -radical compared with other climate proposals. It would require massive government spending. Carbon neutral by 2040. Pelosi a sceptic. • Currently the US gets 17% of its electricity from renewables and 20% from nuclear. • It would also aim for 100% renewable energy and includes a job guarantee program “to assure a living wage job to every person who wants one”. It would seek to “mitigate deeply entrenched racial, regional and gender-based inequalities in income and wealth”. • Strong public support (81%) but little support from Congress. Would the voters pay for it? • “This is going to be the New Deal, the Great Society, the moon shot, the civil-rights movement of our generation,” (Bernie Sanders and Alexandra Ocasio - Cortez).
The US Vs China – trade wars and soft power Wodonga U3A – Feb 20, 2019
Introduction • 2019 should be a year of celebration; it marks 40 years since the establishment of diplomatic relations between the United States and China. • Bilateral trade and investment between the two countries has grown exponentially from $5 billion in 1980 to $710 billion in 2017; student exchange and tourism numbers have soared; and peace has been maintained in the Asia-Pacific. • Yet, over the past several years, trade tensions have risen to an all-time high; there is talk of military conflict over Taiwan and in the South China Sea; • concerns have flared in each country over the political influence of the other and the two countries have launched an all out competition to define the values underlying the international order.
Asia changes • In the 1960s South Korea was one of the world’s poorest countries – Now it is home to Samsung, Hyundai etc. • In 1993 – Infosys started in India – now worth $3bn • 1993 – Qatar begins small regional airline that now owns 200 aircraft and 40,000 staff. • 1993 – FA Cup final. All but 3 players from the UK. 25 years later only 6 out of 27 were from the UK. • Aston Villa, Bromwich Albion, Birmingham all bought by the Chinese as well as AC and Inter Milan. Manchester owned by billionaire from the UAE, Everton by Iran, Paris Saint Germain by Qatar, Arsenal by an Uzbek, Chelsea by a Russian and QPR by Malaysian magnate. • 1993 – “Jurassic park” comes out. Legendary Entertainment sold to the Chinese along with the Hoyts and Odeon theatre chains. • In 2001 China’s GDP was 39% that of the USA. In 2018 it is 114%. Millions now out of poverty and Middle Class driving airline travel boom.
China changes and calls the shots • Prada opens 7 new stores in Xian alone in 2018. Starbucks up to restaurant 1000. • Calling the shots – on China’s terms. Facebook data on local servers and Google develops “Dragonfly” search engine for China that filters out human rights sites etc. Google and twitter often blocked. • China development bank in 2015 announces that it has 900 projects on the books and reserves of $890 bn. 80 Countries are now signed up to it. • US also had plans for a Silk Road with Central Asian connections but no money was forthcoming. • China offers the world cash, hope and a way out. Chinese lead the world’s connections as the US withdraws. • China – “if you want to get rich build roads first”. Poor infrastructure has been what has held countries back. Laos from land locked to land linked (Vientiane to Kunnin). • Poverty now 1% - China has more internet users, homeowners and even billionaires.
Where it all began • In 1984 three quarters of China live in extreme poverty. Decades of turmoil preceded it. • The state decided where everyone worked, what factories made and what cost it would be sold. • Market forces unleashed. Factories still had to meet quotas but could sell surplus at a cost decided by the factory. Undercut the planned economy. • Not now just catching up but moving ahead of the rest in the face of US hostility. • Not modernisation as we know it. Prosperity should have led to political freedoms and democracy. • Did not happen – repression but still innovation. A rigid bureaucracy but again still innovation. • Reform but not democratisation – learned from Russia and Gorbachev. A re-invention that the Russians never managed. Russia liberalises the economy and politics – China only the economy. • The Party must hold the centre. Fears about Gorby influence – Tien An Mien and Gorby and the Red Guards.
The beginnings of China’s reformation • So factories entered the private market . Farmers could sell their own crops even if the state still owned the land. • After the Cultural revolution Deng Xiao Peng sent officials on a study tour of the US. Education opened up to all. • Government incompetence cleaned up. Term limits set for officials as well as mandatory retirement. Easier to get rid of some. Accountability now set into the system. • Concrete targets set but it did lead to corruption as well as tainted food and medicines. • Bureaucrats move into entrepreneurial business. Democracy movement after Tien an mien contributed to its ranks. • Now private sector accounts for 60% of the economic output, 80% of the jobs and 90% of the new jobs. Bureaucrats stay out of the way. Deng said look overseas but Xi said be self sufficient. Xi – son of a high official who served Deng. • Let in foreign investment. Tapped into a wave of globalisation. Investment from Taiwan and Chinese enclaves overseas (HK and Singapore). Dangerous considering then China was as isolated as North Korea is now.
The rise of the Chinese Middle Class • They have forgotten Tien An Mien. • Democracy not high on the priorities list. • Economic boom leads to consumerism and a growing domestic market to offset reliance on exports. • 300 million in the middle class? Can travel and send children overseas for their education. • Trust and belief in Government priorities very high. • Taiwan jump started capitalism and plugged China into the global economy. • “opening up” strengthened party leadership rather than weakening it. • China a model for a democratic autocracy? • Much more sensitive to public opinion particularly over party corruption and pollution.
How overseas infrastructure projects help China • In Pakistan – economic corridor – wind farms and water treatment plants. High speed rail between Karachi and Peshawar. 5 times the freight, double the passengers and half the time on 1000 mile journey. • And why not? Chinese economy shifts from Manufacturing to services which leads to excess Metals, steel and cement in the system. • Sent out to Asia which is hungry for infrastructure upgrades. Opportunities for Chinese companies that get 89% of the contracts and takes pressure of the East Coast populations. • China also exports the workers. • China sets the standards. • Security concerns over Xinjiang which is why it is a focus. Coal and natural gas fields. Uighur re education camps and mass surveillance.
Another one – like Malaysia’s forest city? Highways built and flats being bought off the plan
Debt and convergence • Focus is on the maritime Silk road as well as rail costs 5 times as much and ULCV can carry 10,000 containers each. • China a model for Africa – 30,000 scholarships in Africa. • Silk roads are everywhere – Venezuela bailed out by China in exchange for 700,000 barrels of oil daily. • Debt a problem. Malaysia and Tonga renege. Hambantota in Sri lanka – the airport that Air Lanka no longer flies to. Angolans now have $754 debt per head to finance Chinese loans. • Djibouti – the strategic part of the Western Indian Ocean. Choke point between the Gulf of Aden and the Suez Canal. 30% of Global shipping goes through there. Japan, The UAE, China, Turkey, Russia and the Saudis all doing the same.
China in Egypt • A new administrative capital in the desert east of Cairo built by Chinese companies and financed up to 85% by the Chinese government. • Parallel to the expansion in investment, there has been an increasing flow of Chinese tourists coming to Egypt. Their numbers more than doubled last year to 300,000 from some 130,000 the year before. Egypt loves them as they are not as volatile as European tourists. • New city does not have name yet other than NAC (Sisi city?) but will house 6.5 million Egyptians and take the strain off Cairo (19m). It should be ready by June 2019. New cities are all the rage. • The future of the many buildings that make up Egypt’s sprawling state infrastructure, mostly situated on prime real estate in central Cairo, remains uncertain. Will it help pay for the new city? • Egypt owns the Suez Canal – say no more.........
Rivalry with the US • Don’t know how to play Trump – unpredictability and shouting matches between Mnuchin and Navarro. No plans – removal of Mattis – the last adult. • US – tariffs mean higher prices for US consumers who want cheap Chinese products • Remember that China buys US Bonds (their debt) so that the US can buy chinse goods. • US not interested in reform from within. They leave agreements loudly and bitterly. As is their right. NATO did not pay enough and China was stealing IP on a massive scale. • But it is the manner – G7 2018 leaves two lollies for Merkel – “don’t say I never give you anything". Always on the look out for enemies and targets. Unnecessary bad treatment of Merkel, May and Trudeau. • America first – a slogan but not a plan. The world is more complex. 20% of Apple income comes from sales in China. Boeing lose massive airline deal. US companies do well from OBOR. GE $2.3bn in sales. Caterpillar and Honeywell also profit.
The US did not see it coming • In past decades it was hoped that China would become more like the US. The US helped China into the WTO. • No more – convergence is no longer possible. Mexico and Canada may be easily pushed around but not China. • 1996 – Clinton show of force in the Taiwan straits puts and end 4to Chinese missile tests. What Trump needs is strategy not just tactics. Need s old allies as well as new ones (e.g. Vietnam and India with whom it has growing naval co-operation). The US does have friends while China does not. • What sparked it? In 2006 the US economy was 5 times the size of China’s – in 2017 it was down to just 60%. • 2008 – GFC – the US badly hit but China much less so. China sees a chance and takes it. • China’s economy is growing 20 time faster than the US and the state is investing heavily in high tech like AI and quantum computing. • China is seen as looking to world rather than just regional dominance. The US fears that time is on China’s side.
Unintended consequences • Russia sanctions – puts up price of oil. 50% of Russian income is from oil and gas so they benefit enormously while US motorists pay more for petrol and home heating. • The US courts India to contain China – India wary of China but in the grip of the Russians and have been for many years. Not keen on Trump overtures as they see him as unreliable. “I am a fan of Hindu” says trump. • Pressure on Iran over sanctions and withdrawal of the JCPOA only serves to unite Iranians. • Germany warned to stop trading with Iran or face consequences. Nike pulls out, French Total loses massive gas development deal and so do Airbus and Boeing. Turkey still buys gas from Iran. • As a result China moves in and benefits. Signed up for OBOR. • China, Turkey and Iran are attuned to a changing world. The US is fighting it. EU also fractured _ Brexit etc. US warns that countries with Allies always win out in the end. That is what China is doing.
China hits back • A cyber blitz against Australian web traffic after the failure of the APEC meeting in Port Moresby. • China develops the FD21 long range anti ship missile designed to destroy carriers or at least keep them well away from the South China Sea. • Aggressive posturing over over flight rights in the SCS. • China trying to control the “choke points”. The Kra Canal and the Suez? Building $80bn second capital in Egypt. First overseas base in Djibouti. • Further pushback – China could cut off medical drugs that the US is nearly totally dependent on. Does not buy any soybeans from the US in November – none – Hurts the farmers in Iowa.? • Beijing has moved closer to Moscow and Tehran since Trump entered the Oval Office, partially thwarting US efforts to isolate those countries. China is Iran’s biggest energy customer, spending around $15 Billion a year on crude oil. Beijing doesn’t want that to change anytime soon. It buts more Russian fighters and has relaxed trading with North Korea. • China feels that Trump will not be there forever.
China and the centrally planned economy • Communism has its benefits. • Decisions are effected much more quickly, the internal market is huge and the middle class is growing. Goods quality is much better and innovation is king. • Control over the economy – they can set the value of their own currency. A lower currency makes exports more competitive. 10% Trump tariffs can be offset 10% reduction in the Yuan. • But falling Yuan could mean that Chinese money leaves China. • If the US raises interest rates as it just has money floods into the US. In China that would raise the cost of borrowing just when the economy is slowing down. • China might then have to tap into foreign exchange reserves as it is doing now. • Trade war – China to try and replace US imports particularly hi tech and soybean meal for the pigs.
How could China retaliate • For its part, Washington misjudges as well. It sees China’s economy as vulnerable and doesn’t appreciate that China can wage a trade war with weapons other than tariffs. • It can play a nationalism card so that it becomes unpatriotic for Chinese citizens to buy McDonald’s burgers, drink Coke or wear Nike shoes. Safety inspections can close American hotels; tax investigations can tie American firms in knots; and customs delays can hold up parts and idle American-owned factories. • Chinese tourism to the U.S. can slow, students can be directed to Australian universities over American ones and rare earth minerals needed by American companies may develop shortages. • China can further ease sanctions on North Korea, buy more oil from Iran or become more aggressive in the South China Sea. It can cancel Chinese trademarks owned by Ivanka Trump — that might get the president’s attention — • and it can dump U.S. Treasury bonds.
The Tariff War • The US has imposed three rounds of tariffs on Chinese products last year, totalling $250bn worth of goods. The first two rounds placed 25% tariffs on $50bn worth of imports from China, and Beijing retaliated in kind. • Washington delivered a sharp escalation in the trade conflict in September with another set of tariffs, this time on Chinese goods worth $200b. • Trump has warned even more could be on the way. • Smaller Asian countries further down thesupply chain could also suffer. 30% of the value of the goods China exports to America originates from third-party countries. • Ultimately, China may not have as much firepower as the US to retaliate, given the US buys much more from China than it sells to them. This could mean it would find alternative ways to fight back such as making life difficult for American companies in China by increasing red-tape. • The tariffs have been sold to Americans as a means of forcing multinational companies to make their products in the United States, abandoning China, Mexico and other low-cost centres of industry. But the tariffs are threatening jobs that are already in the US.
Why Apple cannot do without China– the Mac Book Pro • Trump “build them in America”. • They tried that - In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas it turned out the screw suppliers were could not. • The screw shortage was one of several problems that postponed sales of the computer for months. • Quote from Apple “In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room, In China, you could fill multiple football fields” • China is its biggest market - Apple said it would miss earnings expectations for the first time in 16 years, mostly because of slowing iPhone sales in China. Tariffs would make matters worse. • The final assembly is the most labour-intensive part of building the iPhone, and its location often determines a product’s country of origin for tariffs. Base rate in China is $US 3.15 per hour.
What can the US do? • Mike Pompeo offers their version - $113 million • Trump can do to China what President Ronald Reagan claimed to do to the Soviet Union: confront and out-spend militarily until it collapses. • The present US-China confrontation is nothing like the US-Soviet confrontation during the Cold War. During the Cold War security issues could be separated from economic and trade issues. • There was simply so little trade with the communist bloc that it could be ignored. China, on the other hand, has emerged as an economic powerhouse and the West is now dependent on it. • China is kick starting an Asian Century. • They will allow Iran and Turkey to revive dreams of a glorious past. Accentuate differences rather than remove them. • China recycles its surpluses, moves low grade production off to others and secures raw materials. • China is not adapting to a new environment but creating it.
What the US tried to do and should have done.... • The first is to remove China from the centre of the global supply chain. Here’s one example of Beijing’s importance: Apple has around 27 China-based suppliers, mainly in the electrical components sector. • The second goal is to make multinational corporations wary about doing business in China. Trump pressures companies to make components in America. A serious consequence of ruining China could be a world wide recession. • Trump ignored advice that he should aggressively take on China under the World Trade Organisation for theft of intellectual property. Most of the developed world would have joined in. • He ignored advice to stay in the Trans-Pacific Partnership and the Paris Climate Accord. He ignored advice not to impose the steel tariff. The advice was that it would harm US industry that consumed steel especially cars, boats and pipelines while not creating any steel jobs. • But he was probably right to suggest a removal of troops from Afghanistan and South Korea but he did not follow through. • a century ago a US government commission headed by US Army engineers built the Panama Canal. Why shouldn’t the US join Thailand and China in building the Kra canal?
