Month: October 2016

The GOP nominee Don.

He’s feeling a bit put upon.

They’ve followed the money.

I don’t think it’s funny

That his chances of winning aren’t gone.

The relationship between China and Taiwan resembles the relationship between the US and Cuba:  both situations involve a large island off the coast of a much larger nation with a significantly different political and economic system.  In both cases, the island has been a major thorn in the side of the larger nation.  The difference, however, is that no one claims that Cuba is legally part of the US.

Ten or twenty years ago, it was relatively easy to imagine the Chinese and Taiwanese governments agreeing on a formula by which the Republic of China would cease to formally exist for purposes of dealing with the outside world, but would retain considerable autonomy for domestic purposes.  Since then, however, the independence of Hong Kong has been eroded, a significant portion of the Taiwanese population has embraced independence as an ultimate objective, and the Chinese government has become more repressive at home and more assertive in the South China Sea.  The odds against a peaceful solution to the issue have grown accordingly.

The costs and risks of taking or annihilating Taiwan currently outweigh its benefits, from the perspective of the Chinese leadership.  That situation is unlikely to change in the foreseeable future even if Chinese military power and assertiveness continue to grow at their current rate.  On the whole, therefore, the prospects for a satisfactory negotiated solution for the Taiwan issue, while not good, remain better than those for Hong Kong.

The GOP nominee Don

Had no income to pay taxes on.

He insists that he’s rich

But the truth is a bitch.

In the nineties, his fortune was gone.

The real meaning of the NYT story isn’t that Trump uses the system and puts the burden of supporting government on ordinary citizens;  everyone knew that, and he actually takes pride in it.  No, the significance of the story is that the supposedly omniscient businessman lost a billion dollars in a year.  That’s billion, with a b.

Of course, Trump would say that it wasn’t his fault, and that he just got involved with Atlantic City casinos at the wrong time, but the evidence shows that the other casinos didn’t do as poorly as his did, and in any event, why couldn’t he foresee that if he is as brilliant as he says?

The equivalent to losing a billion dollars as President would be starting and losing a nuclear war.  That’s a risk no reasonable person should be prepared to take.

Based on his experience doing business with a few Chinese bankers, Donald Trump feels comfortable stating unequivocally that China is in complete control of events in North Korea, and can change the regime’s behavior at a moment’s notice.  As with most things, he is clueless on this subject.  The relationship between China and North Korea is complex and fraught.

The Chinese government decided a long time ago, and with substantial reason, that while the North Korean regime was dangerous and irresponsible, every alternative to it was even worse.  The North Koreans know this, and consequently pay little attention when the Chinese try to tell them what to do.

While the nature of the regimes is obviously very, very different, the China/North Korea relationship reminds me a bit of the relationship between the US and the Netanyahu government, which knows it has enough support in Congress and with the American public to ignore any attempt by Obama to leverage aid and diplomatic support for moderation in the West Bank and Gaza.

The US is often accused of trying to encircle China, but in the case of North Korea, we would welcome any developments that would increase Chinese influence. Unfortunately, any North Korean official who becomes too cozy with the Chinese is viewed as a threat to the regime and is likely to wind up being executed.  A moderate North Korean regime under Chinese control is, therefore, not likely in the foreseeable future.

Imagine that you are Prime Minister Abe of Japan.   Your country’s economy is stagnant, your population is aging rapidly, your debt is reaching the stratosphere, and you rely on the US for protection. China, your neighbor, is much larger, unfriendly, and growing far more rapidly. What do you do?

You have three choices:

1.  Bury your head in the sand and hope the problems go away by themselves;
2.  Attempt to persuade the population to accept large scale immigration and huge increases in the defense budget in order to deter potential aggression from China; or
3.  Make the best deal you can with China as soon as possible.  Given the history of China’s treatment of vassal states,  it is realistic to think you can preserve your political and economic systems and most of your independence as long as you toe the line on a few foreign policy issues that are important to the Chinese.

Abe is trying a highly watered down version of #2, but has had very limited success.  In the long run, my best guess is that #3 will be the choice.

Today is the 67th anniversary of the proclamation of the creation of the PRC: China’s national holiday.  I will be observing it this week with a series on China and its neighbors, starting with Hong Kong, which, as we know it, is doomed.

Why do I say that?

Hong Kong is an incredibly intense, vibrant, capitalist city.  Virtually every square inch of it is covered by a mall of some sort.  When I went to Shanghai, I described it as two parts Manhattan, one part Las Vegas, and one part Disneyland;  Hong Kong is that times ten.  I would guess that everything in the world is for sale there, and I mean that in the most literal sense.

When the Chinese leadership made the deal with the UK to regain control of Hong Kong, they agreed to leave it more or less as is, because it was the only goose in town, and they didn’t want to kill the golden egg.  Today, a much more powerful and prosperous China has Shanghai as an alternative financial center, so the economic value of Hong Kong to the leadership has diminished, and is decreasing further over time.

No one who watched the events in 1989 has any doubts that the government would rather turn Hong Kong into a cinder than permit it to evolve into a genuinely democratic state.  That includes the vast majority of the residents.  And so, while some of the younger residents in particular will engage in very public fights for more rights, the trend will run slowly, but inexorably, in the other direction.  In the long run, you can’t have a country with two different political systems, and the one that will prevail will be the one on the mainland.