(Video) Hitler and Chamberlain, Putin and Obama

**Posted by Phineas

Obama as Chamberlain

(Photo via Israel Matzav)

I’ve been saying for years, almost since the Jihadi War began, that the state of international relations gives me a “1930s vibe,” a feeling that we may be on a path toward another World War. That feeling has come and gone as the years passed, as I’m sure it did for those living in the 30s, but it’s never quite gone away. In fact, Russia’s predatory moves toward Ukraine have brought that feeling roaring back, the parallels being striking.

Bill Whittle has noticed the same trends and, in this video for Truth Revolt, compares a lion, a bear, and two lambs:

But it’s not Russia that worries me most, unless it’s in combination with other powers. Russia is a dying state, its demographic trends signalling serious future decline. Its military, outside of special elite units, just isn’t all that good, and, while they’ve made steps to rebuild, they’re still  a long way off. (They had trouble mobilizing the limited forces they used to assault Georgia in 2008.) Their economy is far too dependent on natural resources, especially oil, but Russian oil is notoriously expensive to extract. Fracking technology in the West promises to cut the legs out from under Putin and his successors as it drives the price of oil and gas down, making Russia’s less marketable.

China concerns me more: a rising power with a strong hyper-nationalist faction, an aggressive foreign policy, and a strong sense of (as Bill notes about Russia) historical grievance. Some incident in the South or East China Seas could easily be the spark for a major conflagration.

And then there’s Iran: a fascist theocracy that has promised to destroy Israel and is desperately seeking its own nuclear weapons to do just that.

We face a bear, a dragon, and a lion, while we are lead by lambs.

Yep. I have a bad feeling about this.

(Crossposted at Public Secrets)

Leaked Chinese documents show planning for a North Korean collapse

**Posted by Phineas

"I've got some bad news, boss..."

“I’ve got some bad news, boss…”

To paraphrase Whoopie Goldberg, I’m pretty sure these weren’t “leaked-leaked,” so much as deliberately slipped to the Japanese, knowing they’d go public. It’s a not-so-subtle to warning to Dear Leader III: “If things fall apart, don’t count on us to bail you out:”

China has drawn up detailed contingency plans for the collapse of the North Korean government, suggesting that Beijing has little faith in the longevity of Kim Jong-un’s regime.

Documents drawn up by planners from China’s People’s Liberation Army that were leaked to Japanese media include proposals for detaining key North Korean leaders and the creation of refugee camps on the Chinese side of the frontier in the event of an outbreak of civil unrest in the secretive state.

The report calls for stepping up monitoring of China’s 879-mile border with North Korea.

Any senior North Korean military or political leaders who could be the target of either rival factions or another “military power,” thought to be a reference to the United States, should be given protection, the documents state.

According to Kyodo News, the Chinese report says key North Korean leaders should be detained in special camps where they can be monitored, but also prevented from directing further military operations or taking part in actions that could be damaging to China’s national interest.

The report suggests “foreign forces” could be involved in an incident that leads to the collapse of internal controls in North Korea, resulting to millions of refugees attempting to flee. The only route to safety the vast majority would have would be over the border into China.

“Foreign forces,” of course, being the United States and South Korea. Kim Jong Un’s behavior since taking power, from hysterical rhetoric to live-fire artillery drills in sensitive areas to his penchant for executing rivals in various psychopathic creative ways, and especially his continued pursuit of nuclear weapons, has to worry governments with security interests in Northeast Asia. And the last thing anyone wants is a Korean conflict that might again force Beijing to come to Pyongyang’s aid and place Chinese forces in combat against Americans. North Korea’s behavior has become unpredictable since L’il Kim took power, and a lack of predictability in Great Power relations makes everyone nervous. Hence a the message to Kim that’s about as subtle as a gun to the face: instead of helping you, we may put you in a camp, instead.

I don’t think it’s a coincidence that this Chinese report comes out at just about the same time we learn of credible reports that North Korea has developed nuclear warheads that can fit on an ICBM. Missiles that can reach the United States:

According to the 16-page report, “The North Korean Nuclear Threat to the United States,” the Defense Intelligence Agency stated in an unclassified assessment made public a year ago that “DIA assesses with moderate confidence the North [Korean government] currently has nuclear weapons capable of delivery by ballistic missiles.”

“This is disturbing news,” the report says. “The North Korean regime is one of the most fanatic, paranoid, and militaristic dictatorships on the planet. … While North Korea has long made occasional nuclear attack threats, the scope, magnitude, and frequency of these threats have vastly increased in 2013.”

North Korea has in the recent months issued provocative threats to carry out nuclear strikes on U.S. cities and against American allies.

By the way, the Obama administration is trying to deny the conclusions in this report, because it doesn’t fit with their diplomacy. Feel reassured.

Anyway, back to Chinese planning for a North Korean collapse, one has to wonder if the Chinese haven’t seen the same information as DIA (they have much better contacts than we with the regime, though they’ve worsened in recent years) and decided to let Pyongyang know that no help would be coming their way if they decided to play a game of nuclear chicken with us. Quite the contrary, in fact. In that case, it might even be in China’s interests to euthanize its ally before it could push us over the edge. I wouldn’t be at all surprised to find out they have a North Korean general on tap for a convenient coup, or that they were prepared to invade, themselves. For fraternal, humanitarian reasons, of course.

And let’s keep in mind that a military crisis might not be the catalyst for a North Korean state failure: East Germany fell apart after the Soviets left from sheer exhaustion, and the Soviet Union just sort of twitched and dissolved without us having to fire a shot. North Korea is subject to periodic severe famines, and the economy can’t produce what the people need. They’re only held in line through terror and constant propaganda — what if that suddenly stops working? Or what if some general decides he doesn’t want to be the next to go up against the wall? Rather than a military confrontation, Beijing might find itself dealing with hundreds of thousands of starving Koreans looking for food. Better to use the People’s Liberation Army to “restore order” south of the Yalu and keep those people from overwhelming the neighboring regions of Manchuria.

It’s a lot of speculation, I realize, which is all we have when dealing with a black box like North Korea. But, that the Chinese are taking the possibility of sudden regime collapse so seriously (and this isn’t the first time they’ve warned Pyongyang) means we should, too.

via Walter Russell Mead

RELATED: Earlier posts on North Korea.

(Crossposted at Public Secrets)

Paging John LeCarre! #NSA leaker a Chinese agent?

**Posted by Phineas

"Would you believe..."

“Would you believe…?”

This is getting weirder and weirder, but, at the same time, tantalizingly plausible:

Former CIA case officer Bob Baer revealed on CNN Sunday evening that intelligence officials were possibly considering Edward Snowden’s case as Chinese espionage, after Snowden came forward this afternoon from an undisclosed Hong Kong location.

“Hong Kong is controlled by Chinese intelligence,” Baer said. “It’s not an independent part of China at all. I’ve talked to a bunch of people in Washington today, in official positions, and they are looking at this as a potential Chinese espionage case.”

“On the face of it, it looks like it is under some sort of Chinese control, especially with the president meeting the premier today,” Baer said. “You have to ask what’s going on. China is not a friendly country and every aspect of that country is controlled. So why Hong Kong? Why didn’t he go to Sweden? Or, if he really wanted to make a statement, he should have done it on Capitol Hill.”

When you think about it, the possibility of Snowden being used by Chinese intelligence is not at all unreasonable: the US news had been filled for months with items about Chinese hacker attacks and complaints about stolen data, and Obama was expected to bring this up at their summit here in California. Could he have been used by a Chinese “handler” to release this information when it would be both embarrassing to Obama and useful to China by cutting O’s legs out from under him at the summit? “Shut up, you guys are spying, too?” I’ve got no firm opinion about Snowden, himself, though, from what I’ve read, he does strike me as a immature narcissist who could be played by skilled operators. And what free-speech and civil liberties advocate who donates to Ron Paul would take refuge in China, of all places? (1)

There’s something really, really odd about this.

via Legal Insurrection

PS: I haven’t written much about these NSA revelations, the phone metadata collection and the information culling from Internet providers (PRISM), because there is so much to absorb and it has such profound implications for a free society that I think silence, on my part and for now, is better. I’ve seen too many outraged knees jerking, too much heat and not enough light, too much reaction and not enough reading; it makes me worry that, traumatized as we are by the IRS and Rosen scandals, etc., we may throw the “national security baby” out with the bathwater. For now, though, let me leave you with an article by Jonah Goldberg that best captures my thinking at the moment: healthy skepticism.

Footnote:
(1) Yeah, I know he is/was in Hong Kong, which is very free market and capitalist, but if you don’t believe Beijing pulls the strings of what goes on there, especially in an intelligence matter, I have a bridge for you.

(Crossposted at Public Secrets)

Honey trap: US missile defense contractor sold secrets to the Chinese for sex

**Posted by Phineas

"Would you believe..."

“Would you believe…”

It’s amazing how stupid we get when our hormones and feelings are involved: a 59 years old former Army officer, who now works on missile defense, has thrown his career, his honor, and his life away for a woman half his age… who also happened to be a Chinese spy.

“According to the affidavit, the national defense information that [Benjamin Pierce] Bishop passed to [the woman] included information relating to nuclear weapons; information on planned deployment of U.S. strategic nuclear systems; information on the ability of the United States to detect low- and medium-range ballistic missiles of foreign governments; and information on the deployment of U.S. early warning radar systems in the Pacific Rim,” the Justice Department announced yesterday.

The alleged leaks took place between May of 2011 and December 2012, according to DOJ, while the “romantic relationship” supposedly began in June 2011.

Interesting that this comes soon after the Obama administration reversed plans to end Bush-era missile-defense deployments.

Bishop faces up to 20 years for his treason; I think it’s a shame he’s not liable for hanging.

So-called “honey traps” are not at all uncommon in espionage, though I think the Soviets/Russians and other Communist agencies used them far more than we did or do. And men are not the only ones to fall for them: though it’s fiction, the excellent “The Americans” TV show on FX shows an FBI confidential secretary being seduced by an undercover KGB agent.

Stupidity is a universal constant.

(Crossposted at Public Secrets)

Want to know how badly China has bungled its foreign affairs?

**Posted by Phineas

The Philippines says it supports Japanese rearmament:

The Philippines would strongly support a rearmed Japan shorn of its pacifist constitution as a counterweight to the growing military assertiveness of China, according to the Philippine foreign minister.

“We would welcome that very much,” Albert del Rosario told the Financial Times in an interview. “We are looking for balancing factors in the region and Japan could be a significant balancing factor.”

The unusual statement, which risks upsetting Beijing, reflects alarm in Manila at what it sees as Chinese provocation over the South China Sea, virtually all of which is claimed by Beijing. It also comes days before an election in Japan that could see the return as prime minister of Shinzo Abe, who is committed to revising Japan’s pacifist constitution and to beefing up its military.

Anyone who knows anything about the history of World War II in the Pacific knows the brutal, almost unspeakable suffering the peoples of East Asia suffered under Japanese occupation. The Philippines alone lost roughly one million people. Many who survived were nonetheless subjected to torture and starvation, or knew those who were. That’s still in living memory for many Filipinos, making it understandable why they would fear a militarily powerful Japan, and why Rosario’s announcement is such a shocker.

Walter Russell Mead comments:

Today, the Philippines is thought to be one of the countries most subject to Chinese pressure. It has a weak economy and a small military. That a country like this is rallying against China rather than joining up with it, and doing it in such a dramatic way, tells us a lot about what is going on in Asia and the effect Beijing’s foreign policy is having on its neighbors.

China has been anything but deft in its handling of its neighbors, making aggressive claims to islands in the South China Sea, possession of which would give it control of potentially vast oil wealth under the sea bed. This, however, has also had the effect of frightening its neighbors and leading them to seek allies from amongst old enemies.

And now the Philippines, worried by Beijing’s ambitions, wants a rearmed Japan to balance China. (How soon will they be inviting us back into Subic Bay, I wonder?)

This has implications for Japanese politics, too. Japan has a general election in a few days, and the expected winner, Shinzo Abe, has advocated changing Japan’s highly pacifist, restrictive constitution to allow for greater military spending and a larger overseas role for Japan’s military. Concerns about China, where nationalist anti-Japanese protests have become a regular occurrence, and a growing approval of Japanese rearmament from her former enemies could give Abe’s party a boost, in which case we could expect to see Sino-Japanese relations become much more strained.

Obama has made a “pivot to Asia” a focus of his administration’s foreign policy. That’s actually logical (1), but no one should underestimate the challenges Washington faces there.

Footnote:
(1) Yes, I’m surprised. Given the general incompetence Obama, Clinton, and the rest of the Smart Power team have shown in foreign affairs, they’ve generally done a good job in East Asia. I’m sometimes tempted to think it’s the doing of some Undersecretary acting on his own, hoping the bosses won’t notice…

(Crossposted at Public Secrets)

China begs the question: Why would anyone want to “own” North Korea?

**Posted by Phineas

I’ve often referred to North Korea as the “world’s largest prison camp masquerading as a nation.” And let’s face it — it’s a basket-case made in a Stalinist hell: the people are brutally crushed, often rented out as slaves in all but name; the economy is frequently on the verge of collapse, dependent on drug dealing, counterfeiting, and smuggling; famine is an ever-present specter; the regime is nearly isolated internationally as a terror-sponsor and nuclear proliferator; and its almost certain eventual collapse presents nightmare scenarios to the world. So, why would anyone in their right mind want to own it? (1)

I don’t know, but that’s what China has in effect said:

China has told South Korea that it will not allow the unification of Korea under a democratic government. North Korea will remain under Chinese “influence.” If worse comes to worse, China will send in troops to set up a North Korean government that will faithfully follow orders from China. In an effort to dampen some of the anger in South Korea (the United States, Japan, and so on), China would maintain North Korea as a separate entity (and not a new province of China). China wants no misunderstanding about who “owns” North Korea.

Actually, one can understand China’s position. As the linked Strategy Page article notes, China has for years been urging North Korea to liberalize its economy along lines similar to China’s: a form of state capitalism under a one-party regime. For various reasons, North Korea has largely balked and thus often come to China for aid. Pyongyang has also in recent years caused China foreign policy headaches due to its nuclear program, aggressive moves against South Korea, and even harassing Chinese fishing vessels. By all accounts, relations between these two “allies” aren’t at all good.

Thus, as the “big dragon” in the region, China has a deep-seated interest in stabilizing North Korea. A sudden collapse would be almost or just as disastrous for China as it would for South Korea, with potentially millions of refugees flooding over the border into Manchuria and bringing huge headaches regarding food, shelter, and security in their wake.

Almost as bad, from a geopolitical perspective, would be a regime failure similar to that of East Germany’s, which lead to its absorption by West Germany. The specter of the Soviet Union’s collapse soon thereafter is almost certainly in the back of Beijing’s mind, and one of the last things China wants to see is a unified, prosperous, multi-party Korean democracy on its border, giving the Chinese people ideas. The Chinese military, in particular, would blow a gasket if this meant the US military entering the North as part of a stabilization force — which it might, just to secure any nukes.

So, consider this claim of ownership a bit of “defensive imperialism” on China’s part, a message to South Korea, Japan, and their American patrons that “we can handle the problem ourselves, thank you.”

While I’m not in any way a fan of the Chinese regime (unlike certain NYT columnists and US cabinet secretaries), considering the alternatives, I have to hope Beijing is right.

via Breitbart.com

Footnote:
(1) Well, not everyone is unhappy in North Korea. At least Dear Leader Junior gets his Disney stage show and hot date. The rest can go eat grass.

(Crossposted at Public Secrets)

Four must-reads on North Korea

**Posted by Phineas

Busy day today, but I wanted to share with you four articles on the world’s largest prison camp masquerading as a nation, aka “North Korea,” and its uncertain future. Each has something worth your attention:

Writing from Tokyo, the New York Times’ Martin Fackler interview Korea “experts” (as if anyone can be a true expert on what goes on in a closed, paranoid land) whose general consensus is that the new dictator, twenty-something Kim Jong-Un, and the factions surrounding him will likely see a period of consolidation and reduced tension with the US, as the country sorts out its leadership and deals with crushing internal problems:

Masao Okonogi, a specialist on North Korea at Keio University in Tokyo, said that during the new leader’s first few years, North Korea would most likely avoid confrontation with the United States and its allies, like South Korea.

That was the route taken by Kim Jong-il after his father’s death, said Mr. Okonogi, and he seemed to hold out an olive branch by observing a 1994 deal negotiated by his father to freeze construction of two reactors suspected of use in North Korea’s covert atomic weapons program. North Korea eventually suspended the deal in 2003, three years before testing its first nuclear weapon.

“Look for Kim Jong-un to make some offer, like to restart the six-party talks,” Mr. Okonogi said, referring to stalled multilateral negotiations on dismantling the North’s nuclear weapons. “He’ll need to reduce tensions with the United States in order to buy time.”

Some analysts said the new leader would probably use this time to try to fulfill his father’s promise to turn North Korea into a “strong and prosperous” country by 2012. To do that, he must revive a moribund economy that ranks near the bottom of the world in many measures, including per capita gross domestic product of $1,800 per year, versus $30,000 in technologically advanced South Korea. The North’s unwillingness to forsake the centrally planned economic system, its severe isolation and its utter reliance on food and fuel handouts from China and international aid groups have perpetuated or deepened the crisis.

That would be wonderful, presuming the North Korean leadership was rational and motivated by national self-interest. But, if US intelligence is right, the new Kim on the block may be even more deranged than his father:

“It’s been only about a year and three months since Kim Jong Eun was officially tapped, so it would be very difficult for him to effectively seize power within the old guard in the party as well as the military,” said Yoo Dong-ryul, a researcher at the Police Science Institute in South Korea. “I think whether Kim Jong Eun succeeds will ultimately depend on the role by Jang Song Thaek.”

The portrait of Kim Jong Eun that emerges in his U.S. profile is that of a young man who, despite years of education in the West, is steeped in his father’s cult of personality and may be even more mercurial and merciless, officials said.

A senior U.S. official said intelligence analysts believe, for instance, that Kim Jung Eun “tortured small animals” when he was a youth. “He has a violent streak and that’s worrisome,” a senior U.S. official said, summing up the U.S. assessments.

Great. Just what we need: a potential serial killer in charge of nuclear weapons.

One of the great questions is what China will do. As revealed in the Wikileaks cables, China regards North Korea as a pain in the rice bowl and rather an embarrassment, particularly for a nation trying to establish itself as as global superpower. (Kind of like a gangster trying to be “respectable” and not wanting to be seen with his crazy friend from the old neighborhood.) There have even been preliminary feelers about the conditions under which China would accept Korean reunification. My own opinion is that China would like to see a stable, less embarrassing North Korea survive, if for nothing else than the prestige hit it would take from an ally falling apart. Failing that, reunification with the South would be acceptable — provided it did not mean American troops on or near the Yalu river border. In that case, China would want to see some sort of disengagement of the currently tight relationship between Washington and Seoul.

But there’s another possibility: a North Korean descent into chaos that leaves outside powers no choice but to intervene. Back at the NYT, Victor Cha wonders if North Korea won’t wind up as China’s newest province:

The allies’ best move, then, is to wait and see what China does. Among China’s core foreign-policy principles is the maintenance of a divided Korean Peninsula, and so Beijing’s statements about preserving continuity of North Korea’s leadership should come as no surprise. Since 2008 it has drawn closer to the regime, publicly defending its leaders and investing heavily in the mineral mines on the Chinese-North Korean border.

But even as Beijing sticks close to its little Communist brother, there are intense debates within its leadership about whether the North is a strategic liability. It was one thing to back a hermetic but stable regime under Kim Jong-il; it will be harder to underwrite an untested leadership. For Xi Jinping, expected to become China’s president over the next year, the first major foreign policy decision will be whether to shed North Korea or effectively adopt it as a province.

In other words, China may feel it has no choice other than to quietly take North Korea over.

Like Mr. Cha, former American Ambassador to the UN John Bolton sees great danger in a North Korea that slips into instability or outright chaos, to the point that US and South Korean forces might themselves have to intervene on a moment’s notice to secure the nukes:

While an authoritarian DPRK state, armed with nuclear, chemical and biological weapons, is a threat regionally and globally, a fractured DPRK, leaderless and perhaps descending into civil war, is an even greater threat. The prospect of conflict among various military and other security forces, which like the Kim family also have everything on the line, is real. Control over the weapons of mass destruction and other key assets (missile launch sites and storage facilities, communications facilities, the loyalty of major military formations such as the artillery, and armor massed near the borders) will be essential.

Moreover, North Korea’s civilians are not, despite decades of effort by Pyongyang, totally ignorant about conditions outside the hermetic state. Already desperately impoverished and hungry, they may well decide at the first signs of regime collapse, or even before, that their moment is at hand. Aided by South Korean activists, they could begin moving north toward the Yalu River border with China or south to the Demilitarized Zone (DMZ), which has divided North from South since the 1953 Korean War Armistice Agreement.

South Korean authorities, together with the nearly 30,000 U.S. forces there, have long prepared for the contingency of massive refugee flows toward the DMZ. They also have plans for entering North Korea in force on extremely short notice, to prevent massive instability, to secure the nuclear weapons, and to control the DMZ.

The last thing we need is for the North’s destructive weapons (or other elements of its nuclear program) to be used during internal conflict, or auctioned off to foreign states or terrorists by military factions desperate for hard currency to continue their struggle or flee the country. But while we believe that large stocks of chemical and biological weapons are located near the DMZ, we have very little knowledge of where the nuclear weapons actually are. If South Korean and U.S. forces have to enter the North, time will be short, the dangers high, and the odds long.

Bolton is highly critical of what he sees as almost nonexistent efforts by the Obama administration to get clear information from Beijing and coordinate with them over a possible Korean crisis. If Cha is right and China decides it needs to “put North Korea under new management,” and if those efforts fail and the US and South Korea decide they have to intervene, the potential for an accidental clash that reignites the Korean War gets white-hot.

Which makes me feel so good about having Team Smart Power in charge.

(Crossposted at Public Secrets)

Having trouble sleeping?

**Posted by Phineas

Maybe this will help: Is China contemplating a surprise nuclear attack against the US?

Rest well!

PS: The Soviets seriously contemplated the same thing in the late 60s-early 70s, when they felt they had achieved strategic superiority and thought it might be a good idea to… finalize things, according to documents that became available in the 90s. Thankfully, someone must have said something reasonable, such as “ARE YOU CRAZY??” One hopes someone would proffer the same thoughtful question in Beijing.

(Crossposted at Public Secrets)

Disturbing: Biden tells China he “fully understands” one-child policy

Via Weekly Standard’s Mark Hemingway comes this gem:

Good news, reproductive rights advocates and neo-Malthusian environmentalists! Vice President Joe Biden has no problem with the government forcibly sterilizing people and compelling abortions. From his remarks at Sichuan University in Chengdu, China yesterday discussing the U.S. debt:

What we ended up doing is setting up a system whereby we did cut by $1.2 trillion upfront, the deficit over the next 10 years.  And we set up a group of senators that have to come up with another $1.2 to $1.7 trillion in savings or automatically there will be cuts that go into effect in January to get those savings.  So the savings will be accomplished.  But as I was talking to some of your leaders, you share a similar concern here in China.  You have no safety net.  Your policy has been one which I fully understand — I’m not second-guessing — of one child per family.  The result being that you’re in a position where one wage earner will be taking care of four retired people.  Not sustainable.

So hopefully we can act in a way on a problem that’s much less severe than yours, and maybe we can learn together from how we can do that.

Moe Lane doesn’t think the Vice President meant that as a ringing endorsement of the brutal practice.   Nevertheless, he writes:

I’m sure that Biden didn’t actually mean to endorse the People Republic of China’s policy of population control via forced abortions; but he certainly meant to avoid making a moral judgement on the practice.  Which is, by the way, vile, disgusting, and not compatible with the reasonable expectations of moral behavior from a truly civilized nation-state.  I’d just thought that I’d pass that bit of cultural elitism along, since my country’s current leadership team is a bit too scared to.

Exactly. Wouldn’t want to offend the pro-abort lobby, would we?  On the other hand, this former Vice President and failed candidate for President has hinted around at the possibility of supporting a one-child policy right here in the US – in the interests of “saving the environment”, of course.

Just sayin’.

NRO’s Kathryn Jean Lopez has a must-read response/quote to Biden’s shocking, embarassing comments:

“It’s disappointing that Vice President Biden did not mention the severe women’s rights atrocities that are committed in the name of the One Child Policy — forced abortion, involuntary sterilization, and gendercide,” Reggie Littlejohn, president of Women’s Rights without Frontiers, says. “China’s One Child Policy causes more violence to women and girls than any other official policy on earth. To merely mention the economic consequences is to turn a blind eye to the terrible human suffering caused by forced abortion. Chinese women are literally dragged out of their homes, strapped to tables and forced to abort.”

The policy, as it happens, has been not only a moral but a demographic disaster. “The One Child Policy was instituted for economic reasons,” Littlejohn adds. “It’s ironic that through this very policy, China has written it’s own economic, demographic death sentence.”

Let’s make sure the next White House administration gets all this, instead of kowtowing to our creditor.

Amen to that.  So much for being “pro-woman” and “pro-choice” – when you consider the fact that these women don’t have a choice.

Oh, c’mon, now – you didn’t really think Joe Biden would bring the foreign policy gravitas to the Obama-Biden ticket that  the MSM asserted he would, did you?  :-?

China will overwhelm us! Mmm…. Not so fast.

**Posted by Phineas

America is going through one of its periodic crises of confidence (1) in which large segments of the population are worried that our time is past and someone else will come to dominate the world. Roll up the flag, forget anything about being exceptional, and start learning Chinese; our new masters are on the way.

Ehhh… Hold on a minute there, Doc.

Those fears are predicated on our own economic problems (serious ones, not making light of them at all) and are compounded by a president and a ruling party that are trying to make us be people we aren’t and do things we’re almost genetically predisposed against. The strain and turmoil caused by all that makes us look at a rising power like China and think our run is done; it’s their turn, now.

Except they have serious, deep problems of their own. Among them are a housing bubble and a huge number of bad loans. Sound familiar?

Professor Niall Ferguson (2) recently toured out-of-the-way locations in China and saw the warning signs of a Chinese crash:

And yet … A closer look at the Chinese economy reveals that an astonishingly large part of what is going on today is investment in urban residential real estate, which is growing at more than 25 percent a year. The evidence was all around me as I drove through my sample of Chinese provinces. On the outskirts of every city I saw, there was a veritable forest of apartment blocks under construction.

These are the fruits of China’s own stimulus. When the Western economies first tanked in 2008–09, China’s communist rulers ordered the country’s banks to lend, lend, lend. The biggest borrowers were property developers and local governments.

With inflation above 6 percent and the stock market down, the new Chinese middle class has gotten in on the act. An unknowable proportion of these new apartments have been bought as investments by people who already own one or more. With new-property prices up about 20 percent in just two years, who can blame them?

Sound familiar? Yes, this looks a lot like a real-estate bubble—with Chinese characteristics. As for debt problems, Chinese bank loans were 97 percent of GDP in 2008. Now they’re at 120 percent.

This isn’t the only article to mention the vast money (and debt) being sunk into real estate in China in perhaps irrationally exuberant hopes of big returns. Check out this piece on China’s “ghost cities” (3)

Take the New South China Mall, in Dongguan. The Dateline crew took a tour of the place, which has been 99 percent vacant since it opened in 2005, and the result is one of the most depressing things I have ever watched. Six years after its creation, what is touted as the largest mall in the world sits almost empty. One of the very few stores that’s in business is a toy shop, where the wistful owner spends his days dusting children’s bikes that no child will ever ride. He is lucky if he makes one sale a day.

And it’s not just that mall that sits empty. So do rows of massive skyscraper apartment buildings and central business districts in new cities around the country. This is at least part of the reality behind the megacities the Chinese are creating. “All the shops in this mall are empty,” says reporter Adrian Brown, walking down an immaculate but deserted street in one of the new cities, this one in north-central China. “Not that that worries the government, because they’re simply more concerned with maintaining economic growth, and one way of achieving that is building cities like this one.”

According to Hong Kong-based real estate analyst Gillem Tulloch, who is interviewed in the piece, the housing units are priced well above what an average Chinese person can afford. The result, he says, is a housing bubble that is terrifying in size, “a property bubble like which I don’t think we’ve ever seen,” he says. “It will make the United States pale in comparison. It’s said that there’s around 64 million empty apartments…. It’s essentially the modern equivalent of building pyramids. It doesn’t add to the betterment of people’s lives, all it does is it promotes GDP.”

And all this building is supported by bank loans, the extent of which has started to worry Beijing to the point that they’re laying down new regulations, which has created an underground banking economy with its own set of bad loans on top of the already-vast public bad debt.

When their crash hits –and it will, inevitably– it will undoubtedly affect their global reach, just as ours is being hindered by our problems. Only, given the potential size of the bad debt, I suspect theirs will be far worse and far more disruptive, including affecting the stability of their political system, which has little experience with the ups and downs of market economics. (4)

So let’s not write ourselves off and turn China into SuperNation just yet; they may soon be finding they’ve swallowed economic Kryptonite.

via Real Clear World

RELATED: Don’t get the impression that I’m dismissing the strategic challenge and even threat posed by a rising, aggressive China. In my opinion, the dynamics resemble that of Imperial Germany’s rise before World War I, when the new power became the rival of the guardian of the old order, Great Britain. For something to chew on, consider that China has just launched its first blue-water aircraft carrier. Gee, I wonder who that’s aimed at? Meanwhile, this must-read article by J.E. Dyer looks at Chinese intentions in the South China Sea and, by extension, one of the world’s major choke-points, the Strait of Malacca. The Dragon and the Eagle are keeping an a wary eye on each other, believe me.

Footnotes:
(1) I’m old enough to remember the 70s and 80s when Japan, Inc., was going to eat our lunch. How’d that turn out?
(2) Smart man, should be on everyone’s must-read list. Have fun as he rips Obama’s clueless foreign policy.
(3) Here’s a fascinating satellite pictorial.
(4) How China’s rulers will react to that crisis, however, should be worrisome.

(Crossposted at Public Secrets)