Wednesday, 16 January 2019

Nietzsche versus Confucius (Consolidated Version)

Nietzsche contra Confucius (or, how to dance around Xi Jin Ping’s severed head spiked on a sharp stick)

Jesus taught us to love our neighbor. Nietzsche teaches us to hate our enemies. We know whose advice to heed: we must hate our enemies with every fibre of our being, with every cell in our body, every neuron of our brain. If I could put Xi Jin Ping on a nuclear warhead, I would gladly press the switch that lights the fuse. We must hate our enemies until we have shredded every cell in their being, until we have disintegrated every neuron in their brains – because they pose a deadly threat to us, because they have dared to attempt to kill us! And whatever does not kill us makes us stronger…
The core of Western philosophy has always been the Hegelian Ver-sohn-ung (German for “reconciliation”) – the undying hope that opposites attract until they reconcile in a harmonious union. This is a concept that Lukacs inherited and then re-formulated with the notion of Totalitat. The Marxian proletariat is the cosmic identical subject-object, the historical human agency that will lead us to the pacification of existence and the end of history. Even in Heidegger, and then in the neo-Marxist Sartre of the Critique de la Raison Dialectique, Totality plays a central millenarian role (cf. Question de Methode, prefaced to the Critique).

And yet, if we take a closer look at Marx’s own theorization of human history, we see that it is underpinned by a thoroughgoing Realism that defies and perhaps refutes all notions of human historical synthesis (the Hegelian negation of the negation) and of reconciliation. In Das Kapital, Marx derides “Thucydides-Roscher” precisely because the Hegelian Roscher had sought to etherealize economic reality into cultural elements as the emanation of the Volks-geist, the national spirit, in earnest polemical opposition to the growing popularity of mathematical economic analysis centred on the social engineering of neoclassical economics (Gossen, Menger, Jevons). Later, Max Weber too will engage in this critique of the “emanationism” of Roscher’s Old German Historical School of Economics in favour of his own neo-classical leanings; but what is telling in Marx’s histrionic pass at Roscher’s political economy is his thorough misrepresentation of Thucydidean historicism. Here, Marx adopts a one-sided interpretation of Historismus, in which only the “spiritual” pole of its diametrically opposed meanings is highlighted. - Because historicism has also come to mean the opposite of the predominance of the human spirit in history apotheosized in German Classical Idealism. The opposite reading of historicism is the one that stresses the particularity of each individual historical experience – hence, history as empeiria as against telos.

There is no “end” to history – no overriding “goal”, no eschatology. In the empiricist view, we must interpret history according to concrete experience, not according to wishful ideals. - It is Tory versus Whig, in the characterization of R.G. Collingwood and R.H. Tawney. The removal of a telos in the interpretation of history opens the field to a pessimist, Schopenhauerian worldview in flagrant contrast to the linear progressive view that Nietzsche identified with Judaeo-Christianity.
This is the conundrum that Hobbes faced when deliberating upon his own universal theory seeking to draw an uninterrupted thread (deductive or inductive) from atomic physics to the nation-state and geopolitics. It is obvious why in the end the author of the Leviathan had to start from the macroscopic world of politics and trace his way back to the microscopic realm of atoms rather than the other way round – because that was the only way in which both a deductive and inductive approach was open to him. To have moved in the other direction, from atoms to nations, would have presented insuperable non sequiturs.

Where history is concerned , then, if indeed we are to focus on experience, how can we draw any “lessons”, let alone “laws” from this inductive approach? The tendency to draw “lessons” from history leads invariably to the outline of a “scientific methodology” which, in turn, soon metamorphoses into a deductive logic – precisely the vice in Cartesian philosophy that Hobbes detected and denounced. How to avoid the Logos without receding into a vision of human history (Heidegger says the “human” is superfluous; humans are the only historical beings) that is reduced to Shakespeare’s “tale of sound and fury”?

Any attempt at a “scientific” explanation of the cosmos, every theoria,  must display or exude a certain faith in a Reason that is both a formal instrument (deductive logic) and a Value (an ultimate reality or substance) that is the embodiment or the “carrier” (Trager) of human history. Again, the eschatological motif in the notion of “science” is inescapable. Yet, history is sound and fury, it is a tale of woe and destruction, “signifying nothing” (Shakespeare, Macbeth). Behind the seeming “progressive tale” of Thucydidean historicism, behind the scientific “inquiry” (the etymological meaning of “history”) of Herodotean historein, there lies the unpalatable reality of human conflict and antagonism. The “lessons” of history – with the presumption that history holds teachings that can be read or deciphered for our future edification – break down inexorably when they clash against the grim truculence of the Peloponnesian Wars. This is the other side of Thucydides that neither Roscher nor Marx detected, convinced as they were that the Greek historian hunkered toward one pole of the antipodean meanings of historicism – the German Idealist pole. This is the “realism” that Hobbes knew he shared with the Greek historian whose work he translated, and that Marx could not bring himself to acknowledge because of that eschatological bent he inherited from Hegel and never truly relinquished.

There is a sense, however, in which the approaches to history of the pessimist empiricist Hobbes and the optimist rationalist Marx converged that is not confined to their shared materialism. By associating Thucydides with Roscher and deriding the latter for applying the historicist approach to political economy, Marx meant to lay emphasis on the “hard rock” of social reality that goes well beyond the passionate speeches of a Pericles and thus also the valiant ideals of Athenian democracy. Marx referred to this hard rock with the Teutonic phrase “social relations of production”, the “economic base” from which a “superstructure” of cultural and political institutions emerges and of which the latter are a purely “ideological” reflection. But when we take as much as a peek at these “social relations of production”, we find that they are firmly founded on the very pessimistic assumption of irreconcilable human and social conflict that Hobbes premised as an Euclidean axiom of human existence – his hypothesis on which any and all human conventions or contracts had to be erected -, and that he gleaned from his very thorough early reading of Thucydides. (Hobbes’s major systematic work is titled Elements in obvious reference to Euclid’s own Elements of Geometry, which he also translated.) Marx’s fateful misreading of The Peloponnesian Wars may have induced him into the failure to recognize the equally pessimistic roots of the concept of “economic base” and of “social relations of production” – the failure to recognize that Thucydides’s historicism was at bottom, from the historical side, identical with his own economic realism. “It is far more likely that the Church will renege on 38 of its 39 precepts than that it will forfeit one thirty-ninth of its tributary income!” Marx’s cynicism in this footnote to Das Kapital illustrates conclusively the realism that lies at the heart of his critique of political economy. Despite all his vaticinations about a future coming of the communist republic, Marx knew that – again, “at bottom”, in extremis, in the extreme - “man is a wolf to man”.

So, the wheel has run full circle to Hobbes’s fatidic saying, “homo homini lupus”. But what exactly is this “extreme”? It is a “necessity”, dire necessity (dira necessitas), replies Hobbes. A consensus, a convention, a social contract between humans is possible only upon the assumption of a dire necessity – only because the very existence of each individual is equally endangered by each and every other individual – because all human beings are capable in equal measure to harm or kill other humans. This violent hypothesis is the “extreme” upon which all social conventions and bonds are based. This basic violent hypothesis is the only “rational axiom”– a Euclidean axiom – on which all other superstructural political and cultural conventions are subsequently (chrono-logically) and consequently (logically) founded. Indeed, the logical and the chronological aspects of Hobbesian axiology are so intimately connected that it is hard to determine whether his state of nature or status naturae of “the war of all against all” was ever a historical reality or whether it is really an ineluctable axiomatic assumption to lay the constitutional foundations of all human civil society or status civilis.

The Hobbesian hypothesis extends, of course, to groups of individuals with what Carl Schmitt defined (in The Concept of the Political) as the true ambit of the Political  – the groupings of “friends” and “foes”. And it extends to Nations! Those abysmal fools who believe that “free trade” is the panacea for all world ills have not dealt with the Will to Power of the Chinese Dictatorship. But I should warn them that they have sorely underestimated ours!

The Marx of Das Kapital, then, is certainly a realist in spite of the German Idealist foundations of his worldview – and indeed even of his unquestionably eschatological stance in the Paris Manuscripts of 1844. This realism, embedded into the central notion of “social relations of production” from which the distinction between “economic base” and “political superstructure” is derived, allows us to draw Marx closer to what would be otherwise a most fervent foe of his – Thomas Hobbes. From Hobbes’s strictly ontogenetic postulates, Carl Schmitt proceeds to define the Political as the domain of “friend and foe” where human individuals seek to prevail over others by pooling their strength and power with allies that share common interests. The basic Hobbesian postulates that underpin Schmitt’s concept of the Political are (a) the irreconcilable self-interests of individuals and (b) the metus mortis, the fear of death at the hands of any other individual. Thus, the basis of all civil society for this early exposition of the negatives Denken (negative thought) is the axiomatic hypothesis that any and all social contracts and conventions – including the political alliance of friends against their foes - must be founded on the dire necessity to survive the bellum omnium contra omnes – the war of all against all.

For Hobbes as for Marx, then, to paraphrase and invert Lenin’s famous maxim, economics is a concentrate of politics. And, to paraphrase and invert an even more famous maxim by von Clausewitz, politics is the continuation of war by other means! Those beautiful souls ( the phrase is Weber’s) who would have us believe that free trade and world commerce and capitalist globalisation are the perfect panacea against the evils of war and nationalism (look no further than Benjamin Constant) are quite simply delusional and dangerous – for the reason that we are expounding here and that was valiantly if imperfectly theorised by Friedrich List that the underpinning of “wealth” is not “wealth” itself, however we may define it, but rather “the ability to produce wealth”. Hence, all wealth, whatever its definition and make-up, is dependent utterly and completely on the ability to control and command social resources. This is the naked Nietzschean Will to Power that the excrementious maggots of the Chinese Dictatorship exhibit and exert through every pore of their filthy Han skins: this is the Will to Power that we must vanquish and annihilate if we want our values, our culture, our interests – in short, our own Will to Power – to prevail and triumph over theirs! And triumph we will! Because our values are forged with our Will to Freedom when all Asia has ever known is Slavery and Serfdom.

Inverting Lenin’s maxim, we stated that “Economics is a concentrate of politics”; and inverting one by von Clausewitz, we proposed that “Politics is the continuation of war by other means”. Yet this is not to say that the extremes of this equation, economics and war, do not have their own autonomy, their specific weight, that makes them instances of a distinct political reality. The question is: what is the distinguishing mark of economics and war as extreme political realities?

There is a remarkable ambivalence at the centre of the Marxian notion of “social relations of production”. The ineradicable conflict at the heart of Hobbesian social theory makes it irredeemably ontogenetic because it is impossible to reconcile congenital conflict between human beings with any notion of their phylogenetic interdependence. With Marx, however, the phylogenetic interdependence intrinsic to his concept of social relations of production is entirely compatible with its pessimistic realism in that, in direct opposition to Hobbes, Marx maintains that phylogenetic cooperation, not ontogenetic conflict, is the fall-back condition of human being. For Marx, conflict is only a degeneration or a corruption of what is a necessarily benign human interdependence: for him, human beings are not just zoa politika as they were for Aristotle; they are instead animalia socialia. For Hobbes as for Nietzsche, of course, “at the end of metaphysics stands the statement, ‘Homo est brutum bestiale’” (Heidegger, Nietzsche, Vol. 4).

Clearly, then, the all-important puzzle to be solved is this: how is it possible for beings such as humans that are biologically, phylogenetically interdependent to operate, and indeed to co-operate, in conditions of ubiquitous conflict? The hitherto unquestioned assumption in all social and political theory has been that the world is rational and that irrationality alone needs to be explained. But at least since Nietzsche’s implacable ‘systematic’ demolition of the Western Ratio, the much more fateful question is: how is ‘rationality’ possible in an irrational world? And what does the irrationality of the world tell us about the ‘rationality’ that we supposedly discern in human society and institutions? With the question posed in these terms, an answer to it is immediately perceptible. The rationality that we seem to detect in human society is one that preserves the existing irrational order of things by setting strictly enforceable limits to the phylogenetic interdependence of human beings. In other words, what we misname as ‘rationality’ is really a logico-mathematical rule imposed violently on society by one of its groupings on the rest of society that preserves, propagates and perpetuates its rule over society. The very word ‘rule’(or ‘regulation’) suggests the nature of this ‘rule’: it must be logico-mathematical so as to be easily and promptly and precisely, jointly and severally applicable and calculable and reproducible and expandable. By virtue of such a rule, human beings are subjected to something similar to an inexorable fate whereby they become “the inmates of closed institutions” (Habermas, Toward A Rational Society). (Cf. Wittgenstein, “The law always catches the criminal”. But if it does, it is no longer a ‘law’; it becomes an inexorable fate, as in Kafka – see M. Cacciari, Krisis, Part 2

In a capitalist society, and now in the capitalist world market, the law of profit is the overriding monetary rule, based on the money wage as a global exchange standard between living labour and dead labour (workers and capital), that regulates the rational functioning and expanded reproduction of capitalist social relations of production. Surprisingly, it was left to Max Weber to articulate in blunt terms what Marx failed to make explicit – because of his eschatological and ‘scientific’ bent -; and that is that the law of profit is dependent on the “exact calculation” of monetary profit based on the “real cost of labour-power” dependent in turn on “free [wage] labour under the regular discipline of the factory”. Labour (workers) are “free’ because they are paid in money wages and not in kind – which allows them to spend the wages freely as consumers in the market -, but must work under “the regular discipline of the factory” that homologates capitalist factory discipline through “market competition”, that is through independent capitalists, not oligopolies or monopolies. Importantly, it is the relative “freedom” of the labour force to decide where to spend money wages that guarantees “market competition”.

So there we have it: the external binding rule that determines the “rationality” of the entire capitalist system in “mathematical” or accounting terms – in terms of “profitability” – is the ability of capital to discipline the labour force (workers) through the money wage. The money wage serves for capitalism the role of absolute frame of reference that the speed of light serves in Einsteinian physics. That may well be the reason why Keynes titled his major work “The General Theory”, echoing the title to Einstein’s work on relativity.

OIKUMENE: The Capitalist Chimaera and the Han Chinese Dragon

There are two implicit assumptions that all economic theory, bourgeois or Marxist, shares – both of them quite erroneous and utterly pernicious. The first is that economic activity involves only “social relations”, that is to say, only socio-logical relations that are relative to human individuals and do not therefore affect the ultimate metabolism of human interaction with our ecosphere. The second is that capitalist social relations of production are “natural” and therefore (a) capable of “scientific” precision and certainty, and (b) entirely immune to human efforts to obstruct their “necessary” and “inevitable” progress to universal application.

Even the greatest critic of bourgeois political economy, Karl Marx, was not immune to these erroneous and pernicious assumptions: nowhere in his writings is there any mention of the catastrophic effects of capitalist development on the ecosphere; and, by contrast, everywhere Marx envisages the development of capitalism from the individual firm to what he called “the world market” as absolutely inevitable and unstoppable or irresistible.

One of the most insistent aims of our theoretical work has been to establish the folly of these twin assumptions: “twin” because, though quite distinct, these assumptions share the common matrix of the purely socio-logical yet bio-logical, hence entirely “logical” character of human being.  Whether capitalism or communism (for Marx) is identified as the ultimate stage of human social development, in both cases the process or “progress” that leads to this ultimate stage is all implicit in the very nature of human being – and is, accordingly, entirely historically necessary. Even the Marxian critique of capitalism envisages the bourgeoisie as the historical carrier (Traeger) of a Kapital-Geist – capitalism as the teleological extrinsication of the Idea leading to the apotheosis of the Absolute Spirit, the Parousia of the Hellenistic Paideia, the revelation of the Second Coming in Christian soteriology.

More than simply a “teleology”, this rationalist exegesis of the socially antagonistic and ecologically catastrophic denouement of capitalist industry constitutes in fact an absurd optimistic leap of faith that serves merely to obfuscate and conceal its self-fulfilling prophecy of human annihilation, leading us to a fast-approaching apocalyptic precipice from which humanity will never recover and that will almost certainly lead to the early demise of human existence. – Because, as is vastly evident by now to all but the blindest and stupidest members of our species, far from leading to a futuristic Utopia, capitalism is making our lonely blue planet entirely uninhabitable. In short, capitalism’s chimeric delusion of achieving an oikumene – a harmonious and sustainable civilisation – once its mythical “market mechanism” expanded to all corners of the globe through free trade is unfolding into the manifest destiny that it always gestated - a nightmarish kakotopia of planetary desolation, a funereal pyre of cosmic conflagration. The real destiny of the capitalist oikonomia (economics) is not the attainment of the oikumene (note the telling common root of the two words in oikos, Greek for “village” or “home”), but rather the nihilistic curse of a scorched earth.

What Marx seems to have forgotten is something of which Max Weber – the only worthy, real bourgeois answer to the bearded genius from Trier – was supremely aware (cf. his lecture on “Sozialismus”) – and that is that capitalism does not univocally concentrate the labour force and turn it into a cohesive working class. Instead, capitalist industry, wage labour, serves also to divide workers and proletarians, first, by favouring overpopulation, and therefore by creating a “reserve army of the unemployed”; and second by creating political antagonism not just between bourgeoisie and capital, but also and above all between workers from different social, cultural and racial backgrounds – especially between those workers in the advanced industrial capitalist nation-states and those in the less advanced ones under the tyrannical control of ruthless totalitarian dictatorships.

The Red Dragon of the Chinese Communist Party from Mao Zhe Dung to Xi Jin Ping is the most abominable, execrable, pernicious and catastrophic exemplar of this process of the bourgeois “transmission mechanism” of global capitalist domination. Unlike what seemingly diametrically opposed theoreticians of capitalist economic development such as Karl Marx and Benjamin Constant believed, capitalist globalisation – “the world market” – leads neither to democracy nor to world peace (Constant); least of all does it lead to the unity of proletarians worldwide (Marx). It is true, as we have established in our Blog, that capitalist industry relies on the formal freedom of the labour force by means of money wages that workers are “free” to spend buying goods produced by workers under the command of capitalist employers other than their own. But this does not amount to democracy! Far from being pleonastic – as in the absurd phrase “liberal democracy” -, liberalism and democracy are utterly incompatible!

Whilst the capitalist bourgeoisie seeks to preserve its relative “freedom” to exploit workers by mustering their powerful antagonistic push within the dynamic of its own expanded reproduction and accumulation, and so must therefore preserve the “formal freedom” of workers, it is also very keen to undermine and subvert the potential political unification of working-class solidarity by (as we pointed out just above) facilitating the expansion of a reserve army of the unemployed through overpopulation; and, worse still, by moving part of its industry to geographical nation-states where this reserve army is under the oppressive domination of ferociously murderous dictatorships such as the Chinese one headed by that master monster Xi Jin Ping. The capitalist bourgeoisie exports the otherwise explosive antagonism of its own working class to populations under the tyrannical control of truculent dictatorships such as the Chinese. But by so doing the Western capitalist bourgeoisie ends up creating powerful dictatorial regimes whose political rationale and survival are ultimately antithetical to the logic and dynamic of capitalist industry itself!

But wait! There is more. Those friends who may be nonplussed by our own ferocious assault on the murderous, barbaric hordes of Han Chinese who have been aided and abetted and armed by the craven traitors of our own Western bourgeoisie – those friends may be wondering why we make no distinction between the murderous leadership of the Chinese Dictatorship and its own people, the Han Chinese race! Wherever you look, you will find hordes of fools selling you the tall tale of how we should distinguish between dictators and the people over which they dictate. Do not be fooled! With very few exceptions, throughout history dictatorships succeed on the back of overwhelming popular support! Why? Simple. Because dictatorships are universally founded on imperialist expansion, on rewarding their populace on the back of pillage, theft and rapacity. And no dictatorship in history has displayed and effected more genocidal ferocity than the Han Chinese Dictatorship and its people! – Which is why we must spare no effort, no molecule of hatred against this most despicable mass of maggots and welter of worms!
Make this your New Year’s Resolution against all the puny beautiful souls who preach “love and peace”: We shall have no peace and shall spare no love until we have hunted down and reduced to slavery the Han Chinese race of rodents, snakes and maggots!

Tuesday, 15 January 2019


China has made social media an instrument of oppression.

Facebook CEO Mark Zuckerberg speaks in Paris, May 24, 2018.
Facebook CEO Mark Zuckerberg speaks in Paris, May 24, 2018. PHOTO: CHARLES PLATIAU/REUTERS
Social media faces a dilemma: Mark Zuckerberg or Xi Jinping? Despite the many drawbacks, I’d go with Mr. Zuckerberg.
The moral panic surrounding social media and Facebook in particular now stretches from horizon to horizon. “Social media are doomsday machines,” writes Jason Pontin in Wired. “They distract, divide, and madden; we can no longer hear each other, speak coherently, or even think. As a result, our social, civic, and political ligands are dissolving.” This sort of agitation may make almost any measure seem preferable to letting Instagram impose cretinism and anarchy on society.
In reality, social media poses a nest of problems, but it is not the source of them. Racism, sexism and stupidity were possible before it. So were otherwise-unaccountable victories of whatever political party one happens to oppose, And government regulation of social media is liable to be—is already proving to be—an even bigger problem. That’s clear in China, which has turned regulation of the internet to the purposes of a simultaneously traditional and innovative 21st-century totalitarianism. 
The European Union last year enacted sweeping internet privacy protections. But Europe and its member states are also pretty far down the road of regulating content, including material that the authorities regard as “hate speech” or “fake news.” The European Commission, like the government of China, may eventually conclude that, given the disastrous dissolving of civic ligands, communication must be taken out of private hands entirely. And given the moral panic about social media, many have suggested similar “reforms” in the U.S.
WeChat , the Chinese state social-media operation, has managed to eliminate almost everything the Communist Party regards as hate speech, fake news or threats, however vague, to the social order. These include any expression of pride or religious identity by members of the Muslim Uighur community, or support for that community, as Beijing annihilates its culture. A million or more Chinese Muslims are in re-education camps. The unfolding nightmare is as invisible on Chinese social media as on Chinese television. There will be no Arab Spring-style resistance, organizing itself on each participant’s cellphone. Whatever liberating possibilities social media might have held, state control has turned them into instruments of oppression.
In the West, it is disturbing how much commercially useful information the tech giants harvest from their users and customers, how little control we have over our own information and how we can potentially be manipulated by its use. But what the government of China does with people’s information makes the activities of Google and Amazon look trivial. State control of the internet permits the party to rank every person among its 1.38 billion for the extent of their capitulation, and to reward or penalize them—and their families—accordingly. 
This “social credit” system, slated to be fully in place next year, would make every life prospect—education, residence, employment, health care, mere physical freedom—subject to the results of the thorough surveillance that internet regulation makes possible. This policy is supported by everyone in the People’s Republic, on pain of a hit to their social-credit rating.
What’s likelier in the U.S. than federal annexation of Facebook is the sort of close continual regulation and regulatory capture that would make social-media companies increasingly entwined with the federal government, open to surveillance by it, and sensitive to how political content generated by private citizens can present a threat to their profitability as well as “public order.” In a panicked attempt to solve a problem, lawmakers risk creating an entirely new problem that cannot be solved at all.
Mr. Sartwell teaches philosophy at Dickinson College in Carlisle, Pa.


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When Donald Trump sat down to dinner with Xi Jinping last month at the G20 summit in Buenos Aires, the US president did not know about the diplomatic bomb that was about to explode. At about the same time, police in Canada arrested a Chinese telecoms executive after an extradition request from Washington. The detention of Meng Wanzhou, chief financial officer of Huawei, was extraordinary because the US justice department had not told the White House about the warrant to arrest the daughter of the founder of the telecoms group, one of China’s most successful and influential companies. But the importance of the arrest went well beyond the immediate circumstances. It is the most striking symbol yet of the dramatic deterioration in relations between China and a US that is increasingly suspicious of Beijing’s motives and actions. 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Christopher Wray, FBI director, last year warned Congress that US universities were naive about the potential for Chinese nationals to collect intelligence on their campuses. John Demers, head of the justice department’s China Initiative, recently told the Senate judiciary committee that 90 per cent of economic espionage cases over the past seven years involved China. When the US charged the hackers in December, it said Beijing had breached a 2015 deal that neither nation would steal intellectual property for commercial advantages. John Demers, assistant attorney-general for national security at the justice department, says 90% of economic espionage cases against the US in the past seven years have involved China © Bloomberg The US is also concerned about China trying to recruit American spies. In his testimony, Mr Demers said the justice department had an “unprecedented” three cases against former US intelligence officers accused of spying for China. In May, the US charged a former CIA operative named Jerry Lee with illegally possessing secret information. The CIA believes he provided Beijing with details about its spying operation in China. One person familiar with the situation says his actions dealt a catastrophic blow to the CIA’s network — as many spies were arrested or executed. The US also believes that two suspected Chinese cyber attacks in recent years — one on the Office of Personnel Management which maintains government employee records, and another on the Marriott hotel group — were part of an operation designed to help China identify covert US intelligence operatives in the country. Recommended Huawei Technologies Co Ltd Huawei founder breaks silence to dismiss claims of spying by company As the US strikes a tougher tone, China is losing constituencies that once helped balance the more hawkish views in security circles. US academics who were seen as friendly to China are becoming warier as Beijing cracks down on human rights, not least those of the Uighurs held in mass detention centres in Xinjiang, fails to follow through on economic pledges, presses US scholars to be less critical and moves backwards in terms of political reform. “People I’ve known for decades have given up on China,” says Susan Shirk, chair of the 21st century China Center at the University of California San Diego. “There’s a widespread view in the academic community that the overreaching China has done both domestically and internationally is hard-baked into the system and that there’s no hope of getting them to adjust their behaviour to our interests and values.” Mike Pence, US vice-president, has hammered home the American message that China is a 'revisionist power' © AP A turning point that alarmed Washington came in late 2017 when Mr Xi did not name a successor at the Communist party’s 19th congress. He also pledged that China would become a fully modern economy by 2035 — picking a date that some saw as another sign that he intended to remain in power following his second five-year term. In a further sign of centralising power, the National People’s Congress approved last March a change in the constitution to remove the two-term limit on the presidency. More recently, Mr Xi reignited concerns that he was moving backwards on promised reforms when he used a speech commemorating China’s economic opening 40 years ago to stress the primacy of the party. “No one is in a position to dictate to the Chinese people what should or should not be done,” he said in December. One senior US administration official says China has misread the change of mood in the US, adding that “even more disturbingly, they just don’t care”. The official says the fact that Mr Xi’s speech had focused on “the growing role of the Communist party in every aspect of economic, political and personal life in China” suggested that Beijing was not taking the US concerns seriously. The American F-35. China's J-20 stealth fighter has a similar specification © Getty “I don’t see signs of a course shift by the top leadership,” says the official. “I never thought China would aspire to be a Jeffersonian democracy or espouse the western liberal order,” says Mr Paulson. “I always thought the Communist party would be paramount, but I didn’t see the clock being turned back.” Ms Shirk says a major reason for the growing US backlash is that the business community has “really soured on China”. “Right now, it is totally out of balance because the national security concerns are completely dominating the process and the business community isn’t resisting,” she says. Ryan Hass, a former White House official now at the Brookings Institution, says many US companies had “promise fatigue”. While many did not agree with the approach Mr Trump was taking on trade, they wanted him to be tough on China on market access and were “trying to use Trump’s instincts for disruption [to] their advantage”. “The Chinese leadership has promised for years that reform was around the bend and then you see things like President Xi’s speech where he emphasised the central role of the party,” says Mr Hass. “Members of the business community see the Trump administration as an opportunity for the US to rattle the cage in Beijing.” Former state department official Susan Thornton says the wider relationship with China is being ignored inside the administration © Bloomberg Susan Thornton, the top Asia official at the state department until last summer, says many of the grievances had existed for years but Mr Trump was giving them impetus because there was no one inside his administration who was weighing those concerns against the broader China relationship. “There is no one imposing discipline right now. Everybody has now got a hunting licence. It is open season on China,” says Ms Thornton. One reason the Chinese may have been blindsided by the changing US approach is that Mr Trump rarely raises security issues. “Trump never brings up any of that stuff in meetings with the Chinese,” she says. “He won’t bring up Taiwan or the South China Sea, or nuclear missiles or arms control, or espionage.” Just before New Year, Mr Trump tweeted that he had spoken to his Chinese counterpart and that there had been “big progress” on trade. But the landscape has changed so dramatically that most China experts believe the relationship will become much more rocky even if there is an agreement on trade. “I am cautiously optimistic that President Trump will be able to declare a trade victory and end the tariff war,” says Mr Paulson. “But there will still be so many intractable economic and security issues that this will continue to be a very fraught relationship.”


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A Chinese employee at a construction site in Angola. The economic downturn in China’s industrial rust belt has provided a steady stream of workers willing to journey overseas © Reuters Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Share Save Save to myFT Emily Feng in Beijing 25 MINUTES AGO Print this page0 Desperate for cash because he had not been paid for two months and fearing he could be deported because he lacked official papers, Jiang Wei and two colleagues turned up at the Chinese consulate in the Zambian capital of Lusaka in search of help. “Our subcontractor held our passports and visas. We had no formal work contract,” said Mr Jiang. Their passports were returned and they were given their pay and tickets home. But two years later and they are still out of pocket. Now back in China, both are seeking the return of the Rmb15,000 ($2,200) in fees they paid to a third-party labour contractor. Their experience is not unusual: as China has become a global infrastructure builder, more and more Chinese workers have gone to work on projects in south-east Asia and Africa. The economic downturn in China’s industrial rust belt has provided a steady stream of workers willing to journey overseas in the hope of higher wages. With the economy increasingly under pressure and fewer jobs available at home, workers will be even keener to go. “The slowdown in the construction sector in China has not only led to a spillover in terms of building materials and construction machinery, but also human resources, both rank-and-file workers and professionals,” said Miriam Driessen, a research fellow at Oxford university. But a rapidly growing informal economy of contracted labour has left such workers vulnerable to abuse, warned experts. “Chinese construction companies operating abroad often also export domestic workers and business practices — including long Recommended Special Report: China’s Belt & Road Initiative hours, unsafe conditions and deferred or non-payment of wages,” said Aaron Halegua, a lawyer and research fellow at New York University School of Law. “Even workers that obtain a visa to work abroad legally are often compelled to pay fees or security deposits, forced to sign one-sided contracts restricting their rights, of which they rarely get a copy, and experience abuse,” he added. Since China announced its plan to link more than 65 countries along a modern Silk Road — its so-called Belt and Road Initiative — it has hugely expanded its portfolio of state-funded infrastructure projects abroad. In 2017 alone, China committed to more than $23bn to infrastructure projects in Africa according to the most recent figures available from the American Enterprise Institute. While 89 per cent of employees at Chinese companies in Africa are locally hired, according to McKinsey, a consultancy, many larger infrastructure projects backed by Chinese financing are built by Chinese workers. “When the crunch comes where the project has to be completed in a very short time and is important politically to the host government, that’s when there will be a lot of Chinese workers who will be flown in to do the last stretch of projects,” said Barry Sautman, a professor at the Hong Kong University of Science and Technology. Chinese construction workers are also heading in greater numbers to south-east Asian countries including Malaysia and Indonesia to service a real estate boom driven in part by a surge in mainland Chinese demand for property. Forest City, a China-backed compound in Malaysia that will eventually house 700,000 people, faced accusations that it was reliant on Chinese workers there on tourist visas. The Malaysian government is now trying to put illegal workers on the right work permits. Some construction workers say they continue to work on tourist visas. “Our labour contractor said we would switch our tourist visas to working visas when we arrived but that has not happened yet,” said Liu Wei, a Chinese construction worker. Without legal work status, Mr Liu has been unable to demand the Rmb20,000 in pay he said his manager has withheld from him. One of Ren Zhiji's friends, Sun Houlun, was told this letter would get him into the UK Country Garden, the Chinese property developer, said it did not hire workers directly because “contractors and sub-contractors are responsible for the recruitment, hiring and payroll of local and foreign workers in related projects”, but that it did not allow contractors to use illegal informal labour. Those eager to work abroad usually turn to an informal network of subcontractors who charge rates as high as Rmb30,000 to match workers with construction projects abroad. Dozens of intermediaries operate in Ren Zhiji’s home town in Hebei province, just outside Beijing. Lured by the promise of earning Rmb12,000 a month, almost three times as much as he would at home, Mr Ren, a life-long construction worker, paid one of them to help him get a job overseas. Ren Zhiji's first foray into working overseas ended when the project was raided by the FBI Mr Ren’s first foray, to the US territory of Saipan to build a Chinese-funded casino, ended when the project was raided by the FBI last spring after a worker fell to his death. Six Chinese workers are now suing the Chinese contractor — Gold Mantis Construction Decoration — in Saipan district court over their working conditions. “The conditions were terrible, with discarded materials and trash everywhere. We did not have safety harnesses either,” Mr Ren said. Undeterred, he agreed last year to go abroad again, only this time to be scammed out of Rmb2,000 he had paid to an intermediary for work on a UK telecoms project that did not exist. “We have never gone abroad before, so we rely on friends to recommend destinations,” said Mr Ren. “We never imagined that the same people would deceive us.” He added: “Salaries in China have not grown. By working abroad for a few months, you can live a year in China.”


Canada is advising citizens to "exercise a high degree of caution" if they travel to China amid a deepening diplomatic dispute between the two nations.
Hours later, in response, China issued its own advisory to its citizens travelling to Canada.
The updated risk assessment from Ottawa came soon after a Chinese court sentenced a Canadian man, Robert Lloyd Schellenberg, to death for what China said was his role in a drug smuggling scheme. Schellenberg initially received a 15-year prison term, which he appealed as too harsh. 
China issues its own travel warning for citizens headed to Canada, as the diplomatic dispute between the two nations deepens. AP
The risk update also comes after Chinese authorities reportedly detained at least 13 Canadians since Canada arrested Huawei chief financial officer Meng Wanzhou at Vancouver's airport on December 1 at the request of the US. Most of the Canadians detained in China have been released, according to Canadian media reports. Ms Meng was released on bail on December 11 and is reportedly living in a luxury home in Vancouver as she awaits the outcome of her extradition hearings.
Canada has four levels of risk assessment and the new one for China is the second level:
"There are identifiable safety and security concerns or the safety and security situation could change with little notice. You should exercise a high degree of caution at all times, monitor local media and follow the instructions of local authorities."
The third level of risk would see Global Affairs Canada advising Canadians to "avoid all non-essential travel" to China.
"There are specific safety and security concerns that could put you at risk. You should reconsider your need to travel to the country, territory or region. If you are already in the country, territory or region, you should reconsider whether or not you really need to be there. If not, you should consider leaving while it is still safe to do so. It is up to you to decide what 'non-essential travel' means, based on family or business requirements, knowledge of or familiarity with a country, territory or region, and other factors."
The highest level advises Canadians to "avoid all travel" to a country or area of the world.
"There is an extreme risk to your personal safety and security. You should not travel to this country, territory or region. If you are already in the country, territory or region, you should consider leaving if it is safe to do so."
A spokesperson for Global Affairs Canada couldn't immediately be reached for comment.
On January 3, the US State Department lifted its travel advisory for China to level 2: "exercise extreme caution".
Overnight, Chinese Foreign Ministry spokeswoman Hua Chunying, speaking at a regular news briefing in Beijing, expressed "strong dissatisfaction" with comments made by Canadian Prime Minister Justin Trudeau on news of the death sentence for Schellenberg.
"The remarks by the relevant Canadian person lack the most basic awareness of the legal system," Hua said.
"We urge the Canadian side to respect the rule of law, respect China's legal sovereignty, correct its mistakes, and stop making irresponsible remarks," Hua said.
Hours later, the ministry issued its own travel warning.
Citing the "arbitrary detention" of a Chinese national in Canada at the request of a "third-party country", it urged its citizens to "fully evaluate risks" and exercise caution when travelling there.
With Reuters

Sunday, 13 January 2019


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Clouds loom over global business as Chinese economy falters From cars to smartphones, signs of weakening demand worry multinationals Softness in Chinese consumption is worrying global luxury brands © Reuters Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Share Save Save to myFT Lucy Hornby in Beijing and Chris Giles in London 2 HOURS AGO Print this page0 Emma Liu has a good job in Beijing, but she has decided to forgo her normal Giorgio Armani face cream and started buying cheaper sweaters online. Her choices are reverberating in boardrooms around the world. A slowdown in the Chinese economy — and flagging consumer expectations — are clouding the outlook for foreign brands. From VW to Apple, the Chinese economy is now the world’s business. No international brand can safely ignore China’s economic prospects. On a market exchange-rate basis, China accounted for 16 per cent of the global economy in 2018. But for global businesses, what matters more is growth. China’s rapid development and 1.4bn consumers have helped it to account for about 30 per cent of worldwide growth for the past decade even as its domestic expansion has slowed. If the Chinese consumer decides to hold back, companies around the world will tremble. “I don’t feel any pressure at work,” the 20-something Ms Liu told the Financial Times. “I just feel like I need to use my money more wisely because saving would give me a greater sense of security.” China’s rift with the US has compounded fears for the global economy. The trade war may have had little direct effect on global trade volumes, but it has undermined business confidence. Manufacturing has been particularly affected, with sentiment and output indicators in the US, Europe and Asia performing poorly. Financial markets are worried and economists are rapidly revising down global growth forecasts. The World Bank said on January 8 that “storm clouds are brewing for the global economy”. There have been sharp drops in stock and oil prices over the past three months while there is a widely held expectation that interest rates will rise.  Although there are also reasons not to be alarmed — European employment growth remains strong, most US data are still robust and there are many one-off reasons for recent weakness in Asian and European economic data — few look at the signals from the Chinese consumer and feel reassured. Chinese automotive sales fell for the first time in 28 years in 2018, official data are expected to show, after tax breaks expired early in the year. “The willingness to buy big-ticket items such as cars has come down substantially,” said Louis Kuijs, head of Asia for Oxford Economics. The car sector represents about 5 per cent of China’s gross domestic product and 30 per cent of the global market.  It is one of many warnings that the Chinese consumer can no longer be counted on to drive global sales for multinationals struggling with lacklustre demand in their home markets. The gloom extends to real estate, the ultimate barometer of Chinese consumer confidence. The property arm of China Merchants Group, a conglomerate, recently offered to throw in a BMW for anyone who bought an apartment in a soggy industrial district of Shanghai. Regulators quickly squelched the gimmick. The offer “no longer stands”, a local salesman told the FT glumly. In Beijing, developers who once demanded a 30 per cent downpayment now accept deposits of 10 per cent to spur sales. “I think this time is different,” said Mr Lu, a property salesman who declined to provide his given name. “This time I think customers are truly out of money.” When Apple blamed China for its revenue warning early in January, it made headlines. But the slowdown in the tech group’s sales has also hit the share prices of its supply-chain companies, including Foxconn, the world’s largest private employer. Overall, smartphone sales are down and Samsung too has projected its first drop in operating profit in two years. Other indicators are also bearish. Hong Kong jewellery sales — a traditional yardstick for spending by wealthy mainlanders — are down, Jefferies, an investment bank, wrote in an analyst note. Furniture sales growth of about 6 per cent through November 2018 is half that of the previous year. Growth in cosmetics sales slipped to 10.5 per cent, from 13.5 per cent the year before. The number of overseas trips by Chinese tourists stagnated in the second half in 2018, although domestic tourism fared better. Only 69m tourists, roughly equal to the second half of 2017, travelled abroad, according to initial estimates released this week by the state-run China Tourism Academy. That was sharply down from growth of 15 per cent in the first half of 2018. Recommended The Big Read Nervous markets: how vulnerable is China’s economy The sharp drop in global oil prices from $85 a barrel in October to $60 on Friday will increase the purchasing power of global consumers, but that might fail to raise growth rates sufficiently to offset other headwinds. Chinese oil companies led by Sinopec are reeling from a slowdown in second-half domestic consumption, coupled by an unexpected glut of global crude supply that has pushed prices to 18-month lows. The trends, especially in the face of the trade tension, have worried Beijing. China’s central bank has loosened monetary policies to stimulate growth. The Chinese government has promised new loans to small businesses and measures to extend credit deep into the countryside, following several years of credit tightening. “We think policymakers will aim to halt the slowdown in growth, rather than try and engineer a significant pick-up in growth,” Mr Kuijs said. Even if successful, China’s stimulus policies have traditionally helped the large industrial sectors rather than encouraged consumers to spend. Until the mood in China changes, foreign brands will have to look elsewhere for growth.