Commentary on Political Economy

Tuesday 23 October 2018

CRAVEN TRAITORS AT The Financial Times

On the week-end, the London Financial Times's Editorial Board published an extraordinary Editorial about the health of the Chinese economy. The Editorial was extraordinary in a number of ways - each one more mystifying than the other. Firstly, the propagandistic tone of the piece was not just rare - it was positively mesmerising in that it read like a paid advertisement on behalf of the Chinese Dictatorship. Next, the editorial left many readers entirely perplexed - something easily gauged from the commentary annexed to it - in that readers found it, again, extraordinarily, perplexingly ill-informed and tendentious. And this in a number of ways. The FT's Editorial Board simply made light of what to anyone but the most ill-informed and perhaps ignorant followers of the subject are the most glaring problems with the Chinese economy: - problems, I hasten to add, that if they were obvious to us a few years ago, have become utterly visible to everyone except, once again, the most uninformed or wilfully blind observer.

The fact that the Chinese economy, its financial system above all, is spiralling out of control is something that we are observing each and every hour. It is positively spell-binding the way in which the Chinese share market - which was always nothing more than a casino aimed at stealing valuable resources from poor but wishful Chinese investors - how this share market (do we dare call it that?) has quite simply ceased to exist. The top rats running the show for the Chinese Dictatorship are having to come out each and every hour to reassure their poor subjects that everything is fine and there is no need to panic. - Which is exactly what financial authorities - especially in dictatorships! - do each and every time their economic system is about to collapse!

Leaving the Beijing rats to one side - they will be hanging in Tiananmen Square in short order -, the fact that the Editorial Board of the FT should leap to the defence and safeguard of this most corrupt and murderous of regimes is something that we read in utter disbelief and ought to concern all free thinkers in the West! The question I should like to ask the FT is: - it is widely known that one of its members in particular - Mr. Martin Wolf - has been the beneficiary recipient of a lot of benevolent hospitality by the murderers in Beijing. The question is, then, what role did Mr. Martin Wolf have in the framing and writing of this quite extraordinary editorial? For it seems apparent to us, especially from the shrill and wholly erroneous tone and content of the piece, that someone has a personal interest in the formulation of these editorial opinions that flies right in the face of all economic and financial evidence!

That's all for the moment, even as we watch the Chinese share market collapse by another 2.5% todat! THE END IS NIGH FOR THIS HIDEOUS MURDEROUS DICTATORSHIP!

Monday 15 October 2018

Science, Technology and Capitalist Reification

Before moving to the final parts of our study of the origins of science and technology as the chief productive ideology of the bourgeoisie, I wished to propose this introduction to the problematic that we are seeking to confront in our examination of the work of Descartes, Bacon and Hobbes. This type of reflection is utterly essential at a time when the bourgeoisie is attempting – but only attempting, because the attempt will fail and is already floundering – to undermine political freedom through the contemptible utopia of “artificial intelligence “. Each and every day we are finding out, with growing alarm, how idiotic is this ambition, and how despotic is its intention! Cheers.

The original sin of Western reflection is the oblivion of being. From its inception in pre-Socratic Greece, philosophy abandons its unique focus on attaining knowledge as wisdom (whence the equation of the two notions in the Greek word sophia and the literal meaning of philo-sophia as “love of knowledge-wisdom”) and con-fuses it instead with the empirical discovery of the make-up and functioning of the physical universe. Hence, philosophy relinquishes its most sublime task – that of exploring and championing the role of human conscience and action in the cosmos or life-world – and then traduces this quest by defining itself as the handmaiden of scientific enterprise. In other words, the oblivion of being – the reification of being into the world of inert objects and perennial entities - leads to the acceptance of what is called “science” as “the continuation of philosophy by experimental means” (to paraphrase von Clausewitz) – implying thereby that “science” possesses an epistemological status, a methodological identity and solidity – to be sure, a “scientific objectivity”! - that it quite simply does not possess.

The mischievous misapprehension is that philosophy and the instrumental activity universally known as “science” are merely different stages of a single process known as the acquisition of knowledge or, in the title of Francis Bacon’s magnum opus, “the advancement of learning”, where knowledge and learning are understood as power and dominion over an indomitable nature extrinsic and alien to humans. In this perspective, science and philosophy have the same homogeneous object: - that is, the pursuit of knowledge as power and domination by human beings over the life-world and, per extenso, over one another. Yet what we call “science” is not an independent sphere or dimension of human knowledge understood as an innate intellectual and cerebral faculty – the way logico-mathematics or music and art are. Instead, as we are demonstrating here, science is simply “technique” (techne’ as against episteme or indeed poiesis). Nor is science a “technical-neutral” dimension of human action whose “truth” is independent of human social relations and practical goals. Rather, it is a practical pursuit of historically specific goals by instrumental means – through induction and manipulation or experimentation where the creation of an artificial environment goes hand in hand with establishing the “validity” or “success” of “scientific experiments and discoveries”! In sum, “science” is a non-entity; scientific methodology is a mirage pure and simple.

It is thus that philosophy confuses and traduces its scope and unique role of comprehending the human experience of the life-world for the utilitarian advantage of subjecting the environment, the life-world, into an instrument for human gratification. Rather than concentrate on the being of beings, philosophy reduces and therefore traduces the experience of life with its objectification. It also perniciously allows the ascription to “science” of an epistemological and methodological status that, again, is quite simply fictitious. Given that human existence inevitably entails objectification – we cannot but do and act as we live – such a reduction would be politically harmless were it not for the fact that under capitalist social relations of production the specific historical form of objectification is the alienation of human living activity and its reification in terms of dead objectified labour (“goods” or “commodities”). The task of philosophy – its indispensable and ineluctable attribute – is to remind human beings of the reality that they exist within the life-world (the cosmos), and therefore can never observe it “from without” – wherein consists the irrefragable human faculty to initiate action and, as a corollary, to be free. The unique mission of philosophy is to remind human beings of their freedom, of the reality of their existence. The oblivion of being is tantamount to the relinquishment of human freedom.

Already, human living activity has a tendency to become reified and crystallised into its extrinsic inert products: thus, the quest for knowledge understood as wisdom turns into the relentless pursuit of knowledge as power and domination over nature and, through nature, over human beings. This fundamental reduction of the question of being to the observation of particular beings and their instrumental utilization (a utensil is an instrument, a tool), this reification of human thinking activity, this crystallization and freezing of being into static substance or essence or presence and the consequent confinement of human action to mere instrumental exploitation of the world – this is the process whereby being (Etre, Sein) is reduced to beings (etants, Seiende) and philosophy is turned into the handmaiden of “science and technolog”. The reification of human life – this is the true sense and ultimate outcome of “the oblivion of being” claimed by Heidegger but in truth originally seized upon by Nietzsche as the “end [Voll-endung] of metaphysics” and the beginning of European nihilism.

Contrary to the mythology made ubiquitous in bourgeois society, science is not the objective observation of reality but it is rather a precise project whose purpose (Zweck) must be recognized and rendered explicit as a political social goal that involves intervention and manipulation, not neutral observation, of the life-world. The very survival of the human species depends entirely on us acting on this realization. Our principal aim here is to trace this transformation and ultimate reification of practical scientific enterprise at the hands of the bourgeoisie, its corruption and degradation of European thought and society from the original goal, however distorted by Judaeo-Christian religion, of pursuing knowledge as wisdom to the instrumental utilitarian acquisition of knowledge as power (over the life-world, over other humans) and its reduction to a productive technique under the guise of “the advancement of learning” or “science and technology” as the handmaiden of capitalist industry – the aim is to evince this nihilistic process whereby the birth and global expansion of capitalist industry and the social relations of production has come to underlie all of human society nowadays, and to this pursuit of “science” as a “will to truth” that is the thinnest disguise for the will to power of the bourgeoisie right from its origins at the end of the Middle Ages in the transition from feudalism to capitalism.

The Reification of Science

The process of production, therefore, is seen as “technology”, as an ob-ject – that is, as a “neutral scientific process” that is “external” or “exogenous” to economic “science” - rather than as a pro-duct, as the very embodiment of political antagonism over the production and satisfaction of human needs. At a broader level, the capitalistic domination of living labour by means of dead labour (productive materials, machinery and produced goods) is reified as “science and technology” in such a manner that (a) they are mistaken for “objects” or “tools” when in fact they are mere extensions of human activities, they are “techniques”; and (b) they are seen as the result of “scientific and technological” – that is to say, “politically neutral” - research and development or “discovery” independently of capitalist domination over living activity!

As a result, “science and technology” are seen not as specific capitalist strategies that contain antagonism but rather as “autonomous” and “separate” – indeed, “scientific and technical”! – entities that are in themselves “politically neutral”! Yet just as there is no such thing as “science” or “technology” but only human productive activities mediated by tools, so there is and there can be no “neutrality” in the tools employed by humans for their activities! “Science and technology” are not neutral because they are always activities in which human beings engage with a purpose in mind, even when that purpose is “multiple”: hence, tools are not distinguishable from human activities because they are extensions of the human body! (Cf. H. Arendt’s Prologue to The Human Condition in which the automobile is seen as an “extension” of or appurtenance to the human body.) It is not the case that a tool can be used for good or for bad purposes - because the tool and the purpose cannot ever be distinguished – they are part of the one human “activity”; they go “hand-in-hand”, as it were!

The political danger in the hypostatization of “science and technology” lies in the epochal transformation of their socio-political role from the Renaissance, when societies were still emerging from feudalism and Absolutist rule, to the Industrial Revolution when the capitalist bourgeoisie had finally erected its liberal nation-State regimes and begun to subsume the entire reproduction of human societies under the rule of capitalist production. Effectively, capital has succeeded in presenting both the State – the Political – and civil society – the Economy – as “techno-scientific mechanisms” that are politically neutral – securing thereby the apparent depoliticization of capitalist production.

This danger was first exposed with exceptional acuity by Carl Schmitt (in the related essay cited above) by confuting the neutrality of “technology” from two opposing sides, as the respective quotations below evince. From the side of “technology” intended as “tools”, as objects, Schmitt rightly points out in the first quotation that tools are “tools” to the extent that they are util-ized by human beings: but in that case they can never be “neutral” for the exact reason that human actions, by definition, cannot be “neutral” and are always “motivated” instead. In the second quotation, which approaches the reified concept of “technology” (and “science”) from the side of human motives, Schmitt shows that these motives are never obliterated or neutralized by the “tools”, even when human agents believe that they are simply applying a “neutral technology”!

Technology appeared to be a domain of peace, understanding, and reconciliation. The otherwise inexplicable link between pacifist and technical belief is explained by this turn toward neutralization which the European mind took in the seventeenth century and which, as if by fate, has been pursued into the twentieth century. But the neutrality of technology is something other than the neutrality of all former domains. Technology is always only an instrument and weapon; precisely because it serves all, it is not neutral. No single decision can be derived from the immanence of technology, least of all for neutrality. Every type of culture, every people and religion, every war and peace can use technology as a weapon. Given that instruments and weapons become ever more useful, the probability of their being used becomes that much greater. Technical progress need not be either metaphysical or moral and not particularly economic to be progress. If humanitarian-moral progress is still expected by many today from the [92] perfection of technology, it is because technology is magically linked to morality on the somewhat naive assumption that the splendid array of contemporary technology will be used only as intended, i.e., sociologically, and that they themselves will control these frightful weapons and wield this monstrous power. But technology itself remains culturally blind. Consequently, no conclusions which usually can be drawn from the central domains of spiritual life can be derived from pure technology as nothing but technology - neither a concept of cultural progress, nor a type of clerc or spiritual leader, nor a specific political system. (Schmitt, CoP, pp.91-2)

 [94] The spirit of technicity, which has led to the mass belief in an anti-religious activism, is still spirit; perhaps an evil and demonic spirit, but not one which can be dismissed as mechanistic and attributed to technology. It is perhaps something gruesome, but not itself technical and mechanical. It is the belief in an activistic metaphysics - the belief in unlimited power and the domination of man over nature, even over human nature; the belief in the unlimited "receding of natural boundaries," in the unlimited possibilities for change and prosperity. Such a belief can be called fantastic and satanic, but not simply dead, spiritless, or mechanized soullessness.

Again, taken jointly, Schmitt’s objections to the reification of “science and technology” as a thing, show clearly that in reality they are nothing more than human pro-ductive activity or praxis. Yet, although Schmitt’s approach quite correctly leaves this reified concept of “science and technology” with no “separate existence”, with no “neutrality” whatsoever, and therefore correctly stresses its relation to human action and interests, still he refers to “technology” as if such a thing really existed independently of human action.  Of course, the validity of Schmitt’s critique becomes pellucid once we replace the reified phrase “science and technology” with its true equivalent of “techniques” because – as the term itself obviously implies – a “technique” is an actual human activity or skill whereas “science and technology” are quite easily mistaken for and hypostatized as the “methodology” and “tools” (the laboratories, the institutions, the objects, the machines, the equipment, the instruments) that constitute their social embodiment. (This last insight is in Heidegger’s essay on Aristotle’s Physis cited above. This crucial fallacy of treating “science and technology” as “independent realities” – as objects, really - can be found even in the most insightful reviews of the social role of “science and technology” such as Habermas’s review of Marcuse [“Science and Technology as ‘Ideology’” in Toward A Rational Society, which we shall review later] or Arendt’s notion of “human action” in The Human Condition.)

The final part of Schmitt’s second quotation above is a mordant and trenchant riposte to the various late-romantic ideologies denouncing the “reification” and “dis-enchantment” that capitalist “rationalization” imposes on living labour which is now seen as reducing human interests to the mere materialistic pursuit of “prosperity” or “economic value” (whether as utility or as labour-value) or “profits” or “consumerism” – with the consequent loss of “meaning” and of “totality” in this “science and technology” which no longer seek “reason” or “freedom” but serve only to chain humanity to the Promethean wheel of production for its own sake, profit for its own sake, quantity against quality, having against being – the Weberian and Lukacsian Rationalisierung. The locus classicus of this critique of “the crisis of European sciences” is to be found in Husserl’s famous address with the same title:

The exclusiveness with which [6] the total world-view of modern man, in the second half of the nineteenth century, let itself be determined by the positive sciences and be blinded by the "prosperity"2 they produced, meant an indifferent turning-away from the questions which are decisive for a genuine humanity.3 Merely fact-minded sciences make merely fact-minded people. The change in public evaluation was unavoidable, especially after the war, and we know that it has gradually become a feeling of hostility among the younger generation. In our vital need—so we are told—this science has nothing to say to us. It excludes in principle precisely the questions which man, given over in our unhappy times to the most portentous upheavals, finds the most burning: questions of the meaning or meaninglessness of the whole of this human existence. (E. Husserl’s The Crisis of European Sciences, pp.5-6).

This pining for the loss of “totality” [Totalitat] (a central concept in Lukacs) and the consequent alienation of human beings from their living activity (Marx) through the fragmentation and reification of social reality (Lukacs, Heidegger) or “dis-enchantment” (Weber’s Entzauberung) engendered by the instrumental and positivist abuse of “science and technology” is a constant theme running through all social theory – bourgeois, socialist and Marxist - from the middle of the nineteenth century to the present day. Despite the obvious pertinence of many of the critical analyses of Technik and the Rationalisierung central to the German phenomenological tradition from Nietzsche to Weber and Heidegger (which includes figures such as Husserl, Arendt, Lukacs and the Frankfurt School), their incisiveness stops right at the point at which human conflict and the techno-scientific practices that it pro-duces – the Rationalisierung - are misconstrued as ontological or epistemological or ontogenetic categories that are quite independent of social relations of production, and therefore as ineluctable or immutable categories of human activity. Indeed, once more, they are foisted upon us as the evil by-products of “science and technology”(!), which reintroduces by the back door the very reification and hypostasis that the critique of “science and technology” was meant to expose!

Some Marxist intellectuals have criticised these notions as a rear-guard attempt by the German workers’ movement to preserve the “artisanal” work practices of skilled workers (die Gelernte) against the massification of labour introduced by Taylorist and Fordist industrial processes (cf. M. Cacciari, Pensiero Negativo e Razionalizzazione and the studies by G. Marramao on the German workers’ movement.)

All the critics of “the technocratic society” (even down to our days - Jacques Ellul, Alvin Toffler, or Theodore Roszak) and “one-dimensional man” (Marcuse) forget that the ideological use of this reified concept - “science and technology” -, far from actually embodying the political antagonism of the society of capital, and farther still from being able to disguise it, and much farther still from being able to resolve it (!), is instead the actual direct product and manifestation of this antagonism - and not a mere “ideology” (Marcuse) or a “necessary illusion” (Lukacs), or an “objective appearance” (Marx) -, an antagonism that increasingly calls into question the sustainability of the capitalist economic system based on domination over living activity, and indeed also poses ever-growing systemic risks to the very survival of “the society” on which capitalist social relations of production must be founded. Thus, far from hiding or disguising or “reifying” it, these techno-scientific practices actually embody and reveal – they exhibit - the utter incompatibility of human needs with the capitalist command of living labour based on the wage relation.

Habermas, in S&T as “Ideology”, whilst agreeing with Marcuse that perhaps a New Science and New Technology can come to view humanity as “the Other”, rather than humans regarding “nature” as “the Other” (a pious suggestion at best), concedes the possibility of human pacification, yet insists on this notion of “Science and Technology” and goes along with Arnold Gehlen’s wild generalizations about the “universality” of “technological progress” (from mechanical functions involving limbs to cerebral functions)! Once again, Habermas and Gehlen conveniently forget that human “mechanical” functions are indeed as “intellectual” or “cerebral” as any other functions, as Gramsci amply and ably showed in the Prison Notebooks (sections on “Intellectuals”). The reason for this misapprehension is that Habermas falls into the same old habit of seeking to draw an invalid dichotomy between “labour” (mechanical activity) and “interaction” (symbolic communication) – a pathetic humanist and late-romantic distinction that we have criticized in our “Habermas’s Meta-Critique of Marx” and in our critical review of Alfred Sohn-Rethel’s Intellectual and Manual Labor (both on Apart from this, Habermas validly challenges Marx’s facile distinction between “forces” and “relations” of production as well as Marcuse’s even more questionable reduction of “Science and Technology” – an abstraction – to “ideology”, contra Weber, which only tends to reaffirm Weber’s hypostatization of “rationality” as synonymous with capitalism whether in reality or as “ideology”.

A further hypostasis is pointed out by Heidegger, “On the Content and Essence of ‘Physis’ in Aristotle”, in Pathmarks, at p.211. Heidegger insists repeatedly on the absurdity of the attempt in Western civilisation to define physis, the coming-into-being of our surrounding world (Um-welt), as techne, a pre-conceived human project [see especially p.197], and revives instead the notion of “pro-duction” as metabole [especially at p.221]. His vice, as always in these matters, is to identify this fallacious praxis philosophisch, as if it were merely an ontological confusion rather than the historical product of existing political antagonism over the satisfaction and creation of human needs. Heidegger centres this notion of physis and metabole on the contingency or being-toward-death of human Dasein [being there], on its “thrown-ness” or “freedom-unto-death”, and therefore on its mortality. Perhaps the best, albeit abstruse, critique of this “ontologism” is in T. Adorno, Negative Dialectics, esp. Part One on “The Ontological Need”, and the shorter Lectures on Negative Dialectics, esp. Lecture 2, pp.13ff. See also A.Gramsci, Il Materialismo Storico, cited by Bobbio in Gramsci for a critique of the undialectical notion of “evolution” in social theory. Much preferable and more uplifting is Hannah Arendt’s reinterpretation– in The Human Condition - of physis and metabole as “birth” (genesis) and therefore as the inescapable condition of human beings to initiate action as political beings – as beings whose very “being alive” is “to be alive among other human beings” (inter homines esse – whence the notion of “human inter-est”).

Sunday 14 October 2018


Not a day, not a minute, not an instant goes past now that a new story goes round the world exposing the craven criminality, corruption and genocidal turpitude of the assassins in Beijing - chief among them of course is the Rat in Chief - the toothless disgusting Fascist Beast that goes by the name of Xi Jin Ping. A story in today's New York Times is the latest to evidence how this murderous worm ordered the genocidal policies that his Chinese Dictatorship are implementing in Xinjiang at the expense of its Muslim population and in favour of the Han race. Now the US Congress will soon use the Magnitzsky Act to bring his fellow assassins to justice IF THEY EVER SET FOOT OUTSIDE OF RATLAND!!!! Here is the piece:

The Leaders Who Unleashed China’s Mass Detention of Muslims

BEIJING — Rukiya Maimaiti, a local propaganda official in China’s far west, warned her colleagues to steel themselves for a wrenching task: detaining large numbers of ethnic Uighurs and other Muslim minorities.
The Chinese government wanted to purge the Xinjiang region of “extremist” ideas, she told her co-workers, and secular Uighurs like themselves had to support the campaign for the good of their people.
“Fully understand that this task is in order to save your relatives and your families,” wrote Ms. Maimaiti, a Communist Party functionary who works on the western edge of Xinjiang, in a message that was preserved online. “This is a special kind of education for a special time.”
Her warning is one piece of a trail of evidence, often found on obscure government websites, that unmasks the origin of China’s most sweeping internment drive since the Mao era — and establishes how President Xi Jinping and other senior leaders played a decisive role in its rapid expansion.
In a campaign that has drawn condemnation around the world, hundreds of thousands of Uighurs and other Muslim minorities have been held in “transformation” camps across Xinjiang for weeks, months or years at a time, according to former inmates and their relatives.
Beijing says the facilities provide job training and legal education for Uighurs and has denied carrying out mass detentions.
But speeches, reports and other documents online offer a clearer account than previously reported of how China’s top leaders set in motion and escalated the indoctrination campaign, which aims to eradicate all but the mildest expressions of Islamic faith and any yearning for an independent Uighur homeland.

In a campaign that has drawn condemnation around the world, hundreds of thousands of Uighurs and other Muslim minorities have been held in “transformation” camps across Xinjiang for weeks, months or years at a time, according to former inmates and their relatives.
Beijing says the facilities provide job training and legal education for Uighurs and has denied carrying out mass detentions.
But speeches, reports and other documents online offer a clearer account than previously reported of how China’s top leaders set in motion and escalated the indoctrination campaign, which aims to eradicate all but the mildest expressions of Islamic faith and any yearning for an independent Uighur homeland.

Mr. Xi has not publicly endorsed or commented on the camps, but he ordered a major shift in policy soon after visiting Xinjiang in 2014 to weaken Uighurs’ separate identity and assimilate them into a society dominated by the Han majority, according to the documents.
Later, amid official reports warning the results were insufficient, Mr. Xi reassigned Chen Quanguo, 62, the hard-line party chief in neighboring Tibet, to act as the chief enforcer of the crackdown in Xinjiang. Mr. Chen was also promoted to the 25-member Politburo, the party leadership council that governs China.
“What is happening in Xinjiang is the leading edge of a new, more coercive ethnic policy under Xi Jinping’s ‘new era’ of Chinese power,” said James Leibold, an expert on Xinjiang at La Trobe University in Australia who has monitored the campaign.
The Trump administration is weighing sanctions against Chinese officials and companies involved in the indoctrination camps, a move that would extend the friction between Washington and Beijing over trade and military disputes to human rights. A bipartisan commission has singled out Mr. Chen and six other officials as potential targets.
Last week, apparently stung by the international criticism, the Xinjiang government issued revised rules on “deradicalization” that for the first time clearly authorized the indoctrination camps.
Worried about Muslim extremism and ethnic nationalism, Beijing has long maintained tight control of Xinjiang, where nearly half the population of 24 million are Uighurs. In the decade up to 2014, the security forces struggled with a series of violent antigovernment attacks for which they blamed Uighur separatists.
Mr. Xi made his first and only visit as national leader to Xinjiang in April 2014. Hours after his four-day visit ended, assailants used bombs and knives to kill three people and wound nearly 80 others near a train station in Urumqi, the regional capital. The attack was seen as a rebuff to Mr. Xi, who had just left the city and vowed to wield an “iron fist” against Uighurs who oppose Chinese rule.

“That seems to have been taken by Xi Jinping as an affront,” said Michael Clarke, a scholar at the Australian National University who studies Xinjiang.

A month later, Mr. Xi called for a vigorous push to make Uighurs loyal members of the Chinese nation through Chinese-language instruction, economic incentives and state-organized ethnic intermingling. The leadership also approved a directive on establishing tighter control of Xinjiang that has not been made public.
“Strengthen public identification of every ethnic group with the great motherland, with Chinese nationhood and with Chinese culture,” Mr. Xi said at a meeting on Xinjiang at the time. “There must be more ethnic contact, exchange and blending.”
In the year after Mr. Xi’s visit to Xinjiang, the documents show, the party began building “transformation through education” camps to warn Muslim minorities of the evils of religious zealotry and ethnic separatism.
The camps were relatively small back then; many detainees were held for just a few days or weeks, official speeches and reports show. But there were no public guidelines for how they should operate.
By taking a harder line in Xinjiang, Mr. Xi effectively endorsed a group of Chinese scholars and officials advocating an overhaul of the party’s longstanding policies toward ethnic minorities.
For decades, the party kept Uighurs, Tibetans and other groups under tight political control while allowing some room for preserving each nationality’s language, culture and religion. The mosaic approach was copied from the Soviet Union and made Xinjiang an “autonomous region,” where, in theory, Uighurs enjoyed greater rights and representation.

 But in the 1990s, Chinese academics advising the government began arguing that these policies had contributed to the breakup of the Soviet Union by encouraging ethnic separatism. To avoid similar troubles, they argued, China should adopt measures aimed unapologetically at merging ethnic minorities into a broader national identity.
“So-called ‘ethnic elites’ must never be given an opportunity to become the leaders of the pack in splitting the country,” said Hu Lianhe, a researcher in this group, in a paper he co-wrote in 2010.

Mr. Hu is now a powerful voice setting policy for Xinjiang as a senior official in the United Front Work Department, a Communist Party agency that has claimed a growing say over the region.
He has been identified as a potential target of American sanctions. In August, he categorically denied reports of abuses in Xinjiang during a United Nations hearing. “There is no ‘de-Islamization,’” he said.
By 2016, the Communist Party’s main newspaper declared that the “deradicalization” campaign was succeeding; no serious acts of antigovernment violence had been reported since Mr. Xi’s visit to Xinjiang.
But officials gave grimmer assessments in less prominent forums. Some said that young Uighurs were more alienated from China than their elders; others warned that Uighurs who had traveled to the Middle East, sometimes to fight in Syria, were bringing back extremist ideas and fighting experience.

Such warnings appeared to persuade Mr. Xi and other leaders to back tougher measures. In August 2016, they brought in Mr. Chen from Tibet to run Xinjiang. He became the first party official to have served as the leader of both territories.
In Tibet, another frontier region experiencing ethnic strife, Mr. Chen had expanded the security forces, sent party officials to live in villages and tightened control of Buddhist monasteries and temples.
Less than three weeks after his arrival in Xinjiang, he announced a “remobilization” plan to ramp up security, citing orders from Mr. Xi.
Officials in Xinjiang were told to prepare for a multiyear offensive, according to one official report.
In March 2017, the regional government issued “deradicalization” rules that gave a vague green light to expanding the internment camps, but the national parliament never enacted a law authorizing the detentions as would be required by the Chinese constitution. . Local officials soon began reporting growing numbers of Uighurs arrested or detained for indoctrination.
“Since the strike-hard began in 2017, there have been many detainees, including many ultimately convicted,” an official assigned to Hotan, an area in southern Xinjiang, wrote last year. “The numbers sent to transformation-through-education centers are also quite high.”

As the camps and surveillance efforts expanded, Beijing directed new funds to Xinjiang, where spending on security nearly doubled in 2017 from the year before, to $8.4 billion, according to data released early this year.
“The central level ultimately pays for all of it, so some kind of consent was certainly given,” said Adrian Zenz, a scholar at the European School of Culture and Theology in Germany who has studied the camps.
The scale of detentions across Xinjiang may have gone further than initially expected. “They were having to use train stations and other random places to hold people because they weren’t expecting to have so many,” said Jessica Batke, a former State Department analyst.
A broad definition of “religious extremism” — which included behavior as simple as trying to persuade people to quit alcohol and smoking, as well as more serious transgressions — gave the authorities wide leeway to punish even mildly pious Muslims.
Local officials like Ms. Maimaiti had little incentive to hold back; those found dragging their feet in the crackdown have been named and punished.
The public has been told to prepare for a long offensive, which one local official last week called a “campaign of intellectual emancipation.” The Xinjiang government decreed late last year that the security drive would last five years before achieving “total stability.”


Wednesday 10 October 2018


Rather than listen to that demonstrably and now detestable traitor called Martin Wolf at the Financial Times - but who reads him anymore, anyhow? -, here are our friends at the FT Alphaville: this is must reading for all patriots pursuing the relentless fight against the Chinese Dictatorship. Enjoy, friends!

Overheard in the Long Room: corporate China

It's been a breathless year for China-watchers.
If the news flow from Trump's ongoing trade war with the People's Republic wasn't enough to wrap your head around, there are also re-emerging concerns over slowing growth, a bubbly real estate sector and a depreciating currency. Oh, and some stuff in Hong Kong.
But away from the noise, how are Chinese corporates faring?
A discussion in the Long Room drew our attention to GavekalDragonomics annual “China Inc” report — a chartbook “based on two major data sources: the nationwide survey of 374,000 industrial firms, and the financial reports of 3,230 listed non-financial firms”.
Below is a compressed glimpse of a few of the charts, which perhaps tie in with some of the concerns listed above. (Right-click charts to embiggen.)
Sales growth is rolling off . . .

So sales by consumer-facing firms -- car companies, food-producers and the like -- have begun to slow, while IT and healthcare firms, bar semiconductor-manufacturers, have at least maintained growth.
The southbound lines in the left-hand chart speak to an ongoing struggle in China: its tanker-like pivot to becoming a consumption, rather than investment, driven economy. As flagged by our colleague James Kynge, and ex-Alphavillain Matt Klein, China's consumptive spurt since 2007 has been fuelled by debt, rather than income:

More recently, Allianz found that in 2017, household debt hit a record 49.1 per cent of GDP, 19.2 percentage points higher than 2012's figure.
News over the summer of a wave of defaults in China's $190bn peer-to-peer lending industry — shadow-banking platforms which divert short-term savings to households — perhaps signals the brakes slamming on this trend. But, as Matt argued, with workers earning a much smaller share of non-financial corporate value than other countries, circa 40 per cent versus two-thirds elsewhere, consumers now have few other means to grow their spending power. Coupled with trade fears, one wouldn't be surprised to see this trend continue.
Debt servicing is on the up, well for corporates anyway

Two diverging trends here. China, on a national level, is requiring more and more cash to service its debts. Not good news for those concerned about the Republic's burgeoning debt burden, estimated to be anywhere between 300 to 350 per cent of GDP, depending on who you ask and what mood they're in.
This hasn't deterred bond buyers however, as the IMF recorded a circa $40bn flow into yuan-denominated bonds over the second quarter of this year, according to Brad Setser at the CFR:

But on a corporate level, China has become better at meeting its interest payments, maintaining a coverage ratio of 4, up from below 3 in 2015. On a sector basis however, concerns still persist about corporate debt. For instance in real estate, despite core profit margins expanding 12.3 per cent in the first half of the year, the ratio of developers' cash to short-term debt declined from 2.4 to 1.8 times, according to research by China Merchant Securities.
These forking trends — total interest coverage declining, but on a corporate basis improving — suggests debt simply shifting across economic sectors, rather than improving on a net basis.
China's exporting corporates require a lot of labour

This chart shows revenue per worker versus a percentage of sales from exports in China's corporate sectors.
One clear takeaway from this chart is electric machinery and equipment (and, to a lesser extent, straightforward machinery) is going to be the sector-to-watch as the trade war deepens. Of course, protecting America's machinery sector has been a key objective of the Trump administration because a) there are still around 1.6m workers making machines and tools in the US and b) the sector has resumed growth under Trump. Just check out this chart from Brendan's post a few weeks back:

If Trump's tariffs begin to bite, we could therefore see a disproportionately negative effect on employment in these sectors, which, coupled with tightening credit conditions, would not be good news for household incomes.
So consumption looks set to remain repressed. How is China going to maintain growth then? More debt of course! Just last week the People's Bank of China cut reserve requirements for commercial banks, in effect sanctioning a further $109bn of credit creation. We've seen this playbook before; whether it is consistently repeatable, is another matter: