China: and another thing …

Beijing’s One Belt One Road initiative is anything but innocent, and China tried it already – 2000 years ago.

Apologies for my absence: vacations and other writing assignments are to blame; but the lousy weather has returned and it’s back to the routine as autumn approaches. I meant to write something about the Modi cabinet reshuffle that took place last week, but I found I was thinking about China and feeling a bit browned off about it. Don’t misunderstand me: I love the Chinese people and Chinese culture and all that, but I think I hate crony communism even more than I hate crony capitalism. And dopey authoritarians, too. Hate them here, hate them there.

As usual, Minhaz Merchant says the important stuff about the Modi reshuffle best, so if you want to know, go here.

Anyway, China:

  1. Kim Jong Who?

I’m heartily sick of reading acres of useless journalism about North Korea and what the USA might or might not do about the nuclear threat. It’s very simple, as Steve Bannon told David P Goldman a few weeks ago: the USA cannot realistically do anything about North Korea. Were they to try, half of South Korea would be vapourised and clouds of fallout would be floating everywhere to nobody’s benefit. China could deal with North Korea any time it likes, but it is just tapping the USA along because North Korea is its creature and everything North Korea does suits China very well, strategically speaking. Were this not so it would not happen. North Korea keeps the USA occupied, for example, while China gets on with all the things it wants to do relatively unobserved – at least in the media.

I’m sick of journalists writing that, ooh, 90% of North Korea’s trade is with China: if only Beijing would impose sanctions, Kim would cave in, and so forth. What nonsense. Why would China do that and hurt its own economy when North Korea is already doing everything commanded or condoned by China? Look: that pudgy little demon Kim Jong Un is the only one in the room who thinks he is in charge. As for those generals always standing around him with the shit-eating grins and stupid hats? That’s Beijing. If the Chinese had had enough of Kim then five minutes later his bullet-riddled corpse would be lying on the floor. The shit-eating grins would still be standing there, but holding smoking Makarovs (that’s not a cigarette, by the way). While we are on the subject, read Peter Zeihan’s funny and cruel take down of North Korea here.

  1. About that Silk Road plan …

I love this. It turns out that the whole bait-and-switch One Belt One Road scheme –or the ‘Belt and Road Initiative’ (BRI) as we are now supposed to call it – has been …. tried by China before! 2000 years ago! In fact it might not be going too far to say that certain Chinese high-ups came across the original scheme, dusted it off and decided to duplicate it.

I learned about this via Raoul McLaughlin, who is a fabulously good scholar, digging away at uncovering all the history of ancient trade and commerce – a much-underdeveloped area of research that I predict will soon be very visible and popular because of all the useful things it can tell us regarding our situation today. Anyway, I came across this in his book, Rome And The Distant East: Trade Routes To The Ancient Lands Of Arabia, India And China, and it explains how and why China’s OBOR scheme has been put in place, and what Beijing secretly aims to achieve by it (my italics):

In the ancient world, the struggle for supremacy was not always decided by invasion and war. In lands remote from Rome, imperial agents were using economic strategies to bring foreign peoples into positions of subservience. In the Far East, the Han set in motion subtle long-term schemes to undermine their foreign enemies and damage any ability to resist, or make war, on China. The Han encouraged a market for Chinese foodstuffs and fashions amongst foreign peoples including the Xiongnu hordes of the Mongolian Steppe. The eventual aim was to make these populations dependent on Chinese foods and manufactured goods so that these items could be withheld, or offered in diminished amounts, to inflict economic damage on these foreign communities. A Han official outlined how this strategy should be implemented, advising, ‘Every large border market we establish must be fitted with shops … and all shops must be large enough to serve between one to two hundred people … The Xiongnu will then develop a craving for our products and this will be their fatal weakness’. The Xiongnu were beguiled through thousands of trade exchanges that collectively reduced their resources and weakened their economic independence. As another Han official reported, ‘A piece of plain Chinese silk can be exchanged with the Xiongnu nomads for articles worth several pieces of gold. By these means we can reduce the resources of our enemy’. With calculated foresight the Han slowly, but surely, gained an economic stranglehold over their most dangerous opponents.

As I wrote in my earlier piece, OBOR: China’s bait-and-switch debt trap strategy, what China is doing is lending its neighbours the development funds to build infrastructre that China will end up owning and using to push Chinese products and interests into other countires, rendering them vassals in the process. In a generalised way China has been doing this across the world, and America’s uneasiness about how many dollars have been ending up in China due to the importation of its cheap goods, indebting the economy and destroying American jobs, surely contributed to the election victory of Donald Trump.

Today it’s cheap rebar and flat-screen TVs; in ancient times the Romans agonised over the high levels of luxury imports from China in the form of expensive silks that Roman women especially doted on (‘Our wealth is transported to alien and hostile countries because of the promiscuous dress worn by men and women – especially women,’ opined Emperor Tiberius.)

The writer Seneca worried about the political intent of these distant foreign merchants he suspected were looting the Roman empire and weakening it. Pliny the Elder wrote in his Natural History of how the ‘Silk People’ (the Chinese) were effectively pillaging Roman bullion on purpose for nefarious strategic ends. He wrote that they ‘take 100 million sesterces from our empire every year – so much do our luxuries and our women cost us.’ That was probably an eighth of Roman annual expenditure.

Note well the two primary reasons cited by the ancient Chinese planners for their OBOR scheme back then:

  1. Foreign nations ‘will then develop a craving for our products and this will be their fatal weakness.’
  2. ‘By these means we can reduce the resources of our enemy.’

With this track record in mind, I submit that it is far-sighted by Modi to have India resist the commercial blandishments emanating from Beijing towards the countries of the region (and to those even as far away as Europe).

China has just backed down from the confrontation over Doklam and the Siliguri Corridor – and they did back down because the road-building equipment has been withdrawn. Standing up to China over their ultimately damaging and aggressive ‘trade’ plans may likewise produce positive results.

 

Indian futures part 2: the luxury strategy

How can India counter the industrial giant on its doorstep?

In the previous post I briefly looked ahead to the relationship between India and the UK over the next few decades: it is only going to become deeper and more intertwined to the mutual benefit of both countries.

But India is also in the position now of crafting its own future as a “new” country, as Modi leads it out of the retardation after the Congress corruption of the last seven decades. What sort of culture and economy will India follow as part of its growing identity and prosperity? I suggest it will be determined partly by the political realities surrounding India and partly by the artisanal DNA that India possesses and must now cultivate anew and capitalise on.

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Indian futures part 1: Britain and India

It could be the start of a beautiful friendship …

A few days ago, despite the best efforts of the London Underground system, I had a very interesting meeting with one of the most successful British-Indian businessmen of our time, whose identity I shall withhold. He arrived in the UK several decades ago without any capital, and indeed without even much of the English language. He has succeeded in becoming one of the country’s foremost entrepreneurs, with a personal worth in the hundreds of millions of pounds – although he wears it lightly and is open and friendly in person, without any airs or grandiosity. It’s a fact that he is legendary in his sector for being a considerate and kindly employer, and his staff turnover rate is legendarily low. He told me he loves the UK because it’s a place where anybody can come and have a go at making themselves a success, knowing the odds are not stacked against them if they work hard enough.

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Pakistan and China: India’s strategic challenge in 2017

Examining the tactics India can use to turn the tables on its less-than-all-powerful tormentors

Look at a map of South Asia. I’ve said before that China’s unappealing wingmen are Pakistan and North Korea but luckily North Korea has shown no interest in India, lying as it does to the far east of the Middle Kingdom. China, though, right on top of India, is a threatening presence, while also shaking a fist at all the other countries in its neighbourhood, such as Vietnam and the Phillipines, as the People’s Republic throws its weight around the region. Pakistan is its enthusiastic henchman where India is concerned.

China’s strategy for regional –hemispheric? – domination consists of several elements. Forget for now its economy: nearly all growth in China today and tomorrow is debt-fuelled and will deplete wealth in the long run (Michael Pettis has done the calculations here). In fact it’s exactly because China’s real economic growth is grinding to a halt and its debt load reaching nose-bleed levels that expansion and power must now be projected by additional, alternative means.

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April update – and the contortions of the Left

Modi gets his man, triumphs in Delhi local polls; how the Left now backs the bankers; a great new magazine

A little bit of a round-up and some thoughts on the plight of the Left around the globe: I have been busy on something else this month (see below), so I am running around catching up on what I want to discuss on here. Back to normal service soon! OK …

At last Vijay Mallya, rural Hertfordshire’s most notorious alleged loan defaulter (but ask the banks and his wretched employees, who should know, or the Central Bureau of Investigation in Delhi, which recently charged the business genius with fraud) was arrested in London on 18 April on an extradition warrant. This doesn’t mean he’ll be dragged, handcuffed and squealing, onto an India-bound jet next week, desirable as that might be. It’s the start of a long, lawyer-enriching process that should nonetheless eventually see the ‘businessman’ back in the country he loves – and I do mean India not the Bahamas. PM Modi tweeted, ‘There is no place for corruption in India. Those who looted the poor & middle classes will have to return what they have looted.’ Not much fun to be in Modi’s crosshairs, I should think. Mallya’s besotted cheerleader at the FT must be sobbing.

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Antifragile India

What are we to make of the extraordinary progress and results that Modi is achieving? It could be the ‘antifragile’ phenomenon in action.

Of the five recent Indian state assembly elections – in Uttar Pradesh, Punjab, Goa, Uttarakhand and Manipur – the BJP either won outright or formed a ruling coalition in four of them. Only in Punjab did the party strike out, and this was easily foreseen. I think it is time to begin to speak of Modi making India – and himself – ‘antifragile’.

The most stupefying electoral result was from Uttar Pradesh. At the conclusion of my last post I cautiously guessed at a 60-70% chance of Modi (and I purposely say ‘Modi’ rather than ‘BJP’) winning in UP. It transpired that an unprecedented landslide in Modi’s favour gave the BJP 312 seats (excluding alliances) out of a 403-seat Vidhan Sabha. This is almost unbelievable, especially when the doom-laden predictions of electoral oblivion – heavily predicated on the ‘disastrous’ demonetisation of late 2016 – are taken into account.

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Election fever is breaking out in Uttar Pradesh

In a tight, dirty race, which of the electoral horses in a three-party race will cross the line first in UP?

In legal circles it is said that hard cases make bad law, but in electoral politics the opposite is true, and a crunchy election may be a decisive pinch point and an interesting, perhaps reliable indicator of the future course of events.

At present several Indian states are electing their assemblies, which is done every five years. For those not familiar with the Indian political structure, the simplest way to describe it is to say that it’s mostly like the US federal system, but with bits of the British parliamentary arrangement thrown into the mix.

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OBOR: China’s bait-and-switch debt trap strategy

There’s a loan shark prowling in the South China Sea

In an important article for Project Syndicate, Brahma Chellaney says that if there’s one thing China excels at, it’s the use of economic tools to advance perceived geostrategic interests. On a petty level that means dredging sand up into little island berms in the South China Sea and parking machine guns on them. In the grander scheme of things it is what has become known colloquially as ‘The New Silk Road’, or to give the project its proper title and acronym, the One Belt One Road initiative (OBOR). It’s a trillion dollar boondoggle that has as its superficial aim the re-establishment, in the interests of commonwealth and trade, of the ancient merchant route that connected East to West, along which the Romans travelled all the way to India and China two thousand years ago (the Chinese name for the Romans, by the way, is ‘lei jun’ – legion).

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What is this ‘demonetisation’ of which you speak?

Let’s cut through all the meretricious nonsense being written about the radical financial and fiscal reform Modi has unleashed.

‘India’s Prime Minister Has Singlehandedly Crushed The Economy With His Reckless Cash Ban’ runs the headline of one of the latest articles condemning the so-called ‘demonetisation’ unleashed by Modi in India. ‘Modi is quickly solidifying his place as one of monetary history’s biggest idiots’ it adds, before going on to display even more staggering ignorance and error than many of the other hundreds of similar articles on this subject have done.

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We don’t need no stinking dynasties!

The Democrats and the US media gave Trump the Modi treatment – with the same results

My friend Winston the electrician called round last week, a couple of days after Donald Trump’s election victory. I unlocked and swung open the gate and he was pointing at me.

‘You’re the man, Andy, you’re the man! You said Trump would win!’ he said.

I’d briefly forgotten the conversation we’d had the previous Monday, on the eve of the US presidential election, when I’d heretically argued that in spite of all the pro-Clinton hysteria on the TV and wireless, I thought that Trump had a very good chance of stealing victory from under the noses of the Democrat-supporting media. Almost all journalists and commentators were so frantically virtue-signalling that they couldn’t detect the reality of what was happening on the ground.

And so it transpired. I didn’t take any particular delight in Trump’s victory; I wasn’t even gruntled at having been more or less correct in predicting he would win. I didn’t like Hillary at all – a greedy, corrupt, establishment money-grubber and war-monger who had utterly forsaken the ordinary folk who were the Democratic Party’s mass (and essential) voters. Trump was loud, vulgar, abusive and egomaniacal – although he was less boring than the alternative. Like many, I quite liked some of what he was saying but I wondered if it was insincere and crazed gibberish that he had no real intent of making good on. But he certainly knew how to ‘lead and pace’ his supporters.

Continue reading “We don’t need no stinking dynasties!”