EU trade chief proposes mutual tariff freeze to Washington

Brussels suggested the EU and its major overseas partner suspend tariffs imposed on billions of dollars of imports for six months, EU trade chief Valdis Dombrovskis told Germany’s main news platform, Der Spiegel.

The measure would go beyond the latest four-month suspension of import duties that the parties agreed in March.

“We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution. This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” Dombrovskis said.

Last month, the two transatlantic partners agreed to suspend mutual tariffs that had covered $7.5 billion of EU imports of American goods and some $4 billion of US products shipped to the bloc. The freeze is set to expire in four months.

The bitter EU-US trade dispute over aerospace subsidies to plane makers Airbus and Boeing dates back to 2004. Then Washington challenged European subsidies of Airbus that reportedly had “adverse effects” on the US.

The EU filed a retaliatory complaint against the direct support given to Boeing in the form of regional tax breaks and government grants.

So far, tit-for-tat duties on various goods have affected nearly $50 billion in mutual trade. The list of EU products on which the US imposed taxes came in at $25 billion. $7.5 billion was authorized by the World Trade Organization (WTO). In comparison, the EU’s list totaled a mere $20 billion. WTO approved $3.99 billion.


US axes Trump-era Scotch whisky tariffs for four months in bid to resolve aircraft trade war with UK

The US said on Thursday it will suspend 25 percent tariffs on Scotch whisky and retaliatory import taxes on other UK products in a bid to resolve the two parties’ on-going transatlantic trade row due to aircraft subsidies.

Then-US President Donald Trump slapped the UK and other EU member states with tariffs on whisky, wine, cheese and other foodstuffs in 2019 in return for European plane maker Airbus being given illegal subsidies by the bloc. 

The World Trade Organization (WTO) ruled in 2018 that EU governments had failed to comply with US requests to stop funding Airbus, which had caused its American rival Boeing to lose $7.5 billion a year.

Airbus had already filed a similar complaint with the WTO against Boeing in a dispute between the two manufacturers stretching back to 2004.

On Thursday the US and the UK said in a joint statement that “the United States will now suspend retaliatory tariffs in the Airbus dispute from March 4, 2021, for four months.”

The move is the latest of Trump’s policies to be overturned by President Joe Biden, whose administration will now turn its focus toward rising civil aviation powers “such as China,” the statement says.

Reacting to the news, UK Prime Minister Boris Johnson hailed the tariff climbdown as “fantastic news” for the transatlantic trading relationship, as well as for Scotch whisky distillers and other businesses.

In December the UK International Trade Secretary Liz Truss announced Britain would suspend retaliatory tariffs against the US, ahead of Brexit and the expected new trading relationship with the US under Biden.

As well as whisky, Trump’s original tariffs in response to the WTO ruling targeted UK cashmere, German coffee and tools, Spanish olive oil, as well as cheese, meat and other products from various EU nations.

India’s China fears put to rest in Sri Lanka

Sri Lanka hands India major port development deal that will tie the two neighbors together for decades to come

By MK BHADRAKUMAR

In a stunning coincidence, a mere two weeks ahead of Indian Prime Minister Narendra Modi’s planned visit to neighboring Bangladesh, the Sri Lankan government on Monday issued a Letter of Intent to India’s Adani Ports and Special Economic Zones Ltd (APSEZ) to develop and operate the West Container Terminal (WCT) in Colombo. 

Sri Lanka’s Rajapaksa clan-led government took a calculated risk. If New Delhi were in Colombo’s shoes, it probably would have waited for another week. To make up its mind before formalizing the audacious decision to invite a big Indian presence. Right at the epicenter of the Sri Lankan dream to be “another Singapore.” 

For, in another week, Colombo would know which way the Indians actually voted in Geneva when the crunch time came on the US-sponsored resolution at the UN Human Rights Council regarding the alleged war crimes committed during the last brutally violent phase of the struggle to vanquish the rebel Liberation Tigers of Tamil Eelam (LTTE). 

Colombo has drawn New Delhi into a ring of long-term engagement that will be difficult to shake off easily. Indian high commissioner to Colombo has reportedly been touring the eastern and northern provinces of Sri Lanka to explain to the Tamil parties what is on the anvil in Geneva. 

What brilliant geopolitical “outsourcing!” Colombo expects that New Delhi will discourage Washington from undermining the stability of the island nation’s government. And to stop threatening to dispatch President Gotabaya Rajapaksa to The Hague. To meet the same tragic fate as Slobodan Milošević, the last president of the former Yugoslavia. Before it was carved up by the North Atlantic Treaty Organization (NATO) like a turkey on Thanksgiving Day.

Public Private Partnership

The WCT project envisages that APSEZ will partner with John Keells Holdings PLC. It is Sri Lanka’s largest diversified conglomerate, and the Sri Lanka Ports Authority as a part of the consortium with a 51% majority shareholding. It will be developed on a build, operate and transfer (BOT) basis for a period of 35 years as a public-private partnership. 

India’s biggest investment

The WCT will have a quay length of 1,400 meters and alongside depth of 20 meters. Thereby making it a prime transshipment cargo destination to handle ultra-large container ships. The project cost is estimated at US$750 million as of now, which may rise.

The WCT will become the single biggest economic project ever executed by an Indian company in the country’s immediate neighborhood. 

The huge significance of the WCT for the region’s economy cannot be minimized. An APSEZ statement highlighted that the project is expected to boost the WCT’s container handling capacity. And to further consolidate Sri Lanka’s locational advantage as one of the world’s top strategic nodes along the busiest global transshipment route.

The Port of Colombo is already the most preferred regional hub for transshipment of Indian containers and mainline ship operators. 45% of Colombo’s transshipment volumes is either originating from or destined to an Adani-run port terminal in India. 

Simply put, the Sri Lankan government is intertwining its economic prosperity with India’s massive market in an inseparable way. This takes the breath away. Particularly considering that it was only five years ago that New Delhi allegedly became messed up with an Anglo-American project to overthrow the established government in Colombo. It was, ironically, headed by the same leadership as today. 

India had teamed up with its Quad partner Japan originally to bid (unsuccessfully) for the East Container Terminal project at Colombo Port. There was much-suppressed fury when the Sri Lankan government spurned the offer. Indian strategic analysts thereupon went overboard with the stupid hypothesis that Colombo had buckled under “Chinese pressure.” 

Political stability

But now, the WCT, a much bigger BOT project, has been offered to India on a platter with no strings attached. Colombo seems to prefer that the Indians shake off their Quad ally and undertake the WCT on its own steam.

India is de facto becoming a stakeholder in the political stability of Sri Lanka. The bittersweet lesson of 2015 is that securing an easier, cost-effective, risk-free, predictable and durable outcome is possible with a pragmatic outlook and strategic patience.

No one in Delhi talks any more about the “China factor.” The paradox is that the WCT project will be adjacent to the massive Colombo Port project that Chinese companies are funding and executing.

Yet, apparently, there is no heartburn in Beijing either that the Adani Group is moving in as next-door neighbor.

Arguably, Beijing knew about the WCT project, which has been under discussion for a while. But in its ingenuity and wisdom, Beijing assessed that it is just as well if India’s paranoia about China’s presence in Sri Lanka is set at rest.

The WCT saga is unfolding just before Prime Minister Modi’s visit to Bangladesh planned for March 26-27. Bangladesh is another example where it emerges that India doesn’t need to carry a Quad visiting card to build a partnership. The Sri Lankan experience nonetheless has great relevance to Bangladesh.

World Bank Report

According to a new World Bank report titled “Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia,” seamless transport connectivity between India and Bangladesh has the potential to increase national income by as much as 17% in Bangladesh and 8% in India.

The report says a 297% increase in Bangladesh’s exports to India and a 172% increase in India’s exports to Bangladesh. It could be within reach if only transport connectivity improves between the two countries and they were to sign a free-trade agreement.

Nobody’s puppets

From the perspective of diplomacy and foreign policy, the bottom line is that the Indian strategic community should remain self-assured that the political elites in the SAARC (South Asian Association for Regional Cooperation) capitals surrounding India are not only nobody’s puppets but have always regarded New Delhi as their most important partner.

That, in turn, puts the onus on India to act with maturity and a sense of responsibility and decorum. 

Only with such a comfort level can India eschew its paranoia about the Chinese presence. It can instead focus single-mindedly on the pursuit of its business interests optimally in regional capitals. Ideally, leave it to the Adani Group to reset the India-Sri Lanka relationship and put it on a realistic, pragmatic footing.

As for the strategists and think-tankers in Delhi, do not suspend rational thinking after reading the garbage disseminated by US propaganda outfits from time to time expanding on the Central Intelligence Agency’s decade-old hypothesis about a Chinese “string of pearls” around India’s delicate neck. 

This article was produced in partnership by Indian Punchline and Globetrotter.

M K Bhadrakumar is a former Indian diplomat.

Iran wants to join Eurasian Economic Union

Will Russia allow it?

There are some good reasons for Moscow’s lukewarm response to the possibility of Tehran’s admission to the EAEU. What are factors for and against Iran joining Eurasian Economic Union from Russian point of view?

By NIKOLA MIKOVIC

The Russia-dominated Eurasian Economic Union might soon be acquiring a new member: Iran. Boxed in because of its rivalry with other states in the Middle East, and laboring under US-imposed sanctions, Tehran believes it needs to strengthen ties with such neighbors as might be willing to accept it.

Iran appears to think that membership in the EAEU is a done deal. That is despite officials of the bloc denying they had received any formal request. When Mohammad Baqer Qalibaf, Speaker of the Iranian parliament, visited Moscow on February 10, he declared Iran would “permanently join the EAEU in two weeks.” Apart from the fact that the date has passed, such optimism is extremely premature.

The response from Mikhail Myasnikovich, chairman of the board of the Eurasian Economic Commission, was telling. The Eurasian union wants Iran to have “a special view on cooperation with Eurasia,” he said. It hardly sounds like a warm welcome. Other EAEU officials have stressed that Iran must formally apply for membership. A veiled warning, perhaps, that Iran cannot expect to bypass procedures.

On the face of it, there are reasons for Tehran and Moscow to support Iran’s inclusion into the bloc. The economic area is an integrated market of 180 million people with a combined GDP of more than US$5 trillion. It encourages the free movement of goods and services and can formulate common policy in key areas such as energy, agriculture, transport, customs, and foreign trade and investment.

Iran already has had a free-trade agreement with the Eurasian union since 2018. In 2020, trade turnover between Iran and the EAEU increased by 2%, exceeding $2 billion.

Mutual benefits

Food products and agricultural raw materials accounted for most of that trade in both directions. 80% of the goods that the EAEU supplied to Iran and 68% of what Iran sent to the EAEU.

Joining the EAEU would improve Iran’s economic and political position globally and help to offset, at least partly, the cost of US sanctions.

On the Russian side, Moscow wants another pathway to the markets of the Middle East. That is why the Kremlin strongly supports the construction of the Nakhchivan corridor. It is a land route connecting not only Azerbaijan to its Nakhchivan exclave between Turkey and Armenia, but also Russia and Turkey and – crucially – Russia and Iran.

A future rail link between Russia and Iran, passing though Azerbaijan and Armenia, will undoubtedly enhance economic ties between the two countries as well as Iran’s trading relations with other Eurasian union member states.

However, how receptive Arab Middle East states would be to Russian goods transiting through Iran is another question altogether. This might be a reason for Moscow’s distinctly lukewarm response to the possibility of Tehran’s admission to the bloc.

In fact, there are several large questions hanging over inducting a new member into the bloc. Bloc consists of Armenia, Belarus, Kazakhstan and Kyrgyzstan, in addition to Russia. Uzbekistan, Moldova and Cuba have observer status.

Impact on Russian relationship with Israel and Arab States

It is not improbable that closer economic ties would lead to stronger military ones. The UN Security Council embargo on conventional arms shipments to Iran expired in October. It is no secret that Iran is interested in purchasing Russia’s S-400 anti-aircraft system. As well as Su-30 fighter jets. But such a deal would almost certainly ramp up tensions between Moscow and Washington and raise alarm bells in Gulf Arab states.

Then there is Russia’s relationship with Iran’s arch-enemy, Israel. The Russians have not prevented Israel from striking at Iranian targets in Syria, despite operating S-400 units in the area. Russia was the mediator in a prisoner exchange between its ally, Syria, and Israel that took place this month and there are rumors of further ongoing negotiations on humanitarian issues and even on wider geopolitical matters.

Speculation aside, what is known is that Israeli Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin discussed continued coordination between their two countries in light of developments in regional security. Was Iran also on the agenda?

Moscow, after all, must maintain its own delicate balancing act and guard its geopolitical interests. The normalization of ties between Israel and the United Arab Emirates and other Arab states has changed interest-dynamics in the region, tilting the balance further toward the Arab Gulf region’s anti-Iran alliance. How does Russia profit from the new Middle East?

Some other countries are already in the queue to join

Finally, there is the fact that there are others ahead of Iran in the queue to join the Eurasian union. Syria is one of them; 40 other countries also have stated their wish to develop trade and economic cooperation with the bloc.

As well as declaring that Iran would soon join the EAEU, Qalibaf said he had brought “a very important message” from Supreme Leader Ali Khamenei. It may well be that Moscow is composing its own, equally important message to send back to Tehran.

NIKOLA MIKOVIC

Nikola Mikovic is a political analyst in Serbia. His work focuses mostly on the foreign policies of Russia, Belarus and Ukraine, with special attention on energy and “pipeline politics.” 

More by Nikola Mikovic

Race is on for Indonesia’s untapped rare earths

Tin mining tailings could contain commercial quantities of rare earths both US and China would be keen to tap

By JOHN MCBETH

JAKARTA – Rare earth, the experts like to say, is neither rare nor is it earth. But given its use in everything from smartphones to high-tech aerospace and defense systems, a potential buried treasure from the past may soon become the next big thing in Indonesian mining.

Indonesia appears to have only modest proven amounts of the v valuable minerals, but much of what it does have is locked away in the rock waste, or tailings, left over from centuries of tin mining on the islands of Bangka and Belitung, south of Singapore.

Although preliminary studies show state-owned PT Tambang Timah’s tin sands contain 13 of the 17 chemical elements in the periodic table present in rare earths, it will take further investigation to determine whether it is present in commercial quantities.

If it is, that would make Indonesia a player in an industry that is fast becoming a new trade war flashpoint between the United States and China because of its strategic significance for numerous civilian and military technologies, including both laser and precision-guided missiles.

China currently controls 80% of the world’s trade in rare earths and could conceivably  block US access in retaliation for any future Washington sanctions on Chinese-made goods.  

With proven reserves of 327,500 tons, Timah still produces about 30,000 tons of tin a year from an offshore-onshore concession covering 512,369 hectares; other private firms add 40,000 tons, making Indonesia the world’s largest tin producer. 

Rare earths also occur in Aceh, Jambi and Riau’s Singkep Island and in West Kalimantan, where they are associated with rich deposits of bauxite, the feedstock for a US$695 million alumina smelter the Chinese are building north of Pontianak, the province capital.

Historically, most rare earths have been produced as by-products from tin, copper and gold mining, but were not considered worth processing and have invariably ended up in stockpiles, as is the case with Tambang Timah.   

With the US distracted by internal problems, the only outside interest so far in Indonesia’s potential has inevitably come from China, which has 55 million tonnes of rare earth reserves, by far the largest in the world.

But in looking for investors elsewhere, such as the US and Australia, the government is anxious to develop domestic expertise in the complex seven-stage process of refining monazite and xenotime, the two minerals that house REE elements.

Where the US may have an edge over China is in handling radioactive thorium, which is released in the course of the processing and must be treated with extreme care, even if it doesn’t produce uranium’s dangerous gamma rays. 

Laboratory results indicate Timah’s tailings contain significant quantities of neodymium and praseodymium, which in combination with iron and boron are used to produce high-power magnets for electric motors and military guidance and control systems.

Indonesia already possesses 80% of the mineralsrare earths included, needed to manufacture lithium batteries, part of the government’s policy of venturing into electric vehicles as a way of creating a future industrial base built around its vast natural resources.

Neodymium is responsible for most rare earth demand, with a market value of $11.3 billion in 2017. Demand is currently outstripping supply by about 2-3,000 tons a year, but that gap will widen as more lithium battery-powered electric vehicles appear on the world’s roads.

Future prospects depend on the government enacting policy and regulation and in initiating incentives for downstream and upstream industry, according to Fadli Rahman, co-author of a 2014 Colorado School of Mines paper on Indonesia’s rare earth potential.

“If the Indonesian government remains passive and unassertive to the viable options, the rare earths will merely remain rare to Indonesians for the foreseeable future,” said Rahman, now state oil company Pertamina’s youngest commissioner.

With estimated reserves of only 13 million tons, the US is waking up to the fact that China’s domination of the increasingly strategic material leaves it vulnerable.

At one point, neodymium was even on the Donald Trump administration’s list of tariffs it placed on Chinese imports in 2018 before it was quietly removed, an indication of how important it has become to the US economy.

Last year, China threatened to strengthen controls on rare earth exports to the US, one of the reasons why Washington recently formalized an existing partnership with Australia to develop new sources of critical minerals, including rare earth, cobalt and tungsten.

Australia, with 2.1 million tons, is one of a handful of countries possessing significant rare earth reserves. Others include Brazil (22 million tons), Russia (19 million), Vietnam (11 million) and India (3.1 million).

Vietnam, whose rare earth concentrations are along its northwestern border with China and the South China Sea coast, is reportedly keen on using two relatively common elements, cerium and lanthanum, to develop a clean energy capacity.  

The US began mining rare earth at southern California’s Mountain Pass mine in the 1960s, but since 2010 China has become the dominant player, producing 100,000 tons a year compared with the US output of 43,000 tons over the past two decades. 

An open-pit mine close to the Nevada border known as Mountain Pass was recently saved from a second bankruptcy by MP Materials, a company owned by a Chicago hedge fund. It remains the only rare earth mining and processing facility in the US. 

Most rare earth projects have proven to be uneconomic because of mining costs which can contribute 25-39% of the total expenditure for extracting from hard rock deposits. But Bangka-Belitung’s Monazite has the advantage of being in sand form and therefore does not require crushing and grinding.

In the end, thorium and how to deal with it remains a major impediment to the development of monazite deposits.

Indonesian nuclear advocate Bob Effendi, the local representative for American nuclear reactor design company ThorCon, asserts that safety concerns around the stockpiling of the radioactive waste is a “non-issue.”

But local geologists say it will need to be contained in stainless steel casks and stored in reinforced concrete buildings, possibly on a small uninhabited island, until such time as it is needed as fuel for a long-planned nuclear power station.

For decades now, part of the International Atomic Energy Agency’s (IAEA) mission has been to simply monitor the volume of monazite in Tambang Timah’s tailings, as it has done with similar mine waste around the world. 

In the meantime, nuclear power remains on Indonesia’s agenda, initially set down in a 2007 long-term national development planning law that envisaged an operating plant by 2024. 

In 2014, the Ministry of Mines and Energy regulation listed nuclear in the same category as other sources of renewable energy, but with the proviso that it should only be considered as a final option.

A second ministerial regulation in 2019 called for the drawing up of a concrete plan for the construction of a nuclear power station, followed by a presidential regulation earlier this year which listed it as a priority program for advanced studies.

Bangka-Belitung governor Erzaldi Rosman Djohan sent a letter to the Coordinating Ministry of Maritime Resources and Investment on August 3 supporting the construction of the nuclear plant in the southern Sumatran province.

But the Indonesian citizenry may first have to get over their innate fear of nuclear power, which has so far stymied plans going back to the New Order era for a station to be built on the Muria Peninsula in heavily-populated Central Java.

A member of President Joko Widodo’s National Economic and Industry Committee (KEIN), Effendi argues that a thorium-fuelled plant is not only immune to meltdown but is cheaper to build and produces less waste.

The former oilman also challenges the widely-held perception that Indonesia has limitless sources of energy, noting that coal and gas reserves are not finite and claiming that solar and wind potential is only 15% of what it is claimed to be.

Indonesians are not alone in their fear of anything nuclear-related. In Malaysia, the government faces public opposition to the Lynas Corporation’s facility near Kuantan, which processes rare earth oxides shipped from its Mt Weld concentration plant in West Australia.

With more low-level radioactive waste piling up at the plant, and the issue heading for Malaysia’s High Court, Lynas has now been forced to move the cracking and leeching part of the process to the outback mining center of Kalgoorlie-Boulder. 

CHINA’S GLOBAL LEADERSHIP LIST – CHARTS AND FACTS

A vast majority of Americans have absolutely no clue how advanced China has become. Look at the social media comments, and it’s clear that too many Americans – especially Trump supporters – are filled with misinformation and prejudice. “China is 100 years behind” … “All Chinese products are crap” … “China can’t innovate” … “It’s a communist, poor, polluted country” … and, of course, the most popular theme is “China’s economy is about to collapse.” It’s hard to change these opinions, since those people reinforce their biases by gleefully consuming and sharing only anti-China articles. Anything remotely positive about China is attacked as “Chinese propaganda.”

This potent mix of ignorance and hubris is also precisely why western corporations gladly and voluntarily shared their intellectual property (IP) with their Chinese joint-venture partners. The term “forced technology transfer” was invented retroactively only after Chinese corporations started threatening western profits — for example: Huawei has overtaken Apple, Nokia and Ericsson in smartphones, 5G and telecom infrastructure; BYD manufactures more electric vehicles than Tesla; Alibaba and Tencent process 50x more mobile payments than the US; and the most valuable (ByteDance) and the most innovative (Meituan) startups are Chinese.

While it’s true that China as whole has a long way to go in GDP-per-capita, many big cities in China are essentially “developed economies.” Plus, China has surpassed the US in many areas and is catching up in others.

If you don’t know your competitor, you’re certain to lose the game. So here are some quick statistics on China’s global leadership:

Economy, Manufacturing, Trade

=> #1 in PPP GDP (been so since 2014 when it surpassed the US)

=> #2 in nominal GDP ($13.5 trillion in 2018 and $14.4 trillion in 2019). And it’s as big as the next 4 countries combined!

=> #1 in exports (been so since 2009 when it overtook Germany)

=> #1 in container traffic (40% of global market). 7 out of the Top 10 busiest seaports are in China

=> #2 importer ($2.1 trillion)

=> #1 in manufacturing value added (been so since 2010 when China took the crown from the US, which had been #1 for the previous 110 years). The chart below is based on data from the World Bank

In spite of coronavirus/COVID-19, China’s manufacturing continues to grow and accounts for28% of global manufacturing. In fact, China is as big as the US, Japan and Germany combined.

=> #1 in foreign exchange reserves (>$3 trillion)

=> #1/#2 holder of US debt (>$1 trillion)

=> #1 banking system (twice the size of the US, in terms of assets). Surpassed the EU in 2016.

=> #1 trade partner for 130 countries (trade = exports + imports). And for 37 countries, China is their #1 export destination (meaning, they sell the most goods to China).

=> #1 in contribution to global GDP growth for the past decade (25-35%, which is twice that of the US). That is, if the world GDP grows by $100, then $25-$35 comes from China.

=> #1 in steel, cement, aluminum production (linklinklink). In three years (2012 – 2015), China used more cement than the US did in the entire 20th (link)

=> #1 in electricity generation (link)

=> #1 importer of crude oil (link)

=> #1 in purchase of industrial robots, accounting for almost 40% of global market in 2018 (link)

=> #1 in manufacturing of conventional cars (>26 million per year)

=> #2 in hi-tech manufacturing (Yeah, China isn’t just making t-shirts anymore)

=> #2 in billionaires (415 billionaires as of 2020)

=> #2 in millionaires (5 million millionaires)

=> #2 stock market, by market cap (overtook Japan in 2014)

=> #2 bond market, worth $16 trillion (link)

=> #1 in representation in Global Fortune 500 companies. (surpassed the USA in 2020). The chart below is from 2019. By mid-2020, mainland China had 124 and the US had 121 companies.

=> #1 in production of rice, wheat, potato, beer(!), tea, apple, strawberry, grapes and numerous other grains, vegetables and fruits. (link)

=> #1 in Middle Class population (350 million in 2018; and it overtook the US in 2015)

=> #1 country in the wealthiest Top 10% of global households (overtook USA). Now there are 100 million Chinese worth $110K or more.

=> #1 in poverty elimination (800 million lifted out of extreme poverty). Extreme poverty will be practically 0% in 2020.

=> #1 in online/e-commerce retail sales (3x the US)

=> #1 in personal luxury goods sales (35% of global market)

=> #1 retail market in the world by 2019 or by 2020 ($5.6 trillion) ($5 trillion)

=> #1 in international tourism spending (In 2010, Chinese tourists spent half as much as Americans; and by 2017, China was spending twice as much as the US)

Technology Superpower
=> #1 in Internet users (China had only 2 million internet users in 1998. It then grew to 300 million by 2008 and 900 million by early 2020).

=> #2 in Unicorns (startup companies worth more than $1 billion). 142 in China versus 175 in US. In 2020, the number of Unicorns are 227 in China versus 233 in the USA). Interestingly, 16 Unicorns in the US were founded by Chinese immigrants or Chinese Americans.

=> #2 in venture capital funding ($100 billion of new venture capital funding for about 2,900 startups last year )

=> #1 in e-commerce (42% of world market)

=> #1 in 4G mobile network (2 billion users)

=> #1 in Internet users (830 million people) and fiber-optic broadband users (320 million)

=> #1 in smartphones (Chinese brands have 50% of the global market)

=> #1 in solar, wind and hydroelectric power (link)

=> #1 in electric cars – manufacturing and sales (link)

=> #1 in consumer drones (70% of global market)

=> #1 in supercomputers (227 out of the 500 supercomputers are Chinese)

=> #1 in mobile payments (50x larger than the US)

Infrastructure Giant

=> #1 in skyscrapers – more than half of all skyscrapers are in China (link)

=> #1 in global infrastructure projects. China’s Belt and Road Initiative (BRI) involves 152 countries and international organizations. (link)

=> #1 in patents — accounting for almost half of all patents in the world!

=> #1 in international patents – according to WIPO. The US had been #1 since 1978 when WIPO/PCT was established. China had 58,990 international patents in 2019. Here’s an infographics

from WIPO:

=> #1 in science, technology, engineering and math (STEM) college graduates (4x as many as the US)

=> #1 in scientific publications since 2016. And also catching up on the Top 10% and Top 1% of these papers/articles. (link)

=> #1 in the world in math, science and reading proficiency among high school students

=> #1 in 5G (China owns about 40% of 5G patents, and the world’s leading 5G vendor and patent holder is none other than Huawei)

=> #1 in Artificial Intelligence (AI) funding, startups and publications (linklink)

=> #1 in R&D spending in 2019 – according to US National Science Board; here’s an updated article for 2020. In the chart below, brown = USA and purple = China. The chart shows only up to 2017.

=> #2 in number of satellites in orbit/space (280 satellites as of 2018). In 2018, China became the first country to land on the far side of the moon. In both 2018 and 2019, China was #1 in rocket launches.

What should the US do? Try to “contain” China? Start World War III to maintain global hegemony? Become depressed and paranoid? Thankfully, the answer to all those questions is, “NO.” There are constructive things that America can and should do to prepare for the future.


-Chris Kanthan

Originally published on WORLD AFFAIRS

Erdogan sees China as a partner for the future

Even as a US-Turkey stand-off cools, the Turkish leader is pursuing China as a long-term hedge against the West

By Burcu Karakaş

“We are facing an economic war. Do not worry, we will win it,” Turkish President Recep Tayyip Erdogan said during the presentation of his 100-day action plan in August, as a currency crisis and economic showdown with the United States reached its height.

Erdogan declared that China was the country’s economic partner of the future.

That call resounded with Ismet Oztanık, the chairman of Asiability-Turkey, which seeks to capitalize on China’s Belt and Road Initiative and build new bridges linking the republic on the Bosphorus to the South China Sea.

“The Turkish embassy in Beijing is finalizing the launch of a working platform to bring business people in the private sector from China and Turkey together,” Oztanık told Asia Times.

The platform, which will soon be publicized, is expected to enhance mutual investments.

In August, Oztanık announced that the China Entrepreneur Club – led by Jack Ma, the chairman of Alibaba – was considering a visit to Turkey to check out investment opportunities. It now rests on the Turkish private sector and quasi-government bodies to assemble the relevant counterparts and pave the way for a delegation of billionaires.

A lender and investor

The position of Turkey on the global stage has improved since Erdogan announced he would seek other partners over the summer. The murder of Washington Post columnist Jamal Khashoggi by Saudi operatives in Istanbul has put Turkey in a renewed position of influence, namely with the United States.

But the appeal of China has not subsided – it is gaining influence as a lender and as an investor.

In July, Turkey borrowed US$3.6 billion from the Industrial and Commercial Bank of China for investments in the energy and transport sectors.

A debt-driven approach is bringing the two countries closer, with Chinese investments in Turkey on the rise. Between 2011 and 2016, the Bank of China provided $2.5 billion in financing for local projects and institutional companies in Turkey and more is expected to come.

Over the past year, the number of Chinese companies operating in Turkey rose to more than 1,000. Sixteen of them are among the top 500 companies in China, including Huawei and Bank of China.

As a testament to the growing partnership, the Turkish Industry and Business Association in October was chosen to host the Belt & Road Industrial and Commercial Alliance (BRICA) summit, in cooperation with the China Federation of Industrial Economics.

Chinese energy

The largest direct investment of China at present is the EMBA Hunutlu Thermal Power Plant in the Turkish city of Adana, which is expected to contribute significantly to the country’s energy demands.

Consortium investment for the coal-fired plant, a joint venture led by China’s Shanghai Electric Power, has reached $1.7 billion, the Chinese embassy in Ankara told Asia Times. EMBA was granted a 49-year generation license for Hunutlu from the Turkish Energy Market Regulatory Authority, and China holds just over 78% of the shares.

Chinese investors have also expressed interest in the infrastructure, electronics, tourism, logistics and real estate sectors in Turkey. Beijing has become the prime contractor for mega projects such as the Ankara-Istanbul high-speed rail, the Salt Lake Underground Natural Gas Storage Project and the Soda Ash Production Complex in Ankara’s Kazan district.

Since 2001, Chinese companies have amassed project contracts in Turkey worth more than $19.8 billion in total. The two nations are now negotiating for the construction of Turkey’s third nuclear power plant.

“We want to have a new momentum in relations between China and Turkey by completing these negotiations within 2019,” Emin Onen, Turkey’s ambassador to Beijing, wrote in an article for Global Times to emphasize the importance of the current nuclear talks.

Looking to the future, Turkish officials say they will also create special industrial zones – for Chinese investors only.

Beyhan Incekara, an assistant professor of international trade at Istanbul Kultur University, says such steps are mutually beneficial for Ankara and Beijing, with China-led transportation projects in Turkey constituting the most substantial area of bilateral economic relations.

“The US-China trade war is bringing two countries closer. Economic cooperation is important for China and Turkey so this is a win-win situation,” Incekara told Asia Times.

Beijing, the professor believes, has the potential to overtake Europe as Turkey’s top trade partner.

The secret spy dinner behind coordinated assault on Huawei

Five-nation intelligence-gathering bloc steps up campaign to limit China’s reach

The arrest of Huawei executive Meng Wanzhou by Canadian authorities produced attention-grabbing headlines in recent weeks, but the police action is just one part of a coordinated effort to target the Chinese telecommunications giant.

An account in The Sydney Morning Herald on Thursday describes how intelligence chiefs from the Five Eyes nations – the US, the UK, Canada, Australia and New Zealand – hatched a plan to push back on Huawei’s global ambitions.

The debate among the spy chiefs during a dinner in Nova Scotia on July 17 centered on one question, the Herald said: “Should the agencies go public with their concerns about China?”

While not all agreed to speak publicly on the issue, after that meeting, a campaign to block Huawei from supplying equipment for fifth-generation (5G) wireless networks has gained steam.

The UK’s largest mobile network provider announced it would shed Chinese-made gear just days after Meng’s arrest. The US, Australia and New Zealand have already said they will not use Huawei equipment for next-generation mobile networks.

While Ottawa has yet to ban Huawei from 5G networks, Canada’s top intelligence official publicly warned of the dangers of not doing so on the same week that Meng was arrested. The Herald said that “a formal ban on Huawei and ZTE from Ottawa is expected within weeks.”

“A new Great Game was afoot and the West had been slow to act,” went the narrative voiced at the gathering in Nova Scotia. “But it is acting now.”