Posts Tagged ‘China’

Trade-Talk Progress Lifts U.S. Stocks

December 12, 2018
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*Stock Futures Rise on WSJ Report That China Plans to Boost Access for Foreign Companies

*S&P Futures Up 1.3% Vs. 0.9%

*DJIA Futures Up 1.4% Vs. 0.9%

(This article will be updated)

Global stocks gained Wednesday on a fresh wave of trade optimism and climbing oil prices, shrugging off a leadership challenge against U.K. Prime Minister Theresa May.

U.S. futures put the S&P 500 and the Dow Jones Industrial Average on course to rise 1% at the open, with trade-sensitive stocks like Caterpillar and Cisco up 2% and 1.1% in premarket trade, respectively. Meanwhile rising oil prices helped push Exxon Mobil stock 2.1% higher ahead of the market open.

Brent crude oil prices rose 1.6% to $61.18 a barrel and West Texas Intermediate Futures were up 1.5% at $52.58 a barrel, after weekly American Petroleum Institute figures released Tuesday revealed a larger-than-expected fall in U.S. inventories.

Stocks in Europe built on Tuesday’s gains, with the pan-continental Stoxx Europe 600 index up 1.3% in afternoon trade, while the British pound edged up 0.7% but remained near its lowest level in 20 months.

Lawmakers in the U.K.’s ruling Conservative party initiated a no-confidence vote against Mrs. May. On Monday, she postponed a parliamentary vote on her Brexit bill, which prompted a new volley of criticism over her handling of the country’s exit from the European Union. The yield on U.K. 10-year government bonds was at 1.23%, up from 1.18% late Tuesday. Yields rise as prices fall.

Traders at the New York Stock Exchange on Tuesday.
Traders at the New York Stock Exchange on Tuesday. PHOTO: BRENDAN MCDERMID/REUTERS

Rises in European stocks echoed gains in Asia, where the Nikkei climbed 2.2% and Hong Kong’s Hang Seng Index rose 1.6% as signs of a further softening in trade tensions revived risk appetite. Benchmarks in Taiwan, South Korea and Singapore all increased more than 1%.

Details continued to emerge from the first trade talks between Washington and Beijing, with China agreeing to boost purchases of soybeans and other crops, and to reduce auto tariffs.

The warming in U.S.-China trade relations has prompted cautious optimism among some investors, said Viktor Hjort, global head of credit strategy at BNP Paribas.

“A resolution on global trade is one of the most important issues for markets going into 2019,” Mr. Hjort said. “The positive angle is that U.S. and Chinese negotiators appear to be making an effort, but I think at this point, any absence of bad news is good news.”

President Trump said in an interview with Reuters he would intervene in the Justice Department’s case against Huawei Chief Financial Officer Meng Wanzhou if it would help smooth a trade deal with China. Ms. Wanzhou was granted bail by a Canadian judge Tuesday, after her arrest last week sent shock-waves through global stocks.

Uncertainty around trade will remain elevated, though, with technological and intellectual property disputes between Washington and Beijing unlikely to die down despite more conciliatory rhetoric, said Ann-Katrin Petersen, investment strategist at Allianz Global Investors.

The Chinese yuan was last up 0.1% against the U.S. dollar. The WSJ Dollar Index, which measures the buck against a basket of other currencies, was up 0.2%, its five-day gains eroded to 0.4%.

U.S. investors were also keeping an eye out for inflation data, due out later in the day. It comes a day after producer price data, another gauge of inflation, signaled a third straight monthly rise. The numbers will be scrutinized in the context of next week’s Federal Reserve meeting, at which investors broadly expect Chairman Jerome Powell to raise interest rates.

CME Group data gave a 78.,4% probability that Mr. Powell will announce an interest-rate increase.

Market participants will closely monitor the no-confidence vote on U.K. Prime Minister Theresa May’s leadership later Wednesday, although British assets’ initial reaction to the announcement was muted. The U.K.’s FTSE 100 index was last up 1.3%, broadly in line with gains elsewhere in Europe, while the FTSE 250 was up 1.2%.

More volatility may be ahead for U.K. assets, though, with some analysts seeing the confidence vote as a binary event for sterling.

Wednesday’s vote is the latest in a series of developments that have prompted investors from outside the U.K. to limit their exposure to Brexit uncertainty in recent months, said Emmanuel Cau, head of European equity strategy at Barclays.

“Global investors have left the U.K. equities and FX markets and not many people have the ability to trade on what’s going to happen,” said Mr. Cau. “In this particular situation, nobody’s been able to make forecasts so they’ve stopped trying.”

A victory for Mrs. May could prompt a rally as large as 2% for the pound, while defeat would shave off another 3%, Nomura said in a note.

Elsewhere in Europe, investors monitored the reaction to French President Emmanuel Macron’s decision to cut taxes in the wake of protests. The move may test the EU’s budgetary rules and embolden other members, such as Italy, to do the same.

In commodities, gold was up 0.2% at $1,249.50 a troy ounce.

Write to David Hodari at David.Hodari@dowjones.com

https://www.wsj.com/articles/trade-talk-progress-lifts-global-stocks-11544606026?mod=hp_lead_pos3

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Markets Conclude the U.S. Is Riskier Than China

December 12, 2018

Now the Treasury has to pay a premium over Chinese bonds to attract investors. They see four major red flags in U.S. debt.

Beijing is having its moment.   Photographer: Lintao Zhang/Getty Images

Here’s another reason Donald Trump is “not at all happy with the Fed” and will continue to be frustrated by the world’s No. 2 economy. He is the first president to suffer the new normal of China becoming more creditworthy than the U.S. That’s right: America now pays more to borrow money than China does.

Since 2015, when the Federal Reserve began raising interest rates, the gap between the countries’ Treasury bills has narrowed and then reversed, so that now the U.S. must offer higher yields than China when it sells one-year paper. That happened for the first time in November, when the spread between Chinese and American 10-year notes also collapsed, according to data compiled by Bloomberg.

Only 45 basis points separates these two nations in the bond market. China still pays a little more on benchmark securities. But that historic advantage, which coincided with the embrace of the multilateral alliances that made America great and that Trump disdains, may disappear altogether as investors lose confidence in the full faith and credit of the U.S.

They would be pricing in various economic realities: the slowing rate of U.S. economic growth, the U.S. government’s exploding debt, the diminished Treasury revenue caused by the 2017 tax cuts, and the Fed’s pursuit of a monetary policy keeping rates well above their average for the decade.

Investors see growth slowing, and it shows. Extreme fluctuations in the stock and bond markets the past month reflect investor anxiety over the transition from a brightening economy to the creeping sense that the best of this cycle has come and gone.

U.S. government debt is also moving in the wrong direction. Since 2016, when the federal budget deficit as a percentage of gross domestic product declined to a decade-low of 2.2 percent from more than 10 percent in 2009, the deficit nearly doubled to almost 4 percent. GDP increased to a record $19.39 trillion at the end of 2017 as the annual rate climbed to 2.2 percent from 1.8 percent in 2007. But U.S. growth will deteriorate to an annualized 1.9 percent by 2020, according to economists surveyed by Bloomberg, putting more pressure on the widening deficit.

Revenue isn’t stepping in to close that gap. The Trump tax cuts are estimated to increase these deficits by $1 trillion during the next 10 years.

The dichotomy between the U.S and China in the credit markets is exacerbated by the Fed’s determination to return the economy to normalcy: It cut the federal funds target rate to zero during the financial crisis and raised it eight times since then to 2.25 percent. During the same period, China’s benchmark one-year lending rate declined to 4.35 percent from 5.31 percent, according to data compiled by Bloomberg.

China isn’t about to tighten credit appreciably while the economy shows no signs of accelerating. The nation’s $12.24 trillion GDP is looking less robust after growth declined to 6.9 percent last year from 14.2 percent in 2007 and its deficit increased to 3.72 percent from a budget surplus a decade ago, according to data compiled by Bloomberg.

Even though China remains an emerging market, it shares some of the characteristics of Japan and the No. 3 economy’s historically tempestuous relationship with the U.S. over trade. China recognizes that its export-driven model is peaking as it attempts to transition to a developed economy. Like Japan, it has the savings to soak up its own debt and supplanted Japan four years ago as the largest holder of U.S. Treasury securities, now totaling $1.15 trillion, according to data compiled by Bloomberg.

Because China and Japan have perennially large trade surpluses with the U.S., they use these excess dollars to buy Treasuries. China also manages its exchange rate by buying and selling dollars and yuan. Treasuries remain the primary vehicle for exchange rate management in such a predetermined band. The dollar depreciated 4.4 percent since the end of 2016, according to the Bloomberg Dollar Spot Index that tracks the performance of a basket of 10 leading currencies to the American currency. That’s another way of making U.S. debt more expensive.

China and Japan, which account for more than $2 trillion of U.S. securities, have reduced their holdings in recent years. As the U.S. increasingly relies on the bond market to finance its budget deficits, reduced demand at a point when such deficits can only become more burdensome will force the U.S. to offer higher rates.

As much as he loathes the Fed for following its mandate to reach equilibrium, Trump must accept the additional indignity of being America’s first president to pay higher yields than China to finance the U.S.

— With assistance by Shin Pei

https://www.bloomberg.com/opinion/articles/2018-12-12/markets-conclude-u-s-treasuries-are-riskier-than-chinese-debt

Trump says China ‘back in the market’ for U.S. soybeans — U.S. Farmers look for new buyers

December 12, 2018

President Donald Trump said on Tuesday that China was buying a “tremendous amount” of U.S. soybeans and that trade talks with Beijing were already under way by telephone, with more meetings likely among U.S. and Chinese officials.

Trump told Reuters in an interview that the Chinese government was “back in the market” to buy soybeans after a Dec. 1 truce in the U.S.-China trade war.

But traders in Chicago said they have seen no evidence of a resumption of such purchases following China’s imposition of a 25 percent tariff on U.S. soybeans in July.

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“I just heard today that they’re buying tremendous amounts of soybeans. They are starting, just starting now,” Trump said in the interview.

Trump also said he believes China will soon cut tariffs on U.S. autos to 15 percent from the current 40 percent level.

“I think they’re looking to do it immediately, very quickly,” he said.

A Trump administration official earlier told Reuters that China’s plan to cut car tariffs was outlined in a phone call between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

SOYBEAN SALES AWAITED

U.S. government data has not shown any soybean sales to China since July, when Beijing imposed tariffs on U.S. supplies of the oilseed in retaliation for U.S. duties on Chinese goods.

Traders have been watching closely for signs of confirmation of a resumption of Chinese buying of U.S. soybeans, particularly after Trump tweeted on Tuesday morning that “very productive conversations” were going on with China. “Watch for some important announcements!” he added.

Chicago Board of Trade soybean futures edged higher on Tuesday on hopes that new deals would be signed soon, but there were no signs of increased activity in the cash markets, traders said.

U.S. Agriculture Department rules require exporters to promptly report sales of 100,000 tonnes or more of a commodity made in a single day.

China last year purchased about 60 percent of U.S. soybean exports in deals valued at more than $12 billion. With those exports gone, soybean prices had tumbled to their lowest in a decade, heaping pain on U.S. farmers, a key Trump constituency.

Trump and Chinese President Xi Jinping called a temporary truce in their trade war on Dec. 1. Trump agreed to postpone for 90 days a Jan. 1 increase in tariffs on Chinese goods while the two sides negotiated over increased Chinese purchases of American farm and energy commodities, an end to forced technology transfers and stronger protections for U.S. intellectual property in China.

Trump said on Tuesday that those negotiations were already taking place by telephone.

“We’ll probably have another meeting. And maybe a meeting of the top people on both sides,” Trump said. “If it’s necessary, I’ll have another meeting with President Xi, who I like a lot and get along with very well.”

Trump did not offer any timetable for further face-to-face meetings among U.S. and Chinese officials.

He said he would wait to increase tariffs on Chinese goods to 25 percent from 10 percent until it becomes apparent whether the United States and China can make a deal.

Reporting by Roberta Rampton and Jeff Mason; Additional reporting by Tom Polansek and Michael Hirtzer in Chicago; Writing by David Lawder; Editing by Sandra Maler and Leslie Adler

Reuters

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U.S. Soybean Farmers Work to Loosen China’s Grip

Agriculture officials are looking to Asia and Europe amid trade tensions, while producers consider new domestic uses.

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CHICAGO—U.S. soybean farmers worked for decades to make China their biggest foreign customer. Now they face a tougher challenge: weaning themselves off the market.

As trade tensions cut deeply into exports, U.S. soybean farmers, industry groups and government officials are seeking a stronger foothold in international markets beyond China, including Europe and Southeast Asia.

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Pakistan rejects ‘politically motivated’ listing as violator of religious freedoms by US

December 12, 2018
Foreign Office Spokesman Muhammad Faisal. ─ File photo
Foreign Office Spokesman Muhammad Faisal. ─ File photo

The Foreign Office (FO) today issued Islamabad’s reaction to the listing, saying: “Pakistan rejects the US State Department’s unilateral and politically motivated pronouncement … Besides the clear biases reflected from these designations, there are serious questions over the credentials and impartiality of the self-proclaimed jury involved in this unwarranted exercise.”

The FO explained measures that the government had taken to safeguard the rights of its citizens, including the use of legal and administrative mechanisms, adding that Islamabad submits compliance reports on its obligations with respect to fundamental freedoms as a party to seven of nine core human rights treaties.


How Pakistan safeguards its minorities, according to FO:

  • Equal treatment of minorities enshrined in Constitution
  • Special seats reserved for minorities in Parliament
  • National Commission on Human Rights addresses concerns over violations of minorities’ rights
  • Successive governments make protection of minorities a priority
  • Judiciary has made several landmark decisions to protect the properties and places of worship of minority communities

“Pakistan does not need counsel by any individual country how to protect the rights of its minorities,” the statement asserted.

The FO suggested that honest introspection on Washington’s part would have been a timely move in order to ascertain the causes behind the exponential rise in Islamophobia and anti-Semitism in the US.

“Sadly, the proponents of human rights worldwide close their eyes to the systematic persecution of minorities subjected to alien domination and foreign occupation such as in the occupied Jammu and Kashmir,” the statement added.

The FO described Pakistan as a “multi-religious and pluralistic society where people of diverse faiths and denominations live together.”

Last year, Pompeo had placed Pakistan on a special watch list — a step short of the designation — which is used to persuade the targeted nation into introducing reforms suggested in annual US reports for religious freedom.

The designation is based on these annual reports and opens the door for further actions, including US economic sanctions. The US has already imposed strict economic sanctions on Pakistan for its alleged refusal to follow the Trump administration’s Afghan strategy.

The designation also includes al-Nusra Front, al-Qaida in the Arabian Peninsula, Al Qaeda, Al Shabab, Boko Haram, the Houthis, Isis, Isis-Khorasan, and the Taliban as entities of particular concern.

Blacklisting Pakistan a ‘brazen political tactic’: Mazari

Minister for Human Rights Dr Shireen Mazari expressed surprise at the US administration’s decision to designate Pakistan among “countries of particular concern”, terming it a “brazen political tactic to pressure Pakistan to mitigate US failures in Afghanistan”.

The PTI minister, in her official statement on the development, acknowledged that “there is no doubt that Pakistan’s record on religions freedom is not ideal” but questioned if “the EU’s record” is any better “given the restrictions on churches, the banning of certain dress codes of Mulsims, refusal of entry of certain preachers — the list continues.”

Mazari reminded the US that “in our own neighbourhood we have India where Muslims are being targeted and where the BJP is supporting violence against Muslims ostensibly over beef.”

“The timing of the US move smacks of pure political blackmailing because it comes in the wake of Pakistan opening the Katarpur corridor to ease access for the Sikhs of India,” the statement reads.

The human rights minister said that she would “like to educate the Trump administration” that a “diverse denominations of Christian churches are present in Pakistan”, including Catholic, Methodist, Anglican, Lutheran, Baptist, Presbyterian and others.

Mazari made it clear that the US attempt to pressurise “Pakistan to do its bidding” will not work, directing their attention to Prime Minister Imran Khan’s recent remarks that he would net allow the country to be anyone’s “hired gun” anymore.

“It is time for the US to take responsibility for its failures in Afghanistan … and if it is serious about religious freedoms then it needs to examine the record of Modi’s India and and some of its EU allies,” she added.

Pompeo waives CPC sanctions for Pakistan

A US Embassy spokesperson today told DawnNewsTV that Pompeo, along with placing Pakistan on the list, had concurrently issued a waiver of ‘country of particular concern’ (CPC) sanctions against Pakistan “as required by ‘the important national interest of the United States’.”

The spokesperson explained that each country given the CPC designation “presents unique challenges, as well as a different potential for change”.

“The measures the United States carries out or waives with respect to a CPC are part of a broader strategy that aims to improve respect for religious freedom in that country,” the spokesperson added.

“In certain instances, the Secretary (Pompeo) has determined that a waiver of the Presidential Action was required in the important national interest of the United States.”

Pakistan rejects US blacklist for religious freedom violations

December 12, 2018

Pakistan on Wednesday rejected Washington’s decision to place it on a blacklist of countries that violate religious freedom, branding the move “politically motivated” and defending its treatment of minorities.

The US move to designate Pakistan “among countries of particular concern” comes at a difficult time for relations between the nations, with the Trump administration accusing Islamabad of failing to act against Islamist militants on its soil.

“Pakistan does not need counsel by any individual country (on) how to protect the rights of its minorities,” a statement from the foreign ministry said, adding that Islamabad “rejects” the designation.

US Secretary of State Mike Pompeo announced the move to blacklist Pakistan in a congressionally mandated annual report released Tuesday.

In October, a Pakistani court exonerated Asia Bibi, a Christian woman who had spent eight years on death row for blasphemy

In October, a Pakistani court exonerated Asia Bibi, a Christian woman who had spent eight years on death row for blasphemy In October, a Pakistani court exonerated Asia Bibi, a Christian woman who had spent eight years on death row for blasphemy AFP/File

The measure means the US government is obliged to exert pressure, including imposing sanctions if necessary, to end freedom violations.

However, a spokesman with the US embassy in Islamabad clarified on Wednesday that Pompeo had issued a waiver over potential sanctions against Pakistan as required by “the important national interest of the United States”.

Blasphemy is an inflammatory charge in Pakistan, and high-profile vigilante murders and mob lynchings have been carried out in the past.

In October, a Pakistani court exonerated Asia Bibi, a Christian woman who had spent eight years on death row for blasphemy.

She remains in protective custody in an unknown location after violent protests against her acquittal, and a hardline cleric has been charged with terrorism and sedition over the demonstrations.

Bibi is currently seeking asylum abroad. Her family claims her life will be in danger if she remains in Pakistan.

The foreign ministry statement did not mention Bibi, or the issue of blasphemy.

“Pakistan is a multi-religious and pluralistic society where people of diverse faiths and denominations live together,” it said.

It also warned that honesty would have required Washington to examine the “exponential rise in Islamophobia and anti-Semitism in the US”.

– ‘Particular concern’ –

Pakistan says around four percent of its total population comprises citizens belonging to Christian, Hindu, Buddhists and Sikh faiths.

Human rights advocates have long voiced alarm about the treatment of religious minorities in Pakistan including Shiites and the Ahmadis, whom Islamabad forbids from identifying as Muslim.

The State Department had earlier held off on condemning Pakistan, a vital gateway for US forces in Afghanistan.

But it last year placed Pakistan on a special watch list — a step short of the designation — and Washington has separately curbed military assistance.

Relations between Washington and Islamabad have soured in recent years, with US officials repeatedly accusing Islamabad of ignoring or even collaborating with groups like the Afghan Taliban, which attack Afghanistan from alleged safe havens along the border between the two countries.

The troubled relationship hit another snag last month after Trump declared he had cancelled assistance worth hundreds of millions of dollars because Islamabad does not do “a damn thing” for the US.

Nine countries remained for another year on the US list of “countries of particular concern” — China, Eritrea, Iran, Myanmar, North Korea, Saudi Arabia, Sudan, Tajikistan and Turkmenistan.

The United States removed one country from the blacklist — Uzbekistan — but kept it on the watch list.

AFP

Related:

China’s “Quit the [Communist] Party” movement may be more than 321 million people

December 12, 2018

“When you are an illegitimate regime, you have a problem; and that is fear of your own people.”

While the less-than-peaceful rise of communist China and its dream of reshaping the world order have alarmed the world in recent years, a grassroots movement has taken shape that could peacefully disintegrate the Chinese Communist Party, say human-rights experts. Yet this movement has gone unnoticed by many.

By Jennifer Zeng
Epoch Times
December 11, 2018

Now the number of Chinese people who have published declarations with the Tuidang (meaning “Quit the Party”) movement—and thus have renounced all association with the Chinese Communist Party (CCP) and its affiliated organizations—has topped 321 million. Last week, the Global Service Center for Quitting the Chinese Communist Party brought together a panel of experts and human rights activists to discuss what the Tuidang movement means to China and the world.

Averting World War III

Trevor Loudon, a New Zealand expert on socialism and contributor to The Epoch Times, spoke to the Dec. 4 forum on Capitol Hill via telephone, saying that “out of all the beautiful movements of the world right now,” the Tuidang movement “is the most important, because the Communist Party in China is the No. 1 threat to global peace.”

“If people were saying ‘Get out of the Nazi party,’ ‘Don’t join the Nazi party,’ ‘Abandon the Nazi party,’ if we had such a movement in those days, we possibly could have avoided WWII,” Loudon said.

“This is the situation we are in right now. The CCP today is the Nazi party of the 1930s.

“The only movement in the world that is trying to stop the CCP is you people. … If you can keep on making more and more people desert the party, then we can peacefully avert World War III. We can avert what I think is one of the greatest looming disasters that we face, and that is a global war involving China and its allies against the West.”

One of the Greatest Human-Rights Stories

Jeffrey Imm, founder and director of Responsible for Equality and Liberty, noticed that the number of people who have quit the CCP and its affiliated organizations is almost equal to the population of the United States.

Jeffrey Imm, founder and director at R.E.A.L. (Responsible for Equality and Liberty), speaks at the Deteriorating Human Rights and Tuidang Movement in China forum on Capitol Hill in Washington on Dec. 4, 2018. (Samira Bouaou/The Epoch Times)

“Consider any other human-rights movement the size of the U.S. who would leave a totalitarian ideology,” Imm said. “It is one of the greatest human-rights stories in history.

“The world must not surrender to the CCP’s regime. The Communist regime doesn’t intend to limit its control to only China, only to the people it persecutes in the Falun Gong, the Tibetan Buddhists, the Uyghur Muslims, the Christians, minorities, and other Chinese it persecutes. The Chinese Communist Party doesn’t plan to stop just there. It plans to target the world.”

‘Spiritual Abandonment’ of the Chinese People

“I always thought it was a mistake for us to believe that we could turn communist China against the Soviet communists, and thereby, in some kind of 19th-century balance-of-power policy,” said John Lenczowski, founder and president of the Institute of World Politics, who has sharply criticized U.S. policy on China in the past.

John Lenczowski, president of the Institute of World Politics, speaks at the Deteriorating Human Rights and Tuidang Movement in China forum on Capitol Hill in Washington on Dec. 4, 2018. (Samira Bouaou/The Epoch Times)

“[That] ended up, in my view, creating a moral confusion, saying that there were bad communists in the Soviet Union and good communists in China, which I think has turned out to be a conceptual problem that has really produced a strategic disaster for the United States and the world and a huge spiritual abandonment of so many people in China.

“Now, we are seeing a rise of tensions between Communist China and the U.S., and between Communist China and many of its neighbors in East Asia. We are seeing a rising colonialist foreign policy by China. The strategic direction, the vast military build-up, the huge espionage operation, the intellectual property theft is all implicitly related to the fundamental nature of that regime.”

Lenczowski said the CCP’s expansionist and imperialist policy is directly related to the illegitimacy of the regime. “When you are an illegitimate regime, you have a problem; and that is fear of your own people,” he said.

“It’s a massive internal security problem. So everything, from the system of informants, the laogai, the various different types of punishments, persecutions, the organ harvesting and so on, everything that we’ve been hearing about today, all of this is part of the internal security system to protect … its power and the wealth of the gang that is in charge.”

Deter the CCP

Dr. Charles Lee, director of public awareness of the Global Service Center for Quitting the Chinese Communist Party, released a 79-page “Comprehensive Report on the Tuidang Movement” at the forum. He urged the public to see through the “inherited genes” of the CCP, which he says include evilness, deceit, and incitement, and not to harbor any illusion that the Party can be changed for the better.

Charles Lee, director of public awareness at the Tuidang Center, speaks at the Deteriorating Human Rights and Tuidang Movement in China forum on Capitol Hill in Washington on Dec. 4, 2018. (Samira Bouaou/The Epoch Times)

The report on the Tuidang movement says: “The U.S. lost many chances to defeat the CCP in the past and instead, helped the CCP out of several big crises and even with its economic ‘miracle.’ While the U.S. has been suffering from the economic invasion and other invisible wars by the CCP, it is also losing ground from within, due to the communist infiltrations. … The time has come to turn it around, and the Tuidang movement can and will help the U.S. to deter the CCP and to decommunize the USA.

“This is the biggest grassroots movement that deserves the most support from the U.S.”

Rep. Dana Rohrabacher (R-Calif.), speaks at the Deteriorating Human Rights and Tuidang Movement in China forum after receiving an appreciation award from the Global Service Center for Quitting the Chinese Communist Party, on Capitol Hill in Washington on Dec. 4, 2018. (Samira Bouaou/The Epoch Times)

Letters of support for the Tuidang movement by Rep. Chris Smith (R-N.J.) and Rep. Steve King (R-Iowa) were read at the forum. In addition, Tunne Kelam, member of the European Parliament, and the International Society for Human Rights (the largest human-rights organization in Germany) also sent supporting letters and called for the U.S. Congress to pass House Resolution 932, introduced by Rep. Dana Rohrabacher (R-Calif.) in June, to show solidarity with the Tuidang movement. Rohrabacher, who is leaving Congress after 30 years in the House, was honored with an award presented by the Global Service Center for Quitting the Chinese Communist Party.

https://www.theepochtimes.com/a-movement-equal-in-numbers-to-the-us-population-is-changing-china_2736214.html

Japan, US silent over ending ballistic missile patrols

December 12, 2018

Both have reason to keep mum as the move would shift the defense burden and alarm Russia and China

 DECEMBER 12, 2018 6:36 PM (UTC+8)
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The land-based Terminal High Altitude Area Defense, or THAAD, interceptor is one of the alternatives being discussed. Photo: AFP/Missile Defense Agency

The land-based Terminal High Altitude Area Defense, or THAAD, interceptor is one of the alternatives being discussed. Photo: AFP/Missile Defense Agency

President Trump still has an opportunity to challenge the military spending status quo

December 12, 2018
On Dec. 3, President Trump tweeted a statement that got defense hawks in Washington incredibly nervous.

Donald J. Trump

@realDonaldTrump

I am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable Arms Race. The U.S. spent 716 Billion Dollars this year. Crazy!

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Apparently, Trump has already changed his mind.

After meeting last week with Defense Secretary Jim Mattis and the chairmen of the armed services committees, the White House has reversed course. According to Politico, Trump will now propose to Congress a $750 billion military budget for fiscal year 2020, a $50 billion hike from his previous position.

By Daniel DePetris

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Image result for donald trump, photos

Trump is on the verge of making a dangerous mistake, one that would both worsen America’s budding fiscal crisis and perpetuate the strategic drift national security policy has taken over previous years.

No honest person can look at the U.S. military budget today and credibly claim the country is vulnerable, left defenseless, or at risk of being usurped by a great-power competitor. In 2017, the U.S. share of global military expenditures was 35 percent, a figure more than 2.5 times larger than the second-highest country, China. U.S. defense spending has only risen since that time to the highest it has been in history, a number defense hawks continue to believe is too low. For legislators such as Senate Armed Services Chairman Jim Inhofe, R-Okla., and House Armed Services Chairman Mac Thornberry, R-Texas, money grows on trees alongside the Capitol Rotunda. All Congress needs to do is go outside and pluck the dollars from the leaves.

The more important point to remember, however, is that a higher defense budget does not automatically equal greater security. As has been the case throughout history, a nation’s economic prosperity is the foundation of national strength, prestige, and influence and serves as a harbinger of what a nation can or cannot do on the world stage. To conflate military spending with more security, as Washington too often does, is to work off an inaccurate paradigm.

Too often, the solution to a problem in the Beltway is to appropriate more taxpayer money. The Pentagon is no exception. Too many lawmakers have persuaded themselves that the issues surrounding military readiness, equipment maintenance, and training are the products of insufficient resources when the real problem is overcommitment, an inability to establish appropriate national security priorities based on our interests.

This strategic overstretch has persisted since the end of the Cold War and has meant a continuous loop of highly stressful operations around the world largely disconnected from defending U.S. security, prosperity, or our way of life here at home. With soldiers, sailors, airmen, and marines ordered to do everything from stability operations in the deserts of Eastern Syria and bombing missions in the poppy fields of Afghanistan to backstopping Europe’s territorial defense and training African troops in the Sahel, politicians and foreign policy officials should not be shocked when these operations degrade the Navy’s sea vessels and the Air Force’s aircraft.

Before any discussion of Pentagon budget increases should come a sober analysis of what matters for our security and prosperity and what priorities are best left for regional countries to address. Not every problem around the world holds the same significance. Rather than attempting to do everything everywhere and failing to achieve strategic gains, budgets should align with a realistic, pragmatic, but wise strategy that distinguishes the truly important with the tertiary distractions.

The solution to Washington’s many foreign policy failures from the last decades is not spending more money and pretending that dollars will paper over our foreign policy failures. The solution is setting national security priorities, distinguishing which military programs and security policies are essential to America’s national defense and which are actually drains on the military, and making difficult decisions to ensure America’s economic prosperity is maintained instead of saddled with unsustainable debt and overseas commitments that hollow out the force and further deteriorate the military’s readiness problem.

Retired Admiral Mike Mullen, the former chairman of the Joint Chiefs of Staff, put it succinctly in 2016: “[I]f we don’t get our fiscal house in order, it’s going to dramatically affect our security of our country.”

Fortunately, security is readily available. The U.S. is in the privileged position of having two benign and friendly neighbors, a dominant presence in its own hemisphere, a durable system of alliances and partnerships around the world, a highly innovative population, and enormous influence in the international financial system. Washington simply doesn’t need to meddle in the internal affairs of other nations or engage in decades-long nation-building projects to promote its own security. Doing so only outsources our military power to countries that should be taking more responsibility for their own defense and overburdens the military.

The world has changed drastically and continues to shift. Foreign policy leaders need to shift with it and rethink our strategy, especially because a debt crisis would weaken the country, creating a catastrophe for Americans and the world.

President Trump still has an opportunity to challenge this status quo. But he will not be able to do it if he defers to his more hawkish advisers, all of whom continue to advocate for policies — a continuation of the war in Afghanistan, U.S. involvement in Yemen’s civil war, and perpetual containment of Russia — that delay the difficult but strategically vital conversation the country needs.

https://www.washingtonexaminer.com/opinion/trump-can-still-flip-the-fiscally-irresponsible-status-quo

Huawei: Why the Chinese telecoms giant is in the cross hairs

December 12, 2018

Sabrina Meng Wanzhou, the 46-year old CFO of Chinese telecoms giant Huawei and daughter of its founder Ren Zhengfei, has been granted bail by a Canadian court, setting up a protracted legal fight over extradition to the United States.

Logo von Huawei (Reuters/H. Hanschke)

Meng was arrested in Vancouver earlier this month at the request of US authorities, who have accused her of fraudulently representing Huawei to get around US sanctions on Iran.

Her case has now become embroiled in the wider trade war between China and the US after US President Donald Trump suggested he may intervene if it would help secure a broad deal with Beijing. The arrest came the same day Trump and Chinese President Xi Jinping declared a 90-day truce in their trade war during summit talks in Buenos Aires.

By Meng Jing
South China Morning Post

Although Meng’s arrest prompted outrage in China, Beijing is walking a fine line between defending one of the crown jewels of the country’s tech industry and preventing a nationalist backlash that could derail a potential trade deal with Washington.

But what is Huawei and why is it so important to the future of relations between China and the US? Here is what you need to know.

 What is Huawei?

Established in 1987, Huawei is a Chinese tech champion that sells smartphones and telecoms equipment across the world. Headquartered in China’s southern coastal city of Shenzhen, Huawei is China’s top smartphone maker, and overtook Apple as the second-largest smartphone vendor globally in the second quarter this year – a feat it also maintained in the third quarter, according to IDC data.

Perhaps more importantly, Huawei is now the world’s largest telecom equipment supplier and has a key role to play in China’s ambition to lead the way in next-generation mobile telecoms infrastructure – known as 5G. Competing with the likes of Ericsson and Nokia Oyi, Huawei was the only major equipment-maker to achieve an increase in market share in 2017.

Who created Huawei?

Huawei’s founder Ren Zhengfei is a noted figure in China’s business world and moves in the highest government circles. The 74-year-old self-made billionaire is the son of schoolteachers and grew up in a mountainous town in China’s poorest province, Guizhou. A survivor of China’s great famine between 1958 and 1961, Ren graduated from the Chongqing Institute of Civil Engineering and Architecture.

He worked in the civil engineering industry until 1974 when he joined the People’s Liberation Army as an engineer – a connection that still provokes questions in the West about Huawei’s ties to the Chinese army and government. Ren was an elected member of the 12th National Congress of the Communist Party of China.

Today Huawei does business in more than 170 countries and regions globally, has around 180,000 employees and a sales volume of over US$39 billion. The low profile Ren is ranked 83rd in Forbes’ China Rich list with a net worth of US$3.2 billion.

Who owns Huawei?

Unlike its Chinese rival ZTE Corp, which is a state-backed enterprise, Huawei is a private company collectively owned by its employees. Not being familiar with Western stock option systems, Huawei’s founder Ren Zhengfei says he designed an employee stock ownership plan at the inception of the company.

At a time when China was still struggling with the aftermath of the Cultural Revolution, being a private owner and hence open to being perceived as a capitalist – Ren felt that not owning the company was the least dangerous thing for a founder to do, according to a Harvard Business Review story which studied Huawei’s profit sharing model. Ren himself holds a 1.4 per cent stake in Huawei, according to the company’s 2017 annual report.

How did Huawei become successful?

The vast domestic market, the timing of overseas expansion and heavy investment in research and development have all been important positive factors for Huawei. But many analysts attribute the secret of its success to a unique company culture, sometimes dubbed “wolf-culture” for being fearless and aggressive. Workers have also been known to pass out on office mattresses from exhaustion. It has strong discipline and nobody – not even Ren – has their own driver or flies first class on the company dime.

Why and how was Meng arrested?

Meng was detained in Vancouver on December 1 at the request of US authorities. Meng was accused by the US of helping Huawei cover up violations of US sanctions on Iran, according to Canadian prosecutors. She is said to have told financial institutions that affiliate Skycom was a separate company in order to conduct business in the country, when in fact it was a Huawei subsidiary.

“Meng and other Huawei employees repeatedly lied about the nature of the relationship between Huawei and Skycom and the fact that Skycom operated as Huawei’s Iran-based affiliate in order to continue to obtain banking services,” the US authorities said in the arrest request delivered to Canadian authorities.

Meng has denied any wrongdoing and said in her personal affidavit for bail that she will contest the allegations if surrendered to the US.

Why is Huawei banned in the US and in some other markets?

The US government has for years seen Huawei as a national security threat due to fears about its association with China’s government, the Chinese Communist Party and its military. This has been of particular concern when it comes to networking gear and the possibility for breaches of data privacy.

In February, US intelligence officials warned Americans not to buy Huawei devices because they could be used to spy on users. The Chinese smartphone maker was supposed to enter the US via mobile network AT&T, but the deal fell through at the last minute.

The US in August enacted the National Defence Authorisation Act to ban the government’s use of Huawei and ZTE technology products and services on concerns over their connections with Chinese intelligence. US security experts have warned of a range of potential security risks, including but not limited to the capacity to control telecommunications infrastructure and even conduct undetected espionage.

Japan, a US ally, this week excluded Huawei and ZTE from public procurement, adding to the list of countries that have pushed back against the Chinese technology company on security issues. Australia and New Zealand have also effectively blocked Huawei from their roll-out of 5G network infrastructure, with the UK and Canada also weighing up the possible security risks posed by Huawei.

What has Huawei said in its defence?

Huawei has consistently denied any connections with the military, saying that it is a private company that is part-owned by its employees.

When Australia took the decision to block Huawei from its 5G infrastructure in August on national security grounds, Huawei said the decision was not aligned with the long-term interests of the Australian people, and denied Australian businesses and consumers the right to choose from the best communications technology available.

It has said all countries need to recognise the importance of setting better common standards, adopting ­industry best practice and implementing risk-mitigation procedures to ensure that there is an objective basis for choosing technology vendors.

https://www.scmp.com/tech/big-tech/article/2177648/huawei-why-chinese-telecoms-giant-and-its-cfo-are-caught-middle-china

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3 in 5 Filipinos believe US will defend Philippines in a crisis

December 12, 2018

Three in five Filipinos believe that the United States’ defense commitment to the Philippines is strong, according to a Social Weather Stations survey released Wednesday.

The survey found that 61 percent (31 percent strongly believe, 30 percent somewhat believe) believe the Philippines’ long-time ally will defend the country, 9 percent said they do not believe to such commitment while 30 percent were undecided.

The poll also showed that 47 percent of those who believe in Washington’s commitment to Manila have been previously aware of the 1951 Mutual Defense Treaty (MDT) between the two countries. The remaining 53 percent only learned about the agreement when the survey was conducted.

Among those already aware of the MDT, 80 percent said they believe the US will defend the Philippines if there was an invasion.

Awareness of Mutual Defense Treaty

Metro Manila recorded the highest number of those previously aware of the MDT with 58 percent, followed by balance Luzon with 53 percent, Visayas at 41 percent and Mindanao at 31 percent.

In urban areas, 55 percent were aware of the treaty while 38 percent were aware in rural areas.

Among socioeconomic classes, 51 percent of class ABC were aware of the MDT while class D and class E had 49 percent and 34 percent, respectively.

Awareness of the MDT was highest at 67 percent among elementary graduates above while 53 percent of non-elementary graduates were aware.

Those who were aware of the West Philippine Sea dispute also registered a higher awareness of the MDT with 54 percent as opposed to those who only learned of the dispute during the interview at 14 percent.

“The survey also found that previous awareness about the PH-US Mutual Defense Treaty was highest among those with extensive knowledge about the PH-China dispute in the West Philippine Sea (73 percent),” SWS said.

About 67 percent of those previously aware of the maritime dispute also believe that the US will defend the Philippines in case of any invasion.

Belief in Washington’s defense commitment was higher at 82 percent among those who had extensive knowledge of the West Philippine Sea issue. China has been claiming the South China Sea, part of which is the West Philippine Sea, as part of its territorial waters.

The survey was conducted from June 27 to 30 using face-to-face interviews among 1,200 adults nationwide. The poll has sampling error margins of ±3 percent for national percentages and ±6 percent each for Metro Manila, Balance Luzon, Visayas and Mindanao.

“The Social Weather Survey items on people’s opinion about the PH-US Mutual Defense Treaty were non-commissioned. They were included on SWS’s own initiative and released as a public service,” the survey firm said.

Read more at https://www.philstar.com/headlines/2018/12/12/1876461/3-5-filipinos-believe-us-will-defend-philippines-sws#MtiQHmiw3SyxpYg1.99