How China’s downturn threatens one of the world’s greatest success stories

poverty

The Washington Post reports: Over the last 25 years, a period of remarkable economic growth spanning from China to South America spurred one of the world’s greatest — and oft-overlooked — modern achievements: a dramatic reduction in the number of extreme poor. More than one billion were pulled out of the most destitute conditions, and the pace of improvement inspired such optimism that two years ago the United Nations vowed to eliminate extreme poverty entirely by 2030.

But now, China’s downturn — and the related prospect of weaker growth across the world — is threatening to stall that progress, signaling a new era of dimmer prospects for the poorest of the poor. That is just one of the emerging challenges from a slowdown that has crippled some nations’ currencies and wiped hundreds of billions from stock markets globally.

Economists caution that the rise or fall of poverty in the coming years depends on a number of hard-to-predict factors, including technology, disease, corruption, war, and climate change. But they also say with growing confidence that the job of fighting poverty is getting harder, particularly in Africa, a continent that is home to half the world’s extreme poor and depends disproportionately on Chinese demand for raw materials. [Continue reading…]

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Pursuing critics, China reaches across borders. And nobody is stopping it.

The Washington Post reports: China’s campaign against dissent is going global.

Amid extraordinary moves to rein in criticism at home, Chinese security personnel are reaching confidently across borders, targeting Chinese and foreign citizens who dare to challenge the Communist Party line, in what one Western diplomat has called the “worst crackdown since Tiananmen Square.”

A string of incidents, including abductions from Thailand and Hong Kong, forced repatriations and the televised “confessions” of two Swedish citizens, has crossed a new red line, according to diplomats in Beijing. Yet many foreign governments seem unwilling or unable to intervene, their public response limited to mild protests.

The European Union is divided and appears uncertain about what to do. Hong Kong is in an uproar, with free speech under attack, activists looking over their shoulders and many people saying they feel betrayed by a lack of support from Britain. [Continue reading…]

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China to increase wind, solar power capacity by 21% in 2016

Bloomberg reported on December 30: China, the world’s biggest clean energy investor, plans to increase wind and solar power capacity by more than 21 percent next year as it works to reduce greenhouse gas emissions by cutting its reliance on coal.

The nation is targeting at least 20 gigawatts of new wind power installations and 15 gigawatts of additional photovoltaic capacity next year, the National Energy Administration said in a statement on Tuesday.

China has pledged to peak carbon emissions around 2030, by which time it aims to derive 20 percent of the energy it uses from clean sources. China will also stop approving new coal mines in the next three years, the Xinhua News Agency reported Tuesday, citing National Energy Administration head Nur Bekri.

The world’s biggest producer of carbon emissions is expected at the end of this year to have a total of 120 gigawatts of wind power, 43 gigawatts of solar, and 320 gigawatts of hydro power, the NEA said. To accommodate the clean energy additions, China will promote the construction of electricity networks, the agency said.[Continue reading…]

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The invasion of Antarctica

antarctica

Simon Romero writes: On a glacier-filled island with fjords and elephant seals, Russia has built Antarctica’s first Orthodox church on a hill overlooking its research base, transporting the logs all the way from Siberia.

Less than an hour away by snowmobile, Chinese laborers have updated the Great Wall Station, a linchpin in China’s plan to operate five bases on Antarctica, complete with an indoor badminton court, domes to protect satellite stations and sleeping quarters for 150 people.

Not to be outdone, India’s futuristic new Bharathi base, built on stilts using 134 interlocking shipping containers, resembles a spaceship. Turkey and Iran have announced plans to build bases, too.

More than a century has passed since explorers raced to plant their flags at the bottom of the world, and for decades to come this continent is supposed to be protected as a scientific preserve, shielded from intrusions like military activities and mining.

But an array of countries are rushing to assert greater influence here, with an eye not just toward the day those protective treaties expire, but also for the strategic and commercial opportunities that exist right now.

“The newer players are stepping into what they view as a treasure house of resources,” said Anne-Marie Brady, a scholar at New Zealand’s University of Canterbury who specializes in Antarctic politics. [Continue reading…]

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War by other means in the shadow of globalization

destruction

Peter Pomerantsev writes: perhaps this year’s most spectacular propagandists are those of ISIS, with its aggressive use of social media to recruit new combatants and slick, gruesome execution videos to provoke and frighten opponents. Though ISIS has killed roughly seven times fewer people in Syria than the Assad regime, the group has used social media (some 46,000 accounts on Twitter alone) to make itself look even more menacing than it is. Every social-media user who retweets or posts ISIS material, whether in support or censure, ultimately helps strengthen ISIS’s narrative of history-making stature and millenarian significance. The Islamic State’s terrorist attacks in Paris left 130 people dead in a spate of horrific violence, but the operation was executed in a manner that made it seem as if the organization had killed orders of magnitude more.

There is, of course, nothing new about using information as a vital instrument of war. But in the past information tended to be a handmaiden to action. Now the informational element appears to be as important as, if not more important than, the physical dimension. Take Russia’s air strikes in Syria. The Kremlin’s official rationale for the military campaign was to combat the Islamic State. But very few of its operations have actually been aimed at ISIS, with many more directed at U.S.-supported rebels fighting Syrian President, and Russian client, Bashar al-Assad. The Kremlin clearly has more in mind than defeating ISIS militarily. Russia has entered the Syrian stage in such a way as to surprise the West and ensure it will play a starring role in any narrative going forward — whether that narrative involves keeping Assad in power or a “global fight against terror.” The Russian military might be small compared to America’s, and the Russian economy may be a mess, but Vladimir Putin has cleverly undermined America’s reputation as a “global policeman” and boosted his stature as the man who is restoring Russia as a Great Global Power.

This is not “soft power” in the classic sense of projecting a positive national image through culture and public relations, but rather a case of using strategic narrative to keep your opponent intimidated, confused, and dismayed — of exploiting ubiquitous information to appear bigger, scarier, and more indispensable than reality would suggest. Russia’s bombing raids in Syria also have the positive side effects (for Moscow) of distracting from the conflict in Ukraine and helping maintain a steady torrent of refugees to Europe, which in turn strengthens right-wing parties in countries such as France and Hungary that peddle anti-refugee fears, are supported by the Kremlin, and advocate dropping Western sanctions against Russia. What matters in the information age is not so much “military escalation dominance” — the Cold War doctrine emphasizing the ability to introduce more arms than the enemy into a conflict. Rather, it’s “narrative escalation dominance” — being able to introduce more startling storylines than your opponent. [Continue reading…]

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Brave New China: The most disturbing tech story of 2015

shadow8

The New Republic reports: China wants to get in on the credit racket. At the moment, most Chinese citizens don’t have credit scores, unlike in the United States, where they have been part of the consumer landscape for decades, led by the big three credit bureaus, Equifax, Experian, and TransUnion. The Chinese government aims to fix that and fast, establishing a nationwide credit scoring system, known as the Social Credit System (SCS), by 2020.

As with China’s vast construction projects, this scoring system is fiercely ambitious, authoritarian, technologically sophisticated, and likely to disrupt the lives of millions of people. And although it is a deeply capitalist undertaking, the SCS is being positioned as a socialist effort. A 2014 planning document states that “a social credit system is an important component part of the Socialist market economy system” and that “its inherent requirements are establishing the idea of an sincerity culture, and carrying forward sincerity and traditional virtues.” That vague phrasing actually speaks to the scope of the project. With “social credit,” the Chinese authorities plan to do more than gauge people’s finances; they want to rate the trustworthiness of citizens in all facets of life, from business deals to social behavior. Eventually, all Chinese citizens will be required to be part of the SCS.

As of now, the Chinese government is allowing select companies to roll out test projects designed to rate individuals’ trustworthiness. These include efforts by Baidu and Alibaba, respectively the country’s largest search engine and e-commerce site. The involvement of these tech companies is key. Credit scoring in the U.S. has long graduated beyond simple matters of credit card debt or bankruptcy history. The credit bureaus now double as some of the country’s biggest data brokers, and they consider a range of consumer activity when creating their proprietary scores. The scores themselves have grown in value, now being used for anything from rating credit worthiness to evaluating one’s fitness for a job (some states, including New York, have banned the use of credit scores in job screenings). As a consequence many forms of consumer scoring now lie outside existing consumer protections, as a World Privacy Forum report found last year.

China’s Social Credit System promises to build on these techniques, using the vast behavioral records of its people to rate them — as consumers, as citizens, as human beings. According to that same planning document, the SCS will be used “to encourage keeping trust and punish breaking trust,” which includes violations of the “social order.” In other words, everything Chinese citizens do, especially online, may be incorporated into their scores. Doctors, teachers, construction firms, scientists, and tourism employees will be scored. So will sports figures, NGOs, companies, members of the judicial system, and government administrators.

Approved behaviors and purchases will raise a score; other activities may lower it, perhaps drawing the unwanted attention of authorities in the process. Scores in turn will be used for employment, disbursing credit, and determining eligibility for social benefits. While the Chinese government has frequently touted its desire to create “a culture of sincerity” and “trust,” the plan uses surveillance, data collection, online monitoring, and behavioral tracking to render practically all of its citizens’ affairs in market terms. Rather than being equal, China’s citizens will be in fierce competition with one another, jostling for rankings better than their peers. [Continue reading…]

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China burns much more coal than reported, complicating climate talks

The New York Times reports: China, the world’s leading emitter of greenhouse gases from coal, has been burning up to 17 percent more coal a year than the government previously disclosed, according to newly released data. The finding could complicate the already difficult efforts to limit global warming.

Even for a country of China’s size, the scale of the correction is immense. The sharp upward revision in official figures means that China has released much more carbon dioxide — almost a billion more tons a year according to initial calculations — than previously estimated.

The increase alone is greater than the whole German economy emits annually from fossil fuels.

Officials from around the world will have to come to grips with the new figures when they gather in Paris this month to negotiate an international framework for curtailing greenhouse-gas pollution. The data also pose a challenge for scientists who are trying to reduce China’s smog, which often bathes whole regions in acrid, unhealthy haze. [Continue reading…]

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Alfred McCoy: Maintaining American supremacy in the twenty-first century

It could be a joke of the “a penguin, a rabbi, and a priest walked into a bar” variety, but this one would start, “five Chinese naval vessels operating in the Bering Sea sailed into U.S. territorial waters, coming within 12 miles of the U.S. coast…”  And the punch line would be yours to come up with.  Certainly, that “event,” which did indeed occur recently (without notification to U.S. authorities), caused a small news flap here, in part because President Obama was then visiting Alaska.  Not since German U-boats prowled off the East Coast of the U.S. during World War II had such a thing happened and though American officials reported that the Chinese had done nothing illegal or that failed to comply with international law, it still had a certain shock effect in a country that’s used to its own navy traveling the world’s waters at will.

No one would think to report similarly on U.S. ships transiting global waters of every sort (often with the urge to impress or issue a warning).  It’s the norm of our world that the U.S. can travel the waters of its choice, including Chinese territorial ones, without comment or prior notification to anybody, and that it can build strings of bases and garrisons to “contain” China, and determine which waters off China’s coasts are “Chinese” and which are, in effect, American.  This is commonplace and so hardly news here.

Any Chinese attempt to challenge this, however symbolically — and those five ships were clearly meant to tweak the maritime nose of the globe’s “sole superpower” — is news indeed.  That includes, of course, the giant, grim, militaristic parade the Chinese leadership recently organized in the streets of Beijing, which U.S. news reports left you feeling had taken place, like the brief voyage of those five ships, somewhere in close proximity to U.S. territory.  There’s no question that, despite recent economic setbacks, the Chinese still consider themselves the rising power on planet Earth, and are increasingly eager to draw some aggressive boundaries in the Pacific, while challenging a country that is “pivoting” directly into its neighborhood in a very public way.  Get used to all this.  It’s the beginning of what could prove to be a decades-long militarized contest between two bulked-up powers, each eager enough to be off the coast of the other one (though the only coast China is likely to be off in a serious way for a long time to come is the cyber-coast of America).

Fortunately, TomDispatch has Alfred McCoy, a veteran empire watcher, keeping an eye on all of this.  Recently, he wrote a much-noted piece, “The Geopolitics of American Global Decline,” on Chinese attempts to reorganize the “world island” of Eurasia and break the encircling bounds of American power.  Today, in what is in essence part two, he turns to the other side of the equation, American power (never to be underestimated), and suggests that, in the imperial sweepstakes that have been the essence of global politics since at least the sixteenth century, the most underestimated figure of our moment may be President Barack Obama.  The question McCoy raises: Might Obama’s global policies, much derided here, actually extend the American “century” deep into the twenty-first? Tom Engelhardt

Grandmaster of the Great Game
Obama’s geopolitical strategy for containing China
By Alfred W. McCoy

In ways that have eluded Washington pundits and policymakers, President Barack Obama is deploying a subtle geopolitical strategy that, if successful, might give Washington a fighting chance to extend its global hegemony deep into the twenty-first century. After six years of silent, sometimes secret preparations, the Obama White House has recently unveiled some bold diplomatic initiatives whose sum is nothing less than a tri-continental strategy to check Beijing’s rise. As these moves unfold, Obama is revealing himself as one of those rare grandmasters who appear every generation or two with an ability to go beyond mere foreign policy and play that ruthless global game called geopolitics.

Since he took office in 2009, Obama has faced an unremitting chorus of criticism, left and right, domestic and foreign, dismissing him as hapless, even hopeless. “He’s a poor ignoramus; he should read and study a little to understand reality,” said Venezuela’s leftist president Hugo Chavez, just months after Obama’s inauguration. “I think he has projected a position of weakness and… a lack of leadership,” claimed Republican Senator John McCain in 2012. “After six years,” opined a commentator from the conservative Heritage Foundation last April, “he still displays a troubling misunderstanding of power and the leadership role the United States plays in the international system.” Even former Democratic President Jimmy Carter recently dismissed Obama’s foreign policy achievements as “minimal.”  Voicing the views of many Americans, Donald Trump derided his global vision this way: “We have a president who doesn’t have a clue.”

But let’s give credit where it’s due.  Without proclaiming a presumptuously labeled policy such as “triangulation,” “the Nixon Doctrine,” or even a “freedom agenda,” Obama has moved step-by-step to repair the damage caused by a plethora of Washington foreign policy debacles, old and new, and then maneuvered deftly to rebuild America’s fading global influence.

[Read more…]

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Oil shock: Fears of unrest in petro economies as oil prices drop

The New York Times reports: While the price has been declining for months, forecasts have always been hedged with the assumption that oil would eventually stabilize or at least not stay low for long. But new anxieties about frailties in China, the world’s most voracious consumer of energy, have raised fears that the price of oil, now 30 percent lower than it was just a few months ago, could remain depressed far longer than even the most pessimistic projections, and do even deeper damage to oil exporters.

“The pain is very hard for these countries,” said René G. Ortiz, former secretary general of the Organization of Petroleum Exporting Countries and former energy minister of Ecuador. “These countries dreamed that these low prices would be very temporary.”

Mr. Ortiz estimated that all major oil exporting countries had lost a total of $1 trillion in oil sales because of the price decline over the last year.

“The apparent weakness in the Chinese economy is radiating out into the world,” said Daniel Yergin, the vice chairman of IHS, a leading provider of market information, and the author of two seminal books on the history of the oil industry, “The Prize” and “The Quest.”

“An awful lot of producers who enjoyed good times were more dependent on Chinese economic growth than they recognized,” Mr. Yergin said. “This is an oil shock.”

Although the price drop has most directly hurt oil exporters, it also may signal a new period of global economic fragility that could hurt all countries — an anxiety that already has been evident in the gyrating stock markets.

The price drop also has become an indirect element in the course of Syria’s civil war and other points of global tension. Countries that once could use their oil wealth as leverage, like Russia, Iran and Saudi Arabia, may no longer have as much influence, some political analysts said. Iran, which once asserted it could withstand the antinuclear embargo of its oil by the West, appeared to have rethought that calculation in reaching an agreement on its nuclear activities last month. [Continue reading…]

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War in space may be closer than ever

Scientific American reports: The world’s most worrisome military flashpoint is arguably not in the Strait of Taiwan, the Korean Peninsula, Iran, Israel, Kashmir or Ukraine. In fact, it cannot be located on any map of Earth, even though it is very easy to find. To see it, just look up into a clear sky, to the no-man’s-land of Earth orbit, where a conflict is unfolding that is an arms race in all but name.

The emptiness of outer space might be the last place you’d expect militaries to vie over contested territory, except that outer space isn’t so empty anymore. About 1,300 active satellites wreathe the globe in a crowded nest of orbits, providing worldwide communications, GPS navigation, weather forecasting and planetary surveillance. For militaries that rely on some of those satellites for modern warfare, space has become the ultimate high ground, with the U.S. as the undisputed king of the hill. Now, as China and Russia aggressively seek to challenge U.S. superiority in space with ambitious military space programs of their own, the power struggle risks sparking a conflict that could cripple the entire planet’s space-based infrastructure. And though it might begin in space, such a conflict could easily ignite full-blown war on Earth.

The long-simmering tensions are now approaching a boiling point due to several events, including recent and ongoing tests of possible anti-satellite weapons by China and Russia, as well as last month’s failure of tension-easing talks at the United Nations. [Continue reading…]

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Growing sense of alarm in U.S. about human rights developments in China

The New York Times reports: A top State Department official said Thursday that there was a “growing sense of alarm in the United States about human rights developments in China,” vowing that the issue would feature prominently in summit talks between President Xi Jinping of China and President Obama in Washington next month.

The official, Tom Malinowski, the assistant secretary of state for democracy, human rights and labor, cited concerns about a proposed law in China that would severely restrict civil society and nongovernmental organizations, as well as recent roundups of lawyers and activists.

“Our ability to have a very positive summit of the sort that the Chinese government and the U.S. government wants will certainly be affected by the extent to which things get better or worse in the interim,” Mr. Malinowski said, addressing reporters after the close of the 19th U.S.-China Human Rights Dialogue, in which diplomats from the two countries criticized each other’s record on human rights.

The Chinese diplomats raised concerns about recent police shootings in the United States. “The Ferguson case was raised briefly,” Mr. Malinowski said, “and I actually thought this was quite interesting because they said, ‘We all saw that on TV,’ and my response, without in any way diminishing the seriousness of the problem that we are facing in the United States, was, ‘Exactly, you saw it on TV.’ ”

Reporters in China are not free to report on similar episodes of violence, and victims, their family members and lawyers are not able to petition for redress without fear of retribution from the government, Mr. Malinowski said he told his Chinese counterparts, who did not participate in the news briefing. [Continue reading…]

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Asia takes leadership on renewables, but only out of necessity

The Guardian reports: As the Paris climate conference draws ever nearer, and with it the prospect of a global agreement that all countries will cut greenhouse gas (GHG) emissions, Europe can look on its contribution to the fight against climate change with pride.

But having fostered the fledgling renewable energy sectors of wind and solar power, and created the world’s first emissions trading scheme (ETS), it now looks as if Europe is ceding its leadership on environmental matters to Asia.

China was the world’s leading market for renewable power in 2014, the $83.3bn invested there being 33% higher than in 2013. Japan was in third place, India was in the top 10 and more than $1bn was also invested in Indonesia, according to a report for the United Nations Environment Programme. All saw double digit growth in investment. Europe was still a major destination for investment in clean energy, attracting $57.5bn , but the market grew by less than 1%.

Meanwhile, as carbon prices on the EU ETS languish far below the level that would incentivise low-carbon investment, China has launched seven regional pilot carbon markets that will be scaled up to national level next year and Korea has introduced its own market.

And while governments in Europe, from Bulgaria to Spain, scramble to cut support payments to renewable energy projects – most recently in the UK – India has increased its solar power target for 2022 from 20GW to 100GW. [Continue reading…]

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The Chinese stock meltdown that makes the Greece saga look trivial

Bloomberg reports: By any standard, the selloff in Chinese stocks over the past month has been epic. Here’s a look at the turmoil by numbers.

The Shanghai Stock Exchange Composite Index has lost 28 percent since its peak on June 12, the worst selloff in two decades. About $3.9 trillion in market valuation has evaporated, more than the total annual output of Germany — the world’s fourth-largest economy — and 16 times Greece’s gross domestic product. The benchmark is still up 82 percent in the past year, the most among the world’s major markets.

As shares tumbled, companies rushed to apply for trading suspension. More than 1,400 companies stopped trading on mainland exchanges, locking sellers out of 50 percent of the market. The China Securities Regulatory Commission also banned major shareholders, corporate executives, and directors from selling stakes in listed companies for six months. [Continue reading…]

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Explainer: What’s the turmoil in the Chinese stock market all about?

By Michele Geraci, University of Nottingham

The Chinese stock markets have experienced significant turmoil in recent weeks, with the Shanghai Composite Index – the country’s major reference – falling by 32% since June 12. But this fall was preceded by an equally sharp rise of 150% over the previous nine months. In the 20 years since I have been working in finance, I’ve never seen anything like this. So what is going on with the Chinese stock market?

There are several reasons for this unusual behaviour: firstly, when I teach stock market investment to my Chinese students, I always remind them that the Shanghai stock exchange should be thought of more as a casino, rather than as a proper stock market. In normal stock markets, share prices are – or, at least, should be – linked to the economic performance of the underlying companies. Not so in China, where the popularity of the stock market directly correlated with the fall in casino popularity.

Stocks and casinos

In China, given the low credibility of the financial statements published by listed companies, investors need to rely on other tools to predict share price performance. These tools include a heavy reliance on technical analysis and charts – a method that tends to predict future share price based purely on the company’s past performance, with no regards to its fundamentals. Even the name of the company is often neglected; all that matters is the historic price performance.

While this technique is also used in Western markets, my experience in China is that it is the predominant method for investment. Hence the disconnect between a share’s price movements and economic fundamentals.

[Read more…]

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Why cyber war is dangerous for democracies

Moisés Naím writes: This month, two years after his massive leak of NSA documents detailing U.S. surveillance programs, Edward Snowden published an op-ed in The New York Times celebrating his accomplishments. The “power of an informed public,” he wrote, had forced the U.S. government to scrap its bulk collection of phone records. Moreover, he noted, “Since 2013, institutions across Europe have ruled similar laws and operations illegal and imposed new restrictions on future activities.” He concluded by asserting that “We are witnessing the emergence of a post-terror generation, one that rejects a worldview defined by a singular tragedy. For the first time since the attacks of Sept. 11, 2001, we see the outline of a politics that turns away from reaction and fear in favor of resilience and reason.”

Maybe so. I am glad that my privacy is now more protected from meddling by U.S. and European democracies. But frankly, I am far more concerned about the cyber threats to my privacy posed by Russia, China, and other authoritarian regimes than the surveillance threats from Washington. You should be too. [Continue reading…]

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