MONETARY REGIMES - CounterStrikeMedia

BEIJING CLAMPS DOWN ON JACK MA

11/21/2020

Dollars, Digital Currency, And 120 Years Of Chinese Central Banking
via Hoover Daily Report
A History Working Group seminar with Manny Rincon-Cruz.

GORDON CHANG: KISSINGER, CHINA & WAR

CHINA NUKES ITS FINANCIAL SYSTEM

CHINA: THE EXISTENTIAL THREAT

GATESTONE INSTITUTE: GORDON CHANG

Ant: China puts the ‘fin’ back in fintech — and a tech superstar is brought to heel
Claude Barfield | AEIdeas

America: The world’s scariest emerging market economy
Desmond Lachman | The Hill

Structural Adjustment As Development
via Hoover Daily Report
A History Working Group seminar with Nils Gilman.

Will The Covid-19 Pandemic Confound Or Enable China's Strategic Ambitions?
by Robert G. Kaufman via Strategika
Will China’s negligence unleashing the coronavirus and mendacity exploiting it catalyze a reckoning with the PRC, comparable in significance to the Czech Coup of 1948? And will it crystallize long-term American determination to contest China’s scheme to supplant the United States as the world’s preeminent power?

Erdogan Will Play Biden, But Stick To Putin
by Soner Cagaptay via The Caravan
A key foreign policy challenge for President-elect Joe Biden is going to be getting along with Turkey’s president Recep Tayyip Erdogan and managing Washington’s ties with Ankara. To this end, Biden needs to understand the dynamics and fears that inform the decisions of Erdogan, Turkey’s powerful president, including the latter’s view of Russian president Vladimir Putin.

TURKISH LIRA PLUNGES. . . AGAIN WHILE CAPITAL LEAVES CHINA FAST

10/23/2020

Erdoğan as Merkel's Protégé
By Rauf Baker, November 18, 2020
EXECUTIVE SUMMARY: Turkey’s relations with Germany have always been privileged, but Angela Merkel took that relationship even further by treating Recep Tayyip Erdoğan as a protégé in the international arena. Their relationship strengthened in parallel with a significant increase in German-Turkish military and trade cooperation. But Merkel’s term is coming to an end, and there has been a noticeable shift in tone within the Berlin political establishment toward Ankara. The Turkish president will not be able to count on German benevolence forever.
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Inflation rises in Turkey as lira falls for ninth consecutive day
Turkey’s lira hit new lows Tuesday, becoming the worst-performing emerging market currency of the year following a rise in inflation last month.
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Erdogan’s economic policies show growing disconnect from working class
Turkish President Recep Tayyip Erdogan aims for social justice by distributing the loot to his favorite powerful elites at the expense of hardworking blue- and white-collar professionals.
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The US needs to get serious about defending Taiwan from Chinese aggression, argues Michael Beckley in a Foreign Policy op-ed. Taiwan should devote its limited defense budget to acquiring arsenals of mobile missile launchers and armed drones, backed by a strong reserve force. Meanwhile, the US should harden its military base infrastructure in East Asia. China’s recent belligerence offers Taiwan and the US an opportunity to have a conversation about the sacrifices both societies will have to make to contain Beijing’s growing threat. If they do not seize this opportunity, they may not get another. Read it here.

By the end of the third quarter, China is outperforming the world. In an AEIdeas blog, Derek Scissors notes that, despite this rebound, money appears to be leaving China as it has for more than six years, even though the only large, growing economy should be drawing capital. Beijing reports a large merchandise trade surplus, but its official reserves do not reflect the money that is supposedly coming in. COVID-19 adds confusion to perennial credibility problems in the People’s Republic of China’s economic statistics. But one thing is clear: The Chinese people want to send money somewhere Xi Jinping isn’t. Continue here.

It's time to transform the US-Japan alliance. In a Nikkei Asian Review article, Zack Cooper and Hal Brands argue that Washington should jump-start a fundamental discussion about the nature of burden-sharing. As the geopolitical environment becomes more threatening and the challenge from China becomes more severe, the US needs Japan to do more. But Tokyo plays a key role in counterbalancing China, and it is a mistake to focus burden-sharing discussions on how much Japan spends on defense. The US should view Japan not as the junior partner it once was but as the equal ally it has become. Read more here.

Turkish lira hits new record low as central bank holds rates
ISTANBUL — The Turkish lira sunk to a record low on Thursday after the central bank unexpectedly kept its benchmark interest rate on hold, heaping pressure on the beleaguered currency as investors already worried about political risks continue to exit its markets.
The lira fell as much as 2.1% against the dollar to 7.98 — another all-time low for a currency that has lost about a quarter of its value this year — after the bank’s monetary policy committee announced its decision. It steadied to 7.93 in later trading.
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The Trump Administration’s High-Stakes Gambit to Curtail Rocket Attacks in Iraq

Trump Foreign Policy Confounds the Old Guard
By JONATHAN S. TOBIN, Special to the Sun | October 22, 2020
https://www.nysun.com/foreign/trump-emerges-with-new-doctrine-on-foreign-affairs/91310/
President Donald Trump's approach to foreign policy has been subjected to harsh criticism since before he took office. His emphasis on criticizing past American interventions in foreign conflicts and his decision to employ the term "America First" to describe his intentions led many to believe that he was steering the country on an isolationist course. His beliefs about alliances seem, with a few exceptions, purely transactional rather than rooted in notions about common values.
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Turkish bank rulings should be a wakeup call for global financial institutions

CHINA HEDGES ON MARKET LIBERALIZATION: BEIJING'S DUAL CIRCULATION STRATEGY

9/7/2020

Thanks to Trump, China's Huawei Is Dying by Gordon G. Chang

ANDREW POLK CSIS
CSIS ON CHINA

HEDGED INTEGRATION STRATEGY

CSIS ON CHINA: THE SERIES

MICHAEL PETTIS

ASIA TIMES

China’s aggressive tactics aim to bolster the Communist Party’s legitimacy
China has faced two disasters in 2020 — the coronavirus and historic floods — which exposed its fragilities and created internal unrest, explains Dan Blumenthal. Its response to both was the same: escalating aggression against its neighbors.

https://blog.usni.org/posts/2019/04/16/you-get-the-peace-you-enforce

PRICE SHARE VS. MARKET CAPITALIZATION: AMERICAN INDICES MATTER

9/2/2020

https://www.forbes.com/sites/johntamny/2020/08/30/exxonmobils-djia-deletion-exposes-the-insignificance-of-the-feds-latest-policy-shift/#2b5ba5fd26dc

XI'S LEADERSHIP CHALLENGE: MANAGING BEIJING'S EXPECTATIONS OF US DOMINANCE

8/26/2020

CHINA ISN'T READY FOR GLOBAL LEADERSHIP

8/17/2020

https://www.theatlantic.com/ideas/archive/2020/07/china-has-squandered-its-first-great-opportunity/614647/
China Has Squandered Its First Great Opportunity
The world has experienced a six-month geopolitical vacuum, and China has filled it poorly.

https://www.cnas.org/publications/commentary/the-u-s-china-confrontation-is-not-another-cold-war-its-something-new

Opting for backdoor measures, Turkey’s Central Bank holds interest rate steady
ISTANBUL — Turkey’s Central Bank avoided raising a key interest rate Thursday, opting to impose backdoor liquidity measures to support the nation’s troubled currency.
The bank’s monetary policy committee announced it would hold its one-week repo rate steady at 8.25%, where it has remained since May 21 amid inflationary pressures on the Turkish economy.
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Why Erdogan must expand his ultranationalist alliances
President Recep Tayyip Erdogan’s growing dependency on Gray Wolves may mean more trouble for the Kurds and political dissidents in Europe, while increasing risks for Syrian refugees inside Turkey.
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Will Erdoğan's God Stop the Turkish Lira's Slide? By Burak Bekdil

CHINA BUYS GOLD MINES IN CANADA; WASHINGTON CONFRONTS BEIJING

8/3/2020

PAUL WOLFOWITZ: THE CHINA THAT MIGHT HAVE BEEN

6/5/2020

The China that might have been
Paul Wolfowitz | AEIdeas

The Trump Administration Seeks a Balance With New China Strategy
The government is attempting to determine where cooperation is warranted and conflict may be unavoidable.
Thomas Joscelyn

China Isn't Letting A Pandemic Go To Waste
by Victor Davis Hanson via National Review
No more nice-guy façade.

The U.S. Needs A New Grand Strategy For Asia
featuring Michael R. Auslin via National Review
Since World War II, more American soldiers have perished in East Asia than anywhere else. The twin imperatives of containing Communism and maintaining the regional balance of power drew U.S. forces into wars in Korea and Vietnam, with casualties far exceeding those of later conflicts in the Middle East.

China, unquarantined
Dan Blumenthal and Nicholas Eberstadt | National Review
It was not by accident or happenstance that China became a major player in the world economy and, more broadly, in the liberal international order. That outcome, rather, is largely a result of concerted American policy.

Two weeks ago, the World Bank published new estimates putting China slightly ahead of the US in 2017 gross domestic product, adjusted for purchasing power parity. This is badly misleading, argues Derek Scissors in an AEIdeas blog post. While China may become a true peer of the US in economic size, it is not yet equal to the US and is headed for a growth wall. Learn more here.

Eric B. Brown and Charles Horner write: The Party knows that the existence of compelling counter-models to it along the Sinophone periphery are a danger to its hold on power inside the People’s Republic itself. It is an historic gamble: Xi’s ongoing bid to subjugate Sinophone Asia to communist rule is threatening the very Asian peace and economic potential which made China’s emergence since 1978 possible in the first place. – Hudson Institute

Victor Davis Hanson, Hoover, in re: Disorder across America, and foes: Russia and its subset Iran, and China. Xi Jinping has launched against all his foes – India, the US, and presumably against Uyghurs. Does China think it can knock out out the US? Dunno; but they may have concluded that for their regime to survive thy have no choice but to try. Reminiscent of Hitler in 1939. “Do you really want to die for Taiwan, Hong Kong, a Himalayan border spat?” Biden has no credible position on China. “If he’s elected, China will move on Taiwan” because he’s in no position politically to defend Taiwan. His party is infected with Chinese ties. “Rapprochement and appeasement.”

https://www.nationalreview.com/2020/06/coronavirus-pandemic-china-beijing-becoming-authentically-belligerent/#slide-

THE TURKISH CENTRAL BANK LOSES CREDIBILITY

5/21/2020

Turkey’s ‘peg-legged’ foreign currency reserves
Turkey’s central bank appears increasingly fragile, with more than 60% of its reserves secured through swap deals.

Why Erdogan Won’t Ask the IMF for Help
Turkey's economy is a mess, but its president won't seek an IMF loan because the conditions would mean giving up his extensive patronage network.

Turkey’s megaprojects threaten ‘mega’ financial havoc
Turkey’s government might be forced to nationalize some megaproject investments, chief among them the new airport in Istanbul, which have hit dire straits under the combined impact of the COVID-19 pandemic and Turkey’s existing economic woes.

Erdogan’s Fourth Attempt to Take Over Turkey’s Largest Private Bank
Aykan Erdemir

Ankara warns Hifter to lay off Turkish assets in Libya
Turkey has warned of grave consequences if Libyan warlord Khalifa Hifter acts on threats to attack Turkish assets in Libya, signaling a further potential escalation in the Libyan conflict. Turkish Foreign Ministry spokesperson Hami Aksoy said in a statement today that Turkey would see “the putschist elements as legitimate targets” if its interests came under attack.
The warning followed threats from Hifter’s air force chief Saqr al-Jaroushi, who said, “All Turkish positions and interests in all cities are legitimate targets for our air force jets and we call on all civilians to stay away from them.”
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Qatar triples swap line with Turkey
Qatar has offered support to Turkey’s central bank, expanding a currency-swap agreement to $15 billion as Ankara seeks to mitigate economic shocks from the coronavirus pandemic.

Justice Department Unveils Elaborate North Korean Sanctions Evasion Scheme
Mathew Ha | Research Analyst

WHAT TEAM TRUMP GOT RIGHT ABOUT U.S. TRADE DEFICITS OVER 30 YEARS & china builds fortress in the african horn

5/15/2020

China may be more vulnerable than we think. Read the interview here.

China’s Plans to Win Control of the Global Order

US DEBT COSTS TRILLIONS: COVID BONDS

Five Points about U.S. Trade Over the Last Thirty Years
by Brad W. Setser

Cold War shadows creep across China’s political elite
Inside the rarified atmosphere of the Great Hall of the People, the aroma of disinfectant will mingle with a whiff of economic distress. A toxic mix before Premier Li Keqiang gives his annual state-of-the-union-style speech at the National People’s Congress in Beijing later this week.
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The Irish Shock to U.S. Manufacturing?
by Brad W. Setser

The Left Is What It Once Loathed
by Victor Davis Hanson via American Greatness
What is the Left, then? Mostly a Jacobin party that operates ad hoc, without principle, or consistency.

Are the Kurds the Next Kingmakers in Turkey?
By Burak Bekdil, May 11, 2020
EXECUTIVE SUMMARY: Between 1994 and 2015, the Kurdish vote in Turkey rose from 4.1% to 13.1% of the electorate. A greying Turkey is facing a baby boom in Kurdistan: the Kurdish fertility rate, at 3.41, is a demographic weapon against the Turkish fertility rate of 2.09. These numbers suggest that Kurds could be the kingmakers in Turkey’s presidential election in 2023.
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China builds a mega-fortress on the Horn of Africa
The Chinese Navy is busy building a string of overseas bases, and one of the largest is in Djibouti, on the Horn of Africa. The question is, why? Exactly who are they defending against? And why is it a modern-day “Fort Apache” walled fortress, featuring battlements similar to medieval castles, shooting ports and corner towers. Read More

Lebanon’s Interwoven Fantasy Worlds All Lead to War With Israel
How much should America pay to maintain the fraying fabric?

Syria: Israeli Official Says Iran Beginning Withdrawal in Syria. Israel’s outgoing defense minister Natafli Bennett on Monday said Iran has begun withdrawing its forces from Syria. “Iran is significantly reducing the scope of its forces in Syria and even evacuating a number of bases,” Bennett said. Israel has carried out hundreds of air strikes against Iranian and Hezbollah targets in Syria in recent months, stretching Iran’s resources thin. Bennett’s comments echo those of an U.S. envoy who said last week that Iran was reducing its forces in Syria. Haaretz Reuters

Grand Strategy Is No Silver Bullet, But It Is Indispensable by Andrew Ehrhardt and Maeve Ryan

As Conflict Escalates in Libya, the Economy Veers Toward Crisis by Tim Eaton

GREGORY COPLEY: HOW U.S. MANAGES CHINA IN WAR

4/24/2020

Coronavirus Could Revolutionize America's China Policy
By Emil Avdaliani, May 6, 2020
EXECUTIVE SUMMARY: Many argue that the coronavirus pandemic will ultimately benefit China more than the rest of the world, especially the US. After all, America is now the worst-hit country on earth in terms of human casualties. But the crisis could in fact help the US reorganize its geopolitical thinking toward the People’s Republic, resulting in a radical break in which Washington’s political and economic elites are newly unified against a rising Beijing.
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Foreign Shell Companies Trying to Infiltrate U.S. Defense Industry
By Richard Sisk, Military.com: "Without naming China, the Pentagon's acquisitions chief warned Thursday of foreign adversaries using shell companies to buy into struggling small defense firms during the coronavirus pandemic."

One concrete way to start decoupling with China
Gary J. Schmitt and Craig Kennedy | The American Interes

After the pandemic, America must again embrace creative, competitive capitalism
James Pethokoukis | AEIdeas

The China Rethink
China prospered while buying off greedy American elites. Now that alarm bells are ringing in Washington, who will answer the call?

A contemporary woodcut depicts the Third Defenestration of Prague (1618), which marked the beginning of the Bohemian Revolt, and therefore of the first phase of the Thirty Years' War.

Gregory Copley, Defense and Foreign Affairs, in re: The thirty-years' war between the US and China. The virus is thought to have been developed in one of the Wuhan labs. Is China winning? It's got a head start. If you make gains while our adversary is unaware, you have an advantage. This was an unavoidable war for Xi Jinping, In October [2019], he announced that he’d begun: a [replica] of the original thirty-years war in Europe, which ended with the Peace of Westphalia redefining the entire power structure.

Xi said this new peace will overturn the rules-base world order from 1638 and replace it with control by Beijing, which will write the rules. Why did they embark now to become the global hegemon? The PRC economy has been static since ten years ago and has declined for three. If Xi allowed more freedom and enterprise, he’d lose control; therefore, he’s taken power from the private sector and augmented the state-owned enterprises, which have never contributed a nickel. Must ensure that his competitors’s economies are destroyed. Massive hit to US, Europe, Australia, which have gone into enormous long-term debt to recover from the virus. China also put its factories back to work as quickly as possible so, when other nations start to recover, China can provide all the goods demanded and prevent the growth of local manufacturing.

Also, a strong move to separate Western allies from one another. We've seen this. Europe is still reluctant to let go of the Chinese golden ring. Europe still hopes to be bailed out by China. China is trying to split the US from all its allies, then spilt all internal populations: the globalists from the nationalists. It's doing a good job.

PRC intends to show itself as militarily strong and able to deploy force—but the last thing it wants is military confrontation with the US, which would be devastating to China. China sends around the Liaoning to project power.

Image: The Thirty-Six Stratagems. 三十六計 Public domain.
Chinese information operations and information warfare are based on concepts and terms similar to those used by the United States, but the Chinese have evolved them to be more suitable and relevant to Chinese culture and to the doctrine and policies of the Communist Party of China. While the People's Republic of China has adopted the idea of information dominance, its method for going about information dominance differs, using ancient methods such as the Thirty-Six Stratagems.
The number thirty-six was used by Wáng as a figure of speech in this context, and is meant to denote numerous stratagems instead of any specific number. Wáng's choice of this term was in reference to the I Ching, where six is the number of Yin that shared many characteristics with the dark schemes involved in military strategy.

Tuesday 21 April 2020 / Hour 2, Block B: Gregory Copley, Defense and Foreign Affairs, in re: China is boasting how it’s flying PPE to beleaguered nations, how an authoritarian state is so much better able to respond to a crisis than is a mere democracy. So far, we’re not responding brilliantly, but we're focussed on the debt. The key is to take this opportunity to simplify: reduce road blocks to starting businesses, and to eliminate bureaucratic requirement to existing businesses. The laws on corp. bankruptcy have become stricter in the US, whereas one of the ways to keep capital moving is to dispense with unproductive businesses and let the capital go to startups. In Australia and Europe, this is [difficult]. Need to support serial entrepreneurship.

The West needs to deny China what it needs most: food, and resources. If PRC threatens the US and its allies, or manipulate trade therefor, it's obligatory that the e US and allies do the same to it. Failing that, it just prolongs the war and gives the advantage to the PRC.

The Quad: US, Japan, an Australia can trust each other in the Quad talks. India isn't quite there.

Europe is under siege largely because of this transformed world. To protect European borders and coastline from, e.g., Turkey, which is using population war by sending refugees to flood Europe, in numbers that the recipient nations can’t accommodate.

China thinks Pres Trump is starting to [respond to] the 30-yrs' war, so China is currently interfering in the US media to influence the November elections to a degree that no one has ever done before.

EGYPT'S FOREIGN RESERVES FLOUNDERS & TURKISH ECONOMIC COLLAPSE PREVENTS TURNING ON S400; LOOKING AT US ECONOMY POST COVID

4/16/2020

Turkey Shows the Value of Balance Sheet Analysis
by Brad W. Setser

Report: Private sectors in UAE, Egyptian, Saudi economies suffer dramatic losses
IHS Markit, a global information provider, shows how the private sector has suffered major blows in the UAE, Egypt and Saudi Arabia.

Erdogan's cold war with Saudi Arabia and UAE
Turkey's patience with Saudi Arabia and the United Arab Emirates is running low, sources tell Al-Monitor.

As foreign reserves dip, Egypt’s economy slows down
Analysts study the sharp decline of Egypt’s foreign reserves due to the economic slowdown caused by the coronavirus pandemic, with fears that the Egyptian pound would further weaken against the dollar.

Turkey’s S-400 delay is about more than just the economy and COVID-19
Turkey’s deepening economic woes are widely seen as the prime reason behind its decision to delay the activation of the Russian S-400 systems. But an array of other factors have been at play that are forcing Ankara to think twice.

Emerging market risks to the economic recovery
Desmond Lachman | The Hill

“Eyes on the Other Global Crises” by Emily Estelle (Originally published in RealClearWorld)

“Salafi-Jihadi Ecosystem in the Sahel” and interactive graphic by Katherine Zimmerman

US BUDGET DEFICITS FOR COVID

Some Basic Economics of COVID-19 Policy
Casey Mulligan, Kevin Murphy, and Robert Topel, Chicago Booth Review

Borrower Beware: CARES Loans Carry a Steep Cost (subs.)
Paul Atkins, Wall Street Journal

Tax Complexity a Big Barrier to Economic Growth
Travis Nix, RealClearMarkets

Can Restaurants Survive?
Michael Brendan Dougherty, National Review

The States Are Toast
David Schleicher, Slate

EXAMINING THE PACE OF US DECOUPLING FROM CHINA

4/14/2020

From Non-Interference to Wolf Warrior: Chinese Foreign Internal Defense by Jimmy Zhang

Im-Politic: Evidence that Trump Would Be Foolish Not to “Run on China”

My response to the Asia Society’s joint statement on cooperation with China
Paul Wolfowitz | AEIdeas

External headwinds for a US economic recovery
Desmond Lachman | The Hill

US-China decoupling: a reality checkIy was a decoupler before decoupling was cool. I have advocated selective decoupling of the US economy from China for the past four years, arguing that the United States requires absolute self-sufficiency in strategic areas such as defense electronics. That, Dr Henry Kressel and I argued in a November 2016 Wall Street Journal op-ed, requires a massive national effort to bring computer chip fabrication back onshore. We wrote: “Washington should also enforce strict US content rules for sensitive defense technology. Many of the Pentagon’s military systems depend on imported components. That’s a concern on security grounds alone. Procurement rules should be changed to require that critical components be manufactured in the US.” Read More

FIXING THE US DURING KUNG-FLU & HOW TO UNDERSTAND RISK IN INTERNATIONAL FINANCE

4/6/2020

Bradley A. Thayer and Lianchao Han write: One encouraging sign is that the CCP has developed deep cracks, and some may be reflecting on the consequences of dictatorship. True political reform that leads to democracy and the rule of law is the only way out for China. Ren Zhiqiang may be the last hope for creating a reformed China. If the nation falls into a Maoist abyss, it likely would take international peace and stability with it. – The Hill

What Coronavirus Could Mean for China
By Emil Avdaliani, April 13, 2020
EXECUTIVE SUMMARY: States all over the world stand to lose a great deal economically from the coronavirus pandemic. But in the case of China, there is an additional significant dimension to the crisis: the West will grow increasingly distrustful of Beijing, which will further widen an already gaping geopolitical divide. Calls in the West for an economic decoupling from China as well as increasing demands that Beijing comply with Western economic, health, and political standards could complicate China’s global aspirations.
Continue to full article ->

How to make China pay
John Yoo and Ivana Stradner | NationalReview.com

International use of the yuan 'rising'
The Bank of China says there was steady momentum last year with increasing willingness of foreign companies to use the yuan/renminbi in financing and settlement. Read more

Minxin Pei writes: The events of the past few months have shown that CCP rule is far more brittle than many believed. This bolsters the case for a U.S. strategy of sustained pressure to induce political change. Washington should stay the course; its chances of success are only getting better and better. – Foreign Affairs

Hudson Institute’s Tim Morrison: Controlling Chinese weapons: The Wuhan virus and nuclear weapons

Joseph Bosco writes: Just as an increasingly reckless and irresponsible China unleashed the coronavirus pandemic on the world, its actions may well cause war to break out across the Taiwan Strait. If so — and like the pandemic, Tiananmen, Uighur concentration camps, live organ harvesting, persecution of dissidents and a range of other moral outrages, the institution of the Chinese Communist Party “will be perceived as having failed.” It will, at long last, be time for it to go. Priorities must be established. – The Hill

HOW TO UNDERSTAND RISK IN FINANCE

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James Andrew Lewis writes: China’s legitimate desire for economic development is complicated by powerful commercial motives. […]The U.S. and its allies have a strong hand to play in this contest, since the Party’s rule is fragile, and China’s economy, despite its size, needs access to and partnership with the West. A good first step, one where the U.S. might be able to persuade Europe and Japan to join us, is to insist on reciprocity in the treatment of foreign and Chinese companies. – Center for Strategic and International Studies

MI Responds: March 2020 Jobs Report
Beth Akers, Manhattan Institute

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FED ENTERS THE MUNI MARKET: CHAOS & MORAL HAZARD REIGNS

3/29/2020

Not One Emerging Market Financial Crisis, But Many…
by Brad W. Setser

China Needs More Progressive Taxes and More Spending on Public Health
by Brad W. Setser

CHAOS & PANDEMICS

The Fed Enters Municipal Bond Market: Will It Be Enough?
Michael Hendrix, E21

On Monday, the Federal Reserve went all-in to support America’s shuttered economy. Among its most remarkable moves was its backstop of the $3.8 trillion municipal bond (“muni”) market, a critical source of financing for states, counties, and municipalities. The Fed hopes this will keep credit flowing to states and localities as their revenues—and the market for their debt—reel in the wake of the global coronavirus pandemic. As investor dollars rush out of the muni market, it is revealing troubling debts as well as questions about the role of fiscal federalism in a time of crisis. Read more here....

Do You Xi What I Xi?
quoting Victor Davis Hanson via National Review
Whatsoever you do, read Jim

CFR: FOLLOW THE MONEY; ADDRESSING GLOBAL DOLLAR SHORTAGE

CFR: LESSONS LEARNED FROM CHINA TRADE WAR

THE END OF THE CHINA MIRACLE

3/27/2020

CHINA'S DEBT TRAP DIPLOMACY

China's BRI:
The Development-Finance Dimension

CHINESE DEFENSE SPENDING

Coronavirus: China's Great Cover-up by Giulio Meotti

https://www.hoover.org/research/asias-new-geopolitics

EXAMINING THE LEAST CREDIT WORTHY STATES DURING CRISIS & PRC DECEPTIONS

3/22/2020

The Crisis’ Impact on Budgets
Steven Malanga, City Journal

China, America, and the International Order after the Pandemic by Mira Rapp-Hoope

THE HAN MASTERS IN BEIJING THINK SUCCESSION: ARTHUR WALDRON CHINA AUTHORITY SPEAKS

3/20/2020

The West Needs to Wake Up to China's Duplicity by Giulio Meotti •

WHAT'S AFTER XI

WHO REPLACES XI JINPING Frank Chen.

GUY SORMAN
You, Xi
It is time for Americans to recognize and acknowledge that the Chinese president is not our friend.

Beijing Fears COVID-19 Is Turning Point for China, Globalization
By Michael Auslin via RealClearPoliticsMichael Auslin maintains that in its desperation to evade blame from the world community, Beijing has used its propaganda machine to effectively reshape the narrative about the origins of COVID-19. He also argues that the world should responsibly reduce its dependency on China’s economy.

On Coronavirus, Beware the Totalitarian Temptation
By Josef Joffe via the American InterestJosef Joffe challenges the old maxim that totalitarian regimes perform better in devastating times than democracies, arguing instead that an authoritarian cure is always worse than the catastrophe.

Arthur Waldron, University of Pennsylvania; in re: Stability of the PRC and what comes afterward between US and PRC? Origins of the virus; requirement of stability in China for the commerce to continue. Xi early said he was personally in charge of solving the virus matter. The US is the meal ticket for China; how does it benefit China to damage the US? In China, is the younger generation ready for a major change in the Communist party? The artists and academics are miles ahead of the party. Xi does not want to have a successor being groomed, and ensured that that would not happen. Ergo, there’s no clear succession path and the infighting will probably be intense. In Chinese classics, the question of the root of succession: since ancient times, when the emperor is first proclaimed, he must immediately name a successor. Xi emphatically has not done this.

China's first emperor, Ch’in Shi Huang, is famed for having united the Warring States' walls to form the Great Wall of China. Most of the present structure, however, dates to the Ming dynasty. Xi Jinping may oversee the disintegration of today's unified PRC.

Danielle Pletka and Derek Scissors write: Over the last couple of years, the Washington consensus view on China has shifted 180 degrees. The nation whose transformation lifted hundreds of millions out of poverty and spurred serious calls for examination of a “China model”—authoritarian government married to managed capitalism—is now perceived by most political leaders as a strategic competitor at best, a dangerous enemy at worst. Setting aside the well-documented military challenge, since the Wuhan outbreak, the economic and health threats have come sharply into view. – The Dispatch

THE SOCIAL BALANCE OF THE PEOPLE'S REPUBLIC IS UPROOTED

3/15/2020

The Myth of Chinese Capitalism: The Worker, the Factory, and the Future of the World Hardcover – March 10, 2020. by Dexter Roberts (Author)
https://www.amazon.com/Myth-Chinese-Capitalism-Worker-Factory/dp/1250089379

Dexter Roberts lived in Beijing for two decades working as a reporter on economics, business and politics for Bloomberg Businessweek. In The Myth of Chinese Capitalism, Roberts explores the reality behind today’s financially-ascendant China and pulls the curtain back on how the Chinese manufacturing machine is actually powered.

He focuses on two places: the village of Binghuacun in the province of Guizhou, one of China’s poorest regions that sends the highest proportion of its youth away to become migrants; and Dongguan, China’s most infamous factory town located in Guangdong, home to both the largest number of migrant workers and the country’s biggest manufacturing base.

Within these two towns and the people that move between them, Roberts focuses on the story of the Mo family, former farmers-turned-migrant-workers who are struggling to make a living in a fast-changing country that relegates one-half of its people to second-class status via household registration, land tenure policies and inequality in education and health care systems.

In The Myth of Chinese Capitalism, Dexter Roberts brings to life the problems that China and its people face today as they attempt to overcome a divisive system that poses a serious challenge to the country’s future development. In so doing, Roberts paints a boot-on-the-ground cautionary picture of China for a world now held in its financial thrall.

CHINA: THAT 70'S FEELING & THE HORROR OF STATE BUDGETS

3/8/2020

Conditional convergence and the rise of China: A political economy approach to understanding global power transitions
Michael Beckley | Journal of Global Security Studies
The US scores higher than China across measures of geography, demography, and institutions, suggesting that a US-China power transition is unlikely.

China shutdown not affecting fentanyl production
Roger Bate | AEIdeas

That 1970s Feeling
Kenneth Rogoff shows why the next global recession, which could be around the corner, is unlikely to look like the last two.

Coronavirus and Xi Jinping’s Many Failures
By Bradley A. Thayer & Lianchao Han, RealClearDefense: "Fundamentally, the pandemic is only the latest in a list of horrors that China has inflicted on itself and the world, and which, in turn, have dispelled the myth of the “China Dream” and “China model.”"

The Virus and the Economy – Steven Malanga, City Journal

Corona Virus Monetary Policy
By John Cochrane via the Grumpy Economist

Globalization Bleeding
By Victor Davis Hanson via National Review

State Budgets: Hidden Debt And Hidden Deficits
With John Rauh via PolicyEd

Decision 2020 Report: How to Fix America’s Immigration System
Via Decision 2020

CHINESE REGIME: NO TRUST, NO VACCINES

2/28/2020

Visit our coronavirus spotlight page here.

China’s political warfare strategy takes hit from coronavirus

Thankfully, short-run GDP is overrated, and the labor force, capital stock, and productivity remain unchanged. While the second quarter will be weaker than last year, it will be much stronger than the first. Read it here.

China’s ruling elite stumbles into a ‘disaster’Deserted factories, businesses struggling to survive and the economy on life-support.

SYRIA FACES ECONOMIC COLLAPSE

2/10/2020

Turkish Casualties in Idlib Test Putin-Erdogan Alliance

MIDDLE EAST INSTITUTE Winter 2019 Issue

Damascus battles economic collapse as the Syrian pound plummets
Faced with the threat of further sanctions, a volatile situation in neighboring Lebanon, and a brutally tough winter, the only thing currently rising from the embers of war-torn Syria is the value of the dollar against the struggling Syrian pound. This marks the beginning of a dangerous new phase in the Syrian conflict as the government, fresh from its eight-year-long war for survival, tries to fend off an economic collapse from within.
Read article

PLAGUE HITS CHINA, LEADERSHIP'S CREDIBILITY DAMAGED AGAIN

2/5/2020

China: Xi Admits Knowing of Virus Two Weeks before Telling Public. The publishing of a speech made on February 3 showed that President Xi Jinping knew about the coronavirus in early January. This is earlier than previously stated by the Chinese Communist Party, who said they became aware of the dangers posed by COVID-19 on January 23. “I have at every moment monitored the spread of the epidemic and progress in efforts to curtail it, constantly issuing oral orders, and also instructions,” President Xi announced to the public. Some in China are convinced the statement confirms President Xi and the Communist Party identified and handled the outbreak well while others question why the public was not informed on the dangers of the virus by the government until two weeks later.
Associated Press Forbes

China’s Communist Party Struggles to Restore Credibility After Virus Outbreak

Desmond Lachman warns of the potential economic fallout a major pandemic could create.

The coronavirus’ dollar boost
Desmond Lachman | AEIdeas
An all too likely casualty of the coronavirus epidemic will be President Trump’s oft-repeated promise of promoting a more competitive US dollar and eliminating the US trade deficit. Indeed, if the coronavirus epidemic is not soon brought under control, we must expect a much stronger US dollar and a widening in the US trade deficit. Any slowing in the Chinese economy as a result of the coronavirus is bound to have a much larger adverse effect on the Asian and German economies than it will on that of the United States. This is bound to induce a much easier monetary policy stance in Asia and Europe than that in the United States.

Fentanyl is the norm in illicit markets
Roger Bate | AEIdeas

US CONCEDES TO CHINA IN TECH WAR

1/27/2020

ASIA TIMES

CHINA'S BIGGEST THREAT YET: GOVERNANCE & PANDEMICS

1/24/2020

CHINA: RECORD LEVEL BOND DEFAULTS
CHINA DEEP IN MENA REGION
US-CHINA FACE OFF IN MIDDLE EAST

Arthur Waldron, Lauder Professor of International Relations at the University of Pennsylvania; in re: History speeding up, in the context of China. Wuhan coronavirus: Without governmental legitimacy there’s no transparency; without transparency in a crisis, there’s panic. An illegitimate Chinese dictatorship that won’t protect its population from pandemics.