Istanbul's Mayor: Erdoğan's Worst Nightmare by Burak Bekdil
Xi Takes a Page From Mao’s Red Playbook
Craig Singleton — The Daily Beast In the 1985 blockbuster Back to the Future, California teen Marty McFly journeyed back in time to save his present. The film’s universal themes are known around the world, and Chinese leader Xi Jinping appears to have internalized them as he approaches the most fraught moment of his political career. What Xi lacks in a time-traveling DeLorean, however, he more than makes up for with the theory of “continuous revolution,” as first championed by Mao Tse-Tung. Read more
Desmond Lachman breaks down the inflation situation in Turkey and its central bank's strange monetary policy stance. Lachman also provides historical perspective on present economic challenges in South Africa.
Is this China’s Lehman Brothers moment?
Desmond Lachman | The Hill In the same way that US economic policymakers and financial markets were rocked by the aftermath of Lehman Brothers' 2008 bankruptcy filing, Chinese policymakers face a similar challenge with Evergrande. With property accounting for 28 percent of the Chinese economy, a critical failure in this sector could have disastrous consequences for the Chinese and regional economies.  Treasury yields, inflation, and real interest rates: Analyzing the historical record Paul H. Kupiec | AEIdeas Current nominal US Treasury note yields are exceptionally low partly because of massive Federal Reserve quantitative-easing purchases that were absent in historical episodes. Moreover, inflationary pressures are strong and likely to persist if Congress passes the pending infrastructure and budget reconciliation bills. The Dreadful Consequences of the Biden Disaster in Afghanistan by Guy Millière
Why is Turkey’s President Cutting Interest Rates, Spurring Inflation and Lowering the Value of the Lira? Aykan Erdemir | Turkey Program Senior Director  Where is the money? Erdogan feels the heat over foreign reserves drain Turkey’s government goes on the defensive as the main opposition presses for answers on how the central bank ended up with negative reserves. Read More Foreign debt risks hover over Turkish lira’s recovery Saddled with chunky foreign debt repayments in 2021, Turkey might face hefty borrowing costs and renewed currency jitters. To Diminish Terror Finance, Audit International Organizations by Clifford Smith The Washington Examiner February 18, 2021 https://www.meforum.org/62033/to-diminish-terror-finance-audit-global-charities Turkey’s Ziraat Bank Under Scrutiny Aykan Erdemir and Umut Can Fidan — FDD Memo Concerns continue to mount about the integrity of the Turkish financial system. News reports surfaced in January alleging that one of Turkey’s largest financial institutions was involved in questionable offshore deals, conflicts of interest, and irregular transactions with the country’s wealth fund. Turkey’s largest lender, Ziraat Bank, and largest mobile phone operator, Turkcell, are at the center of the scandal. Multiple news outlets report that Ziraat extended a $1.6 billion nonperforming loan to an offshore company, likely under the direction of Turkish President Recep Tayyip Erdoğan. Read more Privatisation Is Not A Remedy For The Ills Of The Banking Sector quoting Raghuram Rajan via The Northlines Indian banking sector was earlier in private hands. However, during the 1970’s, the Indian government was of the opinion that banks favor the rich and that the poor must also be given access to cheap credit. With this view, several banks were nationalized. With Finance Minister Nirmala Sitharaman’s announcement of bank privatisation, all eyes are on public sector banks. Erdoğan’s Turkey Cannot Modernize Via Constitutional Reform
By Burak Bekdil, February 24, 2021 EXECUTIVE SUMMARY: Turks have been seeking to modernize their democratic culture for a century and a half. Recently, President Recep Tayyip Erdoğan pledged to reform the constitution. Beware of an Erdoğan bearing democratic gifts. Continue to full article ->
Jack 'Uncle Horse' Ma Is a Bad Bet by Gordon G. Chang
Turkey’s Frantic Gold Rush Points to a Financial Crisis Ahead
As ordinary citizens seek to preserve their wealth, President Recep Erdogan’s Justice and Development Party is finding new ways to take advantage of the gold rush.
Dollars, Digital Currency, And 120 Years Of Chinese Central Banking
via Hoover Daily Report A History Working Group seminar with Manny Rincon-Cruz.
Ant: China puts the ‘fin’ back in fintech — and a tech superstar is brought to heel
Claude Barfield | AEIdeas
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. 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. Continue to full article ->  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. Read More 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. Read More 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. Read Full Article 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. Continue Reading 
Thanks to Trump, China's Huawei Is Dying by Gordon G. Chang
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://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.
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. Read Full Article
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. Read More
Will Erdoğan's God Stop the Turkish Lira's Slide? By Burak Bekdil
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-
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.
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.” Read Full Article
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.
China may be more vulnerable than we think. Read the interview here.
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. Read More
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. Continue to full article ->
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
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. Continue to full article -
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. |
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