Conflicts with China are helping Taiwan. The trade war is driving manufacturing away from China toward Taiwan, Vietnam, and Burma, among others. China’s travel ban on Taiwan for openly supporting the Hong Kong protests is pushing the Taiwanese to implement better visa privileges with other Asian nationals visiting Taiwan. Not only did last week’s occupation of the Hong Kong International Airport break Western confidence in the Chinese “Special Administrative Region”, the Hong Kong protests are even affecting business in Macau.
Why the protests? Where did it all start? Follow the money. Of the many factors, one of the best kept secrets around the world is the housing cost for local Hong Kongers. It’s called “gentrification”. Ordinary Hong Kong citizens can’t afford even the least expensive homes without government subsidy in addition to living with family. A Hong Kong jail cell is larger that many homes.
That happened because Hong Kong’s government, clearly under the thumb of Beijing, allows Mainland Chinese citizens to move into Hong Kong at such a high rate that new housing can’t be built fast enough to keep residential costs affordable. Wealthy Chinese need a place to live, some place where they can enjoy life. They won’t find anything nice enough within China proper, so they have to go somewhere with an economy created by the West—somewhere like Hong Kong. That way they can enjoy all the money of China without the lousy lifestyle. In their view, it would be cruel for Hong Kong not to let as many Chinese Mainlanders displace native Hong Kongers as fast as possible.
Protests are entering their eleventh week. One more week will begin a new record of 79 days from the Umbrella Movement in 2014.
Nations and peoples of the free world are reaching toward each other. The EU reached out to Taiwan and Taiwan was grateful. Taiwan reached out to CNN and CNN did an interview. Kim Jong Un is likely on a train headed through China to Vietnam to meet President Trump. President Trump met with the Vice Premier of China in the Oval Office to discuss trade. And, China “rightly” oppresses an estimated two million Muslims in internment camps, who inhabit the hope-to-breakaway province of Xinjiang, through which China’s “Silk Road” passes to reach other nations with trillions of dollars in trade.
Taiwan’s position in the world only stepped up. In tech, it’s the multinational victim of China. The EU’s unanimous statement of support for Taiwan and condemnation of China’s military activity in the Taiwan Strait is anything but positive PR for China. Taiwan has the support of Europe; that doesn’t count for nothing.
China’s latest shenanigans include Hong Kong taking a serious look at redefining extradition laws so that Taiwanese in Hong Kong would be “extradited” to China. This does far more damage for Hong Kong’s popularity with its electorate at home than it does for Taiwan, raising international sympathy for both. Remember, meddling in Hong Kong’s government is a “must not” as the condition of Hong Kong not remaining under Britain. Nothing would indicate Chinese meddling in Hong Kong’s government more than such a sure-to-backfire anti-PR move like Hong Kong is making by even entertaining such a revision.
The fingerprints of Beijing damaging Hong Kong where British interests remain, all in order to damage Taiwan, goes against the wisdom of courting favor with the masses across Europe. Then, there’s Huawei.
As if international scandals implicating China weren’t enough, Huawei’s founder made the narcissistic comment that “the world can’t live without Huawei”. In Chinese culture, that might make enough people feel compelled to comply. But, the God-fearing West will take the self-absorbed claim as a challenge, much how God took the challenge when “experts” said He couldn’t sink the Titanic. Huawei just might take its place in the hall of sunken fame. No, the West does not. Not too many years from now, when a finance guru claims that a company is “too big to fail”, the public will respond, “Remember Huawei.”
Buffoons became naysayers this week, arguing that tit-for-tat military drill concessions would be the path to peace and that progress without finality in Hanoi surmounted to failure.
Trump knows exactly what he is doing. Progress without “too much too fast”, passing up the invitation to stop in China while visiting Kim Jong-Un in Vietnam, replacing large military drills with detailed tactical exercises in South Korea, standing with the Philippines against “an armed attack” from China in the South Sea, delaying a tariff hike with China while inviting Xi to Mar-a-Lago, scrutinizing Chinese-funded “learning centers” in America—it all plays right into a larger overall strategy of strength and resolve in Asia.
As the US and China inch toward a trade agreement, Taiwan makes larger and larger strides asserting its independent activity. Backed by a recent US court ruling, Taiwan’s presence will only irritate China. Trade talk is part of the precarious path ahead. No trade agreement is enough to mitigate other disagreements between the US and China. The only way would require the US to surrender, and that’s not about to happen.
North Korea inches further and further toward talks with the US. China fears this. If Kim Jong-Un get in the same room as the man who wrote The Art of the Deal, North Korea could become a stronger ally to the US than even South Korea overnight. That would likely lead to a quick reunification of the Korean Peninsula, as well as other shifts in power, even before any alliance might be formalized. But, Trump’s deal-making reputation should bring no shocks to what is about to transpire in the Singapore Summit.
Then, there’s China, about to be left behind. The hardline crackdown on free speech throughout China won’t be without consequence. Symphony has been saying so for years; Albert Ho effectively said the same, quoted in a Bloomberg article dated June 4. Party power is getting brittle. But, the consequences of brutal brittality are rarely explored. So, here goes.
Hong Kong won’t shut up anytime soon. The whining, whimpering bratty students of Hong Kong may be wrong to demand rights when freedom was largely handed to them by the British. But, those bratty students sure are drawing a press load of attention to China. That alone should be a heavy factor in logistics calculation. Hong Kong is a megaphone for any anti-China sentiment because the world reads about Hong Kong every day. After all, Hong Kong is “Asia’s World City”.
But, then there’s the problem of cracking down within “China proper”, the Mainland governed directly by Beijing, not a SAR like Hong Kong or Macau. If China considers friendly sarcasm to be a threat within China—that means tech companies and hardware manufacturers won’t have candid conversations about quality control and competitive design. Once free speech becomes a minefield, people will divert mental resources away from fee and open brainstorming toward making sure that they don’t say anything offensive. The key to good brainstorm sessions and innovation is that nothing is off the table and no one is allowed to take offense at anything whatsoever. That’s can’t happen in China anymore. Bye-bye Western manufacturing paradise. It’s only a matter of time before Western outsourcing brands figure it out. One little story, like an innovator being locked up for a tech suggestion because it was interpreted as “opposing to the Party”, might plunge Chinese factory stocks into the void below.
“Single-Party Rule” is the key topic now, at least according to Western papers. That’s the protest mantra in Hong Kong. It’s the talking point of headlines and marches. It is the so-called “problem” as is being presented to the world. The Western press is on a path for reporting a narrative that stirs sentiment for two-party rule in China. Whether it’s a typhoon, an earthquake, a solar flare, or some other “act of God”, if China suddenly adopts a two-party system, Western newspaper readers will have already been prepped to think it is a good thing.
Then, there’s Vietnam, exploring foreign investment “zones”. Deserved or unfair, distrust is stirring against China as a place of investment. This will have a double-edged effect in Vietnam. Firstly, Western manufacturing will flock to Vietnam as a way of fleeing the newspaper villain, China. But, with a Communist Party having total rule in Vietnam, Western investors will demand certain assurances before dumping too much money into yet another single-party market. Sooner or later, we could be looking at Vietnam adopting a friendly two-party system as a stronger strategy of competing with China. That will only add to the momentum of change in East Asia.
As talks between Kim and Trump march forward, China is resigned to the new situation at its eastern border and is focusing on other areas, specifically trade. In truth, China’s main trade opponent is not the US, but Vietnam.
Vietnam’s main edge in trade will be that it is less expensive. Vietnam is, in many ways, less developed, yet more free to be expressive. Hanoi doesn’t sanction the same censorship as Beijing does. Many hard-working Vietnamese are hungry, even desperate for income. A hard-working, uncensored, hungry, less-expensive people will be difficult for China to compete with on many fronts. This is entirely beside any point about political tension between China and Vietnam.
The meeting between Kim and Trump is less-than-satisfactorily explained. Suddenly they want to talk? Some “teamwork” consultant trying to sell a book will likely attribute it all to diplomacy, along with the preemptive speculation that Kim would give up the nukes because he got them. More is going on behind the scenes and if the true story is ever told it may not be told for ten or twenty years.
As for the Western spin about China’s constitutional changes, it is all about the party, not about Xi. The humble pig farm worker, Xi Jinping, did not rise to power by publicly trying to serve himself. He has followed Robert Greene’s 48 Laws of Power to a tee and will continue to do so—that means putting the party first in his public agenda.
At the APEC summit in Vietnam, Putin told Trump that Russia had not interfered in the 2016 election. Putin was sincere. At the same time, Taiwan is beefing-up cybersecurity, ostensibly to counter “daily” and “Russian style” attacks originating in China. If everyone’s rhetoric holds true, that means that there aren’t any threats at all.
Trump offered to help settle disputes in the South Sea. The Philippines’ finance minister complemented Trump on knowing “the art of the deal”. The Filipino president does not want any problems in the South Sea. China would rather settle disputes one-to-one. Will everyone get what they want? We’ll have to see. This is a chance for China also to earn compliments about negotiation skill from Filipino leadership.
Trump was very friendly in China. He underscored the importance of cooperation between the US and China. It was one of the kindest things he ever said. He publicly conducted himself in some of the kindest ways he ever has since running for office. China received him with respect and his public appearances went smoothly. If there ever was a good chance for peace, now is the best chance there has been for a long while and is probably the best chance there will yet be for a long while.