First off, it was this, the 2nd week of June, that saw such a huge change for the better in the world’s fortunes 75 years ago. Nations put aside their differences and worked together to overcome the hate and tyranny espoused by Nazi Germany and Imperial Japan and proved that working together could be done and that the whole was greater than the sum of its parts. Let us not forget and let us give thanks – remember, without those efforts, without those sacrifices, most of us would not be here at all and those of us who would be would undoubtedly be living, if living is the right word, under vastly straightened circumstances.
I am glad that I was able to get that down without any trouble. It has been almost impossible to write anything else as there is just way too much happening to even report it all, much less give interpretation and/or comment. After much reflection, the best that I can do is just cherry-pick – sorry! I’m Canadian – we say, “sorry”, for almost everything…it’s part of our DNA.
According, to Xi Jinping on June 5th/19, the Chinese economy is “improving”…..yet Bloomberg reported on June 10th/19 that fresh fruit prices were up 26.7% in May from those of a year ago and that pork prices had increased 18.2%. In China today, the vast majority of citizens have no access to internet or news from ‘outside’…..but it doesn’t give anyone a feeling of confidence to know that they are not trusted with getting timely news that is unfiltered, to be told that things are improving when they can see that things are not and are in fact getting worse and that companies are closing due to lack of orders.
Except the trade ‘problem’ is not just one problem but is in fact many problems, a fact that seemingly just about everyone casually ignores. The more that The Donald opens his unfettered mouth and utters, at best, ill-chosen comments, the less negotiating room he provides Xi Jinping, as the latter cannot afford to lose face (as I explained in Global Gab #14). So the more intemperate that Trump sounds, the more that Xi is left with no choice but to respond in the same vein, with escalation resulting on both sides. This week, Chinese citizens were given a ‘travel advisory’ about the dangers of travel to the USA, this in response to Trump making it more difficult for Chinese students to study in the USA, just as an example. The combined yearly ‘value’ of the 2 categories is in excess of US$50 billion, not counting the extensive multiplier effect. Just yesterday Tiffany’s reported sales to Chinese buyers had decreased by 25%.
Last week, 2.5% of Hong Kong’s population showed up to commemorate the 30thanniversary of the Tianamen Square – subsequently, the prospective law that had been previously introduced for consideration has been pushed forward. I refer of course to the law regarding the Government of China’s right (sic) to effect extradition to Mainland China of anyone charged with breaking Chinese law… that means anyone, and that means alleged ie. not guilty, and that means anywhere, not just in Mainland China or even in Hong Kong. Earlier this week, 1 million people showed up to protest! One prominent financier who has helped to uncover several bookkeeping frauds effected by Mainland China companies on the stock market says that, if the law is passed, he is going to probably move all operations out of Hong Kong (as he could be affected).
He is not the only one – criticizing the Government or any of its leaders is NOT a crime…in Hong Kong. In China, it is, and is punishable by jail. The artist of Harry’s View (editorial cartoon in SCMP) has a problem – so, too, does just about everyone in Hong Kong. That law can further take into consideration anyone making such critical comments anywhere eg: in the USA or Europe and coming to Hong Kong. Imagine yourself flying into Hong Kong, a perceived bastion of sanity and good responsible government, for a business meeting and being arrested at the airport for a ‘crime’ of which you were not aware (and maybe even didn’t commit) and being immediately shuffled off (figuratively and literally) to PRC without access to a lawyer or a consular representative.
You may say that the Government of China promised 50 years of hands-off at the hand-over in 1997 – but that was then and now is now. And before you get all high and mighty about how that is unreasonable, just recall how The Donald has, since taking office, broken almost every established agreement and promise with just about everyone on everything (and sometimes more than once).
I had intentions about writing more in this week’s column about the US supply chains and The Tariff Man’s failure in Mexico but, forgive me, I just don’t have the heart. Notwithstanding what Trump and Chuck Schumer (look up the chuckster’s upchuck speeches of 20+ years ago) said/say about China, there is no question that sourcing in China has lowered costs and improved the standard of living for everyone in the USA via Walmart, Target etc……but the business provided in China from the USA improved almost everyone in China’s standard of living as well. Trade functioned as it was supposed to – mutually beneficial win-win.
And now? Now we have sundered supply chains, increased costs, inflation, curtailed business on both sides, plus suspicions, recriminations and worse – all fostered, fomented, and festered by politicians whose end-game seems to be power at any price as long as they are not the ones paying it.