The China Thread

[Sheilbh]

Not sure where to put this (we maybe need an energy politics/consequences thread because this stuff isn't clearly national) - but London Metal Exchange which is the world's largest market for forwards and futures and hedging etc on metals has just put emergency measures on copper trading largely around liquidity fears in the market. The context is the global (China) energy issues plus supply chain, extraction issues and increased demand which is causing companies to pull copper from supply because they think it'll be worth more in the future here's cash-to-3 month spread which is now over $1,000 (the previous highest level was $330) - this is going to cause costs around the world on all sorts of products that include copper:


I believe there's similar issues with other metals too - especially with the ongoing surge in demand, global supply chain issues (ships waiting at LA Port, cost of containers shooting up) plus China's energy rationing on industry. Over half the world's copper ends up in China to manufacture products for the rest of the world (plus internal construction), I believe it's quite important in manufacturing solar panels and wind farms which will have a knock-on effect on other bits of energy politics.

So this and the other price rises in other metals, plus energy rationing in certain industries/provinces - all feels like it could start adding up into a pretty strong supply shock - or am I worrying too much

[The Minsky Moment]

Big squeeze now in manganese, where China controls 75%+ of output, but production is way down due to the central government's power rationing.  Combined with the shipping disruptions it's a perfect storm.

I am all for taking urgent measures to address carbon emissions but these kinds of the Stalinist style central planning directives are creating significant distortions and disruptions in the world economy.  It is raising questions about China's reliability as a supplier.  China is a dominant exporter of primary materials not because it controls all reserves but because it is a cheap and efficient producer.  These metals and materials could be mined elsewhere and probably in a more environmental sound way, albeit subject to NIMBY objections.

[DGuller]

I think what we're seeing here is an argument for some strategic intervention in the markets.  Sure, the short-sighted economics may lead you to get all your shit produced in China.  However, the strategic vulnerability of a country having all its shit produced in China is a cost that is not captured.  Free markets are much better at leading to optimal microeconomic results than they are at leading to optimal macroeconomic results.

[Sheilbh]

I think what we're seeing here is an argument for some strategic intervention in the markets.  Sure, the short-sighted economics may lead you to get all your shit produced in China.  However, the strategic vulnerability of a country having all its shit produced in China is a cost that is not captured.  Free markets are much better at leading to optimal microeconomic results than they are at leading to optimal macroeconomic results.

I think we saw that with PPE production during the very early days of covid. I agree there needs to be more strategic and possibly "national security" approach to supply chains and production.

Not just raw materials or PPE but also things such as batteries. Similarly with Taiwan and semiconductor production being a possible problem for China and the world.

I think we are moving to an era of political and military competition. We shouldn't be looking to "de-couple" from China because that's not a good idea and very difficult but I think we should ensure that our economies are organised in a way that can deal with that competition. So not a general de-coupling but intervening in markets to ensure we are not dependent on China in any core sectors.

I also think that there's a current mismatch of supply and demand in energy. In the past that is something that can cause recessions or end periods of growth, I think it is going to be a part of the near-term energy transition. I think strategic intervention is also necessary in that case because we don't want core sectors of our economies to be affected by China's energy transition as well as our own, in particular because the Chinese state may decide that the key strategic they need to keep going regardless of energy issues are different than what we rely on/need.

[The Minsky Moment]

I think what we're seeing here is an argument for some strategic intervention in the markets.  Sure, the short-sighted economics may lead you to get all your shit produced in China.  However, the strategic vulnerability of a country having all its shit produced in China is a cost that is not captured.  Free markets are much better at leading to optimal microeconomic results than they are at leading to optimal macroeconomic results.

That's certainly the logic that prevailed in the Cold War period.  The Soviet Union was blessed with many natural resources that capitalist countries needed and used but it was understood that that the "free" countries had to develop and maintain alternative sources of supply, even if it meant subsidizing less economically efficient production.

With Dengist China, that logic did not prevail on the understanding that the PRC was operating a dualist system of a nominally Communist Party controlling a monopoly of political power while allowing economic forces to develop competitively and relatively openly.  The PRC might not be one of us but it was always open for business.  But under the developing political conditions of High Xiism, those assumptions no longer hold. 

The complicating factor is that it is no longer merely an issue of production and distribution of Commodity X - i.e. does the "West" control sufficient deposits of uranium, rare earths, etc.  It is partially unwinding or developing parallel redundancies in highly complex systems of component production, assembly, shipping and logistics centered on China as a critical hub in the system.  That creates challenges for industrial policy that didn't exist in the same way during its last heyday in the 60s and 70s.

[Syt]

https://www.bbc.com/news/world-asia-china-59325399

Peng Shuai: Doubt cast on email from Chinese tennis star

The head of the Women's Tennis Association (WTA) has cast doubt on an email released by Chinese state media attributed to tennis player Peng Shuai.

The tennis star has not been heard from since she made sexual assault allegations against a top Chinese government official two weeks ago.

In the email, Ms Peng purportedly says the allegations are "not true".

Steve Simon, chairman of the WTA, said the message "only raises" his concerns about Ms Peng's safety.

"I have a hard time believing that Peng Shuai actually wrote the email we received or believes what is being attributed to her," he said in a statement.

Written in her voice and published by the broadcaster CGTN, the email claims she is not missing or unsafe, adding: "I've just been resting at home and everything is fine."

Many responding on social media have cast doubt on its authenticity.

Ms Peng - a former number one-ranked tennis doubles player - had not been heard from since posting an allegation about former Vice Premier Zhang Gaoli on Chinese social media site Weibo in early November.

She alleged she was "forced" into sexual relations with Mr Zhang - who served as the country's Vice Premier between 2013 and 2018 and was a close ally of China's leader Xi Jinping - in a post that was later taken down. She has not been seen or heard from publicly since.

The WTA and leading voices from the world of tennis have increasingly spoken out about Ms Peng since.

On Thursday, the spokesman for China's foreign ministry did not give further details about the situation when asked by reporters.

"This is not a foreign affairs matter," Zhao Lijian said. "And I am not aware of the relevant situation you mentioned."

Earlier this week, world number one male tennis player Novak Djokovic said he hoped Ms Peng was OK, adding that he was shocked, while Naomi Osaka also voiced concerns about her whereabouts.

"The WTA and the rest of the world need independent and verifiable proof that she is safe," WTA chair Steve Simon said on Wednesday.

He also reiterated that her sexual assault allegation must be investigated "with full transparency and without censorship".

"The voices of women need to be heard and respected, not censored nor dictated to," he added.

Ms Peng, 35, is a prominent figure in Chinese tennis. She has won two Grand Slams at Wimbledon in 2013 and the 2014 French Open, both alongside Taiwan's Hsieh Su-wei.

Her allegation is the highest profile incident in China's fledgling #MeToo movement.

Ms Peng has more than half a million followers on Weibo, the Chinese equivalent of Twitter.

Her post containing the sexual assault allegations was taken down only minutes after it was posted on 2 November, and other recent posts from her account have also been removed.

For Weibo users now searching for Ms Peng's name online, it is still possible to find her account but it is no longer possible to write comments beneath her remaining posts.



Analysis by Robin Bryant, Shanghai Correspondent:

Ms Peng hasn't been seen in public nor heard from in weeks. Now an email appears and the language appears flippant.

The image released by the state controlled TV network CGTN appears to be a screenshot, with a cursor hovering on the page. All of which has raised immediate suspicions about its authenticity.

No other domestic media outlet has picked it up.

Prominent people do disappear from view in China. Sometimes it's billionaire businessmen. It's not usually athletes.

Sporting success, like Ms Peng's, has become a key component of the ruling Communist Party's soft power push. That is, however, yet to include a #MeToo moment.

[Jacob]

Sweet sounding Chinese pop song with anti-regime lyrics. 20 million views in two weeks: https://www.youtube.com/watch?v=-Rp7UPbhErE (subtitled)

The male singer is Chinese Malaysian, the female singer is Taiwanese.

The chives in the video is a well known metaphor for the common working people, the Panda is Xi Jinping/ the CCP, "li'l pinky" refers to Chinese nationalists. Lot's of other little metaphors and imagery. Civets is a reference to SARS. You can probably identify a Covid-19 reference as well. Pineapples is a reference to harming Taiwan's economy, Apple is an anti-CCP Hong Kong daily paper as you may recall. 10 miles is a reference to some of Xi's nonsensical claims about his "toughness" during his youth.

Article in the Sydney Morning Herald: https://www.smh.com.au/world/asia/the-australian-singer-behind-the-viral-pop-hit-that-infuriated-beijing-20211118-p59a2a.html

[Jacob]

Another song by the same artist: https://www.youtube.com/watch?v=0NtzsP8U6vc

(Kinmen is a small group of Taiwanese islands right off the mainland coast)

A video digging into the video a bit more: https://www.youtube.com/watch?v=6sDERBmygwY

Some of the symbolism of the video is explained.

Unsurprisingly the video is banned in the PRC.

[Josquius]

So... The peng case looks over?

BBC News - Peng Shuai: Chinese tennis star tells Olympic officials she is safe
https://www.bbc.co.uk/news/world-asia-china-59368774

Though I don't know how they can say this. There might well be a security agent off camera with a gun to her dad's head.

And this is the ioc... Kind of known for corruption

[Sheilbh]

Strong recommend on the recent Talking Politics episode with Cindy Yu.

[Josquius]

Maybe I spoke too soon with Peng.

BBC News - Peng Shuai: WTA announces immediate suspension of tournaments in China
https://www.bbc.co.uk/sport/tennis/59498779

[The Larch]

US confirms it will stage diplomatic boycott of Beijing Winter Olympics
Decision is response to what is described as China's 'genocide and crimes against humanity in Xinjiang' and other abuses

The White House will stage a diplomatic boycott of the 2022 Winter Olympics in Beijing, press secretary Jen Psaki has confirmed.

"The Biden administration will not send any diplomatic or official representation to the Beijing 2022 Winter Olympics and Paralympic Games, given the PRC's ongoing genocide and crimes against humanity in Xinjiang and other human rights abuses," Psaki said from the briefing room podium on Monday.

The announcement comes two months before the games are to begin. American athletes are still expected to compete in the Olympics, despite the Biden administration not sending any representatives to Beijing.

"The athletes on Team USA have our full support," Psaki said. "We will be behind them 100% as we cheer them on from home. We will not be contributing to the fanfare of the games."

Psaki said the White House determined it would be wrong to deny athletes the opportunity to compete in the games, and she argued the lack of a diplomatic delegation would still send a "clear message" about the administration's priorities.

Before the announcement, China said a diplomatic boycott of the Olympics would be "a stain on the spirit of the Olympic charter" and "sensationalist and politically manipulative", in what appeared to be a further rift in the already strained bilateral relations.

The last time the US staged a full boycott of the Olympics was during the cold war in 1980, when the former president Jimmy Carter snubbed the Moscow summer Games along with 64 other countries and territories.

China's foreign ministry spokesperson, Zhao Lijian, on Monday accused Washington of "hyping a 'diplomatic boycott' without even being invited to the Games".

"I want to stress that the Winter Olympic Games is not a stage for political posturing and manipulation," Zhao said. "It is a grave travesty of the spirit of the Olympic charter, a blatant political provocation and a serious affront to the 1.4 billion Chinese people."

The US diplomatic boycott comes amid escalating tensions between China and many western countries. It was first raised by Joe Biden last month as pressures grew in the US Congress over its concerns about China's human rights record, including over the treatment of Uyghurs and other Muslim minorities. Politicians including Nancy Pelosi, the speaker of the House of Representatives, have advocated a boycott as protest.

Concerns have been raised in recent weeks over the treatment of the Chinese tennis star, Peng Shuai. The 35-year-old former doubles world No 1 last month accused a former senior Chinese politician of having coerced her into sex.

Countries from the US to Australia have since called on China's authorities to ensure Peng's wellbeing, and the Women's Tennis Association last week announced the suspension of future games in China.

Rights groups have also seized on the opportunity to urge the international community to boycott the Beijing Olympics.

In the UK, the Commons leader, Jacob Rees-Mogg, told MPs last month that "no tickets have been booked" for the Beijing Games in February. But he also added that the UK government "have long had a policy of thinking that sporting boycotts do not work and that it is a matter for the International Olympic Committee to decide whether the athletes go."

The Foreign Office said on Monday that "no decisions have yet been made" about the government's attendance at the Beijing Winter Olympics.

In Australia, Canberra last week joined 19 other countries in not signing the Olympic Truce – a tradition that dates back to ancient Greece and ensures conflicts don't disrupt the sports competition – with China in order to send a message to Beijing.

On Friday, the Australian prime minister, Scott Morrison, said his government "was considering those matters and working through those issues".

Zhao on Monday said in response to Morrison's comments that "no one would care about whether these people come or not, and it has no impact whatsoever on the Olympics to be successfully held by Beijing".

[HVC]

as long as the athletes still go this really doesn't mean much, i don't think.

[Barrister]

as long as the athletes still go this really doesn't mean much, i don't think.

Still seems to upset the Chinese Communist Party though.

[HVC]

They have to say something because they need to have the last word, but internally i doubt most would notice (or even know depending on the level of censorship). Hard to hide missing countries on the field though.