My full-length live TV interview on 30 November on The Worldwith ABC (Australian Broadcasting Corporation). I gave a snapshot analysis of why Trump's presidency is likely to change regional dynamics and soft power in favor of China.
A report "North Korea’s Special Economic Zones: Plans vs. Progress" published on 23 November 2015 on a website 36 Northof the U.S.-Korea Institute (USKI) at SAIS provides some latest information on these Zones in the DPRK. The website is part of an extensive program launched in 2006 to make the Paul H. Nitze School of Advanced International Studies (SAIS), Johns Hopkins University, a hub of Korea-related activities in the Washington, DC area, and to increase information and understanding of Korea and Korean affairs.
Another report on Mail Onlinedated 26 November 2016 shows interesting photos of the top 10% elite in North Korea with a relatively affluent life-style.
These update my following post dated 19 December 2015:
"Yazhou Zhoukan , Chinese-language Asia Weekly, (20 December, 2015, p.16-17) reported on the construction of various special economic zones in North Korea largely with the help of China’s capital and engineering teams. Download North Korea building SEZs
At the north-west border with China near Dandong City, the Sinuiju Special Economic Zone 新义州经济特区, shelved in 2002 due to tax evasion and other charges, is apparently being revived. This promises to become North Korea’s largest export base, comprising a total area of 132 sq.km to include clusters of textiles manufacturing, tourism and commercial facilities. A 40,000 sq.m. Sinuiju International Exchange complex is reported to have been completed, ready for occupation next year. A cooperation agreement was signed during China’s Politburo Standing Committee Member Liu Yunshan’s recent visit.
Another large development zone is the Rason Special Economic Zone 罗津先锋经济特区 around the Rajin Port at the eastern tip. It is said to comprise a dozen sectors including agriculture, logistics, light manufacturing, oil refinery and eco-tourism.
There is also a host of infrastructural projects vaulted to build some 3,000 km of expressways and 3,500 km of modern rail.
Total investments are reported to number billions of dollars, although the figures quoted in the article, up to $400 billion, appear too large to be credible.
If true, these facilities could well signal that a new North Korea, tilted towards both economic and military development, may well emerge. This may augur well for North Korea’s eventual development into a less insecure nation relying solely on nuclear threats to prop up its regime. After all, Vietnam’s transformation from a closed communist state to a modern vibrant economy is instructive."
Even Trump says he has an open mind on Climate Change, transcript of his interview with the New York Times suggests that he is likely to put money ahead of climate.
Trump has also vowed to boost the oil and gas industries, including pipelines from Canada and more lands opened up for shale gas fracking.
As pointed out in The Economist leader, The burning question: Climate change in the era of Trump (26 November, 2016), the historic Paris Agreement, supported by 197 nations, is nevertheless likely to endure with or without the United States. Countries threatened by rising sea levels are unlikely to sit tight. Europe's green movement is unlikely to wither. China, the world's worst polluter, is also taking a lead in de-carbonization driven by regime-threatening pollution fears and geopolitical energy security considerations.
As President-elect, Trump has openly declared ditching the Trans-Pacific Partnership (TPP), which was a US-initiative in the first place. Notwithstanding initial denial of World Trade Organization chief Roberto Azevedo, Trump has also hinted at leaving the WTO, which the US was instrumental in founding, if the US cannot renegotiate its terms of trade. The WTO includes 164 countries worldwide and has been the cornerstone of global trade for many decades until its primacy is challenged in recent years by regional and bilateral agreements. China has since been a great beneficiary of WTO which she initially joined at great costs to herself by having to open up her market for many products.
All signs are that a Trump America is likely to retract from its leading role of maintaining the existing global order, unless its intervention can be monetized. This is now greatly worrying allies and as well as rivals. .
China has been seeking to gain more influence as an integral part of the existing global order. America's retreat from it to focus everything on "America First" is likely to hand over much of global soft power to a rising China as a defender of the global commons.
This would have game-changing consequences for an America-dominated world order.
My Guest Lecture at the University of Hong Kong on 22 November 2016.
The PowerPoint presentation, with 72 slides, examines some of the most salient game-changing dynamics of the 21st century, including the Fourth Industrial Revolution, "Connectography", Internet of Things in Smart Cities, Fintech, Blockchain, e-Commerce, e-banking, the global connectivity of the China Dream with One Belt, One Road (OBOR), regional networks, the Paris Agreement on Climate Change, the Rise of State Capitalism, the Demographic Cliff, Capital in the 21st Century, Asset Bubbles, Debt Mountains, Globalization and its Discontents, and the Rise of Nationalism, Chauvinism, Nativism and Localism, all leading to an interconnected, independent yet uncertain world of distributed powers where America's retraction under a Trump Presidency is likely to give way to increasing influence of a dynamic China embracing globalization with a vengeance.
Article 104 of Hong Kong's Basic Law stipulates a sworn-in requirement of every Legislative Councillor to take oath in the Legislative Council to pledge allegiance to the Basic Law and the Hong Kong Special Administrative Region as an integral part of the People's Republic of China.
During their sworn-in session, The two new-elected "localist" Youngspiration legislatorsprovocatively used the word "Hong Kong nation", unfurled a banner bearing the words "Hong Kong is not China", and used the insulting phrase "chee-na" used by war-time Imperialist Japan to refer to China. They also made a trip to Taiwan to promulgate the idea of "insulating" from Mainland China. These pre-mediated and orchestrated manoeuvres suggested deliberate provocation to test Beijing's bottom-line rather than isolated impromptu antics of stand-alone activists.
As territorial integrity is China's core-of-the-core national interest, it's no wonder that Beijing immediately sought to interpret Article 104 (which interpretation is provided for in the Basic Law), in order to lay down the law and nip such separatist sentiments in the bud in Hong Kong's Legislative Council. Click here
The UK High Court ruled on November 3 that Article 50 divorce process for leaving the EU requires a vote by parliament. The judgment, now subject to appeal, rests on the argument that “fundamental rights” had been bestowed on them after Britain joined the EU and the European Communities Act 1972 was passed by parliament. The government could not now “unilaterally” take away these rights, which is what would happen if Article 50 were triggered and Britain left the EU, according to a reportin the Financial Times.
In the House of Commons, there were about 480 MPs in favour of the UK remaining in the EU just before the Brexit referendum compared with 150 opposed. The House of Lords was also highly supportive of the Remain camp, the newspaper article adds.
If the ruling is eventually upheld, the sheer numbers would mean that Brexit may well not happen after all, as I predicted much earlier in my blog, which is re-posted below with updates before the High Court ruling.
The sheer scale and complexity of Article 50 negotiations for the UK to leave the EU discourages a leap in the dark. Once Article 50 is triggered, the clock will start to tick to the UK's huge bargaining disadvantage. So the dynamics work in favour of more deliberation.
However, the longer it takes, the greater the sense of foreboding. And the more the unattractiveness of Brexit may become clear. It is quite possible that at some point after 2017, an early general election may have to be called to approve or reject a likely unsatisfactory bargain, which could effectively mean that Brexit may not happen.
My prognosis is reinforced by an insightful analysis on the UK Constitutional Law Association website by constitution lawyers Nick Barber, Fellow, Trinity College Oxford, Tom Hickman, Reader, UCL and barrister at Blackstone Chambers and Jeff King, Senior Lecturer in Law, UCL.
The authors explain clearly why in a robust constitutional democracy, the UK government cannot invoke Article 50 which triggers a 2-year automatic "guillotine" severing UK's membership of the European Union without the specific consent of the UK Parliament.
Section 2 of the UK's European Communities Act 1972 confers on UK citizens a host of rights, powers, liabilities, obligations and restrictions as part of the European Union. These cannot be removed unilaterally by the government, even supported by a Referendum, without prior consent of the Parliament.
The authors explain that "There are very good reasons for involving Parliament. With its broad range of representatives and peers, various pertinent committees with extensive evidence gathering powers, it is an institution that has the expertise and legitimacy to discuss the implications of various withdrawal options and any framework conditions or further approvals that Parliament may want to stipulate. The referendum was silent on the terms of withdrawal. Such terms should be matters for cross-party discussion in open Parliament rather than among the front bench of a (divided) single party in closed Cabinet meetings".
Moreover, the process of unravelling UK's many rights and obligations as a member of the European Union is likely to be highly complex and time-consuming. The analysis points out that "Parliament could conclude that it would be contrary to the national interest to invoke Article 50 whilst it is in the dark about what the key essentials of the new relationship with the EU are going to be, and without knowing what terms the EU is going to offer".
The authors contend that "If the UK seeks to obtain some form of framework agreement on key terms before invoking Article 50, once these terms are in place, Parliament could then trigger the Article 50 procedure to effect exit, perhaps with only details left to negotiate by the Government. Immediately upon an agreement being finalised the UK would no longer be part of the EU. This option would comply with the outcome of the referendum".
However, it begs the question whether the EU is prepared to or can in fact start negotiating a framework agreement with the UK without Article 50 being triggered first. The provisions of Article 50 are quite specific.
What is more, negotiating the un-bundling of UK's rights and obligations in the World Trade Organisation (WTO) from the European Union is just as complicated and time-consuming, if not more so. Click here Again, the WTO is in no position to promise the UK anything before the UK regains a separate identity outside the EU. Nor would any country within or outside the WTO be able to negotiate with the UK for any bilateral trade agreement absent such separate status.
Faced with this chicken-and-egg situation, Theresa May quite wisely appointed the three "Brexiteers" to handle this hot chestnut. As the EU is unlikely to allow the UK to eat its cake and have it at the same time, tough negotiations are likely on balancing access rights to the EU with core EU principles like freedom of movement of people, which happens to be the key sticking point of the "Leavers".
So the more both sides bandy key issues to test the waters, the more it will become clear to those who voted to leave that a final deal, even if one can be reached in time, could be very unpalatable. The more so, therefore, would there be demand for negotiating terms be first debated and authorised by the Parliament before Article 50 is triggered.
There is no legal compulsion as to how soon Article 50 must be triggered. Naturally the EU wants the UK to pull the trigger as soon as possible and a lot can be said about ending the uncertainly. But as the analysis points out, "uncertainty needs to be weighed against other imperatives, such as the need to comply with the UK’s constitutional requirements and the need to ensure that Brexit is effected consistently with the national interest". With all the to-ing and fro-ing, before we know it, the next general election date will not be far off.
The Fixed Term Parliament Act sets the date of the next general election in 2020. An early election is possible with a two-thirds majority support of MPs or by the government of the day engineering an artificial no-confidence vote on itself (which would be highly unlikely), according to an article in The Independent dated 12 July, 2016.
Either way, as remorse is already setting in and as the prospect of an unpalatable deal increasingly looms large, Theresa May, despite her initial promises to the contrary, may well be able to call an early general election to give her the mandate on whether to trigger Article 50 regardless or to abandon the exercise altogether. If so, after all the fuss and costs of uncertainty, Brexit may not happen after all.
My above prognosis, which was first mooted months ago, is consistent with what The Economist(8th October) outlined as what may appear implacable conundrums in securing an acceptable Brexit outcome in a protracted and highly-contentious multi-state and multi-dimensional process.
It also happens to chime with what Tony Blair has recently opined - "Right now there is one point and one point only to win: we should keep every option open. We’re a sovereign people. We can make up our mind; and we can change our mind. And whether we do, is up to us".
The following analysis was first posted on 4 April, 2016. This is re-posted with the latest updates.
A scathing front-page articleBeware the cult of Xi in The Economist (2 April, 2016) accuses President Xi of turning himself into another Chairman Mao. It accords Mao with "a mischievous sense of humor" while describing Xi as "reserved and unsmiling". It blames him for almost everything from market gyrations last summer to the recent vaccine scandal. It portrays him as confused in policies and lacking in sense of direction for the economy. It describes him as one obsessed with power concentration - being chairman of everything - and indulges in personality cult. It fears that by ripping apart the Communist Party's "corruption for able-job-done" compact, Xi could well do more harm than good for himself and the Middle Kingdom. Above all, it casts Xi as a super-authoritarian ruler bent on shutting down all civil dissent. In the final analysis, Xi does not seem able to bring about greater wealth and economic well-being and a more open society for the Chinese people.
Whilst Xi is no liberal and lots of vested interests feel threatened, my first reaction is that if Xi is as such bad news as the article describes, we would soon see a collapse in China of the social and economic, if not the political order. Yet, according to findings in September last year by PEW, a world-renowned public opinion survey organisation based in Washington D.C., there is widespread belief that standards of living have improved. Indeed, 96% believe that their lives are better than their parents' generation.
As for personality cult, the affectionate nickname "Xi dada" is not his invention. Compared with his recent predecessors, Xi is winning popularity hands down. In a single party state, fawning behavior is commonplace. But the call to rally behind the Party "core" ("hexin") is not a Xi-era phenomenon. The same happened during the Presidency of Jiang Zemin, and even during the weaker rein of President Hu Jintao. In any case, we are not seeing massive Maoist rallies waving the Little Red Book.
Indeed, any mirage of a Maoist revival is more a reflection of a popular nostalgia for ideals of the early Communist Revolution “where its government was clean, its army was the model of serving the people, its working men and women were dignified, and its life was meaningful without "commodification" and consumerism.” Click here (para.11)
A firm hand at the center has come from the realization that previous lax attitude towards provinces has resulted in uncontrolled, widespread corruption, power grabs and blocs of rent-seekers. With the Bo Xilai Affair, it dawned on the top leadership that unless the Party firmly grasps the nettle, its whole legitimacy and survival would be at risk.
The Economist leading article concedes that Xi's anti-corruption campaign has been popular with the Chinese people. What it fails to see is that as corruption has become so deep-seated and far-reaching, the whole legitimacy of the Party is under existential threat without a major surgery. To get on top of powerful opposing vested interests, authority needs to be concentrated as corruption has spread into every corner, including the military. The recent fall from grace of top Party and military brasses is a case in point.
A firm hand is also needed as, through turbulent waters, Xi is shifting China's complex behemoth into a different development model, more oriented towards consumer, innovation, and sustainable development. The unveiling of the country's ambitious Five Year Plan doesn't depict confused policies or a leader lacking in sense of direction.
However, centralized coordination doesn't translate into micro-management. The Five Year Plan, for example, comes from months if not years of input from groups of home-grown and foreign experts across the board, where the input and guidance of Premier Li Keqiang are evident. With its vast size and diversity, 21st-century China is no 16th-century Spain. The comparison with Philip II is a little ludicrous.
All in all, The Economist article under-estimates the complexity in China's change of direction and the need for a firm hand to turn things around, increased authoritarianism notwithstanding. It also conflates China's learning curve in financial reform with sheer incompetence and confused policies.
This happens to tally with the take of Cheng Li, Senior Fellow, Foreign Policy, Brookings Institution - The end of collective leadership in China? Not really- what he makes of the latest communique of the Communist Party of China (CCP) issued at the conclusion of the Sixth Plenum on 27 October, 2016. This sets the tone for the 19th Party Congress in the latter half of 2017. Cheng is the author of a new book, Chinese Politics in the Xi Jinping Era: Reassessing Collective Leadership.
To understand China's complexities and to see if and how China is likely to achieve her Five Year goals, click here.
A 10th October Lowy Institute Analysis by Thomas Wright explores "how US foreign policy would change should Donald Trump or Hillary Clinton win the US presidential election. Wright argues that a Trump presidency could see the United States undermine the liberal international order that it helped to establish. Clinton, by contrast, would be a more traditional internationalist president".
"Trump’s foreign policy will very likely be informed by his core beliefs: opposition to America’s alliance relationships; opposition to free trade; and support for authoritarianism, particularly in Russia".
"Clinton’s foreign policy is likely to reflect a more traditional internationalism, but may also distinguish itself from the Obama administration by a greater effort to deal with regional challenges to order in the Middle East, Europe, and Asia".
"If Clinton wins, she will need to respond to growing populist and nationalist sentiment in America in favour of limiting US engagement in the world".
Never before is an American presidential election been watched and debated so closely by so many nations, most of all the world's rising powers. All, not least Russia and China, are geared up in anticipation of a potential paradigm shift in the dynamics of the world order.
A Brookings Institution analysis by Jeffrey Bader dated 10 October "A framework for U.S. policy toward China" offers some possible pointers on how a new US President, particularly if Clinton wins, may re-calibrate policies in relation to a rising China.