Category Archives: Trade

Democratizing China Should Be The U.S. Priority

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Journal of Political Risk, Vol. 7, No. 7, July 2019

Hong Kong protest, June 2019. Source: Flickr.

Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

U.S. goals in relation to China, our biggest national security threat, tend to array along three main axes: military, diplomatic, and economic. But in deference to the failed strategy of engagement, we don’t use the significant normative and ideological power of democratization as a multiplier on these battlefields, nor does the prospect of democratizing China factor sufficiently in our cost-benefit analyses.

Militarily, we prioritize defense from China, but other than ongoing military support to Taiwan and the Tibet campaign of 1957-72,[1] we have not used our substantial military resources to promote democracy in China, for example in the rebellious zones of Xinjiang or Hong Kong. Economically, we prioritize U.S. market share in China, IP protection, and beating China’s GDP, technology and industrial strength. But we don’t condition our China trade on our lowest priorities, human rights and democracy.

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Geopolitics and the Western Pacific: An Interview with Leszek Buszynski

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The book cover of Geopolitics and the Western Pacific: China, Japan and the US, by Dr. Leszek Buszynski. Routledge, 2019.

Journal of Political Risk, Vol. 7, No. 6, June 2019

This interview with Dr. Leszek Buszynski, author of Geopolitics and the Western Pacific: China, Japan and the U.S. (Routledge, 2019), took place by email with Dr. Anders Corr between May 31 and June 12.

Anders: What are some of your recommendations in the book?

Leszek: The recommendations are in the final chapter and have been written from the perspective of Australia as a a middle power and ally of the US.  Basically, the U.S. relies excessively on military power to counter China but this is creating the fear of a US-China clash in the region from which China benefits, particularly within ASEAN.  Scuttling the Trans-Pacific Partnership (TPP) was a mistake because it is a way of bringing together the states of the region into cooperation with the U.S., Japan and Australia in a way which would offset Chinese influence.

Anders: Don’t you think that China is also creating fear with its military buildup? Wouldn’t countries like Japan and South Korea be even more fearful if they did not have the U.S. military there to protect them?

Leszek: This is not the issue, the answer is of course. But without a broader US presence in the region, one that is not just military based, regional countries such as those in ASEAN would feel the pressure to gravitate to China.  China has a way of undermining the U.S. presence and its alliance system by playing on regional fears of conflict and instability, the Philippines under Rodrigo Duterte is a case in point. America has to counteract that. Continue reading →

Canada’s Conflict With China Can Be Solved With Joint Tariffs By Democratic Allies

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Journal of Political Risk, Vol. 7, No. 6, June 2019 

(Front L-R) Brazil President Jair Bolsonaro, French President Emmanuel Macron, Indonesia President Joko Widodo, Chinese President Xi Jinping, US President Donald Trump, Saudi Arabia’s Crown Prince Salman, Japan Prime Minister Shinxo Abe, Argentine President Mauricio Macri, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan, South Korean President Moon Jae-in, South African President Cyril Ramaphosa, Netherlands Prime Minister Mark Rutte, (Second row L-R) Spanish Prime Minister Pedro Sanchez, Egypt President Abdel Fattah el-Sisi, President of the European Commission Jean-Claude Juncker, Australia’s Prime Minister Scott Morrison, British Prime Minister Theresa May, India Prime Minister Narendra Modi, Canada Prime Minister Justin Trudeau, Italian Prime Minister Giuseppe Conte, European Union President of the European Council Donald Tusk, Senegal President Macky Sall, Chile President Sebastian Pinera and Singapore Prime Minister Lee Hsien Loong and third row’s invited guests attend the family photo during the G20 Osaka Summit in Osaka on June 28, 2019. Source: OECD Organisation for Economic Co-operation and Development via Flickr.

Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

Canada is in an awkward dispute with China. On the one hand, it wants two Canadians, Michael Kovrig and Michael Spavor, released from detention, under conditions some would call torture. The lights are left on 24 hours a day, they cannot see loved ones, they undergo daily interrogations without legal counsel present, and they only get short visits from their consular officials once a month. On the other hand, Canada wants to comply with its extradition treaty with the U.S., which wants Meng Wanzhou for alleged lies to financial institutions in order to evade Iran sanctions. Perhaps more urgently, Canada wants to continue its lucrative trade with China. A solution is for other allied democracies, including in the U.S. and Europe, to use their substantial power to impose tariffs on China to help out their fellow democracy, Canada. Our neighbor to the north could do the same, in its own defense. Canadian tariffs against China, linked to demands for the release of Kovrig and Spavor, would likely get them freed overnight.

China is not too subtle about its demands. It wants Meng sent back safe and sound to China. Until then, apparently, the two Canadians will be detained and Canada will undergo increasing difficulty with its agricultural exports to China. All of Canada’s China problems will go away if it just signs on the line and releases her from home detention, according to China and its Canadian intermediaries.

The Kovrig-Spavor predicament is awkward for Canada because it is arguably a result of decades of democracies’ prioritization of trade over human rights issues. That includes Canada. Now that Canadian citizens have been targeted, Canada is wondering whether it is getting the same cold shoulder from its allies that it gave to human rights activists in the past.

The newly-found Canadian human rights concern for Kovrig and Spavor rings hollow after it largely ignored, for purposes of trade, the thousands killed by China at Tiananmen Square in 1989, and the 1-3 million Uyghurs and other Turkic Muslims detained in reeducation camps. By not taking a stronger stand on all of China’s human rights abuse, but instead focusing on just the two Canadians of the millions harmed by China, Canada undermines its own moral authority, and with it, any advocacy for the human rights of the two Canadians.

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Can the U.S. and Saudi Arabia Defeat Iran?

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Journal of Political Risk, Vol. 7, No. 6, June 2019 

President Donald Trump walks with Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman, along the West Colonnade of the White House, Tuesday, March 14, 2017. Source: Official White House Photo, by Shealah Craighead.

William R. Hawkins
International Economics and National Security Consultant

There is concern that President Donald Trump’s last minute decision to call off airstrikes against Iran signals weakness in the White House. The Commander in Chief stated, “We were cocked & loaded to retaliate last night on 3 different sights [sic] when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it, not….proportionate to shooting down an unmanned drone.” This explanation will feed critics the next time there is an American strike anywhere, for any reason, that kills enemy troops.

President Trump’s explanation did not address why Iran is shooting at drones (the one downed was not the first targeted). Drones are used to survey Iranian attempts to attack oil tankers, a major threat with the strategic goal of pressuring the international community to lift the sanctions on the sale of Iranian oil which are crippling the Iranian economy. The attack on shipping also threatens the lives of crews. By taking the one drone out of context, its loss seemed too minor to justify retaliation. This was a mistake in analysis that fostered a mistake in principle. Continue reading →

Trade Wars, Sanctions and Business Appeasement

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Journal of Political Risk, Vol. 7, No. 6, June 2019 

Chinese President Xi Jinping, center, addresses a U.S.-China business roundtable, comprised of U.S. and Chinese CEOs on September 23, 2015, in Seattle, Washington. The Paulson Institute, in partnership with the China Council for the Promotion of International Trade, co-hosted the event. Source: Governor Jay & First Lady Trudi Inslee via Flickr.

William R. Hawkins
International Economics and National Security Consultant

In his book Appeasing Bankers, Jonathan Kirshner, the Stephen and Barbara Friedman Professor of International Political Economy at Cornell, argues that “Bankers dread war. More precisely, financial communities within states favor cautious national security strategies and are acutely averse to war and to policies that risk war.” He finds this to be a “universal” trait (at least within capitalist societies) evident throughout modern history. This should be kept in mind when watching the large swings in the stock market in response to reports about the progress, or lack of, in U.S.-China trade talks, Iranian threats and turmoil at the Mexican border. While Kirshner focuses on “stability” with an emphasis on inflation and debt accumulation, he notes the “breathtaking financial globalization” that took place in the post-Cold War period. This has made markets even more sensitive to the dynamics of a contentious international system. Fortunately, the stock market rapidly recovers from panics generated by headlines thanks to the fundamental strength of the U.S. economy.

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