Articles Featuring the late Chinese leader Mao Zedong and President Obama dressed in Communist Cultural Revolution-era military uniform are sold in Beijing. The Chinese have learned English from Obama’s speeches and celebrate the “fearless” way he rolls up his sleeves. Now that he’s coming, he’s also being greeted by items ranging from “Oba Mao” T-Shirts to a statue of him that bursts into flames.
IBD: 19 Oct. 2009
The Pentagon has announced that Chinese Gen. Xu Caihou will visit the United States and meet with Defense Secretary Robert Gates on Oct. 26. Xu is vice chairman of the People’s Liberation Army Central Military Commission. While here, Xu will visit American military installations around the U.S., including the U.S. Pacific Command.
Perhaps Xu will bring with him a note of thanks for the administration’s decision to shift authority for approving sales of missile and space technology from the White House to the Commerce Department. As Bill Gertz points out in the Washington Times, the little-noticed “presidential determination” made Sept. 29 alters a key provision of the 1999 Defense Authorization Act.
That provision required that the president notify Congress whether a proposed transfer of missile and space technology to China would harm the U.S. space-launch industry or help China’s missile programs. It was enacted after a Clinton-administration scandal in which U.S. companies were allowed to transfer technology that jump-started a troubled Chinese missile program.
After the failed launch of a satellite built by Loral Space and Communications Ltd. and attached to a Chinese rocket in February 1996, Loral provided 200 pages of data to China’s Great Wall Industry Corp. to correct the guidance system problems of their “Long March” rockets, which blew up 75% of the time. Hughes Electronics was also involved in the technology transfers.
On March 14, 1996, the Clinton administration transferred licensing responsibility for technology exports to the Commerce Department from State and Defense and, as a result, our formerly strict export controls were effectively eviscerated. This transferring of licensing responsibility was made after a request from a man who would be the Democratic Party’s largest donor in 1996 — Loral Chairman Bernard L. Schwartz.
A May 1997 classified Pentagon report concluded that Loral had “turned over expertise that significantly improved China’s nuclear missiles” and that “United States national security has been harmed.”
According to the Pentagon, the technology that improved the Long March satellite launcher has also made the Dong Feng ICBM series more lethal.
The move to shift technology export controls back to Commerce comes not long after the Chinese successfully tested a ground-launched anti-satellite weapon.
It follows a military parade celebrating 60 years of Communist rule. On display were 108 missiles of various types, including some designed to end U.S. dominance in the Western Pacific.
Military analysts strained their necks to see one new Chinese missile, the land-based DF-21, the world’s first ballistic missile capable of hitting a moving target at sea. The conventionally armed missile has maneuverable warheads and a range in excess of 1,000 miles.
“Investments in cyber and anti-satellite warfare (by China), anti-air and anti-ship weaponry, and ballistic missiles could threaten America’s primary way to project power and help allies in the Pacific — in particular our forward air bases and carrier strike groups,” Gates recently said in a speech to the Air Force Association.
“It is shocking,” said Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, “that it (technology controls) would be delegated to the secretary of commerce, whose job it is to promote trade, rather than to the secretary of state or the secretary of defense, who have far more knowledge and responsibility within their organizations for missile technology.”
Edward Timperlake, a Pentagon technology-security official under George W. Bush, said of the policy shift: “It looks like we’re going to have Loral-Hughes part two.”
Indeed, under the guise of space cooperation, we appear to be about to repeat the mistakes of the 1990s, when our technology flowed to the Chinese, allowing them to fix and modernize their ICBM force.
During his visit, Gen. Xu will have a chance to see the carriers and other warships in the U.S. Pacific Fleet — or as the Chinese might call them, thanks to periodic infusions of U.S. technology, targets.
IBD: 2 Oct. 2009
Commerce: Last month’s tariffs on Chinese tires were explained away as just upholding U.S. law, not the first shot in a trade war. So why are special interests now flooding the president with demands for more tariffs?
When the White House slipped in an order to slap 35% optional tariffs on Chinese tire exports late on a Friday night last month, an anonymous official quickly justified it to the Los Angeles Times.
“This is certainly not an action directed against globalization . .. . The president is very committed to open and free trade,” the official said. “Part of that is being committed to enforcing trade laws and trade agreements.”
In fact, that tariff opened a floodgate for new demands for protective tariffs on steel pipes, solar panels, chemicals, glossy paper, truck tires and more. Big Labor and industry groups heard the starting gun, and are now barreling forward with protectionist wish lists.
It’s not surprising: They have a friendly White House that has let trade technicalities be used to impose tariffs.
Section 421 of the 1974 Trade Act, used to place tariffs on Chinese tires, is a law China signed off on to enter the World Trade Organization. It lets a president raise tariffs on anything if some sort of market “disruption” from foreign competition can be shown.
“The 421 special safeguard law has a very low threshold,” notes trade expert Daniel Griswold of the Cato Institute. “All you have to do is show that imports have gone up and markets have been ‘disrupted’ — as if trade and competition were not about disrupting markets.”
What the provision ultimately says is that other countries can trade with us, but only so long as they don’t make better products.
It’s an outrageous use of a loophole that shouldn’t be there at all.
Not only has it stimulated new candidates for Section 421 claims, it’s stimulated other protectionist claims for relief on issues like dumping. It’s all likely to trigger retaliation abroad, Griswold adds.
“One of the biggest negatives of the tire tariffs is that it has opened floodgates to copycat actions,” he warns.
That’s not hyperbole. Global Trade Alert, a panel of experts working with the World Bank, warned last month that 130 new measures to restrict trade worldwide are in the pipeline.
Russia, Japan, Ecuador and South Africa are all joining in. Fifty-five acts of protectionism are directed at China, 49 target the U.S and 46 hit Japan.
Manufactured goods and food are hit the hardest, but 90% of all goods traded globally are hit by some sort of protectionist measure. In an atmosphere like this, is it any wonder that global trade is expected to shrivel 10% this year?
Griswold says American families — the poor and the middle class — will be hurt the most. Imported goods make up a larger part of their consumption than they do for upper-class families.
Moreover, producers will lose key markets overseas. World GDP is roughly $60 trillion — vs. $14 trillion for the U.S. A trade war shrinks our companies’ potential global market sharply. And if foreigners sell less in our markets they’ll buy less, too. It’s lose-lose — or, as liberal economists say, a zero-sum game.
Well, maybe not so zero sum. A small slice of protected industries that employ very few Americans will emerge as winners.
A trade war is nothing but a bunch of carved out set-asides for Big Labor unions and uncompetitive industries.
It may look like tiny exceptions and compromises, but it snowballs with each measure and countermeasure. It’s what happened in 1930 with the Smoot-Hawley tariffs and it’s happening now.
A trade war is no different from Ernest Hemingway’s description of going broke: “It occurs at first very slowly, then all at once.” The result of this mudslide of punitive trade tariffs is the same thing.
By INVESTOR’S BUSINESS DAILY | 8 July 2009
Democracy: Riots exploded in China’s western Xinjiang province this week, in what authorities alternatively call criminal acts or global terrorism. In reality, it’s neither: it’s the pent-up fury of people who live without freedom.
International response has been muted, but shouldn’t be. The scale of deaths and the increasing frequency of such upheavals across the country raises red flags about China’s prized “stability.”
It’s curious, but places that justify repression in the name of stability always seem to end in turmoil. Official Chinese sources offer two explanations, each containing a bit of truth, but all skirting the real issue, which is China’s growing need for democratic accountability.
Uighur women protest China’s detention of 1,400 men in Urumqi on Tuesday after Sunday’s riot. Uighurs also held sympathy protests globally.State media claimed the riots were a law-enforcement matter, describing Uighur ruffians coming armed and ready to rumble at last weekend’s demonstration in Urumqi. But that doesn’t quite work.
China’s other version of events contradicts the law-enforcement thesis and called it essentially the work of outside agitators.
The riots were also said to be an orchestrated effort from abroad to break up the country with terrorism. One official version holds that Uighur rioters are al-Qaida-inspired troublemakers.
There’s some truth to this, given rising Islamic fundamentalism in Xinjiang. Other versions insist the unrest was masterminded from America by exile leader Rebiya Khadeer, a 62-year-old businesswoman who leads the Uighur National Congress. Khadeer denies this, and it’s impossible to see how much influence she has, anyway.
All these explanations ignore that these riots and demonstrations are getting bigger, more frequent, and more lethal.
They’re not just in Urumqi, but in Lhasa, Tibet, and in China’s central industrial cities, with some sources estimating them at 80,000 per year now.
That signals this isn’t about the extremes of crime or terrorism, but rather the absence of democracy and accountability.
China remains a communist country, with most freedoms absent. Citizens cannot express themselves to government, or even get their attention through civil means. Writing a letter to a congressman and getting a result is out of the question in China.
Redress for grievances doesn’t happen, and booting corrupt officials is out of the question. For minorities, it’s especially tough: “Uighurs get two choices: They are terrorists if they voice concerns or else good Uighurs if they assimilate,” said Alim Seytoff, spokesman for the World Uighur Congress in Washington.
That leaves the only outlet for pent-up anger in demonstrations and riots. It’s human nature, and likely to grow unless Beijing gets serious about giving citizens a voice.
The democratic deficit is growing increasingly obvious as China’s cities — even remote Urumqi — grow more prosperous and Internet communication, including Facebook and Twitter, expand.
Xinjiang is remote, but it’s no backwater. It’s part of China’s economic success story, with its vast oil and mineral resources.
All that economic prosperity logically leads to one place: Democracy. Right now, what’s happening in Urumqi is a hunger for freedom.
IBD: 2 July 2009
The U.S. Environmental Protection Agency on Tuesday granted California its long-standing request — denied by the Bush administration — for a waiver to allow it to impose even more stringent air pollution rules than currently required by the federal government.
The way is now clear for implementation of a 2002 state law requiring new cars to increase their fuel economy 40% by 2016. At least a dozen other states are champing at the bit to follow California’s lead.
Gov. Arnold Schwarzenegger, captain of a ship seriously listing to port, hailed the decision as a “huge step for our emerging green economy that will create thousands of new jobs and bring Californians the cars they want while reducing greenhouse gas emissions.” So far the green economy is withering on the vine.
Californians don’t want clown cars any more than the rest of the country. That’s why they’re driving their real cars out of the state. For four straight years California has suffered a net loss of population to other states. Without illegal immigration, California would be shrinking. For the rest, it’s go east, young man.
California faces a $42 billion deficit. It needs nuclear power plants to generate pollution-free power to attract, not repel, industry and jobs. It needs revenues from the exploitation of its offshore oil resources. Redemption will not come from paving the state with solar panels and hoping the sun shines.
As Peter Brookes of the Heritage Foundation reports, sulfur from China alone in California, Oregon and Washington state alone reaches 10% to 15% of the EPA’s allowable levels. Estimates are that a third of California’s air pollution and a fifth of Oregon’s comes from China. Sensors in the Sierra Nevada Mountains have identified huge Chinese pollution clouds that traverse the Pacific.
“We’re going to see increased particulate pollution from the expansion of China for the foreseeable future,” says Steven Cliff, a research engineer at the University of California, Davis.
“If they started driving cars and using electricity at the rate in the developed world, the amount of pollution they generate will increase many, many times,” adds Tony Van Curen, a UC Davis researcher who works with Cliff.
In a recent issue of the Journal of Environment Economics and Management, a UC Berkeley research team noted that China had in fact become the world’s biggest polluter and that current computer models substantially underestimate future emissions growth in China. The Berkeley researchers say China’s emissions are now growing at an annual rate of 11%.
“When you look at China’s population growth and industrial growth, it’s hard to imagine how air quality could improve in the near future,” said Ruby Leung, a researcher at the Energy Department’s Pacific Northwest National Laboratory in Richland, Wash., which collaborates with Chinese government scientists on atmospheric research.
Every seven to 10 days, as the New York Times reports, a new coal-fired plant big enough to serve every household in San Diego comes on line in China, exporting more pollution to California and the Western United States than Schwarzenegger’s draconian proposals could ever hope to eliminate.
As a “developing” nation, China is exempt from the Kyoto agreement under which industrialized countries are trying to reduce their collective emissions of greenhouse gases. China burns 2,500 tons of coal and 210,000 gallons of crude oil per minute. It has plans for 2,200 additional coal generators by 2030.
For every “cleaner” car put on California highways, many more regular cars will be added to Chinese roads with their drivers going to businesses that are opening, not closing or moving elsewhere. Guess which way the wind will blow all those greenhouse gases and auto pollution.
Attached is a commentary by CFNS’s Program Director, Peter Leitner, that appeared last week in the Washington Times regarding the proposed sale of General Motors’ Hummer brand and assets to China. Given Dr. Leitner’s vast experience as senior strategic trade advisor in the Office of the Secretary of Defense, his perspective on this deal is unique – and most disturbing.
Clearly, Peter sees the transaction as a threat to our national security, as opposed to part of a financial workout for a bankrupt company. However, if the history that he cites of such sales to China is any indicator, our government would be well advised to heavily scrutinize this matter from his point of view.
Friday, June 5, 2009
LEITNER: Hummer sale to China
Peter Leitner – Washington Times
COMMENTARY:
Current plans to reorganize General Motors Corp. by, in part, selling off some of its specialty automotive brands may have gone off the deep end by announcing that the Hummer brand and all its manufacturing facilities and know-how will be sold to Communist China.
The Hummer is a civilian variant of the U.S. military’s Humvee – the world’s most advanced multipurpose and biggest-selling military vehicle of its class. Proponents of this sale will insist the Hummer is not as rugged as its dedicated military counterpart, so there is nothing to worry about in selling its factories and technology to China.
The civilian Hummer still has enough off-road agility, maneuverability, ruggedness and hauling capacity to qualify as a military vehicle virtually anywhere on Earth. Selling the production lines to China will, no doubt, quickly result in mass production of less luxurious versions and their sale throughout the world to the most repugnant and repressive regimes, rogue militias, terrorist entities and governments hostile to U.S. interests.
Since most of these entities now rely upon Toyota 4X4 pickup trucks for their military mobility and raiding parties, they will quickly upgrade to the Hummer, which can readily be equipped with pedestal or ring mounts for machine guns, cannons, mortars or rockets.
The Chinese have a long track record of securing manufacturing licenses for civilian versions of military systems and upgrading those “civilian versions” back up to military capability. They did this with the French-designed Dauphin (PRC Z-9) helicopters by morphing them into ground attack and anti-submarine warfare missions.
We should not expect that the Hummer production lines will remain in the United States very long either. In the case of another GM/Delco spinoff sold to Chinese interests through an American frontman, the Anderson, Ind., Magnequench saw the Chinese clone its manufacturing processes and move all production to China – forever hijacking scores of U.S. jobs as well as a critical military technology – rare-earth magnets.
Not too long ago, the People’s Liberation Army was prevented from purchasing the production line for the TFE-731-2A-2A gas turbine engine from the Garret engine company. The company, as well as the Chinese importer, insisted the engines would be produced in China for civilian aerospace applications. That myth was exploded after analyses revealed the engine would more likely be used to power a new generation of long-range Chinese cruise missiles.
Desperate, financially strapped, companies often engage in shortsighted and dishonest transactions that place our nation at risk while executives lie through their teeth in an attempt to brush off national security concerns.
A classic case was the so-called MD-17, a C-17 strategic military airlifter painted white with an easily replaceable electrical panel removed that otherwise allowed the rear cargo ramp to be opened in flight for tactical insertions. China and the U.S. manufacturer said it was to be used for rural mail delivery – a statement so ludicrous that the concept was eventually dropped.
At a minimum, the proposed sale of Hummer to China should be carefully reviewed by the interagency Committee on Foreign Investment in the United States, the intelligence community, the State and Defense departments and the Congress.
We simply cannot trust the judgment of a desperate company as it seeks refuge in bankruptcy proceedings.
ABOARD THE EUGEN MAERSK, IN THE NORTH SEA — On an early afternoon last month, the Eugen Maersk has left Rotterdam, the Netherlands, on the tail end of a journey from Shanghai. But the giant freighter is cruising at 10 knots, well shy of her 26-knot top speed.
John W. Miller/The Wall Street Journal
At about half speed, fuel consumption drops to 100-150 tons of fuel a day from 350 tons, saving as much as $5,000 an hour. “The strategy now is to slow steam as much as possible,” said Christian Hagart, the Eugen’s chief officer.
That strategy is a key element in plans by AP Moeller-Maersk AS to cut $1 billion in costs this year, scaling back on everything from fuel to paper napkins. Analysts say the cuts should keep the whole company out of the red in 2009, since Maersk’s container unit is expected to lose between $1 billion and $2 billion.
BEIJING – Chopped cardboard, softened with an industrial chemical and made tasty with pork flavoring, is a main ingredient in batches of steamed buns sold in one Beijing neighborhood, state television said.
China Central Television’s undercover investigation showed a street vendor making the buns from squares of cardboard picked from the ground. The report, aired late Wednesday, highlights the country’s problems with food safety despite government efforts to improve the situation.
![[SB123808216173948753]](https://i0.wp.com/s.wsj.net/public/resources/images/OB-DL378_maersk_D_20090407172157.jpg)
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