<>Electric Cars and China.

NEW York Times: “The U.S. Needs Minerals for Electric Cars. Everyone Else Wants Them Too.” And adds: “The United States is entering an array of agreements to secure the critical minerals necessary for the energy transition, but it’s not clear which of the arrangements can succeed.” 

       To run, EVs require six times the mineral input, by weight, of conventional vehicles. These minerals are needed and America’s push for “climate change” autos is hobbled by impending shortage of those valuable thingies, which the U.S. doesn’t have much. Importation is imperative.  

       What are those? Cobalt, nickel, lithium and manganese. But mining and processing them can be harmful for workers, their communities and the local environment. Here are the top 5 cobalt producers by country: Democratic Republic of Congo, Russia, Australia, Canada, and the Philippines. Nickel: Indonesia, Philippines, Russia. Lithium: Chile, Australia, Argentina, China. Within Europe, Portugal has smaller quantities of the valuable raw material. Manganese: South Africa, China, Australia, Gabon.

       Leading U.S. electric vehicle manufacturer Tesla gets most of its lithium from China’s Ganfeng Lithium. At the end of 2021, Tesla inked a fresh three year lithium supply deal with the top lithium producer. News: “Can the World Make an Electric Car Battery Without China?” And adds: “From mines to refineries and factories, China began investing decades ago. Today, most of your electric car batteries are made in China and that’s unlikely to change soon.”       

And then we talk, again, of Foxconn, main manufacturer of top U.S. technology giants, mainly Apple Inc. Taiwan-owned Foxconn has 12 factories in China, including the largest in Shenzhen province. Main supplier of Foxconn’s silicon (for microchips) is, of course, China. 🚕🔋🚙

Poverty. Crime. Jobs. In America.

NEWS months ago. New York Times: “New Orleans Mayor Moves Past Failed Recall Effort, but Unease Persists.” And adds: “LaToya Cantrell remains in office, but frustration among residents has continued to spread as crime remains high and basic services sputter.” The Big Easy though, compared with other states, isn’t the prime of unease. Poorest is Detroit; most crime-infested, St. Louis; highest unemployment rate, Nevada at 5.5 percent. NO isn’t even in the Top 10 in those categories. 

       News has a way at singling out certain targets and then blurs the larger picture. Detroit is the poorest city in the United States with a median income of $27,838. Poverty rate, 37.9 percent; unemployment rate, 19.8 percent. Joblessness in this famous Michigan city is the highest of anywhere else in the nation and more than five times higher than the national unemployment rate. 

       New Orleans isn’t even in the top ten poorest. The rest: Cleveland, Dayton OH), Hartford CT, Rochester NY, Newark NJ, Jackson MS, Syracuse NY, Birmingham AL, and Springfield MA.

Ten highest crime cities in the United States? St. Louis, Detroit, Baltimore, Memphis, Little Rock, Milwaukee, Cleveland, Albuquerque. No NO. 

       In June 2023, Nevada and the District of Columbia had the highest unemployment rates of any state in the United States. The unemployment rate in Nevada was 5.4 percent, and 5.1 percent in the District of Columbia. California also had a high unemployment rate, reaching 4.6 percent during the same time period. Louisiana is not in the Top 10. 🗽🇺🇸🗽

Photo credit: NPR.

<>China Stuff.

DURING the Chinese Communist Party's 100th year anniversary in July 2021, Xi Jinping reiterated China's "Common Prosperity" ideal in several speeches. Ushered by then Chairman Mao Zedong in 1953, “Common Prosperity” stated a goal to bolster social equality and economic equity. Easily, the political slogan meant collective ownership. In the 1970s, ensuing leader Deng Xiaoping modified it as collective entrepreneurial sense leading to open-door policy. But some could get rich before others. 

       Then 21st century strode in. China and the United States, or CCP chief Jiang Zemin and President Bill Clinton, signed a defining trade pact in 2000, which paved the way for Beijing to enter the World Trade Organization as MFN (most favored nation) the following year. And we know how stuff all went down following that year. China soared as the world’s #2 economy, behind the U.S. 

       And so under the leadership of Xi Jinping, Common Prosperity gained large-scale prominence, yet again redefined as more equal distribution of income, but also saying that it is not uniform egalitarianism. Egalitarianism is the doctrine that all people are equal and deserve equal rights and opportunities.    Clearly, Xi’s definition of the word is exclusively Chinese, which many of us outside the Great Wall are unable to fully comprehend. 🇨🇳🇨🇳🇨🇳

MEANWHILE, according to data from Forbes, the United States has the highest number of billionaires in the world with a total of 724 billionaires. This is followed by China with 698 billionaires and India with 237 billionaires. Although Statista and the Hurun Global Rich List 2023 say, China housed the highest number of billionaires worldwide in 2023. In detail, there were 969 billionaires living in China. By comparison, 691 billionaires resided in the United States. (Take note as well that China’s population is 4x larger than the U.S.) 

       And so in 2021 as The Dragon contemplated, Xi reminded the 1.4 billion Chinese that individual wealth has been "uncontrollable" in the last two decades, at least. But there must be a way to level some discrepancies somehow. 

       What followed: Alibaba, one of the world's largest retailers and e-commerce companies, donated $15.5 billion to the program. Another tech giant Tencent, doubled the money. Etc etcetera. Total donations by China’s 49 top philanthropists rose to a record $10 billion, while the top 10 gave away 6.3 percent of their combined wealth. Most of the money will go toward rural revitalization and helping grow earnings for low-income groups. And China’s ambitious Belt and Road Initiative. 

       By the way, China’s super-rich technology sector are private corporations. Most of major industries are state-owned. 🇨🇳🇨🇳🇨🇳

THE Belt and Road Initiative a.k.a. New Silk Road is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in more than 150 countries and international organizations. It is considered a centerpiece of Xi Jinping's foreign policy. 

       Hence, post-Covid, China eases up on its manufacturing mojo to focus on BRI investments globally and upgrade of countryside life, a continuum of "Four Modernizations" that Deng Xiaoping started in the 1970s. 

       The Four Modernizations were goals formally announced by China's first Premier Zhou Enlai to strengthen the fields of agriculture, industry, defense, and science and technology in China. The strategy was adopted as a means of rejuvenating China's economy in 1977, following the death of Mao, and later were among the defining features of Deng’s tenure as the paramount leader. In those years, China (quietly) bought tracts of lands in four corners of the globe. 

       Meantime, China has also loaned out (via its 4 state owned banks) $1.5 trillion in direct loans and trade credits to many countries in the past 10 years before Covid. These countries are unable to heed repayments due to the pandemic obvious and then the Ukraine War happened. (Remember as well that China holds $1+ trillion of US national debt as well.) 

       But China as China prepared for these. 🇨🇳🇨🇳🇨🇳

DESPITE China’s stature as #6 in oil production, it doesn't sell/export its oil, instead the Chinese buy as the world's #1 oil importer. No brainer. But a prolonged war isn't good for China as the shudder affects ongoing BRI projects and countryside development, as well as Beijing FDIs scattered all over the globe. What about the gargantuan loans? Debtors, mostly low income economies, wouldn’t be able to issue repayments.  

       Many say, the Chinese majority are poor, anyways. There’d be disagreements on the word "poverty" because we in America define it per our sociocultural experience. China is a different world although glimpses of Western lifestyle can be seen in some cities. 

       Yet the fact is, Chinese visitors are a major tourism moneymaker in many cities globally. And Chinese investors and business owners are all over, many as young as 17 year olds. But if we visit Chinese countryside, we'd see traditional life, which we may say "poor." That is more Han Buddhism/traditionalism than Chinese socialism. 

       But I can't dispute the fact that they are a lot happier than most Americans. Example: China ranks #3 as the country with the largest pet dog population but on festivities, fireworks are all for fun. No reason to get depressed, irate, or sad. Dogs out there enjoy the crazy noise and insane dragon dance fanfare. Need I say that the Chinese of 600 to 900 A.D. manufactured fireworks from saltpeter (potassium nitrate), charcoal, sulfur and other ingredients such as herbs? It was first known as “black powder.” Which the Western saw and turned into gunpowder. But that’d be another subject to discuss and blog. 🇨🇳🇨🇳🇨🇳

GEOPOLITICS: Ukraine, Russia, United States, E.U., NATO, and a war that has to end.

INVASION: An unwelcome intrusion into another's domain. Inhuman, unlawful, evil. Yet it’d offer current events clarity to look back to where/when the armed hostilities started. By doing so, we would see some sense in knowing more about geopolitical power play and the forces involved, and why. 

       First, let’s go to 2014: Russia’s annexation of the Crimean Peninsula, then part of Ukraine. In that year, NATO allies agreed to halt the cuts they made after the Cold War ended. National military budgets were upgraded, and moved toward spending 2 percent of GDP on defense by 2024. With that target date closing in, and the biggest land war in Europe in decades ravaging Ukraine, NATO is expected to commit to a new budget goal.

       Vladimir Putin said that Russian troops in the Crimean peninsula were aimed "to ensure proper conditions for the people of Crimea to be able to freely express their will," whilst Ukraine and other nations argue that such intervention is a violation of Ukraine's sovereignty. And so on and so forth. 

THEN there’s the war in Donbas. The coal-rich Ukrainian region was already crushed by war since 2014, at least, as part of the broader Russo-Ukrainian War. Russian-backed separatists versus the Ukrainian military. Armed hostilities were still at it until it was subsumed by the Russian invasion of Ukraine in February 2022. Yet the world never really paid attention with Donbas, although the oblast turned into ruins and rubble with almost 15,000 dead as of 2021.

       Clearly, conflict between Russia and Ukraine is deep. You may google more history before 2014, including the Chernobyl disaster in Kyiv in 1986. Yet per natural gas export, the two countries somehow found reason to sit for mutual profit. Approximately 80 percent of natural gas that Russia sends to the E.U. used to pass through Ukraine territory. Moscow then paid Kyiv billions$ as transit tax for the passage. 

       Then came the unresolved “gas dispute” between Moscow’s Gazprom and Kyiv’s Naftogaz, dating back to 2008. These disputes have grown beyond simple business disagreements into transnational political issues—involving political leaders from several countries—that threaten natural gas supplies in numerous European countries dependent on natural gas imports from Russian suppliers. Repeat: Russia provides approximately a quarter of the natural gas consumed in the European Union.

       During this conflict, Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation, but later Naftogaz admitted that because of harsh winter (lower than minus 30C) some natural gas intended for other European countries was retained and used for domestic needs. Etc etcetera. 

NORD Stream 2, which is mainly funded by Russia, was nearing completion when the war broke out in early last year. NS 2 was half-Moscow funded and the other half by 4 European utility/energy giants Uniper, Wintershall Dea, OMV, Engie, and Royal Dutch Shell. The pipeline negates Ukraine. Moscow’s natural gas would instead pass by the Baltic Sea onto Western Europe to Germany. 

       Russia’s business rivals, mainly U.S. corporate giants, loudly sounded that Nord Stream 2 was Russia’s tactic to (politically) rule Europe via its massive fuel exports. The U.S. was only #4 in fuel (gas and oil, or either) export in E.U. that time.  

       By now, we know how stuff went down. Meanwhile, due to perennial double-digit unemployment in Ukraine, around 4 million Ukrainians used to work in Russia before the war. 

NEWS: “How NATO's expansion helped drive Putin to invade Ukraine.” I don’t sincerely believe that Vladimir Putin will to invade Ukraine. A major reason was China inked a $117 billion oil deal with Russia, on a discount, a week or so before the war. The summer before, China also signed a $400 billion oil deal with Iran. Take note that prior to all these, Saudi Arabia was China’s top importer. Yes, China is world’s #1 oil importer. As we  know it by now, these three giants are BFFs. With BRICS buddy India, priority of these “emerging economies” is economy, and war–especially prolonged war–easily derails economic activity.

       China’s purchase of oil and major commodities from Russia totaled $88.3 billion in 2022. Although Russia isn’t China’s top importer, overall. What I am saying is, a war that is expected to shudder the global market because Russia is involved, would adversely affect China’s business, especially financial investments and contractual cooperation with 147 countries via Belt and Road Initiative projects. Meanwhile, as of 2022, China has sunk almost $68 billion on BRI, which is of course a modest estimate. This: China has loaned $900+ billion to 151 lower-income countries before Feb 2022. 

       Why would the CCP want a war? Doesn’t make an iota of sense to the intensely trade-minded Chinese. 

BACK to NATO and Russia. Boris Yeltsin in 1991 in Helsinki: "We believe that the eastward expansion of NATO is a mistake and a serious one at that," the ex-Russian post-Cold War president said. "Nevertheless, in order to minimize the negative consequences for Russia, we decided to sign an agreement with NATO." Those agreements included an array of security and economic issues, including further sharp reductions in the two nations’ nuclear arsenals.

       In the most ambitious accord, the two countries agreed in principle to negotiate a new arms control treaty that over the next decade would reduce the number of deployed strategic warheads by about a third from the levels agreed to.

       How would arms control work if a huge military alliance continues to expand? What is the sense in that? Remember, Russia dissolved the Warsaw Pact, NATO’s counterpart in Eastern Europe, alongside dissolution of the USSR and end of Cold War in 1991. 

       However, to Kremlin’s dismay, NATO further expanded, adding the Czech Republic, Hungary and Poland (1999), Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia (2004), Albania and Croatia (2009), Montenegro (2017), North Macedonia (2020), and Finland (2023). 

WHY Ukraine is important?

       Ukraine, as the largest former Soviet republic in Europe besides Russia itself, has been a key part of alliance talks since it declared independence from the USSR in 1991. In the three decades since, NATO expansion has put four members on Ukraine's borders.

       Putin himself has long said that he believes Ukrainians and Russians to be a single people, unified by language, culture and religion. In July 2021, he wrote a long essay about the "historical unity" between the two nations. Before the war, there are 5.8 million Ukrainians living in Russia; 8.3 million Russians in Ukraine. Easily, they are kin, pretty much like the Chinese in the Mainland and in Taiwan.  

       For the U.S. and its Western allies, a successful and independent Ukraine was a potent potential symbol that Russia's time as a powerful empire had come to an end, political watchers say. A NATO membership would have sealed it? Maybe.  

       Meanwhile, in April, Finland joined NATO in a major blow to Russia. Sweden’s accession seems imminent. However, on Ukraine’s requested admission into NATO, President Joe Biden told CNN in an interview: “I don’t think it’s ready for membership.” Or the West isn’t ready to 101 percent infuriate the Kremlin? 

       NATO chief Jens Stoltenberg adds there’s no timetable set for Ukraine’s membership. President Volodymyr Zelenskyy blasted the organization’s failure to set a timetable for his country’s admission as “absurd.” 

       While it’s not on the agenda, NATO hopes that Belarus, Lithuania’s big neighbor, and Russia’s main backer, will not do some surprise moves. Belarusian President Alexander Lukashenko said in June that his country has received Russian tactical nuclear weapons.

       Despite all these, Western countries are still willing to keep sending weapons to help Ukraine do the job that NATO was designed to do — hold the line against a Russian invasion. Why not just end the war? The United States has forwarded $75 billion (out of $113 billion approved by Congress) of taxpayer’s money to Ukraine, as of end of 2022. The European Union has given $35 billion, so far. NATO members actually committed at least 75.2 billion euros (or $80.5bn) in financial, humanitarian and military aid to Ukraine between January 24 and November 20, 2022.

       Yet darkness still shrouds the glade. As I end this post, Russia’s threat to pull out of the Ukraine grain deal raises fears about global food security. And more movements of valuable merch, fuel, and products are shuddered. At this juncture, major global businesses are competing for gargantuan profit. Sure. But if this monstrous idiocy goes on, it is not just China’s BRI or FDIs or India’s shrewd trade juggling would suffer big. Peoples of the world are easy victims, of course. And I am not talking about a full-blown world war either. (Despite my fears, I am not that paranoid.) 

       But Western powers don’t seem to care. Sad and tragic. ☮️☮️☮️

Photo credits: Futures Platform. 360info. Geopolitika.hu

President Biden’s Foreign Policy Chess Game.

BAFFLING. But what do I know, right? The same week or so after President Biden approved the delivery of cluster munitions to Ukraine (as part of a new $800 million military aid package) and ahead of the Vilnius (Lithuania) NATO meeting, he also said Ukraine is not ready for NATO membership–while war with Russia is ongoing. 

       A cluster munition is a form of air-dropped or ground-launched explosive weapon that ejects smaller submunitions, and designed to kill personnel–and civilians–and destroy vehicles and structures. The move would easily invite outrage from some allies and humanitarian groups that have long opposed cluster bombs. 

       But Mr Biden appears to be confident that he’s doing the right moves. At least, on that particular moment–till he changes tone again, I guess. 

       Meanwhile, NATO Secretary General Jens Stoltenberg is all over the news cool and sweet in photo-ops with President Recep Tayyip Erdogan, seemingly certain that Turkey will okay Sweden’s entry into the military alliance. With a smirk, I say okay. Would that be a trade-off for a thumbs-down on Ukraine? The other new applicant Finland was accepted in April. At least Stockholm and Helsinki are not Eastern Europe. 

       Boris Yeltsin reiterated in 1991, as the Warsaw Pact ended with the demise of the USSR, a NATO expansion in Russia’s region would be dangerous. Yeltsin’s successors onto Vladimir Putin stood with that word even as NATO continued to expand. Poland, Hungary, and the Czech Republic became NATO members in 1999, and so on and so forth. 

       Would the rejection (for now) of Ukraine please Vladimir Putin and so he’d probably sit and a peace truce could ensue? Let’s wait and see. ☮️☮️☮️

ANYHOW, allow me to figure out President Biden’s chess moves. Following State Secretary Antony Blinken’s visit to China last month to patch things up or ease tensions (you know, the Taiwan drama and all that stuff), Joe wobbled the table by branding Xi Jinping a dictator. Worse, as Treasury chief Janet Yellen prepared to fly to Beijing, a U.S. travel advisory asks Americans to reconsider travel to China due to “...enforcement of exit bans and the risk of wrongful detention.” I mean, Ms Yellen was about to go there? 

       Baffling and confounding.

       While Janet Yellin sat in Beijing with CCP officials to obviously work things out, President Biden was in the U.K. to confer with PM Rishi Sunak to sell Washington’s position (whatever that’d be per July 2023) on Ukraine War. Sunak’s position has always been neither here or there, or simply contradictory. He reiterated the UK’s “longstanding position” on NATO membership for Ukraine, wholeheartedly backing Kyiv's bid, but blurry on military aid to the country. But he also told Biden UK will stand by cluster bomb ban.

       Meantime in May, Germany's Olaf Scholz and Berlin’s leadership okayed an additional military aid worth more than $3 billion to Ukraine, regardless of the fact that the E.U. powerhouse hasn’t really stopped buying fuel from Moscow as the region’s top importer, even after Feb 2022. ☮️☮️☮️

AND so as Janet Yellen discussed trade and politics with the Chinese, her President was in Europe pushing stuff that’d certainly irritate the CCP. Not only that Russia is China’s BFF and BRICS partner. China doesn’t need this war. Per 2020 record, Beijing and its subsidiaries lent $1.5 trillion in direct loans and trade credits to more than 150 countries around the globe. The Covid pandemic stalled repayments and now the war. 

        And then there’s India, also with BRICS, whose surging economy could plummet if hostilities don’t stop. Doesn’t the U.S. need India? Narendra Modi may just do a fake fist-bump with Joe Biden a-la MBS of Saudi Arabia. 

        President Biden's playbook isn't a diversion from past hawkish policies but his chess game is a bit whacked. He lost the oil sheikhs of Riyadh to Moscow, significant Latin American leaders snubbed his Summit of the Americas in Los Angeles in June last year, China got Africa per trade, with the exception of the Philippines (Marcos Jr. got quid pro quo to deliver to Washington), Asia is mostly “diplomatically nice” to the U.S., and now Mexico’s Andres Manuel Obrador upped his trade leverage by agreeing to stop migrants from reaching the border. Etc etcetera. Biden lost Taiwan, for sure, reason why his top economic negotiator is in Beijing. 

       Yup, this is Washington’s playbook at this juncture. President Joe Biden’s version. ☮️☮️☮️