Dragon Move – Chairman Xi Imposing Mainland National Security Laws Upon Hong Kong…


China is signaling they will drop the panda illusion and take a full frontal dragon approach toward Hong Kong. Chairman Xi Jinping is deploying, some say he has already deployed, the Ministry of State Security – China’s leading intelligence agency – into Hong Kong to begin formal control through national security laws.

The move appears to be a direct signal that communist Beijing will not longer accept or allow Hong Kong’s current autonomous status as a free democracy. Beijing signaling “enough is enough”, and Hong Kongers are rightly concerned.  If Xi follows through, we can expect to see even more protests and confrontations; and the possibility President Trump will remove the “special trade status” the U.S. gives to Hong Kong.

Right now Hong Kong is exempt from U.S. tariffs and other economic measures the U.S. has deployed against China.  If Beijing takes full control, that could quickly change.

(Reuters) – Beijing appears determined to stamp out any renewed rebellion against the Communist Party’s authority over the former British colony. China’s largely rubber-stamp parliament, the National People’s Congress, is preparing to circumvent the city’s lawmaking body, the Legislative Council, in drafting the new laws.

The fear among many in Hong Kong is that China intends to criminalize existing freedoms, including criticism of the central government and its policies. It is the latest and biggest step in a concerted effort by Beijing to assert control over Hong Kong and its 7.4 million people.

In recent weeks there had been widespread speculation here that Beijing was planning this move, described by some local commentators as the “nuclear option.” Thursday’s announcement by China nonetheless stunned pro-democracy lawmakers, business leaders and lawyers in the city. It was, they said, a historic turning point – the end of “one country, two systems,” the formula Beijing had promised would allow Hong Kong to retain its way of life and freedom for at least 50 years after the 1997 handover to Chinese rule.

“This represents a real demolition of the one country, two systems idea and also the idea of Hong Kong’s autonomy,” said barrister Wilson Leung, a member of the Progressive Lawyers Group. Leung said extremely harsh sentences had been imposed on dissidents, journalists and lawyers on the mainland under vaguely expressed but draconian laws. “These same vague concepts are now being introduced to Hong Kong,” he said.

Many details of the new laws and exactly how they will be absorbed into Hong Kong’s existing statutes remain unclear. But Beijing has openly expressed its intentions in recent months. It wants to end the cycle of mass protests that have thwarted successive post-colonial administrations each time they have moved to more closely align the city with China’s political and legal system.

[…] Hong Kong is a vital cog in China’s economy. While China still has extensive capital controls and often intervenes in its financial markets and banking system, Hong Kong is one of the most open economies in the world and one of the biggest markets for equity and debt financing.

China uses Hong Kong’s currency, equity and debt markets to attract foreign funds, while international companies use Hong Kong as a launchpad to expand into mainland China. The bulk of foreign direct investment in China continues to be channeled through the city. And many of China’s biggest firms have listed in Hong Kong, often as a springboard to global expansion.  (read more)

Prior to the Wuhan virus President Trump was positioning the confrontation between the U.S. and China based on economics and trade.  Within that dynamic Beijing had a weak hand and President Trump exploited their vulnerabilities with a geopolitical strategy to dismantle China’s one-belt/one-road expansion plan.

President Trump used access to the strong U.S. market to leverage multinational companies away from Chinese manufacturing.  Trump’s tariffs against China were extremely effective; and led to Beijing’s initial acquiescence.   However, it was soon evident that China would not accept their diminished economic outcome.

If Xi moves on Hong Kong, there’s a very strong likelihood President Trump will remove the HK special trade status which will have an immediate impact.

“The List” – Interesting and Quietly Overlooked Remarks by Secretary Pompeo…


With an increased awareness of how some U.S. politicians appear to be reacting to the COVID-19 challenges; and with a new American perspective toward the way media outlets, some businesses and many politicians appear to be influenced by China; it’s worth revisiting a recent speech by Secretary of State Pompeo that might have been overlooked.

Pompeo’s remarks were made to the National Governors Association (NGA) Feb 8, 2020; and there’s an interesting segment where Pompeo reveals his awareness of a list of U.S. governors compiled by China’s communist party; and their alignment with China’s interests. A transcript of the key excerpt from his speech is provided. WATCH:

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[Transcript at 01:45] […] “Last year, I received an invitation to an event that promised to be, quote, “an occasion for exclusive deal-making.” It said, quote, “the opportunities for mutually beneficial economic development between China and our individual states [are] tremendous,” end of quote.”

“Deal-making sounds like it might have come from President Trump, but the invitation was actually from a former governor.

I was being invited to the U.S.-China Governors’ Collaboration Summit.

It was an event co-hosted by the National Governors Association and something called the Chinese People’s Association For Friendship and Foreign Countries. Sounds pretty harmless.

What the invitation did not say is that the group – the group I just mentioned – is the public face of the Chinese Communist Party’s official foreign influence agency, the United Front Work Department.

Now, I was lucky. I was familiar with that organization from my time as the director of the Central Intelligence Agency.

But it got me thinking.

How many of you made the link between that group and Chinese Communist Party officials?

What if you made a new friend while you were at that event?

What if your new friend asked you for introductions to other politically connected and powerful people?

What if your new friend offered to invest big money in your state, perhaps in your pension, in industries sensitive to our national security?

These aren’t hypotheticals. These scenarios are all too true, and they impact American foreign policy significantly.

Indeed, last year, a Chinese Government-backed think tank in Beijing produced a report that assessed all 50 of America’s governors on their attitudes towards China. They labeled each of you “friendly,” “hardline,” or “ambiguous.”

I’ll let you decide where you think you belong. Someone in China already has. Many of you, indeed, in that report are referenced by name.

So here’s the lesson: The lesson is that competition with China is not just a federal issue. It’s why I wanted to be here today, Governor Hogan. It’s happening in your states with consequences for our foreign policy, for the citizens that reside in your states, and indeed, for each of you.

And, in fact, whether you are viewed by the CCP as friendly or hardline, know that it’s working you, know that it’s working the team around you.

Competition with China is happening inside of your state, and it affects our capacity to perform America’s vital national security functions.” (Keep Reading)

It sure sounds to me like Secretary Pompeo and President Trump have that list of China-friendly governors…. Oh my.  Very interesting.

UPDATE:  Axios had an article earlier this year and included the Chinese Communist Party Report [Cloud pdf Here]

It will be interesting to see how and when each of these governors responds to the re-opening of their economy post COVID-19 peak.   Will there be a correlation to their CCP assigned alignment?

We’ll keep watching…

 


Just how is Chinese communist disinformation playing into coverage of the Wuhan coronavirus outbreak? How has the Chinese regime been ramping up its efforts to spread propaganda and shape news content globally, including in the US? And, what methods does Beijing use to systematically suppress dissenting voices and critical coverage? This is American Thought Leaders 🇺🇸, and I’m Jan Jekielek.

Germany Frets – China Threatening German Auto Industry if Huawei 5G is Blocked…


At the same time Beijing is reportedly promising internal reforms to retain access to a vital and necessary U.S. market for Chinese goods, Beijing is threatening Germany if they block Huawei technology from their 5G network China will announce German autos are unsafe for import…. Chancellor Angela Merkel is in a pickle.

According to Bloomberg analysis, German automakers sold approximately seven million cars to China in 2018.  The Chinese Ambassador to Germany said this weekend: ” “If Germany were to take a decision that leads to Huawei’s exclusion from the German market, there will be consequences. The Chinese government will not stand idly by.”

(SCMP) […] The Chinese ambassador in Berlin has stirred up a fresh controversy over the tech giant Huawei after he threatened “consequences” if it was excluded from Germany.

Wu Ken’s comments – in which he pointed to the importance of the Chinese market to Germany’s car industry – came amid an intense debate about the company’s role in building 5G networks, which the United States has warned poses a security threat.

Chancellor Angela Merkel’s government has been widely accused of bowing to Chinese pressure after she ruled out banning Huawei from the country’s 5G network.

Lawmakers from her ruling coalition are seeking to override her decision with a bill that would impose a ban on “untrustworthy” 5G vendors without explicitly naming Huawei. (link)

With Brexit a virtual certainty as an outcome of the recent U.K. election; and with a WTO ruling giving U.S. President Trump a massive $7.5 billion tariff approval against the EU in the Boeing case; and with USTR Lighthizer completing a Section 301 investigation against France resulting in another $2.4 billion in U.S. tariff authority; and with Germany’s economy essentially at a standstill, this latest Chinese threat against Merkel is a perfect storm of negative economic issues.

Germany and France are very precariously positioned against the looming tariffs almost guaranteed by President Trump, and the USMCA content rules for the auto-sector are already going to cause a major supply chain reorientation for German autos sold in the U.S.  Overlay the EU climate regulations the nations’ have regulated against their own industry and, well, it doesn’t take a economic analyst to see a future of severe consequence.

This is the background for Beijing’s threat.  Essentially China knows Angela Merkel’s economic policies are all coming to bear at the same time the 5G tech issue has risen to the surface of the political debate.   Germany has few options, they cannot lose the Chinese market for their auto exports.

Things are about to get very interesting in Europe.

It’s a hot mess worth keeping an eye on…

 

Steve Bannon Discusses the Corruptive Influence of China Upon Capitalism…


Steve Bannon is at his best when he explains how the Chinese Communist Party (CCP) use their power in economics -against the capitalist view of profit- to erode the values of western companies and corporations.   Good points made in this interview.

Hong Kong Anti-Mask Riot – Will this Become a Worldwide Contagion?


The protest in Hong Kong over remove all masks has a deeper concern which has sparked the most violent protests yet. China’s “social compliance ranking” is an AI system that is based on facial recognition software. The deep concern is that this new law is to identify who the people are and then arrest them quietly.

Two months ago in Vancouver, the local paper reported on what was going on with local Hong Kong protests. As many know, Vancouver has been the migration spot for Chinese after the British ceded HK. The Chinese-Canadians were traditionally pro-democracy. However, as China’s power has grown, so has a pro-homeland perspective among some expat Chinese.

Consequently, the pro-democracy protesters were met by the opposition who have been taking pictures of all the faces of the pro-democracy activists. This is what sparked the wearing of masks.

The five demands that the HK protesters had, may actually be eclipsed by the mask issue for that seems to be the real core of the concerns. Have governments gone too far is demanding to know what everyone says, does, and thinks?

As of December 1st, 2019, if you want a new phone number in China, you must submit to have your face scanned. Facial recognition is being used to identify every person.

Many are now saying that because privacy no longer exists, people will have to ban together and fight even harder. That’s an interesting take on the future. Are we watching a riot that is setting new standards that will emerge worldwide? The American Revolution set off a contagion of anti-monarchy. Even where monarchs retained the title, they lost the power as in Britain. Are we witnessing a contagion in the making?

Is the only solution that all governments must realize that privacy should be restored? Is this what the War Cycle is really forecasting with the sharp rise in civil unrest on a global scale which turned up in 2014? Just maybe the HK Anti-Mask uprising is hitting on something we all never considered – the other side of no privacy.


We have a lot of clients on both sides of this issue. Here are other comments to be fair:

 

COMMENT: HONG KONG PROTESTS ERUPT OVER ANTI-MASK LAW

Martin, please tell your blog visitors who live in Honk Kong and/or China that the protesting youth are fighting a very needful fight and they are far more purposeful than just being out of control. They know what China’s rule is really like and they are scared s***less it will happen to them!

QUESTION: Dear Mr. Armstrong,

Thank you for touching upon the HK Madness right now.

Would you kindly also share some tips/opinion of what average Hkers can do to protect themselves? Besides from holding USD?

Looking forward to Orlando.

Thank YOu.

B

Steve Bannon Speaks About China…


Former WH strategist, Steve Bannon, appears in DC at a “Clear and Present Danger China” event to discuss China.

The first half of the Bannon’s presentation reflects why he had to leave the white house; reactionary, influenced by media, vulnerable to fake news, and lacking stability.  However, the second half of the video reflects why Mr. Bannon was a valuable strategist.

[Video prompted to 06:26 – just hit play]

UPDATE: Chinese Mar-a-Lago Intruder Found Guilty…


The Chinese woman who tried to lie her way into Mar-a-Lago was found guilty today.  Previously, U.S. Magistrate Judge William Matthewman said: “It does appear to the court that Ms. Zhang was up to something nefarious when she unlawfully attempted to gain access to Mar-a-Lago”…

PALM BEACH, Fla. (CBS12) — A jury found a Chinese businesswoman guilty of lying to the Secret Service to sneak into President Trump’s Mar-a-Lago club.

Yujing Zhang represented herself at trial and claimed during opening statements she did nothing wrong.

Zhang now faces up to six years in prison on charges of unlawful entry of restricted buildings and making false statements.

Prosecutors claimed she had no right to enter the private club. Secret Service agents detained her in March.

Authorities said they found Zhang in possession of a number of cell phones, USB drives, a thumb drive believed to be full of malware, and a signal detector to check for hidden cameras. (Link)

Hong Kong withdraws Controversial Bill


Hong Kong leader Carrie Lam said that she will withdraw a controversial extradition bill that has sparked months of mass protests. The Hang Seng index rallied around 4%. The bill has been withdrawn after it really became clear that Hong Kong could lose its financial position in Asia to Singapore had Chinese troops intervened.

I have been in Asia for this crisis with clients on both sides of the controversy were really deeply concerned that there was a capital flight beginning with deep concerns that a troop invasion would raise tremendous concerns with respect to the future stability of Hong Kong in the world financial system.

The bill’s withdrawal has been a major positive event for Hong Kong and the rest of Asia as the protest escalation was clearly impacting capital flows and was a major potential threat to the global stability of the economy we have been warning about over here

Panda Games – China Files WTO Complaint Against U.S. Tariffs…


After benefiting from ridiculous preferential treatment by the World Trade Organization under “emerging nation” status for the past two decades, Beijing now turns to the WTO and files a complaint against the U.S. over recent tariffs and countervailing duties.

The substance to Beijing’s complaint is silly.  China claims there was a “leadership agreement” during the Osaka G20 summit not to apply additional tariffs.  However, the latest round of U.S. tariffs on China were in response to Chinese tariffs applied after Osaka.  Bottom line, Beijing is playing political games.

China, once again playing the wounded panda routine, is trying to set up a narrative that President Trump has broken his word.  That’s the cornerstone of their position, and they know such a complaint won’t go anywhere at the WTO; the complaint is really for the use, exploitation, and consumption by President Trump’s political opposition, domestic and international.  (emphasis mine)

HONG KONG/GENEVA (Reuters) – China has lodged a complaint against the United States at the World Trade Organization over U.S. import duties, the Chinese Commerce Ministry said on Monday.

The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday and China began imposing new duties on U.S. crude oil, the latest escalation in their trade war.

China did not release details of its legal case but said the U.S. tariffs affected $300 billion of Chinese exports.  The latest tariff actions violated the consensus reached by leaders of China and the United States in a meeting in Osaka, the Commerce Ministry said in the statement. (more)

China did not release details of the legal case because there is no legal case.  You cannot go to the WTO and say: ‘but, he promised to buy my pickles‘…. because the WTO will ask you to prove the contract.  There isn’t a contract.  The whole claim is silly.

Notice how the claim comes from the “China Commerce Ministry”.

Those who are following closely will note the dragon face behind the panda mask of Vice-Premier Liu He is Chinese Commerce Minister Zhong Shan.

This political scheme, to complain to the WTO, is specifically from Zhong Shan and Beijing counts on Americans being to stupid to understand what is going on.

The aggregate U.S. position on tariffs relates to countervailing duties being used as sanctions against the practice of: (A) intellectual property theft; and, (B) forced transfer of technology.  The U.S. position is that the tariffs are countervailing payments due to both issues.

The U.S. position on all enhanced tariffs against China, as explained to the WTO, falls under the category of “measures necessary to protect public morals.”  China is stealing the intellectual property of the U.S, another WTO member, and therefore violating WTO rules.

There is clear evidence of these illegal practices, and the U.S. has already outlined the case.

Within international trade agreements each nation can protect their interests by using the clause “public morals” and “cultural industries.”  This is the same way Canada keeps media competition out of their country in the technology sector of the USMCA.

In the U.S. example the theft of intellectual property and forced tech transfer in order to do business with China, are clear examples of China violating international trade rules and “public morals”, stealing is not allowed; and the U.S. tariffs are applied and upheld based on that obvious -and internationally accepted- authority.

Beijing is just playing a political panda game with their ‘complaint’ to the WTO about the latest tariffs.  They are looking for allies to join them in their Orange-Man-Bad narrative.

Ridiculous.