4) China: Rare Earth Elements. Lesson thirtysix

Although China extracts 98 percent of the world’s rare earth elements, like Neodymium, which in small amounts together with some Boratoms to keep everything in place are used to “dope” magnetic iron so that they become stronger (Neodymium magnets) and other elements that have recently been used in high-tech contexts, it’s difficult for them to use the ore as an economic weapon.

There are also much China is dependent on which comes from the surrounding world, like agricultural products and fuel oil, as well as copper and other metals. China alone stands for 2/5 of the worlds consumption of coal, aluminum, zinc and copper. Therefore, the Chinese are doing mining and oil business with countries that Europe and America consider too dubious to do business with, African countries with a horribly low level on human rights, that China benefits from. China is a relatively resonable trading partner for western countries. As of 2015, the only mining company of its kind in the United States – Molycorp – which used to capitalize rare earth elements, filed for bankruptcy due to unfavorable Chinese competition.

The problem is that REE (rare earth elements) is so difficult to extract from the soil. In May 2012, Japanese researchers discovered an estimated 6.8 million tonnes of rare earth metals near the island of Minami-Tori-Shima, which can supply Japan’s current industrial consumption for over 200 years.

Another recently developed source of rare earths is discarded electronics and other scrap that have components of REE. Progress in recycling of electronics has made the extraction of REE from junk possible and recycling stations have recovered hundreds of thousand tonnes of REE from electronic junk. In France, two factories have been built that will recycle 200 tonnes of REE per year from end-of-life fluorescent lamps, magnets and batteries.

China has no real market advantage despite their introducing of restrictive export quotas from 2010 and also their stopping of production, and despite their extraction of REE in China linked to the Chinese state. In March 2012, the United States, the EU and Japan confronted China in the WTO. China claimed that the export quotas were maintained for the sake of the environment. (Well, sometime would be the first.) Chinese export restrictions failed in 2012 since prices on REE fell in response to the opening of other production sites. [In January 2015, China lifted all export quotas of REE, but export licenses will still be required. It is unclear if they thought they were the only ones who had raw materials in sufficient quantities, but the Chinese had misjudged the power of the free market and for the moment being they have already used up their advantage.

In 2013, Rand Corporation published a report that stated that the US economy is “critically dependent” on 14 different raw materials produced in countries with weak regimes and that China has a market-controlling position on 11 of these raw materials. China has introduced production monitoring, export restraints, closing of mines and restructuring of production within China’s own borders. In the same year, the United States’ Energy Department announced that they had created a new institute with an annual budget of $ 120 million called the Critical Materials Institute. The aim is to avoid the consequences of scarcity of raw materials, which threaten to put obstacles in the way of transition to alternative energy forms. Five so-called rare earth metals (neodymium, europium, terbium, dysprosium and yttrium) are listed on the institute’s website as such critical raw materials. Two non REE raw materials are also included in this category. Calculations showed that there would be an imbalance of about thirty percent between supply and demand already in 2016. This primarily affects electricity production by wind and solar power. A major problem is that there is no acceptable alternative to oil for propulsion of vehicles and aircraft. There is no other substance with that much energy content per transported unit than oil products and which does not cost astronomical sums to produce with now known technology. Without transport, we would return to the stoneage. Every country needs to look out for its supply of crude oil to meet both civil society’s need for fuel in peacetime and sustain its military in the event of conflict. Source: KKrVA, Ingolf Kiesow

Source; KKrVA, Ingolf Kiesow

 

Homework:

Will REE become a big issue in the future you think? Short term or long term?

Roger M. Klang, defense political Spokesman for the Christian Values Party (Kristna Värdepartiet) in Sweden

3) China: Monetary warfare. Lesson thirtyfive

China’s GDP per capita is estimated at $ 16,600 (2017). It’s just a 106th place in the world. The Chinese has yet to make an effort to start producing quality goods the way the Japanese did in just a couple of years at the end of the 1970s. In the long run, it should be inevitable for a giant country like China to start manufacturing quality goods in order for them to survive and continue to grow and be able to build up their fleet, army and air force, as well as their space technology if they are to have a chance to be able to measure up qualitatively with the US.

More and more westerners realize that buying Chinese junk goods do not pay off. The junk goods often doesn’t work even when it has just left the factory band. The Chinese knows this, which is why they allow and even use as regulator that China’s factories produce pirated copies of branded goods. Pirate copies that unscrupulous western buyers buy and sell cheaper than the market price or at dumped prices. One example is the Danish store chain Netto, which used to sell electronic junk in Sweden. But in order for the Chinese to avoid an economic dependence on the West, in the future, they must make an effort to make merchandise with quality.

But first, they want to crack the almighty dollar by distorting competition in absurdity because of currency differences and encumber the Americans with dept over their ears and by pushing up the repayment of US loan from China to insurmountable levels. US owes China $ 1,200,000,000,000 ($ 1.2 trillion). So much has China invested, mostly in US almost interest-free government bonds which, however, have to be repaid according to the terms. The alternative to repaying is that the United States declare themselves in state bankruptcy or turn their own financial rules upside down by simply refusing to pay. Not much thought is needed to realize that this would cause an economic and military turbulence without any match in the world.

$ 1.2 trillion is equivalent to 19 percent of US foreign debt (2017), and China still has a surplus to invest. Though they may never succeed in breaking the US economy. It is the United States that decides how many treasury bills, notes and bonds they want to give out and therefore the Chinese have been forced to revise their strategy between 2011-2018, which shows that China’s economy is in a dependence to the US. But with US tax policy, the US government’s budget get strained when they don’t issue any bonds. US GDP (2013) was $ 16.72 trillion. The Americans now know that Beijing was trying to push up the US loan ceiling to unsustainable levels and punch a hole in the US economic bubble as they did in 2018 by selling, selling, selling. It’s just that the Chinese risk their own finances in the process. But better to do what you can to turn the winds of fortune than to do nothing at all.

But the low-valued Yuan and the fact that China extracts 98 percent of the world’s rare elements (rare earth metals), and their low quality on technology or, in other words, the low production costs together with industrial espionage are what the Chinese believe are the best Chinese weapons yet. The Chinese work ethic is also one of their best weapons. In August 2015, the Chinese currency was first devalued by 1.9 percent and the following day by 1.5 percent and the following day by another 1.6 percent. Devaluation was an attempt to pump up their own economy. You get US $ 0.15 for a Chinese Yuan at present time. You get US $ 0.0091 for a Japanese Yen, but Japan is expensive for westerners still, and the prices of their goods are high. If it is possible to set an exchange rate artificially, is a philosophical question. Actually, the Yuan should be valued as half the Dollar and quality goods should flow from China, one might think.

It was debated a few years ago in the United States of America if they should print a trillion ($ 1,000,000,000,000) platinum coin to use to pay off its foreign debt to China. I do not know how serious the debate was, but it would be a dishonest act, although it is legal in the US to print a platinum coin with this denomination whilst it is not legal with silver coins, gold coins or banknotes. CNN correctly mentions that such a coin will not contribute to inflation in America because it will never come into circulation. Suppose the Americans could force such a coin on the Chinese with the threat of otherwise unilaterally writing off their own debt to China. What then would the Chinese be able to use the coin for, and what would it be worth? The collector value of a single trillion dollar coin issued by the US government would surely make a realistic value of an estimated $ 100 million for a wealthy patriotic American collector who wants to help his country not appearing to be crooks. But the Chinese will not be able to buy even a larger company for the coin, its value being at most just $ 100,000,000 regardless of what denomination is printed on the coin.

 

Homework:

What do you think could happen if the United States coined a trillion dollar coin and tried to force it on China as if it was mony paid back? You can choose to answer what you think it would bring to the United States, or to China, or to the world, or to your country.

Roger M. Klang, defense political Spokesman for the Christian Values Party (Kristna Värdepartiet) in Sweden

2) China: Japan and South Korea. Lesson thirtyfour

We know with certainty which the other east Asian countries that the United States wants to connect to their nation are.

”Overshadowed by China and India, a group of smaller Asian economies has committed to rapid economic integration and cooperation. The six largest economies among them – Indonesia, Thailand, Malaysia, Singapore, Philippines and Vietnam – have diverse population sizes, incomes and cultural affinities but share a common desire to prosper as independent and open countries. Together, they are on their way to becoming a powerful new economic bloc.” LIGNET (CIAs former public page) August 29, 2013

In the above citation from LIGNET, Japan and South Korea are omitted in the American-preferred union against China. It may be because of Japan’s and Korea’s early nineteenth century history dominated by Japanese supremacy in a time when hundreds of thousands of Korean women and girls were taken as sex slaves to Japanese soldiers while Korean men were force recruited to the Imperial Army.

The mentioned countries in the quote – Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam – encircle China in the South China Sea, and by including the to a large extent Muslim Malaysia, the US covers the important Malacca Strait geostrategically.

Islam is the state religion of Malaysia, about half of the population are Muslims. The malays are defined according to paragraph 160 of the Malaysian Constitution as Muslims. A piece of the puzzle is added, but it may raise more questions than answers, at least what concerns the US plans for Japan and South Korea. It has been interesting to follow the development. We can begin by citing the CIA LIGNET from October 15, 2013:

Why Japan Lost Faith in America’s Security Guarantee
Secretary of State John Kerry and Defense Secretary Chuck Hagel recently held important talks with their counterparts in Tokyo to revise the U.S.-Japan Defense Cooperation Guidelines. But rather than bringing the United States and Japan closer together, the talks revealed a growing divide between them, as Japan appears to have lost its trust in the U.S. security guarantee over North Korea’s triumphant emergence as a nuclear missile power. LIGNET

The questions we need to answer are;

a. Why do they or did they want to revise the U.S.-Japan Defense Cooperation Guidelines?
b. Why is there a growing gap between Japan and the US?
c. And why have the Japanese lost their confidence in the US security guarantee (nuclear umbrella)?

Question b. above has already been answered in previous lessons, it happened because of US fears of a possible Chinese-Russian-Japanese axis. Perhaps this is also why the Japanese have lost their confidence in the US security guarantee?

December 8, 2013: South Korea expanded its air defense zone so that it partially overlaps an expansive air defense zone that China had declared just before South Korea’s expansion of their air defense zone. The area includes two islands in the south east China Sea, and an underwater reef that China also claims. The new zone was effectuated from December 15th, 2013. South Korea conferred with the United States before the country decided to expand their Air Defense Zone, according to the Washington State Department. According to the Korean Defense Ministry, the decision “will not violate the sovereignty of neighboring countries”. Now we at least know what role South Korea playes in the equation under LIGNET on August 29, 2013 mentioned before. The statement by the Korean Defense Ministry carries the Americans’ thumbprint, and the parties – quite rightly and technically correct – makes no secret of the fact that South Korea conferred with its US advisers.

December 26, 2013: Perhaps we have the explanation for the US prudent behavior in the neighborhood of the East China Sea. Japan’s Prime Minister Shinzo Abe raises anger from neighboring countries. This because he made a visit to a controversial memorial on December 26, honoring his country’s fallen soldiers of the second world war. Abe later explained that he visited Yasukuni in Tokyo to pray at the memorial. He said that the intention wasn’t to provoke anger in China and Korea, and he said that Japan is working for peace these days. Abe also again mentioned that he felt “deep repentance” over Japan’s past. But there were angry comments and condemnations coming from the regime in Beijing. South Korea also condemned the visit. Abe’s visit to Yasukuni was the first from a seated prime minister since the year 2006.

In Washington, the government expressed disappointment because of Abe’s visit to Yasukuni since Abe should have known it would increase tensions with neighboring countries. [Washington said “neighboring countries” but what they really meant is that they were disappointed that Abe had done something to increase the tension between Japan and South Korea, since it counteracts US interests to unite the region economically under US supervision against China.]

In 2015, the Japanese military budget amounted to 42 billion US Dollars, up 3.5 percent since 2014. The military budget has been on the rise since 2012 and pending. Overall, this means that Japan is developing a military capacity to carry out limited offensive undertakings, in terms of the ability to recapture an occupied island/archipelago, within the framework of a defensive military operation with an emphasis on qualified air and naval forces. Source; Johan Elg, Swedish National Defense College

Japan has three (3) ongoing border conflicts. These concern three islands as well as an island group with Russia, the island of Takeshima with South Korea and the Senkaku Islands with China. Japan only controls the Senkaku Islands.

Why are Japan and China arguing about some small uninhabited islands off the coast of China? I can only imagine three reasonable explanations:

A) It is believed that the waters around the islands hide oil deposits. But no oil or gas has yet been found.
B) China feels threatened because Japan possibly may develop and deploy non-ballistic cruise missiles or ballistic missiles on the islands, so that Japan can strike China’s mainland faster than they can from Okinawa or any other of the Riukiu Islands.
C) China wants to circumscribe Taiwan by building an airbase and a missile base on the islands and Japan oppose it because they want to prevent China from strengthening its position in the region.

LIGNET reported on July 3, 2013 that China was on a charm offensive at an ASEAN meeting. Certainly it was a causality based on Obama’s State of the Union speech from February 12, 2013, when he gave his “And level the plane-field in the growing markets of Asia” speach. This speach in turn was a causality based on the RCEP rounds, but above all it was based on China’s industrial espionage. Fool me once – shame on you. Fool me twice – shame on me; The Chinese proverb that President Bush could not get it right in a television speach. Obviously, Obama would have had no problem getting it right. Obama played hardball when he delivered his speach on February 12, 2013. But already Hillary Clinton threw the glove too early at China when she wrote in November 2011; “When the war in Iraq ends and the US withdraws from Afghanistan, the United States faces a turning point in the US Pacific Ocean.”

Hillary Clinton revealed the US plans which could be interpreted as the United States doing as they please and that no morality is necessary to apply to any emerging situation for the US to take the right to intervene in any part of the world. We are not yet there, but we are heading there. For the time being, there is always someone holding the rudder, if not America then someone else, and someone else is not better.

Sources;

CIAs LIGNET; and Johan Elg at the Swedish National Defense College

 

Homework:

What do you make out of this information? Is Trump just following a charted course demarcated by Obama and Hillary Clinton?

Do Japan and South Korea play any important geostrategic role you think? I am not asking if they play any important geopolitical role, because obviously they do.

Roger M. Klang, defense political Spokesman for the Christian Values Party (Kristna Värdepartiet) in Sweden

1) China: Nine Dash Line. Lesson thirtythree

There is a slim possibility for the Americans, but still a possibility, to fuel conflicts on several fronts so that they would not have to face China alone. Here’s what the CIA’s former public site LIGNET expressed on July 17, 2013:

Why the Indian Ocean Could Be the Next Theater of War
While China has loudly trumpeted its new aircraft carrier and its developing “blue water” navy, India has quietly embarked on its own naval modernization program, with a new aircraft carrier on order from Russia and a new nuclear submarine now undergoing sea trials. Both China and India have their eyes on the Indian Ocean and on guarding the oil tankers that traverse it. The recent advances in the navies of both nations set up the potential for a clash there.

And here’s what the CIA expressed on LIGNET september 24, 2013:

China, Russia Compete for Influence Over Central Asia
China and Russia are engaged in an intense rivalry for hegemonic control over Central Asia, a rivalry that could jeopardize the close friendship that has developed between them over the past two decades. What will China’s unquenchable thirst for energy and Russia’s desire to revive the glory of its former empire mean for the future of the region?

The United States has no desire that the Spratly Islands and the Paracel Islands in the South China Sea should explode in their face. Some of the Spratly Islands are controlled by Vietnam, others by the Philippines and some islands by Taiwan and some by China. The islands are hard to reach but the surroundings are believed to contain raw material resources. Due to the seemingly unresolvable disputes, there have been no serious explorations of deposits in the areas, so the estimation of commodity resources is largely extrapolated from mineral deposits in neighboring areas.

China has built a runway, 10 flight minutes in mach 1 (approximate speed for sound waves or 1,224 km/h) from the Philippine Islands, on one of the Spratly Islands called Mischief Island 200 nautical miles (370 km or 230 miles) from the Philippines. Conflicts (i.e., Chinese hijacking) regarding the ownership of the islands are undesirable. China claims virtually the whole of the South China Sea and commits violations of other countries’ legal rights to an economic zone under the UNCLOS Convention on the Law of the Sea. China calls their self-imposed demarcation lines for the nine-dash line.

On the largest island, known as Woody Island in the States, in the disputed Paracel archipelago south of China, it is believed that China has deployed surface-to-air missiles. In 2012, China established a military garrison as well as the city of Sansha on the island to administer the entire South China Sea. In 2015, China temporarily deployed fighter jets on Woody Island. Many countries claim ownership of several of the Paracel Islands in the archipelago, countries such as Taiwan, Vietnam, the Philippines, Malaysia and Brunei. Woody Island is located about 300 km (186 miles) southeast of the giant island of Hainan in southern China.

China wants to conduct bilateral negotiations, but many of China’s neighboring countries argue that China’s strength and size are giving the country an unfair advantage. ASEAN (Association of SouthEast Asean Nations) cannot even resolve the dispute. The US says they do not choose side in territorial disputes, but they have frequently sent military ships and flights near the disputed islands and they call it “Freedom of navigation” operations. In addition to these islands, there are dozens of rocky reefs, atolls and sandbanks, such as Scarborough shoal, mostly uninhabited. These data were current in July 2016.

Already President Obama declared in his State of the Union speech on February 12, 2013, that he (America) intended to pursue a Pacific Trade Agreement. With these few words in an one-hour speach he declared his intentions:

”To boost American exports. Support American jobs. And level the plane-field in the growing markets of Asia. We intend to complete negotiations on a transpacific partnership. And tonight I’m announcing that we will launch talks on a comprehensive transatlantic trade and investment partnership with the European Union. Because trade that is fair and free across the Atlantic, supports millions of good paying American jobs.”

What did he mean by “And level the plane-field in the growing markets of Asia”? It can only be interpreted in one way; an Obamish economic War declaration against China, by financially binding other east Asian countries to the United States, North Korea excluded. It should have been a piece of cake but Trump is less skillful and kid-gloved than most people.

Was it China that started the contentions? In 2012, China initiated formal talks in an economic union with a number of countries in east Asia and other places, including Australia, New Zealand, India, Japan and South Korea. The rounds of negotiations have succeeded each other and are known as RCEP (Regional Comprehensive Economic Partnership). The discussions have been going on for a long time, but God knows if they have reached an agreement as late as in November, 2018.

 

Homework:

What do You think Obama meant by “And level the plane-field in the growing markets of Asia”? Was it an unfriendly perhaps even hostile sentence?

And if it was hostile, was it a legitimate sentence? Please motivate your conclusions! Before answering the question, I want you to make an effort to justify your conclusions by searching for background material about the conflict so that you get training in fact finding and screening of information. Don’t come back to me with a foggy response, because you are biased and think this and that, only trying to prove what you already presuppose.

Fact searching means being able to walk a few miles in your opponent’s moccasins, i.e. you need to search for information and screen information not only on the home team’s site but on all possible sites. It is not the same as being unbiased because nobody really is, but If you always assume that your home team is right and that you therefore do not need to listen to the other side, you might as well skip doing this homework altogether. Be generally critical when seeking out information.

Every time you get suspicious, keep the thought in the back of your head until you can confirm it or until it has been falsified, even if it will take years of fact searching and contemplating. Your level of perseverance determines if you will become a good intelligence person or not.

Roger M. Klang, defense political Spokesman for the Christian Values Party (Kristna Värdepartiet) in Sweden

Mirror imaging. Lesson thirtytwo

Russia argues that NATOs Kosovo mission in the 1990s was identical to Russia’s takeover of the Crimea. But the Kosovo mission was only implemented after lasting discussions which involved the entire NATO which dealt with a far reaching and long-lasting crisis that caused the UN Security Council to perceive the Kosovo conflict as a threat to international peace and security.

In the Crimea, however, there was no previous crisis, there were no attempts to discuss the situation with the Ukrainian government and the UN was not involved, and finally no attempt was made to mediate. In Kosovo, international efforts were made to find a solution over a period of 3,000 days. In the Crimea, Russia annexed parts of Ukraine’s territory in less than 30 days.

Russia has tried to justify its illegal and illegitimate annexation partly by referring to the referendum that took place in the Crimea. But the referendum was incompatible with Ukrainian law and was held under an illegal occupation force, without freedom of expression or media access for the opposition, and without credible international monitoring of the election.

Russia claims that the Ukrainian government is illegitimate. Ukrainian President Poroshenko was elected with a clear majority in an election that the OSCE election organization characterized;

”clear resolve of the authorities to hold what was a genuine election largely in line with international commitments and with a respect for fundamental freedoms.”

The only areas in which serious restrictions were reported were in areas that were controlled by the pro-russian separatists who undertook; “Increasing attempts to derail the process.” Official Russian administrators continue to claim that the Ukrainian parliament and government are dominated by Nazis and fascists. But in the parliamentary elections, the parties that Russia claimed to be facsist got far less than 5 percent of the votes required for these parties to take their seats in Parliament. The voters in Ukraine voted for unity and moderation, not separatism or extremism, and the composition of parliamentarians reflects it.

In short, the Ukrainian President and Parliament are legitimate while the separatists’ actions were not.

Source; North Atlantic Treaty Organization

 

Homework:

Is there any possibility that Russia can soak this up? Can you think of a credible pro-russian counterargument if you are pro-russian? Don’t waste my time with pseudo arguments!

Can you add any credible arguments against Russia if you are pro-ukrainian?

Roger M. Klang, defense political Spokesman for the Christian Values Party (Kristna Värdepartiet) in Sweden