Category Archives: China

China, Economic, Government, International trade, Politics, Society, United States

Global trade war: America is advancing its own decline

ECONOMIC

Intro: China is braced for economic turbulence due to swingeing tariffs. But it sees an opportunity by taking the longer-term view: a decline in US hegemony 

THERE can be no winners in Donald Trump’s ferocious trade war that he has unleashed, least of all among consumers and workers. In strongarm tactics, this has become a game of who can bear more pain. And because trade is at the heart of US ties with its biggest tariff target, China, the rest of the bilateral relationship is likely to deteriorate. That too is concerning.

Yet, paradoxically, despite the economic struggles of recent years, China may see a longer-term opportunity in the current crisis. Beijing’s response to the initial US tariff announcements was measured. Now it vows to “fight to the end” and has imposed an additional 50% tariff on US goods – taking total tax charges to 84% – in retaliation for reciprocated tariffs that Mr Trump now says will hit 125%.

Such an approach is unlikely to falter first. Any concessions would likely be taken as a sign of weakness, encouraging the US to ramp up the pressure even more. Xi Jinping is also a strongman who has dialled up nationalism as economic growth has slowed. Backing down would be humiliating, especially when the US vice-president, JD Vance, speaks dismissively of “Chinese peasants”.

Beijing is already allowing the yuan to weaken, but a major devaluation in the currency is thought unlikely. It has been preparing for this moment. China’s demographic boom is at an end, Mr Xi’s new vision for his nation, the impact of the pandemic, Donald Trump’s first term in office, and US bipartisanship have all turned against China in reshaping the world economy. But China has diversified in areas such as agricultural imports and found new markets for its goods – though exports to the US still account for just under 3% of its GDP. In recent weeks, it announced plans to “vigorously boost” domestic consumption, although previous action on that long-held ambition has not matched the rhetoric.

Mr Trump’s sudden announcement that he is suspending punitive tariffs on other countries for 90 days highlights an apparent underlying intention to make them distance themselves from China and stop them being used as a conduit for its goods. Still, if he goes ahead, high rates risk pushing them towards Beijing instead. Trump’s erratic policy may also reflect growing anxieties about the impact of those tariffs, not least among his own supporters. China is quietly confident that the U.S. will come under growing pressure to rethink from billionaire backers, ageing workers worried that their retirement funds are losing value, farmers, employees fearing for their jobs, and consumers contemplating higher prices in everyday consumables. A bilateral deal is not impossible, but sense needs to be restored.

Beijing does not like what lies ahead. But in the longer term, it has more confidence in its trajectory. It looks back to the 2008 financial crisis, when it “saved the world” with its massive stimulus package, and looks ahead now with emboldened self-assurance following its launch in January of its AI DeepSeek platform.

Above all, Beijing believes that when this storm has passed, few will regard the US as a dependable economic or security guarantor, with China becoming a more predictable and likeable partner. At February’s Munich security conference – where Mr Vance’s sneering attacks on European allies made the headlines – China’s foreign minister, Wang Yi, pledged that China would be “a steadfast constructive force” and “factor of certainty in this multipolar system”. Some countries may feel forced to live with Beijing’s own trade and investment restrictions, and its use of economic coercion for political purposes. But others may simply drift from America’s orbit.

China expects to suffer, but as it watches on it will not be entirely unhappy as the US advances its own decline.

This is a transformational moment in the global order.

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Britain, China, Defence, Government, Military, National Security, Politics, United Nations, United States

Chagos deal risks the UK’s nuclear deterrent

CHAGOS ISLANDS

BRITAIN’S nuclear deterrent would be at risk from Chinese interference if the Prime Minister capitulates over the Chagos Islands.

A covert satellite system used to direct British and US nuclear missiles would be compromised if Keir Starmer signs off a deal with China-friendly Mauritius, it is feared.

The UK is currently locked in negotiations, led by Attorney General Lord Hermer and National Security Adviser Jonathan Powell, over handing over the strategically important islands in the Indian Ocean following a UN ruling.

The archipelago, controlled by the UK for more than two centuries, is home to the joint UK-US Diego Garcia military base. Britain is set to pay billions to Mauritius to lease the base back for 99 years under the terms of the deal.

But concerns have been raised that the UK’s system for coordinating nuclear missiles relies on connection points on the Diego Garcia base. To function properly, these “nodes” require physical protection and British control of the island’s electromagnetic spectrum.

However, the deal includes a clause saying other countries could also use the spectrum, from which Mauritius could profit.

This could offer Beijing a gateway to jamming the highly classified Automated Digital Network System 3 (ADNS 3), which is shared by the Royal Navy and the US Navy, and, which crucially, is part of the “Nuclear Firing Chain” (NFC). The deal would enhance UK national security, but without it, Britain would lose access to the spectrum. The future operation of the base without a deal would clearly be at risk.

Nonetheless, critics suggest that the government’s arguments are totally fabricated. They say that the islands are far more important than just this and the potential threat to our operations from a no deal is a total fiction from the pen of the Cabinet Office – and, by extension, the human rights law firm, Leigh Day.

Lord Hermer was a go-to barrister for Leigh Day before his appointment as Attorney General last year and he has been accused of a deference to international law over domestic needs.

Leigh Day is currently representing asylum seekers who claim they were trapped on the Chagos Islands after being rescued at sea by the Royal Navy. In 2019, the International Court of Justice ruled that Britain’s continued administration of the islands was unlawful.

Despite the UK ignoring the ruling, it was subsequently ratified by the UN General Assembly, which found the islands rightfully belonged to Mauritius. Sir Ben Wallace, a former defence secretary, said: “Many of the UN judges who made the flawed ruling come from totalitarian states including China.

“Is the PM really going to put their opinions before that of Britain’s security? Diego Garcia is British and must remain so.”

And, MP Tom Tugendhat said that in his former role of security minister, he had seen the advice on the implications of the deal, but the version being presented to the public was “nonsense”.

The settlement could also mean that the Royal Navy could be prevented from entering a buffer zone which Mauritius intends to set up around the islands.

Without any protection from Western navies, there is heightened fear that China could get close enough to the sensitive military facilities.

It is known that ADNS 3 provides assured tactical wide area networking between ships and shore around the world to support full battlespace connectivity.

Britain’s nuclear threat is carried by the Royal Navy’s bomber submarines. Any breakdown of communications or hostile interception of messages which are part of the NFC, or any other breach, would mean Britain losing its nuclear deterrent.

This is a highly technical matter, involving a lot of classified systems, which, according to critics, is being overlooked by government lawyers.

This part of the world is key to China’s expansionist agenda, and any deal with the UK would appear to facilitate that. These systems rely on guarantees around the security of Diego Garcia.

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Britain, China, Government, Intelligence, Middle East, Russia, Society, United States

Spy chiefs give joint-interview at Festival

US-UK INTELLIGENCE

IN a rare public appearance, Richard Moore, the head of MI6, has warned that Russia’s intelligence services have become “feral” and “reckless” in the way they are plotting attacks in Britain and across Europe.

In an historic joint interview with the head of the CIA, Mr Moore said Moscow is now using criminal gangs for state-sponsored terror attacks in Europe. The attacks are “more amateurish” and are endangering more lives.

His CIA counterpart William Burns said coordinated operations between UK and US intelligence services are thwarting the plots across the Continent and in mainland Britain. The intelligence chiefs were appearing before a Festival in north London, where they spoke of the long-standing relationship between MI6 and the CIA.

Mr Burns also revealed how the CIA feared Vladimir Putin was going to deploy tactical nuclear weapons in Ukraine in the autumn of 2022, after falsely accusing Volodymyr Zelensky of amassing nuclear materials for such an attack against his troops.

The CIA chief also said 90 per cent of a new peace deal between Israel and Hamas is complete, adding that its details may be published in the “next few days”.

Mr Moore, known as C by his officers, spoke about how the two services often conduct intelligence operations together. “We will sometimes decide who is better-placed to go first – we call it the best athlete model. Whoever is best placed to do it, we work in a non-competitive way to get the result,” he said.

The MI6 boss said Russia’s intelligence services have conducted sabotage and criminal acts in Britain and in Europe, becoming “a lot more feral”. He added: “The fact they are using a criminal element shows they are becoming a bit desperate – they can’t use their own people. They’re happy to use criminals. It’s just a bit more reckless.”

Mr Moore referred to an arson attack in Leyton, east London, on a Ukraine-linked business, which is suspected of being directed by Moscow. Two men have since been charged for helping Russian intelligence after the Metropolitan Police used terrorism powers to investigate.

He also said the Salisbury poisoning in 2018 was “emblematic” of the recklessness of Russian agents.

“They left a large phial of a deadly poison lying around to be picked up,” he said. “It could have killed an entire school – in fact, it killed an innocent British civilian.”

Two Russian agents daubed Novichok nerve agent on the doorknob of former Russian spy Sergei Skripal, which nearly killed him and his daughter. But the perfume bottle with the poison in it was later picked up by a woman, who later died.

Speaking publicly for the first time about how the CIA feared Russia was close to using a tactical nuclear weapon in Ukraine months into the conflict, Mr Burns said: “There was a moment in the fall of 2022 that I think there was a genuine risk of potential use of tactical nuclear weapons. I felt we should not be intimidated by Putin.”

He was dispatched to the Turkish capital Ankara to tell the head of the FSB, Sergei Naryshkin, how the West would respond “militarily” if Russia used nuclear weapons in Ukraine. The CIA chief said: “We cannot afford to be intimidated by that sabre-rattling and bullying. The record shows the United States has provided enormous support to Ukraine, and I’m sure we’ll continue to.”

Mr Burns has been intimately involved in the difficult negotiations in the Middle East between Hamas and Israel, with Qatar and Egypt acting as intermediaries.

He said 90 per cent of a peace deal is complete, adding: “The last 10 per cent is the last 10 per cent for a reason… it’s the hardest part to do. But we will make this more detailed proposal, I hope in the next several days, then we’ll see.”

And he warned that Hamas cannot be entirely defeated. “You can severely degrade their military capabilities, but it is a movement and an idea, and the way you kill an idea is with a better idea.”

The intelligence chiefs – who gave a public interview to the editor of the Financial Times on the grounds of Kenwood House in Hampstead – said China was their main preoccupation, with 20 per cent of the CIA’s resources being devoted to the Beijing regime.

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