Author: GreatWall

Forbidden to Leave Your Country

Population decline is starting to become a serious issue in countries like Japan, but also most countries outside of Africa. China has attempted various ways of getting their citizens to have more children, but to no avail.

Given that China is essentially authoritarian and capable of extreme policies – like the (crazy in retrospect) one-child policy, and social credit scores – deciding that their citizens are not allowed to leave the country is definitely on the cards. It will also increase internal spending if people cannot take overseas holidays.

It won’t be absolute; bribery will still happen, and party members will still have privileges. Also, any family members remaining in the country can be punished.

Meanwhile in western countries something similar might occur, but for businesses, not individuals. It is well-known that businesses create overseas divisions for the purpose of lower tax, like tech companies in Ireland. This costs their homeland a lot of lost tax. It also makes outsourcing easier and more common, with the consequence of less employment in their homeland.

Here’s a bold prediction – and the US might lead the charge. Once a business is incorporated in the US, it is forbidden to have overseas subsidiaries, or invest in overseas businesses. Anything “overseas” they wish to do must be with unrelated businesses.

While it won’t stop outsourcing, it wil become a little bit less appealing, and further the east/west divide.

China’s Various Allies

BRICS nations (Brazil, Russia, India, China and South Africa), began in 2001 (South Africa was oddly added in 2010), purportedly representing the fastest emerging economies. BRICS has developed its own development bank and various forms of financial cooperation. They are also constructing a private telecommunications undersea cable network.

The Shanghai Cooperation Organisation (SCO) also began in 2001 with six original members (China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan). In 2017 they were joined by Pakistan and India, which means it covers 40% of the world’s population.

They cooperate economically and militarily. Keep in mind that India cleverly has a policy to be friends with everyone, so they are not expected to be loyal to anything.

The North South Transportation Corridor (NSTC) is a 7,200-km-long multi-mode network of ship, rail, and road route for moving freight between India, Iran, Azerbaijan, Russia, Central Asia and Europe. Other routes under consideration include via Kazakhstan and Turkmenistan.

While the routes are intended to increase international trade efficiency, they are also a private network if borders were closed to western nations.

Eurasian Economic Union. This organisation was formalized in 2015 and incorporates Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, with Iran signing a free trade agreement in 2018.

Any or all of the above could be factors in an East/West schism.

Russia + China: Propaganda Agreement

A bilateral agreement signed July 2021 makes clear that cooperating on news coverage and narratives is a big goal for both governments. At a virtual summit that month, leading Russian and Chinese government and media figures discussed dozens of news products and cooperative ventures, including exchanging news content, trading digital media strategies, and co-producing television shows. The effort was led by Russia’s Ministry of Digital Development, Communication and Mass Media, and by China’s National Radio and Television Administration.

In the propaganda agreement, the two sides pledged to “further cooperate in the field of information exchange, promoting objective, comprehensive and accurate coverage of the most important world events.” They also laid out plans to cooperate on online and social media, a space that both countries have used to seed disinformation, pledging to strengthen “mutually beneficial cooperation in such issues as integration, the application of new technologies, and industry regulation.” 

The source is The Intercept.

It isn’t just that Russia and China are combining their disinformation efforts – which is all it can be, when you consider that real news needs no such planning – but also that it is going to be shared anti-West sentiments. This will further lead to a distancing between East and West

Taiwan & China – All Hot Air

China and Taiwan are already quite integrated. Taiwanese people are able to live and work in China, and Taiwanese corporations operate factories there. The Chinese government has been luring them with tax credits.

Trade between the two countries keeps growing and is vital to both economies.

In many ways, it is the same relationship as Canada/US or Australia/NZ. Cousins who live next door and hang out a lot.

Those countries see no particular need to become one entity, because the status quo works very well.

To invade Taiwan means risking something more important to China – their economy – so that alone should be enough to dissuade them.

When the great split happens, Taiwan will need to choose a side. They will choose the East.

14 Countries Ban Disney’s “Lightyear” movie

They are primarily Muslim countries and the problem with this kid’s animated movie is that it has a same-sex couple. (news story here)

The bigger, more important trend is that Hollywood is deciding not to modify their movies for such markets. Instead, they are forgoing revenue to stay true to their artistic vision and/or values.

We are seeing a further divide between “east” and “west”. The split is becoming true due to many, many aspects, but homophobia is clearly part of it, or at least a symptom of it.

A few decades of accumulating consumer activism is now bearing fruit. Corporations are appeasing their woke, local consumers at the expense of foreign profits. See also the lesser reliance on fashion sweatshops. And in general, products from China.

The trend shows no sign of ending. Expect more reluctance to deal with the “east” in any way, and for “western” corporations to become more self-reliant.

The split continues…

Ukraine: The Split Has Begun

In The Age (Australian newspaper) yesterday:

Some in global finance, including the International Monetary Fund, fear the onslaught of Western sanctions means the global economy is splitting into camps in the wake of Russia’s invasion, one led by the US and the other by China, with disastrous consequences.

Sanctions against Russia will continue for long enough that Russia will need to find new structures, agreements and allies to survive them. Clearly this will include China, because they have so much in common besides a shared border. Primarily, the West doesn’t like them.

Instead of military conquering, China is already doing very well with its Belt and Road initiative. Countries that continue with it will be part of a special club. Many countries won’t (for example Victoria in Australia signed an understanding that they would take part, but that seems unlikely).

That club will end up having its own banking system and trading currency. It will increasingly cut off Internet access to foreign countries.

This can happen fast.

I Hope Russia Invades Ukraine??

Historically, sanctions have had a mixed effect. They certainly hurt apartheid South Africa, yet the invasion of Crimea was not dealt with harshly enough.

It is clear that the appetite for extreme sanctions is strong this year, with nations like India, US, Germany(?) and Australia all willing to pay the price.

While all war is bad, an invasion of Ukraine is likely to be a walk-over, so we can negate the human suffering aspect, hopefully.

If the invasion occurs, to any degree, expect the economic punishment for Russia to be so extreme that no advanced country ever commits such an act again.

Which means that if Russia can’t be a big fish in a big pond, they might form alliances with the non-West, and slowly form their own sphere that doesn’t recognise the other sphere.

Let’s Formalise Buffer Countries

When the world splits in half, we will not want hard borders between the two. Buffer countries, slightly friendly to both sides, could be the answer.

A buffer country could (unofficially) facilitate illicit connections between both sides, with trade, ideas and people smuggling.

Ukraine is in the news lately. They want to join the EU. Russia wants a buffer country. Russia’s only option is to invade them, because Ukraine being a formal buffer country is not on offer.

Suggestion: Finland, Estonia, Latvia, Lithuania, Belarus and Ukraine form a combined buffer.

Georgia and Azerbaijan are stuck between Russian allies (East), so ignore them…

The buffer has these aspects:

  • Joint trade agreements with the EU and Russia
  • A NATO like military arrangement
  • Residency rights for EU and Russian people
  • Agree to not get in the way of any trade/pipelines etc between the EU and Russia
  • A commission on any trade between the EU and Russia, like 1%

In a full East/West split, the buffer can facilitate trade while neither the East or West have direct contact with each other.

Taiwan: The Nuclear Option

The land-only component of Taiwan has value, but not worth invading for.

China desires the economy of Taiwan, the people, and retribution. All can be nullified via the “nuclear” option.

Many people have fled Hong Kong, especially because the UK welcomed them with open arms.

Taiwan can choose this, if they want, as a response to an invasion from China:

  • Everyone leaves for foreign lands who have promised to look after them
  • Infrastructure is destroyed enough for repair costs to be not worth doing
  • All non-Chinese business relationships vow to not do business with a Chinese run Taiwan

I don’t think this tactic has been tried before, but presumably it would scare off China.

Digital is Dangerous

The US doesn’t trust Chinese technology firms. So now China is doing their standard tit-for-tat. Tesla (who until recently were the #1 electric car sellers in China), are now facing a ban on their cars being near military installations, because they are techy cars with cameras.

This type of ban could be endlessly spread into other rules, like a tightening noose around a major US buisness.

Given that so many more products in the future will have cameras, online connectivity and secret software, this could be a major aspect of worsening East/West relations