2024 Presidential Election_That Pesky China Question Again: Exclusive—Seamus Bruner: Seven Troubling Tim Walz Connections to Communist China

 

                           Exclusive—Seamus Bruner: Seven Troubling Tim Walz Connections to Communist China

Seamus Bruner
8 Aug 2024

Minnesota Governor and Vice-Presidential hopeful Tim Walz has an abnormal relationship with China.

“No matter how long I live, I will never be treated that well again…it was an excellent experience,” Walz said upon his return from the first of many trips there. Walz claims that his Chinese hosts lavished him with “more gifts than I could bring home.”

Walz and his supporters would like us to believe that his cozy ties to the Chinese Communist Party (CCP) are not unusual. In fact, he is “hawkish” and staunch critic of the CCP’s human rights abuses, his media allies say. The Chinese have an expression for the practice of providing cover for the communist regime while issuing the occasional muted critiques: it’s called “big help with a little bad mouth.”

As Breitbart News reported, Walz first visited China in 1989 under the auspices of a now-shuttered Harvard program called WorldTeach. Walz and became so enamored with the country that he and his wife honeymooned there after their marriage on June 4, 1994, the fifth anniversary of the Tiananmen Square massacre. Walz “wanted to have a [wedding anniversary] date he’ll always remember,” according to his wife.

The pro-democracy protest movement of students in Tiananmen Square ended in a blood bath during the night of June 3 to June 4, 1989. Between 1,500 to 4,000 demonstrators were killed and 10,000 wounded when the Chinese Communist Party ordered a military crackdown on the protesters, and the People’s Liberation Army rolled their tanks into the square and opened fire on the crowd. The students were demonstrating to demand more democracy and freedom of thought from the Chinese government. (Jacques Langevin/Getty Images)

The pro-democracy protesters watch as the Chinese communist regime’s tanks rolled into Tiananmen Square during the bloody military crackdown of the democracy demonstrations on June 3 to 4, 1989. (Jacques Langevin/Getty Images)

The pro-democracy protesters are seen on Changan Avenue during the CCP’s bloody military crackdown on June 4, 1989, in Tiananmen Square. (Peter Charlesworth/LightRocket via Getty Images)

The pro-democracy protesters are seen after the military crackdown in Tiananmen Square on the night of June 3 to June 4, 1989. (Jacques Langevin/Getty Images)

People transport a wounded woman during the military crackdown in Tiananmen Square on June 3 to 4, 1989. (David Turnley/Getty Images)

 

Family members try to comfort a grief-stricken mother who just learned that her son was killed during the military crackdown in Tiananmen Square on June 4, 1989. (David Turnley/Getty Images)

 

A Chinese man stands alone to block a line of tanks heading towards Tiananmen Square on June 5, 1989, one day after the Tiananmen Square massacre. This courageous unknown man became known to the world simply as “Tank Man.” (AP Photo/Jeff Widener)

The Walz newlyweds brought sixty students with them on their honeymoon, kicking off the first of many student exchange trips to the communist country. Walz and his wife set up a company, Education Travel Adventures Inc., to facilitate the trips to China. They ultimately ended up taking more than thirty trips there.

Walz’s last known trip to China was in 2015, but he continues to meet with communist officials and headline CCP-backed events. Walz’s deep and abiding ties to China—including multiple connections to CCP intelligence front organizations—present troubling national security questions about a potential Harris-Walz administration.

Here are Walz’s top seven connections to the CCP that demand explanation.

1. The CCP approved and even subsidized Walz’s student exchanges.

After his first trip to China in 1989, Walz returned to his teaching job in America and hung a “Chinese banner” in his school office. By 1993, Walz was taking American students on visits to China where he told his students to “downplay their American-ness.”

When asked about why he was so interested in China so early on, Walz stated “China was coming, and that’s the reason that I went.” According to U.S. national security expert John Schindler, “no American would be allowed to run academic exchanges for a couple of decades, on the CCP’s dime, without [Ministry of State Security] approval. It just wouldn’t happen.”

Shockingly, Chinese authorities reportedly covered “a large part of the cost” of the 1993 summer trip. The next year, Walz and the Chinese government jointly sponsored scholarships for American students to visit China. Between 1989 and 2003, Walz travelled with hundreds of students to China.

Did Walz or his travel company, Education Travel Adventures Inc., receive any money from the Chinese government? His public financial disclosures do not go back far enough to know.

2. A CCP diplomat and other CCP government officials attended Walz’s gubernatorial inauguration in January 2019.

A translation from a Chinese government source reveals that, “Acting Consul General Liu Jun congratulated Governor Waltz and expressed his expectation to strengthen cooperation with the new Minnesota government to jointly promote the friendly and cooperative relations between Minnesota and China.”

Why were CCP members at the inauguration of a Minnesota governor and would Chinese diplomats congratulate a sincere critic of China’s human rights abuses?

3. The CCP Diplomat left the Walz inauguration to meet with Walz cronies at Minnesota’s premier globalist non-governmental organization (NGO), Minnesota Global.

According the translated Chinese government press release, “Acting Consul General Liu congratulated [Global Minnesota] on the successful holding of the China Theme Year event and said that the Consulate General looks forward to continuing to strengthen communication with [Global Minnesota] in the new year to promote friendly cooperation between Minnesota and China.”

Global Minnesota is close with Walz and has sponsored at least one his foreign trips (to Finland). Last December, Walz awarded a Global Minnesota nominee for a business award.

Global Minnesota is affiliated with globalist entities like the United Nations and frequently invites Walz for speaking engagements (in 2020, 2021, and 2022).

4. Walz has close connections to a Twin Cities-based organization that houses an alleged secret CCP police station—one of only seven secret CCP police stations in the U.S.

In 2022, Minnesota Global partnered with group called the Chinese American Association of Minnesota (CAAM) to send delegations to China.

CAAM has been accused of housing a CCP intelligence agency “Service Center” (which is effectively a secret CCP police station) in Minnesota. The Daily Caller reported:

The Chinese Communist Party’s (CCP) United Front Work Department (UFWD) — which at least one U.S. government commission has characterized as a “Chinese intelligence service” — operates so-called “Overseas Chinese Service Centers” (OCSCs) that are housed within various U.S.-based nonprofits. OCSCs were ostensibly set up to promote Chinese culture and assist Chinese citizens living abroad, according to Chinese government records.

In April 2023, the Justice Department busted an alleged CCP Ministry of Public Security outpost, which the DOJ called a “secret police station” used to “monitor and intimidate dissidents” and other critics of Beijing.

Why has Walz failed to shut down this Overseas Chinese Service Center operating out of Minnesota?

5. Then-Congressman Walz praised a CCP-backed event that he attended with CCP diplomats in 2018. 

According the Consulate General of the People’s Republic of China in Chicago, the event Walz attended was “The Greatest Spirit: Embrace China—Beautiful Sichuan” hosted at Minnesota University’s Northrop Theater.

The event was sponsored by the CCP’s All-China Federation of Returned Overseas Chinese (ACFROC). According to the Chinese government website:

US Congressman Waltz commented that 30 years ago, he celebrated Mid-Autumn Festival for the first time in Foshan, Guangdong. As Mid-Autumn Festival stands out in Chinese culture as a special day of family reunion, it was his pleasure to enjoy this performance with everyone together. China and the US have a solid tradition of cultural exchanges, and hopefully both countries can maintain this tradition and amicable relations.

6. Less than one year into his first gubernatorial term, Walz was an honored guest speaker at multiple CCP-backed influence operation events in 2019.

Ten months after his inauguration, Walz accepted a speaking gig from a CCP-backed event, joining the president of the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC) on the short list of speakers.

Walz was invited to “speak about his experiences [in China] and Minnesota’s connections with China.” Walz also was a guest speaker at the U.S. China Peoples Friendship Association convention in 2019 (alongside CPAFFC President Li Xaolin).

The CPAFFC is effectively a CCP “United Front” cutout that is accused of “directly and malignly influencing” state and local politicians in the U.S., according to the State Department. The CCP’s United Front influence operation is specifically tasked with “co-opting and neutralizing threats to the party’s rule and spreading its influence and propaganda overseas.” Beijing view United Front operation “magic weapon” to advance CCP objectives around the world.

Why is Walz so cozy with obvious CCP intelligence operatives and are they paying him for these speeches?

7. Walz has a long history of making outlandishly pro-CCP comments.

Walz has said that “going [to China] was one of the best things I have ever done” and that if the Chinese “had the proper leadership, there are no limits to what they could accomplish.” He claims that his teaching position Macau Polytechnic University “helped develop his knowledge of China’s unique international status.”

In 2011, Walz said he developed “a great admiration for and a close connection with the Chinese people” after teaching there. He indirectly praised the CCP’s brutal police when he said that China had “almost no crime.”

Walz has also claimed the U.S. does not need to have an “adversarial relationship” with China and that “there was no anti-American feeling [in China] whatsoever.”

Notably, Walz’s gentle criticisms often ignore the aspect of the Chinese system responsible for the brutality: communism. And he recently compared socialism to “neighborliness.” Walz seems to view human rights abuses as events that all countries commit from time to time and move on.

On the twentieth anniversary of Tiananmen Square massacre, Walz said that “every nation has its dark periods that it must come to grips with.” And that “this Nation [the US] is no exception.” While this is true, Walz refers to events in American history that happened over a century ago with far less bloodshed.

Meanwhile, the CCP’s ongoing “break their lineage, break their roots” persecution of ethnic minorities in China is rightly characterized as a crime against humanity and even a genocide.

Why does Tim Walz seem to downplay the undeniable bloodshed of communism and socialism?

This is a developing story.

Seamus Bruner is the author of Controligarchs: Exposing the Billionaire Class, Their Secret Deals, and the Globalist Plot to Dominate Your Life and Peter Schweizer’s Head of Research at the Government Accountability Institute. Follow him @SeamusBruner. [SOURCE]

China Suspected in Massive Breach of Federal Personnel Data

FILE - This Feb. 24, 2015, file photo, shows the Homeland Security Department headquarters in northwest Washington. The Department of Homeland Security said in a statement Thursday, June 4, 2015, that data from the Office of Personnel Management and the Interior Department had been hacked. (AP Photo/Manuel Balce Ceneta, File)

WASHINGTON (AP) — China-based hackers are suspected of breaking into the computer networks of the U.S. government personnel office and stealing identifying information of at least 4 million federal workers, American officials said Thursday.
The Department of Homeland Security said in a statement that data from the Office of Personnel Management and the Interior Department had been compromised.
“The FBI is conducting an investigation to identify how and why this occurred,” the statement said.
The hackers were believed to be based in China, said Sen. Susan Collins, a Maine Republican.
Collins, a member of the Senate intelligence committee, said the breach was “yet another indication of a foreign power probing successfully and focusing on what appears to be data that would identify people with security clearances.”
A spokesman for the Chinese Embassy in Washington called such accusations “not responsible and counterproductive.”
“Cyberattacks conducted across countries are hard to track and therefore the source of attacks is difficult to identify,” spokesman Zhu Haiquan said Thursday night. He added that hacking can “only be addressed by international cooperation based on mutual trust and mutual respect.”
A U.S. official, who declined to be named because he was not authorized to publicly discuss the data breach, said it could potentially affect every federal agency. One key question is whether intelligence agency employee information was stolen. Former government employees are affected as well.
“This is an attack against the nation,” said Ken Ammon, chief strategy officer of Xceedium, who said the attack fit the pattern of those carried out by nation states for the purpose of espionage. The information stolen could be used to impersonate or blackmail federal employees with access to sensitive information, he said.
The Office of Personnel Management is the human resources department for the federal government, and it conducts background checks for security clearances. The OPM conducts more than 90 percent of federal background investigations, according to its website.
The agency said it is offering credit monitoring and identity theft insurance for 18 months to individuals potentially affected. The National Treasury Employees Union, which represents workers in 31 federal agencies, said it is encouraging members to sign up for the monitoring as soon as possible.
In November, a former DHS contractor disclosed another cyberbreach that compromised the private files of more than 25,000 DHS workers and thousands of other federal employees.
Cyber-security experts also noted that the OPM was targeted a year ago in a cyber-attack that was suspected of originating in China. In that case, authorities reported no personal information was stolen.
One expert said it’s possible that hackers could use information from government personnel files for financial gain. In a recent case disclosed by the IRS, hackers appear to have obtained tax return information by posing as taxpayers, using personal information gleaned from previous commercial breaches, said Rick Holland, an information security analyst at Forrester Research.
“Given what OPM does around security clearances, and the level of detail they acquire when doing these investigations, both on the subjects of the investigations and their contacts and references, it would be a vast amount of information,” Holland added.
DHS said its intrusion detection system, known as EINSTEIN, which screens federal Internet traffic to identify potential cyber threats, identified the hack of OPM’s systems and the Interior Department’s data center, which is shared by other federal agencies.
It was unclear why the EINSTEIN system didn’t detect the breach until after so many records had been copied and removed.
“DHS is continuing to monitor federal networks for any suspicious activity and is working aggressively with the affected agencies to conduct investigative analysis to assess the extent of this alleged intrusion,” the statement said.
Cybersecurity expert Morgan Wright of the Center for Digital Government, an advisory institute, said EINSTEIN “certainly appears to be a failure at this point. The government would be better off outsourcing their security to the private sector where’s there at least some accountability.”
Rep. Adam Schiff, ranking Democrat on the House intelligence committee, called the hack “shocking, because Americans may expect that federal computer networks are maintained with state of the art defenses.”
Ammon said federal agencies are rushing to install two-factor authentication with smart cards, a system designed to make it harder for intruders to access networks. But implementing that technology takes time.
Senate Intelligence Committee Chairman Richard Burr, R-N.C., said the government must overhaul its cybersecurity defenses. “Our response to these attacks can no longer simply be notifying people after their personal information has been stolen,” he said. “We must start to prevent these breaches in the first place.”[source]
 

China Bank Moves to Buy U.S. Branches

China's biggest bank signed an agreement that would make it the first Beijing-controlled financial institution to acquire retail bank branches in the U.S., though regulators could still block the deal.

Under the deal, Industrial & Commercial Bank of China Ltd., by some measures the world's largest bank, agreed to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary. ICBC will pay $140 million for an 80% stake. Bank of East Asia, which is a publicly traded company based in Hong Kong, has a total of 13 branches in New York and California. ICBC and Bank of East Asia have talked to U.S. regulators about the deal, these people said.

The move represents what could be the start of big expansions by Chinese financial institutions in the U.S.

Signed in Chicago on the last day of Chinese President Hu Jintao's state visit to the U.S., the move, comes as both Beijing and Washington are calling for greater commercial ties between the two countries.

Both Beijing and Washington are eager to showcase their willingness to strengthen the business ties between the two countries, despite the many issues that will continue to hinder the relations. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, aimed at its biggest economic rival. The U.S. is asking for more Chinese purchases of made-in-America goods and services.

The transaction is expected to be carefully scrutinized by U.S. regulators, including the Committee on Foreign Investment in the U.S., known as CFIUS, because of the state-controlled nature of the Chinese bank. A previous deal by a Chinese bank to acquire a bank in the U.S. was rejected by regulators. "It is going to be a long process," a person familiar with the matter said.

If ICBC's deal to acquire Bank of East Asia's U.S. subsidiary goes through, Americans could walk into the retail branches, open check and savings accounts and, most significantly for many investors, open yuan accounts to trade the currency.

ICBC, as the bank is known, is based in Beijing and is 70% owned by the Chinese government. It has become increasingly comfortable venturing outside its home markets, which still account for the bulk of its profit. Last year, ICBC got into the broker-dealer business in the U.S. with a symbolic $1 purchase of the U.S. brokerage unit of Fortis Securities, controlled by France's BNP Paribas SA. That deal didn't subject ICBC to tight U.S. regulatory restrictions on foreign purchases of retail-banking operations.

U.S. regulators often demand that foreign banks prove they are adequately supervised in their home markets and have proper antimoney-laundering procedures in place before allowing them to set up retail operations, legal experts say.

The agreement was signed at the Hilton Chicago as part of a slew of pacts announced by roughly 60 U.S. and Chinese companies at a giant "signing ceremony" organized on Friday by China's Commerce Ministry and its U.S. counterpart.

Both Beijing and Washington are eager to showcase their willingness to strengthen the business ties between the two countries, despite the many issues that will continue to hinder the relations. China is prodding the U.S. to ease its export controls, especially those involving high-technology products, aimed at its biggest economic rival while the U.S. is asking for more Chinese purchases of made-in-America goods and services. The contract-signing event in Chicago was hailed as "the most important event" in conjunction with President Hu's visit, according to officials in the Chinese delegation.

The move by ICBC underscores the desire by Chinese banking executives to transform their strength into a greater presence globally, as Chinese banks have emerged from the global financial crisis largely unscathed. Their hope is to better support Chinese companies and guard against losing customers to U.S. and European banks that already have networks world-wide. Meantime, Beijing has encouraged Chinese companies to expand overseas in recent years. In light of the huge foreign-exchange reserves China has, Beijing has encouraged its banks to invest more overseas.

In a speech at the event Friday, Chen Deming, China's Commerce Minister, said one of the priorities for the Commerce Ministry is to "encourage our companies to go out." He pointed to the vast foreign-exchange reserves held by China, saying that "we should turn those reserves into capital and assets." Otherwise, the reserves could decline in value because of inflation, Mr. Chen said.

While China's resource and construction companies have moved aggressively into new markets, its financial institutions generally have been slow to follow.

Bank of East Asia is led by prominent Asian banker Sir David Li. Mr. Li drew unwanted attention to himself in the U.S. and Hong Kong in 2007 when the former board member of Dow Jones became the target of an insider-trading case involving News Corp.'s buyout bid for Dow Jones. Mr. Li later agreed to pay $8.1 million to settle the civil charges. Mr. Li couldn't be reached for comment.

So far, most Chinese investments in the U.S. financial sector have involved the Chinese taking passive, minority stakes in firms such as Blackstone Group LP and Morgan Stanley. Taking a majority stake in Bank of East Asia is a change of tactic for ICBC

At the same time, Bank of East Asia is no stranger to ICBC. It sold a 70% stake in its Canadian operations to ICBC last year and all of its six branches in Canada have since been rebranded ICBC Canada. Bank of East Asia has 13 branches in the U.S., concentrating in New York and California—two states that boast the largest numbers of Chinese immigrants. The bank formed its U.S. banking subsidiary in 2001 through the acquisition of Grand National Bank, of Alhambra, Calif.

The deal, if approved by U.S. regulators, would allow ICBC to gain relatively quick access to American depositors. Right now, ICBC has one branch in New York, but it isn't involved in the retail-banking business. Bank of China Ltd. is the only mainland Chinese bank that has a retail license in the U.S. market. The bank, also state owned, has two branches in New York and one in Los Angeles. It recently has started allowing American customers to buy and sell the Chinese currency through its U.S. branches.

The decision by Bank of China is the latest move by China to allow the yuan, whose value is still tightly controlled by the government, to become an international currency that can be used for trade and investment.

Chinese banks have encountered uphill battles to gain access to the U.S. market in the past. For instance, it took almost two years for ICBC to get the approval from the Federal Reserve to open its New York branch, which has so far focused on commercial lending. That green light was given shortly before President George W. Bush's trip to Beijing for the Summer Olympics in 2008.

Some Chinese banks' bids to acquire U.S. counterparts have been rejected. A case in point is China Minsheng Banking Corp. In 2008, Minsheng, China's first private bank and a midsize lender, agreed to take a 9.9% stake in San Francisco lender UCBH Holdings Inc., the holding company for United Commercial Bank. When the bank ran into trouble during the financial crisis over bad loans and accounting errors, Minsheng tried to buy it. U.S. regulators rejected the move because of restrictions on foreign investment in U.S. banks, according to people familiar with the matter. Regulators in late 2009 shut down United Commercial Bank and Minsheng had to write off its $130 million investment.(source)

Barry As President: CHINA'S MILITARY RISE MEANS Appeasement Is The Proper Policy Towards Confucian China

We all learned at school how the status quo powers mismanaged the spectacular rise of Germany before World War I, a strategic revolution so like the rise of China today.

And we all learned how the Kaiser overplayed his hand. That much was obvious.

Yet it is difficult to pin-point exactly when the normal pattern of great power jostling began to metamorphose into something more dangerous, leading to two rival, entrenched, and heavily armed alliance structures unable or unwilling to avert the drift towards conflict. The Long Peace died by a thousand cuts, a snub here, a Dreadnought there, the race for oil.

The German historian Fritz Fischer has in a sense muddied the waters with his seminal work, Griff nach der Weltmacht (Bid for World Power). He draws on imperial archives in Potsdam to claim that Germany’s general staff was angling for a pre-emptive war to smash France and dismember the Russian Empire before it emerged as an industrial colossus. Sarajevo provided the “propitious moment”.

Kaiser Wilhelm’s court allegedly made up its mind after the Social Democrats (then Marxists) won a Reichstag majority in 1912, seeing war as a way to contain radical dissent. This assessment was tragically correct. War split the Social Democrats irrevocably, allowing the Nazis to exploit a divided Left under Weimar.

The Fischer version of events is a little too reassuring, and not just because the Entente allies had already fed Germany’s self-fulfilling fears of encirclement and emboldened Tsarist Russia to push its luck in the Balkans. A deeper cause was at work.

"The only condition which could lead to improvement of German-English relations would be if we bridled our economic development, and this is not possible," said Deutsche Bank chief Karl Helfferich as early as 1897. German steel output jumped tenfold from 1880 to 1900, leaping past British production. Sound familiar?

Is China now where Germany was in 1900? Possibly. There are certainly hints of menace from some quarters in Beijing. Defence minister Liang Guanglie said over New Year that China’s armed forces are “pushing forward preparations for military conflict in every strategic direction”.

Professor Huang Jing from Singapore’s Lee Kwan Yew School and a former adviser to China’s Army, said Beijing is losing its grip on the colonels.

“The young officers are taking control of strategy and it is like young officers in Japan in the 1930s. This is very dangerous. They are on a collision course with a US-dominated system,” he said.

Yet nothing is foreordained. Which is why it was so unsettling to learn that most of the leadership of the US Congress declined to attend the state banquet at the White House for Chinese President Hu Jintao, including the Speaker of House.

Senate Majority Leader Harry Reid called Mr Hu a “dictator”. Is this a remotely apposite term for a self-effacing man of Confucian leanings, whose father was a victim of the Cultural Revolution, who fights a daily struggle against his own hotheads at home, and who will hand over power in an orderly transition next year?

Or for premier Wen Jiabao, who visited students in the Tiananmen Square protests of 1989, narrowly surviving the “insubordination purge” that followed? These leaders may be wrong in their assessment of how much democracy China can handle without flying out of control, but despots they are not.

President Barack Obama has bent over backwards to draw China into the international system through the G20, the World Bank and the IMF, in practical terms recognizing Beijing as co-equal in global condominium.

You could say Mr Obaba has won little in return for reaching out, but as Napoleon put it, “a leader is a dealer in hope”. What, pray, would a policy of crude containment do to China’s psyche?

Heaven protect us from unreconstructed Neo-cons such as ex-UN ambassador John Bolton, who wants to send aircraft carrier battle groups into the Straits of Taiwan, as if we were still living in that lost world of American pre-eminence in 1996, when China was still too weak to respond, and did not have operational missiles able to sink US carriers far at sea. Yet variants of the Bolton view are gaining ground on Capitol Hill.

Yes, China’s leaders should be careful not to succumb to the Wilhelmine illusion that economic and strategic momentum is the same as actual power.

There is a new edge to Chinese naval policy in the South China Sea, causing Japan, Vietnam, Indonesia, and the Philippines to cleave closer to the US alliance. Has Beijing studied how German naval ambitions upset the careful diplomatic legacy of Bismarck and pushed an ambivalent Britain towards the Entente, even to the point of accepting alliance with Tsarist autocracy?

Factions in Beijing appear to think that China will win a trade war if Washington ever imposes sanctions to counter Chinese mercantilism. That is a fatal misjudgement. The lesson of Smoot-Hawley and the 1930s is that surplus states suffer crippling depressions when the guillotine comes down on free trade; while deficit states can muddle through, reviving their industries behind barriers. Demand is the most precious commodity of all in a world of excess supply.

The political reality is that China’s export of manufacturing over-capacity is hollowing out the US industrial core, and a plethora of tricks to stop Western firms competing in the Chinese market rubs salt in the wound. It is preventing full recovery in the US, where half the population is falling out of the bottom of the Affluent Society. Some 43.2m people are now on food stamps. The US labour force participation rate has fallen to 64.3pc, worse than a year ago. Only the richer half is recovering.

The roots of this imbalance lie in the structure of globalisation and East-West capital flows – and no doubt the deficiencies of US school education – but China plays a central role, and this will not tolerated for much longer if Beijing is also perceived to be a strategic enemy. China’s economic and military goals are in conflict. One defeats the other.

The undervalued yuan is merely the visible tip of the mercantilist iceberg, and is a diminishing factor in any case as leaked dollar stimulus from the Fed’s QE drives up Chinese wage inflation. What matters is that China’s entire credit, tax, and regulatory system is geared towards subsidised capital for exporters.

Professor Michael Pettis from Beijing University argues that a key reason why Chinese consumption has collapsed from 48pc to 36pc of GDP over 12 years – and therefore why China cannot eliminate the trade surplus with the US – is that the banking system has been bailed out with an interest rate subsidy extracted from depositors, shifting income from the people to corporate debtors. Unfortunately, this is about to happen again.

A cocky China needs to watch its step, as does a rancorous America, before resentments feed on each other in a Wilhelmine spiral.

The Chinese have no recent history of sweeping territorial expansion (except Tibet). The one-child policy has left a dearth of young men, and implies a chronic aging crisis within a decade. This is not the demographic profile of a fundamentally bellicose nation.

The correct statecraft for the West is to treat Beijing politely but firmly as a member of global club, gambling that the Confucian ethic will over time incline China to a quest for global as well as national concord. Until we face irrefutable evidence that this Confucian bet has failed, 'Boltonism’ must be crushed.

Appeasement, your hour has come.(source)

CHINESE MILITARY MACHINE: On The Rise

Lift-off: China's J-20 stealth plane has made a successful test flight. Military officials say it is likely the Chinese were able to develop the stealth technology from parts of an American F-117 Nighthawk that was shot down over Serbia in 1999

China was able to build its first stealth bomber using technology gleaned from a downed U.S. fighter, it has been claimed.

Beijing unveiled its state-of-the-art jet – the Chengdu J-20 – earlier this month.

Military officials say it is likely the Chinese were able to develop the stealth technology from parts of an American F-117 Nighthawk that was shot down over Serbia in 1999.

During Nato’s aerial bombing of the country during the Kosovo war, a Serbian anti-aircraft missile shot the Nighthawk. It was the first time one of the ‘invisible’ fighters had ever been hit.

The Pentagon believed a combination of clever tactics and luck had allowed a Soviet-built SA-3 missile to bring down the jet.

The pilot ejected and was rescued but the wreckage was strewn over a wide area of farmland.

Civilians collected the parts – some the size of small cars – as souvenirs.

‘At the time, our intelligence reports told of Chinese agents crisscrossing the region where the F-117 disintegrated, buying up parts of the plane from local farmers,’ says Admiral Davor Domazet-Loso, Croatia’s military chief of staff during the Kosovo war.

‘We believe the Chinese used those materials to gain an insight into secret stealth technologies... and to reverse-engineer them.’

A senior Serbian military official confirmed that pieces of the wreckage were removed by souvenir collectors, and that some ended up ‘in the hands of foreign military attaches’.

In what appears to be a clear message of its military might, China staged the first test flight of the new stealth jet earlier this month - at the same time that U.S. defence chief Robert Gates was in Beijing on the second day of an official visit.

The fighter jet's successful test follows reports that China is planning to launch its first aircraft carrier and has tested a ballistic missile capable of sinking U.S. vessels in the Pacific.

The prototype jet was shown in flight, with civilians and air force personnel watching on, in pictures on several unofficial Chinese military websites, after local media outlets had claimed a successful test flight had taken place.

While the Chinese government is renowned for its stringent approach to state secrets, photos and reports of the J-20's test have remained online.

According to international agencies, the scheduling of the test flight to coincide with Mr Gates' visit to China, coupled with the seemingly relaxed approach to reports about the flight, indicated Beijing's willingness to be more open about its military intentions.

Nonetheless, reports of the stealth's successful test will do little to quell anxieties about the speed of China's military progress.

The U.S. F-22 Raptor is currently the only operational stealth fighter in the world, while Russia's Sukhoi T-50 jet is expected to enter active service in the next four years.

But pictures of China's J-20, which looks larger than the F-22 or T-50, will be of concern to the Taiwanese government, whose antiquated aircraft and radar systems would provide little resistance to radar-evading Chinese jets.

The U.S. has claimed China would not be capable of developing a stealth jet for years and production of the F-22 was recently capped.

But the J-20's successful test, coupled with reports of the development of an aircraft carrier and missile system, confirms China's growing military might.(source)