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    What If America Doesn’t Recover From Trump?

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    With two-thirds of Republicans still believing that President Joe Biden’s election was fraudulent, the Republican Party faces what could prove to be an existential fork in the road. Does it double down on Trump and Trumpism at this juncture or does it reject his divisive legacy root and branch much the same way that McCarthyism …
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      It’s Time to Put Guardrails in Place in Washington

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      Americans have historically been fond of pounding their chests when proclaiming US “exceptionalism,” believing that what happens elsewhere in the world doesn’t happen here. That was until Donald Trump came steamrolling in. His supporters’ storming of the US Capitol on Wednesday was a perfect capstone to his tumultuous and torturous presidency. At his direction, the …
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      America Gets Rid of Trump, But Not Trumpism

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      The degree to which about half the US electorate supported Donald Trump in this presidential election, following a steady stream of outrages over the past four years, is a sad testament to how small-minded a significant percentage of the American public remains. The partisan battle lines have only grown stronger and appear to be insurmountable, at least in the short term, as blue and red America seem perfectly content to lash out at each other in perpetuity. The Founding Fathers would be spinning in their graves if they could see what America has become.

      360˚ Context: The 2020 US Election Explained

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      I published an article in July 2016 stating that I believed that Donald Trump had narcissistic personality disorder, and tried to warn America what would be in store for it if we elected him president. Exactly four years ago, on the eve of the US presidential election, I wrote an article predicting that Trump would win. My view was based largely on the belief that Hillary Clinton’s intended “coronation” was premature, that she was a flawed candidate, and that Trump had succeeded in tapping into an important vein in American political culture — the neglected blue-collar voter. I published that article at 3:00 the morning after the election, one of the very first to have acknowledged the birth of Trumpism.

      In that piece, I wrote:

      “It is doubtful that Mr. Trump will be able to heal our terribly divided nation, which he so handily and successfully contributed to. Now that the battle lines are drawn — between those who cling to an ‘Ozzie and Harriet’ vision of America, in which everyone is white, conservative, straight and Christian, and those who recognize and accept the multi-racial, ethnic, religious and sexual orientation of this great land — there is no putting Humpty Dumpty back together again, certainly not with a leader hell bent on fanning tendencies toward divisiveness, rather than unity. While we are certainly not all going to be joining hands together and singing kumbaya, no matter who is president, we are not going to get there by having a Divider-in-Chief at the helm.”

      We have seen the result of four years under his thumb. America has rarely been more partisan or divided. Those who yearned for an Ozzie-and-Harriet vision of America have become more emboldened four years later, apparently believing that America can once again become a bastion of white conservatism, replete with racism, bigotry and misogyny. That is unlikely to happen. America has become too diverse, and sufficient progress has been made toward equality to revert to that sad vision. The partisanship will surely only continue to get worse in the coming four years. The question is, can we ever return to a time when bipartisanship reigns?

      It was of course just a generation ago when that was the norm. I’d like to believe that Joe Biden can take us some ways in that direction, but what will probably be required to return to that era is sustained leadership by someone who has not spent decades with their snout in the trough inside the Beltway. Biden is not that man, but neither are the majority of politicians in Congress who have made being a politician a way of life rather than a temporary service to their community, state or nation.

      To achieve that, America will need a wholesale change in how it is governed in Washington, complete with cleaning house, term limits, mandatory accountability pledges and an end to special interests, lobbyists and corruption, among other things. There’s little chance that will be happening any time soon. It appears that we will have to settle for just heading down that road, which would be a victory in itself, knowing that America has saved itself from perhaps insurmountable damage of a second Trump term.

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      As for Trump, he will surely not be going quietly into the night. We can expect that he will challenge the results of the election for days and weeks, if not months, to come, his fragile ego refusing to acknowledge that he is the ultimate “loser.” While he toils and writhes in egomaniac agony, he will be planning his next act, which may be some combination of reality television or radio show, creation of a media empire or planning his own political comeback in 2024. Donald Trump has made an undeniable, indelible mark on the American political landscape, for better or worse, and his ego will not allow him to simply walk away as George W. Bush did.

      As for his followers, surely they will not be changing their political stripes or beliefs any time soon, nor should they be expected to. From their perspective, they have found a political voice, so Trump will have a loyal legion of fans supporting him no matter what he decides to do. That ensures that America will be in for many more years of Trumpism, and his legacy will of course live on in the Supreme Court for decades.

      America got the leader it deserved for the past four years, but for the first time since 1992, it has decided to reverse course after Trump has served a single term. Let us hope that Joe Biden can at least start down the road of healing this fractured nation and that whatever he is able to achieve in the coming four years serves as a useful counterpunch to Trumpism. While America can endure Donald Trump’s legacy bubbling beneath the surface, it cannot afford another four years of a Trump presidency. We have to believe that, having said no to another Trump term, America has decided that another four years of him is a price that is just too high to pay. The question is, will the answer be the same when Trump runs again in 2024?

      *[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Does Beijing Prefer Biden or Trump?

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      Few major events occur in the world now occur without China having a stake, directly or indirectly, in their outcome. That is because Beijing has become a force to be reckoned with, and its influence has grown to rival or even surpass that of the US in many parts of the world. Just as elections throughout the world have historically implied some sort of impact on Washington, now the world is becoming accustomed to the same being true for Beijing.

      The US presidential election is certainly no exception. At least part of the reason that matters to Washington is because, for the first time since America became a global superpower, it now has a proper peer. The former Soviet Union may have been a military peer, but it was not a peer on any other level. That is not true with China, which now rivals the US in some arenas or is on its way to doing so. In some aspects of science, technology, the global economy, diplomacy and political influence, Beijing is already more consequential to much of the rest of the world than America is.

      360˚ Context: The 2020 US Election Explained

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      Given its single-minded focus on creating an alternative world order crafted in Beijing’s image, as well as the tremendous resources it is devoting to that task, there is little reason to believe that China’s trajectory will change in the coming decade and beyond. One could argue, in fact, that the outcome of the election matters almost as much to Beijing as it does to America, for it will define the type and scope of headwind Beijing faces for at least the next four years.

      A second Trump term of course implies more of the same: trade war, challenging Beijing at every opportunity, the war of words, and not giving an inch on anything. But it also implies four more years of discord and disarray between America and its many allies. Both America and China have paid a serious price for having Donald Trump in the White House, but Beijing has certainly benefitted while Washington has suffered from the fractious nature of America’s relationship with its allies.

      Under a Biden presidency, that is likely to be greatly reduced, which should concern Beijing a lot, for it has enabled the Communist Party of China (CPP) to act with virtual impunity on the global stage while America and its allies passively look on. That is what has enabled Beijing to expropriate and militarize the Spratly and Paracel Islands, bulldoze its way into more than 70 countries without opposition via the Belt and Road Initiative, and significantly increase its influence in the world’s multilateral organizations, among other things. That damage has already been done and, in truth, there is relatively little Joe Biden or any subsequent US administration may be able to do about it.

      What Biden can do in response is repair those alliances and lead an effort to coordinate and unify the West’s future responses to Beijing’s actions. It is by acting in unison that the West will not only get Beijing’s attention, but begin to reverse the tide. Beijing has few real allies, and some of its “allies” have dual allegiances between Beijing and Washington. When push comes to shove in a time of crisis, Saudi Arabia, for example, is not likely to pivot in Beijing’s direction, despite China’s growing economic ties with the kingdom. The same is true with a variety of other allies that China believes are in its camp but which Washington has cultivated over the decades. Beijing is a new arrival to the party.

      So, what is at stake for Beijing is an unfortunate choice: endure four more years of Trump’s tirades or (at least) four years of a US administration that values America’s alliances and intends to reinvigorate them. Biden is not likely to try to reverse the course Trump has embarked upon with Beijing. That ship has sailed. US Congress is on board with Trump’s contention that Xi Jinping and the CCP are bad actors and that the Chinese government is America’s greatest adversary. Biden’s foreign policy is unlikely to be substantively differently oriented.

      In that regard, while this is undoubtedly the most important election of most Americans’ lifetimes, it is also crucially important for Beijing. The gloves are off on both sides and they are not going to be put back on. The question is, does Beijing prefer Trump or Biden? While the answer is probably neither, knowing that bilateral relations are not going to revert to where they were under Barack Obama, Beijing may actually prefer Trump over Biden in the hope that the damage done to America’s alliances may become permanent. In the meantime, the CCP will continue to use Trump to whip up nationalism at home, which of course suits its ultimate objective of strengthening Xi’s and the CCP’s grip on power.

      *[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Will China’s Digital Currency Revolutionize Global Payments?

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      China is well on its way to becoming a cashless society. More than 600 million Chinese already use Alibaba’s Alipay and Tencent’s WeChat Pay to pay for much of what they purchase. Between them, the two companies control approximately 90% of China’s mobile payments market, which totaled some $17 trillion in 2019. A wide variety of sectors throughout China have since adopted Blockchain to pay bills, settle disputes in court and track shipments. The Chinese government understands that, via Blockchain, the issuance of its own cryptocurrency is an excellent way to track and record the movement of payments, goods and people.

      Beijing Wants to Rewrite the Global Rulebook

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      The unsexily named Digital Currency/Electronic Payments (DCEP) is intended to be used by anyone around the world to purchase anything. It has the potential to revolutionize the global payments system. Assuming it succeeds, many other countries will want to emulate it. Some other governments have already launched similar initiatives, but not on the scope or scale of the DCEP, which promises to be the first global digital currency.

      Digital Wallets

      What appears to have spurred the Chinese government to actively pursue the DCEP in 2019 was the birth of an organization that also has the potential to revolutionize the global payments system, the Libra Association. Libra is a grouping of more than two dozen organizations creating the world’s first Blockchain-derived global payment system, specifically founded on best practices in regulation and governance. Its stated objective is to transparently bring access to financial services to billions of people who either have limited or no access to the existing global banking system.

      Embed from Getty Images

      Given that it is an American-led initiative that will use the US dollar to determine its benchmark value, Beijing viewed Libra as an attempt to establish US dominance over the global cryptocurrency marketplace. It previously viewed other cryptocurrencies as a threat to its own hegemony over capital controls in China.

      Although its motivations to counter the US are clear enough, much remains unknown about the DCEP. One has to wonder just how much focus it will have on transparency, governance or best practices. It will not be available on cryptocurrency exchanges, nor will it be available for speculative purposes. Embracing Blockchain and creating a DCEP ecosystem will give the Chinese Central Bank unprecedented power over capital movements — certainly in China, but also around the world.

      Like Alipay and WeChat, the DCEP will require a digital wallet, but it will not require a bank account. Commercial banks will issue the digital wallets, but no internet connection will be required to conduct transactions via the DCEP. All that will be required is that a phone has battery power. While a certain degree of anonymity will be present with the DCEP, the Chinese Central Bank will still be able to track who spent or received funds, when, where and from whom. The Chinese government calls the concept “controllable anonymity” and will rely on Big Data to identify behavioral characteristics of the individuals and businesses using DCEP. Doing so will help the government identify money laundering, tax evasion and terrorist financing. It will, of course, also permit a higher degree and quality of state surveillance of Chinese citizens and citizens of any other country that may use it.

      Since the Chinese government will be the first to launch a global digital currency, it will gain a considerable lead over the world’s nations and provide it with the ability to perfect its surveillance capabilities in China and around the world for any country that chooses to adopt the DCEP. It will also help to internationalize the yuan and simultaneously create less dependence on the US dollar. So, the Chinese government intends to stay a step ahead of the competition, enhance its ability to monitor its citizens, broaden its soft power and increase China’s appeal to other countries while countering the supremacy of the US dollar in the process.

      Alternative System

      By issuing the DCEP, the Chinese government hopes that demand for yuan reserves will follow, facilitating a digital version of the yuan as a global alternative to dollar reserves, especially in Belt and Road Initiative (BRI) member nations seeking to modernize their financial sectors. It could also help internationalize China’s e-payment systems, which are not used outside of China. In the absence of an American cryptocurrency, which seems to be a long way off, doing so could in theory make the DCEP the cryptocurrency of choice among BRI (and other) countries.

      Such an alternative system may be particularly appealing for countries under US sanctions, which may wish to avoid using the US dollar entirely, or for countries or businesses engaged in trading, investment or lending with Chinese companies. But the yuan remains not fully convertible, with just 1% of international payments using it. That could have a significant impact on the government’s implementation strategy. In addition, the Chinese government is attempting to centralize what is a decentralized technology by requiring that all “nodes” using the Blockchain register with the government and provide information about their users.

      While the Chinese people are accustomed to having their government pry into, and try to control, their private lives, most of the world’s population wants nothing of the sort. It remains to be seen just how broadly the DCEP will be adopted, or whether it will turn out to be a net positive for the nations that choose to use it, but having the first-mover advantage will surely serve Beijing well. Despite its apparent flaws, if it also helps to bring some of the world’s poorest nations with the least access to basic and global financial services on par with the world’s developed nations in that regard, Beijing will have done much of the world’s population a great service in the process.

      *[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      The Unintended Economic Impacts of China’s Belt and Road Initiative

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      China’s footprint in global foreign direct investment (FDI) has increased notably since the launch of the Belt and Road Initiative (BRI) in 2013. That served to bring Chinese overseas FDI closer to a level that one would expect, based on the country’s weight in the global economy. China accounted for about 12% of global cross-border mergers and acquisitions and 9% of announced greenfield FDI projects between 2013 and 2018. Chinese overseas FDI rose from $10 billion in 2005 (0.5% of Chinese GDP) to nearly $180 billion in 2017 (1.5% of GDP). Likewise, annual construction contracts awarded to Chinese companies increased from $10 billion in 2005 to more than $100 billion in 2017.

      Interestingly, however, the American Enterprise Institute’s China Global Investment tracker recorded $420 billion worth of investment and construction in BRI countries versus $655 billion in other countries between 2013 and 2018. So China actually invested more in countries outside the BRI during the period, given that Chinese investment in developed countries tends to have larger market values, particularly for mergers and acquisitions.

      Additional Pain

      Based on other measures, however, Chinese investment in BRI nations was much larger as a percentage of its total investment for the period. For example, greenfield investment represented almost half of all investment in BRI countries, but only 13% in other markets. Chinese firms were awarded $268 billion worth of construction contracts in BRI countries versus $166 billion elsewhere. Greenfield investment and construction in BRI countries amounted to $340 billion versus $230 billion in non-BRI countries.

      The subsidies that Beijing contributes to its state-owned enterprises implies that many of the BRI projects actually cost it far more than the face value of the construction and investment, meaning that loan defaults — a common occurrence — add that much more additional pain to Beijing’s coffers.

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      Asia attracted the majority of BRI-related investment and construction contracts between 2013 and 2018, receiving just over half of such activity, with Southeast Asia taking 46% of that amount. Africa received 23%, followed by the Middle East at 13%. Overall, approximately 38% of total investments and construction contracts were targeted at the energy sector in host nations, with 27% ending up in transport and 10% in real estate.

      The largest BRI project as of 2018 was the China-Pakistan Economic Corridor, which links Kashgar in China’s Xinjiang province with the port of Gwadar in Pakistan. Investments and construction contracts worth nearly $40 billion had been devoted to the project, with total spending likely to reach in excess of $60 billion by the time it is finished, equivalent to about 20% of Pakistan’s nominal GDP. The country endured a large increase in imports of materials and capital as a result, which aggravated its trade imbalance. By 2018, its current account deficit had expanded to more than 6% of GDP from less than 2% in 2016.

      Expensive Membership

      While Pakistan’s economic challenges were not and are not entirely attributable to the BRI, the strains added to it by the BRI became highly problematic. That turned out to be a common byproduct of the initiative among the countries receiving the largest amounts of investment. Large debts in countries with limited financial resources and means of generating revenue often undermine governments’ ability to successfully manage their economies. Rather than benefiting from the infrastructure investments made by China, they sometimes end up perpetually treading water.

      Rising debt service often increases a country’s borrowing costs, can raise doubt about its solvency, contribute to a depreciating currency and increase the local currency value of the external debt burden. Consequently, the macroeconomic fallout of being a recipient member of the BRI “club” can be severe, particularly for the smallest and poorest countries.

      A 2018 study from the Center for Global Development has noted, for example, that in the case of Djibouti, home to China’s only overseas military base, public external debt had increased from 50% to 85% of GDP in just two years — the highest of any low-income country. Much of that debt consists of government-guaranteed public enterprise debt owed to China’s Export-Import Bank (EXIM).

      In Laos, the $6-billion cost of the China-Laos railway represents almost half the country’s GDP. Debt to China, Tajikistan’s single largest creditor, accounted for almost 80% of the total increase in Tajikistan’s external debt between 2007 and 2016 period. And in Kyrgyzstan, China EXIM is the largest single creditor, with loans of $1.5 billion, or about 40% of the country’s total external debt.

      It certainly does not appear that Beijing put sufficient effort into contemplating the likely economic impact of the BRI prior to commencing it, either upon host nations or upon itself, for all concerned have borne the consequences of excessive and imprudent lending. Could it be that that Communist Party of China did not care, and that all that mattered was rolling the Initiative out as quickly as possible once it decided to do so?

      It is truly surprising that Beijing did not do a better job of envisioning the multiplicity of potential outcomes. That is undoubtedly the overriding reason why the Chinese government decided to pivot in 2018 and adopt a seemingly more rational, moderate and achievable approach to unleashing the remainder of the BRI upon the world. It now realizes that its reputation and legacy are at stake, never mind the hardship it has placed on scores of developing countries around the world in the process.

      *[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      China Is Flexing Its Muscles in the South China Sea

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      As the coronavirus continues to spread across the globe, China is taking advantage of the chaos and the preoccupation of governments with battling the pandemic. Beijing has long been opportunistic, so it is using what it sees as a unique confluence of circumstances to strengthen its strategic, geopolitical and military position. This is being done in a number of ways — using soft and hard power — by delivering personal protective equipment (PPE) throughout the world, increasing its foreign aid, rejiggering the Belt and Road Initiative and reinforcing its militarization of the South China Sea.

      Beijing Wants to Rewrite the Global Rulebook

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      For years, the Chinese government has argued that its “nine-dash line” of sovereignty over the entire sea is based on centuries of maritime history and that China’s claim is airtight. The Chinese Foreign Ministry has even asserted that ample historical documents and literature demonstrate that China was “the first country to discover, name, develop and exercise continuous and effective jurisdiction over the South China Sea islands.”

      The truth is somewhat different, however. As veteran journalist Bill Hayton notes in the book, “The South China Sea,” the first Chinese official ever to set foot on one of the Spratly Islands was a nationalist naval officer in 1946, the year after Japan’s defeat in World War II and its own loss of control of the sea. He did so from an American ship crewed by Chinese sailors who were trained in Miami.

      Nine-Dash Line

      As for the story of the nine-dash line, it began a decade earlier through a Chinese government naming commission. China was not even the first to name the islands; the naming commission borrowed and translated wholesale from British charts and pilots. It is unclear how the Chinese government transformed all of this into a bill of goods it has sold to the Chinese people, but by now it is a source of national pride, however misplaced it may be.

      Yet the Chinese government and its people have backed themselves into a corner. In 2016, an international tribunal in The Hague ruled that there is no legal basis for China’s claim over the islands. Meanwhile, Beijing has failed to produce evidence of its declaration to back up its version of the facts. Despite this, the Chinese have been drinking the nine-dash line Kool-Aid for so long that national pride will not allow them to admit that what the government is doing in the South China Sea is illegal under international maritime law — the UN Convention on the Law of the Seas. Ironically, China subscribed to the convention on the very day in 1982 when it first became a legal instrument.

      Embed from Getty Images

      The Chinese government has not personified the rule of law in this case — or in others related to maritime borders — and wants to be able to cherry-pick which provisions of international treaties it will comply with. That is behavior unbecoming of a rising global power and will make states which are signatories to treaties with China wonder if its signature is worth the paper it is printed on. This cannot be in China’s long-term interest.

      The Chinese government views America’s recent naval exercises in the South China Sea as illegal and merely serving to aggravate tensions between the two countries. Washington has maintained for many years that China has no legal basis upon which to continue to assert its maritime claim over the islands, shoals or reefs of the South China Sea. The nations of Asia, and the rest of the world, agree with the US position. The question is: Will the world’s nations join America in publicly and consistently opposing Beijing’s continued illegal actions in the region?

      Who Will Speak Up?

      That seems unlikely. Given Beijing’s recent propensity to practice wolf diplomacy by swiftly and harshly responding to any criticism of its actions, most Asian countries are likely to remain silent. Australia, Japan and South Korea are possible exceptions to that from a military perspective, but given that they have been content to cede that role to America, not much is likely to change in the near future. Australia is already reeling from a healthy dose of wolf diplomacy, which has negatively impacted its bilateral trade with China.

      Beijing has become accustomed to doing whatever it wants, with little consequence. The US, the countries of Asia and much of the rest of the world remained largely silent when Beijing was expropriating and militarizing the Spratly and Paracel Islands. That was a grave error. Now, most governments see little point in objecting to what is, in essence, a fait accompli. Now, short of going to war, China’s militarization of the South China Sea is a reality the world is simply going to have to live with.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      How the US Government Failed to Prepare for a Pandemic

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      The response to the COVID-19 crisis by both President Donald Trump and his administration has been abysmal, crafting a narrative that has revealed a warped reality based on a combination of ignorance, delusion, denial and a lack of preparedness. Trump has displayed utter ignorance, especially in the early days of the outbreak in America, stating […] More

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      China’s Race for Scientific and Technological Supremacy

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      Science and technology will become the lifeblood of the Chinese economy in this decade and will remain its lifeblood in the future. That is, in part, because China has become sufficiently advanced to be able to effectively compete with the US and other technological leaders in the West. It is also the key to China’s […] More