No travel for you

North by Northwest smoking on trainIn the latest evolution of China’s social credit system, people who have committed offenses like smoking on trains or defaulting on fines will now be effectively banned from traveling:

China said it will begin applying its so-called social credit system to flights and trains and stop people who have committed misdeeds from taking such transport for up to a year.

People who would be put on the restricted lists included those found to have committed acts like spreading false information about terrorism and causing trouble on flights, as well as those who used expired tickets or smoked on trains, according to two statements issued on the National Development and Reform Commission’s website on Friday. […]

However, there are signs that the use of social credit scoring on domestic transport could have started years ago. In early 2017, the country’s Supreme People’s Court said during a press conference that 6.15 million Chinese citizens had been banned from taking flights for social misdeeds.

That’s an extraordinary number of people. A case could be made that people who, for example, open the emergency exit of a moving plane should be put on some kind of no-fly list, but only a small fraction of 6.15 million citizens can possibly be guilty of those types of offenses.

Protectionist China

Reuters provides a handy rundown of China’s restrictions on US imports. They are… significant:


China keeps close control over the use of tech within its borders, including full or partial blocks against many popular U.S. firms including Google, Facebook Inc, Twitter Inc and others.

The Chinese government has adopted a raft of strict new cybersecurity regulations, which foreign business groups complain either put China off limits or require them to provide sensitive intellectual property for government checks. […]


Global carmakers can only operate in China, the world’s largest auto market, via joint ventures (JVs) with local partners, with their stake limited to 50 percent, part of a government drive to protect home-grown auto firms.

Tesla Inc chief executive Elon Musk said on Twitter earlier this month that China trade barriers created an unfair playing field and that it was “like competing in an Olympic race wearing lead shoes.” […]

China also imposes a 25 percent duty on imported vehicles, versus a 2.5 percent import tax in the United States.


Foreign financial firms face long-standing equity caps to participate in some services in China, including a 50 percent limit on life insurance and a 49 percent cap on foreign-invested securities broker-dealers. […]


China has a strict quota system for imported movies, limiting the number allowed to be shown on domestic cinema screens through the scheme to 34 each year. Hollywood producers also get around 25 percent of the box office, compared to nearer 40 percent they received in other overseas markets.


China bans imports of poultry, poultry products and eggs due to avian flu. It conditionally lifted an import ban on U.S. boneless beef and beef on the bone in June last year. […]


China requires rail equipment suppliers to its domestic train networks, which are among the world’s longest, to prove that at least 70 percent of their supply chain is in China.

Embracing “free trade” when your trading partners are severely protectionist is a bit like leaving all your doors unlocked when your neighbors are thieves.


Beppe Grillo

Italy’s Beppe Grillo

The enigmatic Five Star Movement (Movimento 5 Stelle, or M5S) is now Italy’s biggest political party:

One person notably absent from the Five Star Movement’s triumphant celebrations at a plush hotel in Rome in the early hours of Monday morning was Beppe Grillo, the comedian who less than a decade ago founded the party that seized the biggest share of the vote in Sunday’s inconclusive election. […]

Grillo, who was instrumental in turning the movement built by a rabble of rebels into Italy’s strongest political force, said in January that unless it won an outright majority in the election it should remain in opposition. “It would be like saying that a panda can eat raw meat. We only eat bamboo,” he said of the prospect of sharing power.

But Di Maio, said to have been groomed by Grillo for the leadership, has other ideas. On Monday he said he was open to talks with all political parties, and he has already presented his would-be cabinet – a list of what he calls “anti-politicians”.

In light of the news from Italy, I remembered this prescient article by Francesco Sisci — from April 2013:

Italy over the past century was a staging ground for experiments with new political solutions that had global consequences. Fascism was born in Italy in the 1920s, although it also flourished elsewhere and caused the start of World War II. In the 1970s, the Italian pro-Soviet Communist Party supported coalition governments that included pro-American parties, showing that communism could be adapted to a democratic environment. Thus, it inspired reforms in Gorbachev’s USSR some years later, something that led to the collapse of communism in Europe altogether.

One then wonders whether the new Italian political entity the “5 Star Movement”, created by comedian-turned-politician Beppe Grillo, will also lead to something else – and what that could be. The “5 Star Movement” scored a huge success in the recent Italian elections while refusing to reach out to voters through talks and debates on TV, the traditional means of political campaigning for the past five decades.

It canvassed votes by means of old-fashioned public meetings and by modern web chats and Tweets shot through the Internet and mobile phones. He and his followers explained that this is the new web democracy. In fact, there is something extremely modern in Grillo’s political movement. Certainly, US President Barack Obama understood the importance of the web and relied on songs spread on Facebook and Twitter slogans. But he still went on TV and engaged in all the traditional campaign activities.

Grillo, conversely, refused TV appearances, political debates, and even interviews in the Italian press, and this magnified his image, bringing him almost 25% of the vote. The Internet is and was the ground for internal debates. Candidates were selected through mock elections on the web among Grillo’s supporters; policy discussions were held in web chats rather than in smoky rooms. There were no meetings, no cells, and no steering committees.

Actually, this is not the only new element of Grillo’s party. Contrary to all past practices, Grillo and his main partner, Gianroberto Casalegno, chose not to run for parliament. Notwithstanding that, these two extra-parliamentary leaders control all their elected deputies in parliament through a series of binding agreements. Meanwhile, the few top leaders decide the party line in informal gatherings on phone calls. It may not sound good – the party looks more like a private entity than an organization to promote political change and effective popular participation – but it has so far provided an organization that works similar to, if not better than, the old party systems.

Social networking is devouring the political systems of the West, starting in Italy and the US. It’s easy to imagine that in another five or 10 years, online networks will have taken over the machinery of the major parties, turning politicians into puppets for internet movements/mobs. Which may or may not be an improvement over the existing, obsolete party systems.

In any case, China’s prescience in censoring the internet more severely than Saudi Arabia is now clear. China’s rulers are extremely uninterested in dealing with uncontrollable, socially networked movements that could destabilize the country and threaten the Party’s grip on power, so it has opted to wall off China from huge swaths of the global internet.

Under this brutal logic, all major foreign social media platforms are blocked, and the domestic platforms are heavily censored and monitored. Weibo, the closest thing to Twitter, has recently been chastened (again). The closed nature of WeChat, which now has a billion active monthly users, does not lend itself to hashtag activism. There will be no Beppe Grillo on China’s watch.

Tariff talking points

Some thoughts from trade expert Alan Tonelson on the impending metals tariffs:

>Many countries have declared their intention to retaliate against the American tariffs with higher barriers to U.S. exports. Curiously, they are overlooking the Chinese government-subsidized overcapacity at the root of the long-time distortions in world steel and aluminum markets.

>Many of these countries want the problem tackled multilaterally. But the World Trade Organization (WTO) has failed to stem this overcapacity (or deal effectively with many other forms of Chinese trade and broader economic predation), and a G20 forum specifically addressing the steel issue has produced nothing since its founding in December, 2016.

>Although major steel-producing powers like the European Union have imposed their own steep tariffs on shipments from China, the global glut has continued. One reason may be that, since the global economic recovery took hold in 2010, according to World Steel Association data. the United States has been the major steel producer that has suffered by far the greatest loss of global production share by volume. (See this post of mine for the 2010 figures and the Steel Association’s latest report for the most recent – January, 2018 – figures.) And as of the most current World Steel Association data (2016), the United States is also the steel producer with the highest steel trade deficit by volume (21.7 million tons).

As a result, charges that American steel tariffs in particular will jeopardize the rules-based global trade system seem to be arguing that this system requires the United States to remain as the world’s dumping ground for government-subsidized steel.

Also don’t miss the follow-up post.

The ingenious Midwest

From The American Midwest: An Interpretive Encyclopedia, a selected list of inventions and product innovations that have come from the Midwest, from airplanes to zippers.

What has made this region historically such a hub of ingenuity?


Saturday links: Nuclear Jonestown edition

Cults and their consequences

1) Some provocative tweets on how things could go very wrong in Northeast Asia:

2) Speaking of Korea, as I had hoped, Michael Breen has given his reaction to the jailing of South Korea’s ousted president – in the form of satire:

Political parties and commentators have welcomed the court decision last week to put former President Park Geun-hye behind bars, saying it represents a victory for public sentiment-based democracy.

Presidential hopefuls for the upcoming election took a break from their illegal pre-campaign speeches and tours through markets to humbly credit voters and not themselves for the ruling.

“It’s what the people wanted,” said Park Mi-bum (no relation) of the minority People’s Party.

In a statement, the Prosecutor’s Office which had requested Park’s detention said jailing people before their trial is a necessary step when they are unpopular. “The people would have been angry if we had not made this request,” the statement said.

In a statement of their own, the people agreed.

“Had Park not been jailed, we would have been angry,” the people said.

For context, see this Breen article on the mob-rule aspect of South Korean democracy:

The preamble to the Constitution notwithstanding, “We the People” don’t exactly rule in the United States. A legal document, the Constitution, looms godlike over the affairs of Americans. Some form of that goes for most democracies. The laws are in charge, not the public — at least not directly.

South Korea presents an unusual case — and last week’s impeachment of President Park Geun-hye is a case in point — of a country where the rulers and the ruled not only believe that the people exist but in fact accept that the people, or some mystical conception of their collective will, are directly in charge.

This notion lies behind the country’s feisty politics and helps explain why it is, arguably, the most directly democratic country in Asia. Whether that’s a good thing or not depends on how much you trust the people’s spontaneous collective judgment.

See also here and here.

3) On the decline of book-reading in Iran and the government’s plan to open the world’s largest bookstore (it will cover 484,376 sq ft).

Failure to launch

Well done

Hey, North Korea, maybe you should just give up

A North Korean missile launch that failed shortly after it was fired may have been thwarted by cyber attacks from the US.

The medium-range missile exploded seconds after it was launched on Sunday from a site near the port city of Sinpo, as Mike Pence, the US vice president, arrived in Seoul for talks with the South Korean government over how to deal with Pyongyang’s belligerence.

“It could have failed because the system is not competent enough to make it work, but there is a very strong belief that the US – through cyber methods – has been successful on several occasions in interrupting these sorts of tests and making them fail,” the former Conservative foreign secretary Sir Malcolm Rifkind told the BBC on Sunday. […]

Experts have suggested that the United States may be carrying out “left-of-launch” attacks on the missiles using electromagnetic propagation or cyber attacks, including through infected electronics aboard the weapon that confuse its command and control or targeting systems.

Eamonn Fingleton suggests another possible culprit:

Rifkind could have added that Japan and South Korea, where many of the chips in the North Korean rocket were probably made, may also have played a part in the outcome.

Will Canada go east?

This essay by strategist Edward Luttwak (a.k.a. the Machiavelli of Maryland), on why Canada should turn its military attention to the Pacific, also serves as a mini recap of the theme of Luttwak’s book The Rise of China vs. the Logic of Strategy:

It would appear that China’s leaders badly misread the 2007-2008 financial crisis and greatly overestimated China’s gain in relative strategic power. This prompted them to abandon the very successful “peaceful rise” (中国和平崛起) or “peaceful development” (中国和平 发展) foreign policy officially presented in 2004, but long practised before then. This policy set aside all Chinese claims against regional parties in order to have everyone’s co-operation in China’s economic growth.

Once that policy was abandoned, there ensued the loud and practically simultaneous assertion of Chinese territorial claims against Japan, the Philippines, Malaysia, the Sultanate of Brunei, Indonesia, Vietnam, and India, in a half-circle of expansionist pretensions. Newly aggressive forms of border and maritime patrolling, increasingly frequent territorial intrusions, and even outright occupations added greatly to the concerns provoked by China’s verbal demands.

Inevitably, the threatened countries started to strengthen themselves militarily and to coalesce diplomatically. They did this mostly in pairs that became increasingly interconnected, but also in threes, as in the case of the India-Japan-Vietnam trio that accelerated Vietnam’s deployment of Russian submarines. […]

Nobody can reasonably suggest that Canada should restructure its armed forces on a very large scale in order to become a major power in Northeast Asia. But given that Canadian political and economic leaders know very well that the centre of gravity in world politics has changed, it would behoove Canada to gradually acquire a significant stabilizing role, in the agreeable company of Australia.

The essay also contains this nugget of strategic wisdom:

All of this is in perfect accordance with the paradoxical logic of strategy which prohibits any form of linear progression in the realm of conflict. This logic ordains that great powers can defeat middle powers, but not small ones.

They are not amused

One of the noteworthy aspects of the viral outrage over the recent involuntary deplaning incident on the United Airlines flight (see here) is the Chinese reaction. From Jeffrey Towson, Professor at Peking University and author of the excellent The One Hour China Book:

  • The video was viewed online between 200-300M times in China.
  • It resulted in over a 100,000 comments, most all negative.
  • It became the top trending story on Weibo.
  • Petitions calling for a boycott of United Airlines went viral on Wechat.
  • Chinese media jumped in and it became a top news story everywhere in China. The People’s Daily ran photos of the man’s bloodied face and openly criticized the airline.
  • Prominent Chinese began lambasting the company. CEO Richard Liu said “…United is the worst airline, not one of the worst.”

[…] What we can conclude is that United Airlines was caught by surprise. Yet another multinational has suddenly realized that not only are Chinese consumers a big economic phenomenon, they are also a demographic that is paying close attention. This huge middle class is watching and listening all the time. They know what happens in the USA and can react within minutes. And this is not limited just to famous companies like United and KFC. If you have a bed and breakfast in Vermont, I guarantee you there are Chinese reviews and discussions about your hotel.

The combination of the growing economic power of Chinese middle-class consumers, and the instant worldwide spasms of attention (either positive or negative) that social media can generate, will prove rather disruptive to many businesses in the coming years.

Buckle up

To be taken with a truckload of salt:

North Korean leader Kim Jong-un ordered 25 percent of Pyongyang residents to leave the city immediately.

In accordance with the order, 600,000 people should be urgently evacuated. Experts note that the evacuation will most likely be conducted due to extremely strained tensions in relations with the United States of America.

Reportedly, Pyongyang’s bomb shelters will not be able to accommodate the entire population of the North Korean capital. Therefore, 600,000 people – mostly individuals with criminal records – will have to leave Pyongyang to let others use bomb shelters.

It was also said that one modified Ohio type rocket carrier carrying 154 Tomahawk type missiles on board joined the US Navy deployed near the coast of the Korean Peninsula. The missile carrier is expected to arrive at the port of registration on April 18.

Could this have anything to do with the “big and important event” coming up?

In a striking development involving the rapidly changing North Korean geopolitical situation, moments ago Voice of America reporter Steve Herman stated that according to US government and other sources, North Korea has “apparently placed a nuclear device in a tunnel and it could be detonated Saturday AM Korea time.”

South Korea said on Thursday it believed it would be consulted by the United States before any possible pre-emptive U.S. strike against Pyongyang, where foreign journalists gathered for “a big and important event”.

With a U.S. aircraft carrier group steaming to the area, tensions on the Korean peninsula grew this week amid concern that the reclusive North could soon conduct its sixth nuclear test or more missile launches in defiance of United Nations sanctions. […]


North Korea marks the 105th anniversary of the birth of state founder Kim Il Sung on Saturday. In 2012, it tried but failed to launch a long-range rocket carrying a satellite to mark the date and tested a newly developed intermediate-range missile last year.


The flagship of Russia’s Pacific Fleet Varyag arrived to the shores of Korea. The warship entered the port of Pusan earlier than the USS Carl Vinson, which the US turned to South Korea at the time when she was traveling to Australia. […]

Together with the Pechenga sea tanker, the Varyag entered the port so that the Russian seamen could meet with representatives of the South Korean Navy command, the mayor of Pusan and the Russian consul general. It is planned to show the Russian seamen around and play friendly matches with Korean sailors.