Mending fences

The first state visit by a Japanese leader to China in seven years suggest that the two countries, which allegedly have deep-seated mutual animosity, are in the process of strengthening ties:

What Happened: China and Japan signed multiple agreements intended to strengthen bilateral ties during the first day of Japanese Prime Minister Shinzo Abe’s official visit to China, the South China Morning Post reported Oct. 26. Both countries will cooperate on roughly 50 third-country infrastructure projects and agreed to resume currency swaps. Additionally, they will further discuss joint East China Sea energy cooperation and China’s lifting of food import restrictions following the nuclear disaster at Fukushima.

Why It Matters: Both China and Japan are recalibrating their strategies toward each other as they look to hedge against uncertainties as well as increasing trade protectionism from the United States.

This makes sense; as the neoliberal world order falls apart, regional trade blocs will emerge and solidify, and Japan and China, with their proximity and shared Confucian heritage, can be expected to align more closely.

Stratfor argues, however, that any Sino-Japanese rapprochement is complicated by China’s maritime ambitions, which clash with Japan’s interests as an island nation. Japan is also expanding its activities in the South China Sea, recently sending a submarine to conduct drills there for the first time. The duo may need to remain frenemies for a while.

Propaganda bridge?

Hong Kong-Zhuhai-Macao Bridge

Bridge to nowhere? (Hong Kong-Zhuhai-Macao Bridge)

The new Hong Kong-Zhuhai-Macao Bridge in South China is without a doubt a spectacular feat of engineering, construction, and national infrastructure planning. But… is it necessary? Or is this mega-bridge snaking across the mouth of the Pearl River Delta in fact a $20 billion white elephant?

“The delays in the construction of the bridge had given cities in the PRD region time to greatly develop their port capacity, resulting in a situation where many exporters in the delta no longer need to use Hong Kong,” said chief research officer at the Hong Kong-based One Country Two Systems Research Institute, Fang Zhou. “Other PRD bridges will offer lower tariffs than the new bridge, while existing cargo barges to Hong Kong are even cheaper.”

“In terms of time and convenience, the bridge is not so competitive,” Zhou added. […]

The strongest economic benefit of the bridge is that it can enable producers west of the Pearl River move their goods faster to the Hong Kong International Airport. In 2016, the airport has handled around 4.52 million tons of air cargo, making it the top freight transportation airport worldwide for the seventh consecutive year.

Quoting an anonymous engineer:

“The bridge could have an impact on Hong Kongers’ life style when it opens – there could be more people making the decision to find a job, or even live in China when there are more convenient ways to connect the two places.”

That’s an important point, I think. In addition to the propaganda value of binding Hong Kong closer to the mainland, the very existence of the bridge may generate more demand for cross-border travel. It’s easy to underestimate the future traffic that a brand-new, colossal Chinese infrastructure project will generate. A lot of people were skeptical about China’s high-speed rail system back in 2011, but already by 2015 the Beijing-Shanghai line was earning a profit, claiming 130 million riders (one-tenth of China’s population) that year alone.

The blogger Big Lychee is characteristically scornful:

The vast link, with three lanes in each direction, will be the World’s Biggest and Longest Slab of Concrete Over Sea in the History of the Universe. It will also almost certainly be embarrassingly under-used. Of the three cities it connects, only Zhuhai and its hinterland has capacity for extra traffic; Macau’s road network is totally full, as is downtown Hong Kong’s. Apart from buses going back and forth, and presumably some trucks carrying containers full of Hello Kitty phone cases, it is hard to see who will use it, especially given the ‘fast and convenient’ permit system for car owners.

The South China Morning Post laboriously describes the thing as part of the Greater Bay Area Hub-Zone Branding Concept. [Ed: “Greater Bay Area” is China’s scheme to link together 11 cities around the Pearl River Delta into a gigantic metropolitan region with some 67 million people.] But it is actually the other way round – ‘Bay Area’ is an extension of the bridge project, which came first as a symbol if not means of integrating/absorbing Hong Kong into the Mainland.

This will be the second approx-HK$100 billion pointless-infrastructure fiasco inaugurated within a few weeks, following the West Kowloon High-Speed Rail Vibrating Express Line Hub (which at least has some potential use for those of us with an urgent desire to get to Wuhan). It also comes in the midst of the uproar about the Trillion-Dollar Sandpit Lantau Reclamation Wacko Proposal. We are surely hitting Peak Taxpayer-Wealth Destruction Orgy.

Hong Kong Zhuhai Macao Bridge

A damn big bridge

Hong Kong-Zhuhai-Macao Bridge

The Hong Kong-Zhuhai-Macao Bridge

Meanwhile, in Asia, massive infrastructure projects continue to get built:

Chinese President Xi Jinping has officially opened the world’s longest sea crossing bridge, nine years after construction first began.

Including its access roads, the bridge spans 55km (34 miles) and connects Hong Kong to Macau and the mainland Chinese city of Zhuhai.

The bridge cost about $20bn (£15.3bn) and should have opened in 2016. […]

Designed to withstand earthquakes and typhoons, it was built using 400,000 tonnes of steel, enough to build 60 Eiffel Towers.

About 30km of its total length crosses the sea of the Pearl River delta. To allow ships through, a 6.7km section in the middle dips into an undersea tunnel that runs between two artificial islands.

The remaining sections are link roads, viaducts and land tunnels connecting Zhuhai and Hong Kong to the main bridge.

The bridge was first conceived by Hong Kong construction tycoon Gordon Wu in 1983, apparently inspired by the Chesapeake Bay Bridge-Tunnel in Virginia. Construction started in 2009 and just wrapped up in February. Talk about persistence.

Fun facts:

Special cameras will be on the look-out for drivers on the bridge who show signs of getting sleepy, among other checks – yawn three times and the authorities will be alerted, local media report. […]

And drivers will have to change which side of the road they are on at the crossing. People drive on the left in Hong Kong and Macau but the bridge is Chinese territory and special merger channels have been built to cope with this.

There’s also this ominous bit: “As drivers cross the bridge their heart rate and blood pressure will be monitored. The information will be sent to the bridge’s control centre.” What?

Video from the South China Morning Post:

America’s Belt and Road?

The US may be stepping up its game to counter China’s multi-trillion-dollar development strategy known as the Debt Trap Diplomacy–… sorry, the Belt and Road Initiative:

The US is preparing to create an agency that can invest up to $60bn in the developing world in an effort to counter what some in Washington describe as China’s use of debt to wage “economic warfare”.

In what observers say is the biggest shake-up of US commercial lending to developing countries in 50 years, the Overseas Private Investment Corporation will be folded into the new agency and allowed to invest in equity. At present Opic can invest only in debt, putting it at a disadvantage to European development finance institutions (DFIs).

Ray Washburne, president and chief executive of Opic, told the FT that China – by using what he called “loan-to-own programmes” – was “creating countries that have the shackles of debt around them”. That amounted to “economic warfare”, he said.

By more than doubling Opic’s lending ceiling to $60bn and allowing it to invest in equity, he said, it would be put on “an equal footing with other DFIs”.

According to the report, OPIC well be folded into the new agency, called the International Development Finance Corporation, and “The arrangement has been sold to the president.”

Of course, the US has other ways of creating potholes in China’s Belt and Road… This could get very interesting indeed. On a quasi-related note, China is ramping up its PR campaign in the US, according to Bloomberg reporter Jennifer Jacobs:

China Daily advertising supplement

Text of the full thread:

CHINA sends a message to Trump and Ambassador Branstad by taking over 4 pages of Des Moines Register. Advertising supplement has “news” on:

—China buying soybeans from South America due to “trade row”

—Xi Jinping’s “fun days in Iowa”

—“Beijing can set an example for the world.”

The advertisement, labeled as paid for by the “China Daily, and official publication of the People’s Republic of China” is like a 4-page tweet from the Chinese government. It calls the trade war with Trump the “fruit of a president’s folly.”

In 15 years of covering Iowa news, I cannot recall the Chinese making a play like this. Certainly unprecedented for China to take out a four-page advertisement in the DMR. [Emphasis added]

China uses this advertising format regularly—“news” inserts have appeared in Nepal, Australia, U.S., etc. per @kashishds, @lillebuen, @DavidMDrucker and others. Beijing seems to be talking straight to Trump with this Iowa ad on “China-U.S. economic interdependence.”

Newspaper advertorials are a relatively clunky way of getting the message out, and unlike, say, troll armies on social media, they aren’t plausibly deniable. Nevertheless, as much as Americans (and others) may roll their eyes at such obvious and heavy-handed PR efforts, the cumulative impact of China’s vigorous overseas messaging is likely to be non-zero.

That’s a good boy

Australian Trade Minister Steven Ciobo

Australian Trade Minister Steven Ciobo

The Australian government happily complies with China’s demand to keep the public in the dark about the terms of an infrastructure MOU between the two countries:

The Turnbull government has refused to release an agreement it signed with China covering the controversial “Belt and Road Initiative” infrastructure program on the grounds Beijing does not want it made public.

Trade Minister Steven Ciobo signed the memorandum of understanding last September for cooperation on building infrastructure such as roads, bridges and dams in third countries – including under the Belt and Road Initiative – during a visit to Beijing. […]

The MOU would be expected to state Australia’s conditions for cooperating with China – such as that projects are financially transparent, do not involve corruption, genuinely help other countries and do not burden them with unsustainable debt.

But the Department of Foreign Affairs and Trade has refused to release the agreement under the Freedom of Information Act.

Mr Ciobo told Fairfax Media that “both parties are required to agree to release the text of the MOU and China has not agreed to do so”.

Why all the secrecy? Is there some aspect of building roads, bridges and dams that needs to be concealed from the public? The comments to the article tend to indicate that the Australian people are *not* happy about this.

Daily links: Geopolitics and Tom Cruise

US teams up with Japan and Australia to invest in Asian infrastructure projects. China’s Belt and Road Initiative has competition.

US Secretary of State Mike Pompeo announces $113 million in new technology, energy and infrastructure projects in emerging Asia as part of Trump’s “Indo-Pacific” strategy.

Generals from the rival Koreas meet at the border to ease military tensions.

But there’s still a long and difficult road ahead with North Korea. “Washington and Pyongyang, however, are not the only players. Racing against a clock of its own, Seoul will aim to drive Trump and Kim toward an early trilateral summit to declare an end to the Korean War as a first step toward peace, fueled by President Moon Jae-in’s determination to go down in history as the peacemaker.”

Professor Stephen Cohen points out that in early 1986, President Ronald Reagan met alone with Soviet leader Mikhail Gorbachev for about two and a half hours, during which they discussed abolishing nuclear weapons, paving the way for the Intermediate-Range Nuclear Forces Treaty which was signed a year later.

Behind-the-scenes on Tom Cruise’s HALO jump from a C-17 military aircraft at 25,000 feet for the latest Mission: Impossible movie. HALO means high altitude, low open (i.e. the parachute is deployed at below 2,000 feet).

Reminds me of this incredible scene from Moonraker.

Tom Cruise is “our last remaining movie star.”