Global Analysis from the European Perspective. Preparing for the world of tomorrow


The real background to the dispute between China and the USA

It is not about politics. It’s not about the eternal struggle between Chinese pseudo-communism (with the capitalist tinge) and American pseudo-capitalism (with the neo-Marxist face). It’s all about raw materials and semiconductors.

Last week, a meeting took place between US President Joe Biden and Chinese President Xi Jinping. Among other things, it was agreed that contacts between the US military and the Middle Kingdom should be resumed.

It should be remembered that the military dialog was broken off following the visit of Nancy Pelosi (then Speaker of the House of Representatives) to Taiwan at the beginning of August last year. This was the first visit by such a senior US politician to Taiwan in 25 years. China protested strongly against the visit and even threatened the US with a military response. Well, Biden’s team has always behaved like a bull in a china shop when it comes to diplomacy (see the flight of US soldiers from Afghanistan and their approach to Russia).

Although a few gestures are now being made after the meeting between Xi and Biden that could indicate a de-escalation in mutual relations, the war on the semiconductor front continues. In the middle of the year, for example, China decided to restrict exports of gallium and germanium, two important raw materials for the semiconductor industry. This was in response to the American decision to deny China access to the equipment needed for chip production. Incidentally, China is the world’s leading producer of gallium and germanium. The Middle Kingdom controls no less than 98% of the supply of gallium and 68% of the supply of germanium.

In October, Joe Biden’s administration announced that the United States would shorten the list of semiconductor types that US companies are allowed to sell to China. With this move, Washington wanted to further cut off Beijing from chips, which triggered an immediate reaction in the Middle Kingdom. This time, however, China decided to strike on a different front by announcing a restriction on the export of graphite, a raw material that is essential for the production of batteries for electric vehicles, among other things. It is worth remembering that China controls 2/3 of the world’s graphite supply. This raw material is the largest component of electric car batteries by weight. Each vehicle contains an average of 50 to even 100 kg of graphite. That is about twice as much as lithium, the processing of which is also controlled by the Chinese worldwide.


Since many of the raw materials that are indispensable for the green revolution preached by Western decision-makers are mined in Africa, China has been focusing on colonizing the Dark Continent with the help of cheap loans and direct investments since the New Silk Road initiative began in 2013. The regimes of black dictators are happy to go into debt to their Chinese friends because they don’t talk about human rights and environmental protection. Meanwhile, Americans are investing billions in AI and high-tech, which cannot function without Asian and African raw materials. They disregard the potential collapse of supply chains that has been underway since the start of this trade war and which the Chinese can exploit as a weapon.

Chinese install themselves in Switzerland

On March 10, 2020, the Cantonal Council in Lausanne announced to the commune of Maudon that a display of the Tibetan flag on public buildings was not in accordance with the policy of the Ministry of Foreign Affairs in Bern. The protesting Tibetans, who had found their new home and protection from the Chinese dictatorship in Switzerland, were not allowed to manifest their freedom of expression on this day of their traditional protest (the commemoration day of the Tibetan uprising).

In the past, Chinese diplomats were like frightened or disoriented sheep running among the Russians and Americans, the bears and sheepdogs. Now the Chinese dragon has been reborn. Now they are more like sly foxes: they infiltrate Western democracies by having their diplomats rather than spies act in the field of culture, cooperation on international projects, or free trade. Beijing achieves its goals by shaping its positive image abroad.

In 2017, protesting Tibetans were arrested during Comrade Xi’s visit. The Confederates in Bern do not mind advocating cooperation with China since the 1970s. It began in 1949 when the country of banks, cheese makers and watchmakers was one of the first to recognize the newly formed People’s Republic of China. China remained grateful and signed new treaties with the country in the mountainous heart of Europe during the Cold War and again and again in the following decades. Most important was the 2013 Free Trade Treaty, which was never challenged by Brussels or Washington. While deglobalizing measures dominated the world stage under Trump shortly thereafter, such as those against TIPP and CEFTA, Bern remained loyal to Beijing profiting from globalism. Switzerland, Greece, Serbia, Montenegro, which are on the fringes of Washington’s and Brussels’ interests, are a training ground of China in Europe. The Middle Kingdom comes and buys Piraeus (Greece’s biggest port), comes where NATO bombs shattered its embassy and the main bridge in the city and rebuilds it. It opens its cultural institutes all over the West, just as Erdoğan weaves his web through Diyanet like a spider, and Western governments swallow this hard-to-digest Chinese soup in the form of forums, NGOs, scholarships, student exchanges, an overarching cooperation. Even before the pandemic, Swiss President Maurer assured of his support for the New Silk Road during his visit to Beijing, and despite the massive repression of Tibetans and Uyghurs at the time.

Professor Ralph Weber (University of Basel) examined the connections between Swiss companies and the Chinese Communist Party: Comrades from the Far East sit on the boards of many Swiss companies – at Nestle, UBS, SWISS RE.

China forced Turkey to deport the exiled Uyghurs back to China. Switzerland doesn’t care about them either, it is mercantile as far as it goes. And where there are high-tech and innovative solutions, there are also Chinese tentacles.

A lesson for China

Beijing, the Chinese Communist Party, the Chinese government and Chinese patriots are certainly keeping a close eye on what’s going on in Russia, what’s been going on in Russia for the past 30 years and what preceded these events while the Soviet Union still existed from Sakhalin Island to Belarus, from Leningrad to Almaty. What lessons do they draw? Here they are:

Never, ever and under no circumstances, believe what Western politicians promise. Western politicians promised the leaders of the Soviet Union that they would not accept countries bordering on the Soviet Union into NATO, and they have not kept that commitment.

Never, ever and under no circumstances should you trust Western politicians to treat you as an equal, as a partner. Yes, these will be the promises, yes, this is how Western politicians will pretend to be during the flirtation period, during the seduction period of the country in question (in this case China), but the moment the country in question (China) is seduced, Western policy will change: the partner will gradually turn out to be the dominator.

Never, ever and under no circumstances should economic reforms proposed by the IMF or WB or similar institutions be adopted. Such reforms are calculated to turn the economy of the country receiving aid upside down and to subordinate that country to the global financiers.

Never, ever and under no circumstances should one be dragged into international projects because sooner or later they will serve to subordinate a member country to supranational organizations that serve the United States, the European Union or the financial international circles, but certainly not the member country.

Never, ever and under no circumstances should one rely on the international division of labor, that is, on the arrangement that some produce this and others produce that, or on the scheme that Russia is to be the supplier of raw materials, China – the global factory and the West – the brain of the world, the world’s manager. The state should be self-sufficient, at least when it comes to the most important branches of the economy or else the sanctions imposed by the West might ruin the country thus punished. Continue reading

What is Kazakhstan about?

That the Russians and Belarusians are invading Kazakhstan right now is no wonder at all: the subversives, protesting against higher gas and fuel prices, also demanded that Kazakhstan abandon all alliances with Russia and that both President Tokayev and the government resign immediately. Moscow cannot put up with such political demands. Kazakhstan is a major oil and gas producer and also supplies about 40 per cent of the world’s uranium. Kazakhstan is home to a number of first-class mining companies: Lukoil from Russia, CNPC from China, Chevron and ExxonMobil from the USA, Shell from the Netherlands, ENI from Italy, and Total from France. Insofar as oil and gas extraction has been allowed to the foreign corporations, uranium extraction remains in Kazakh hands. It is a tasty morsel for all the countries that talk so much about green energy at the moment, but in fact are preparing for the future that will be based on nuclear energy. After all, Russia’s nuclear missiles and power plants, Baikonur and space presence depend on Kazakhstan.

Rioters topple statues of Nursultan Nazarbayev, the “Elbasy”, the father of the nation, as Nazarbayev is called for life, the man who once guaranteed friendly relations with Moscow as long as he was honorary chairman of the Security Council. The Nazarbayev-Tokayev tandem has been uneasy for some time, however, and now the Father of the Nation left his fatherland aboard the private plane of his son-in-law Timur Kulibayev, a billionaire and one of Kazakhstan’s richest men. We know such stories from different countries. Main characters: oligarchs serving foreign capital. Behind the protests could be Mukhtar Ablyazov, another controversial oligarch who is at odds with the current government team in Kazakhstan and who used to live permanently in Paris, but is now in Kiev. Please note: in Kiev. If you think about the role of the oligarchs in the upheavals in Ukraine in recent years and at present, it will immediately become clear to you that this is an attack by the West, namely the USA and Ukraine, who want to “facilitate” the forthcoming talks between Biden and Putin with a blow to the “soft underbelly” of Russia, i.e. Kazakhstan.

Tokayev has also taken advantage of current events domestically to remove the government that was loyal to Nazarbayev and especially Abish Satidbaldila, the former president’s “man” who was deputy chairman of the Public Security Committee. As a result, Tokayev took full power, which enabled him to get rid of Nazarbayev painlessly. From Moscow’s point of view, what happened is actually a palace revolution, a shock. Not only because, as it turned out, in practice there is no ironclad guarantee of life for the former head of state, but also because Putin has been demonstrably respectful towards Nazarbayev and somewhat, perhaps even more, disrespectful towards Tokayev. At the recent CIS summit in St. Petersburg, he met with “Elbasy” and found no time to talk to the current president. It is likely that if a new government is formed, relations with Moscow will be different and probably more difficult for Russia.

The Western world is enthusiastic about the revolution and interprets what is happening on the streets as a struggle against dictatorship and for democracy, but it seems to me that this perspective is misleading and that it is worth looking at the situation in Kazakhstan from a different, non-European angle. We tend to see the roots of the revolutionary events in the bad mood related to poverty and the lack of reforms in the authoritarian state, which drives people to the extreme and to the streets. Apart from what can be seen with the naked eye and what is difficult to question, there is an even deeper level, which is the logic of the people living there. In any Central Asian society, clan and family relations are more important than political divisions or material differences.

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Sow the wind and reap the whirlwind

There used to be a time when European countries would conquer other continents to spread Christianity, i.e. to save the savages – as it was said – from eternal damnation. Since Christianity has been dead for many decades now, Western nations have rolled out a new religion: that of human rights. The advantage of the new creed is that it is supposed to be universal – as such was adopted by the United Nations – and does not require the different peoples of the world to renounce their religious beliefs. Rather, the religious leaders of all the other faiths fall all over themselves to show that their religious precepts have always been in line with the universal human rights or, indeed, that the human rights derive from their creed.

Be it as it may, the human rights religion is a political tool in the hands of the powerful for subduing others to their will. Under the pretext of defending human rights – wars are launched, missiles are fired, revolutions are staged and governments are toppled. Yugoslavia, Libya, Syria, Afghanistan – you name it – have all been subjected to penal measures in the name of preventing humanitarian disaster from occurring or spreading. The countries were bombed in the name of saving the lives of – yes, yes – women and children and oppressed minorities of all types. Even when the Americans did not know what to do with the incorporation of Crimea into Russia, Victoria Nuland, while listing the alleged Russian violations of the international law and – how otherwise! – human rights, pointed to the alleged prosecution of the homosexual “community” as they say.

The human rights religion is only used when it becomes useful. The fate of Uyghurs in China was not a problem for the “international” opinion for decades until it fit Washington’s plans to use it as a pressure to be exerted against Beijing. Since China has been regarded as America’s rival vying for world dominance, the human rights card is being played more frequently. When you lend your ear the the Western media, then all the message that you get is that the Middle Kingdom is a den of perpetrators of the worst atrocities aimed against particular groups of people: Uyghurs, the Tibetans, Christians, political dissenters and so on, and so forth.

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EU, not China or Japan, is the biggest US Treasury holder. And this is not a good sign.

US-based media have been reporting that Japan has become the biggest holder of the US treasuries, surpassing China last month. However, this is true only in regard to single countries. If we consider the European Union member states collectively, then they appear to be the biggest holder of the US treasuries. It has been so almost one year long. Unfortunately, the EU’s holdings are artificially overstated because of some financial havens and they are going in the opposite direction to the trend: up rather than down.

According to the latest data from TIC (Treasury International Capital System), the EU was in possession of $1242 billion of US Treasuries in November 2016, $9 billion more than one month earlier. The EU was the only one from three biggest holders that increased its amount of US treasuries in November, while China and Japan continued to lower their holdings.

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MyDrivers reports that China’s homegrown Zhaoxin processors are now operational with its self-developed Unity Operating System (UOS). The news come on the tail of new Chinese government restrictions that force Chinese institutions to replace all foreign-powered PC hardware and software with domestically-produced products over a three-year span. Tongxin Software, the developer behind UOS, has been able to get the KaiXian processors to work on the desktop and server versions of UOS, respectively. The Chinese CPU maker has already laid out its ambitious plans for the company’s next generation of processors. Source: Tom’s Hardware

Retail sales in China grew 7.6% year on year, below the consensus of 8.6%, and Fixed-asset Investment (FAI) growth slowed to 5.7% in the first seven months of the year. The readings showed weakness across the board on both the demand and supply sides of the  Chinese economy, Bloomberg Economics said, adding that policy support will likely be stepped up in the coming months. Source: Bloomberg Economics

Taiwan confirmed Thursday it has asked to purchase more than 100 tanks from the U.S., along with air defense and anti-tank missile systems in a major potential arms sale that drew immediate protest from China. A Defense Ministry statement said it has submitted a letter of request for 108 cutting-edge M1A2 Abrams tanks, 1,240 TOW anti-armor missiles, 409 Javelin anti-tank missiles and 250 Stinger man-portable air defense systems. Source: CBS News

  • The Chinese government’s first seizure of a bank in more than two decades reverberated through markets for a second day, driving up funding costs for smaller lenders and adding pressure to shares that already trade at rock-bottom valuations.
  • China’s central bank injected a net amount of 150 billion yuan through open-market operations on Monday and Tuesday, the most since the week ended March 8.

Source: Bloomberg

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  • The spread of African swine fever (ASF) in Asia is taking a worrisome turn.
  • First reported in northeastern China in August 2018, the highly contagious, often fatal pig disease quickly swept through the country, causing the death or culling of more than 1 million pigs.
  • In recent weeks, it has jumped borders to Vietnam, Cambodia, Mongolia, Hong Kong, and possibly North Korea. Many of the newly hit countries are even less prepared to deal with ASF than China, experts say, which has so far failed to end its outbreaks.

Source: Science Magazine

Among China’s most surprising responses to the trade war has been its reluctance to use its vast state media empire to rally the home front. That’s changed since U.S. President Donald Trump’s latest tariff barrage.
In recent days, the once-banned phrase “trade war” has roared back into widespread use in Chinese media. Meanwhile, official news outlets gave high-profile play to commentaries urging unified resistance to foreign pressure, including an editorial from the nationalist Global Times calling the trade dispute a “people’s war” and threat to all of China.

Source: Bloomberg

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