Quality

 Quality is important. The Japanese learned that exceptional well. From tin toys to high quality photographic equipment and highly reliable cars. If it is made in Japan it would be the best.

Now for Chinese goods, the same is not there. They are cheap, but as the saying goes you get what you pay for. I have been observing this over the past few years with Amazon purchases. The latest was a clock. Looked good on line but when delivered it was a disaster, and in this case an expensive one. The numbers on the face were wrong to start with, the clock face was askew, and the ability to adjust the time required medical instruments to get to the change control! 

Now the list goes on. Buy batteries from a Chinese source and you have no idea if they are knock off. I have another clock, looks great but burns through batteries every 3 weeks. 

Does the American consumer want quality or just to be able to buy more junk. I suspect quality will become a real issue. Think Yugos.

Andromeda Strain Redux: From the folks that brought you COVID!

 Back in the 60s I worked on the Apollo mission designing one of the navigation system elements. There was a serious concern about bringing something back from the moon landing. Layers of security, isolation, testing etc were applied.

Now the Chinese bring back soil samples from the dark side. God only knows what is in the soil. They just drop it in a field somewhere and treat if like its a delivery from Grub Hub!

What surprise will we get this time?

Classroom Study

 The above example was done for my grandson's science class. Namely how large a balloon filled with helium was required to keep a pumpkin from smashing. Think ChiCom spy stuff and you just plug in the numbers!

Spy in the Sky

 There have been many vehicles that have been used to gather intelligence. Not just balloons, but tons. One I recall from the 60s was a satellite that photographed Soviet sites and then dropped the film to be picked up by an aircraft with a hook. Nicely called "the Hook". Then the SR-71, but initially called the RS-71, but due to President Johnson;s dyslexia introduced as the SR-71 and thus the name stuck.

In all cases the data gathered had to get back to the gatherer some how. Now how can this China balloon get stuff back to the mainland. Simple, spread spectrum it up to a satellite and then down to the processing site. Better yet it can also communicate to agents on the ground lots of stuff. 

All they need are good processing chips which thankfully we have designed and have given them! Yep, and most likely educated their technical people at our best institutions, where they were most likely supported by DoD funded research projects.

This story will make Pearl Harbor look patriotic. Remember Yamamoto was educated at Harvard. Want to see his replacement now part of the CCP, just look at the news sites of some of our top universities.

Europe, Russia and China

These three areas present somewhat uniquely different problems. For example:

1. Europe presents the complexity of the EU and its overly bureaucratic governances as well as its dependence on a US supported NATO system. Ironically Poland has one of the strongest military institutions. Poland is adjacent to Belarus which is in a sense a captive state of Russia and a buffer zone that Russia feels comfortable with. NATO was formed to address the Soviet threat coming from a Stalinist regime.  It is an amalgam of European forces, often poorly trained and organized, and underpinned by massive US forces, technology and dollars. One should really examine the need for NATO, especially a US backed and facilitated one. NATO was formed before the EU was created. The EU now has a larger population than the US and perhaps they should consider their own defense, perhaps allied with the US, but not led by the US. The current EU is all too often a sinecure for military and politicians as a transit to post political life in some lucrative manner.

 2. Russia is a vast territory whose economy is dominated by arms and extraction. It provides oil and gas, minerals, and other related resources and is a major seller of arms to a wide collection of buyers. Russia has ocean ports only on the eastern side on the Pacific and on the west, it has precarious access via the Baltic and the Black Sea. Russia views its adversaries to the west. Perhaps its eastward adversaries are neglected due to its massive loss in the war with Japan a century ago. In contrast to China, Russia does not hold claim to the Pacific. The Pacific is a protection for Russia from the west. Russia has no substantial consumer goods. It is not akin to China, where massive manufacturing of consumer products prevails. Russia also has an ongoing mentality of being threatened by remote neighbors. Thus, Russia seeks to have buffers between its territories and its putative adversaries. In a sense Belarus serves the purpose. Ukraine is a threat, especially if it were joining NATO. Ukraine can become a major flashpoint, dragging the US into a conflict of which it truly has no interest. A neutral Ukraine is a stable point. A NATO Ukraine is a stick in the eye of the Bear.

 3. China is a global threat. It has taken a while for many US politicians to recognize this. They are a threat because they want global hegemony via economic power. The economic power starts with manufacturing but moves on to bio technology. Yes, China can manufacture cheaply, just go to Walmart. No Russia products but tons of Chinese. Yet that is but a start. The true mover is the massive progress and advances China has and is making in biotech. One need just read the scientific literature and it shouts dominance. Yet this dominance is a double-edged sword. China can produce advanced therapeutics but it lacks the basic quality controls we demand in the west. Shar practices is de regur for all Chinese producers. The US now imports well over seventy percent of its over the counter drugs from China. One has no ideas as to their quality of safety. If China wanted to assert itself it could do so via ibuprofen and acetaminophen.  The recent pandemic is a clear example of all of the above. Millions dead, economies smashed, and politics distorted. China does not fear neighbors. The neighbors fear them.

 Overall, these three issues should be re-examined. NATO should become an EU force, allied with but not supported by the US. Russia must be understood by its basic fear of intrusion and thus needing safe buffers. China must be seen as a threat not due to nuclear weapons but due to its ever-expanding biotech expertise and global reach. China, lacking the checks and balances insuring safe and quality biotech products, presents the most significant flash point in the decades to come.

 

Chinese Day Lily

A bit of a misnomer but this is the daylily H citrina, a night blooming flower from China. It is highly fragrant and I have used them over the years as crosses for hybrids. I also sent them back to China upon request since many of their plants had excess colchicine in the petals. The petals are used in such things as hot and sour soup, and are a major Chinese export. I have managed to get these plants to naturalize in New Hampshire which is regionally where they would be in China.

Word War

By following China Daily one can get a glimpse as to the battle brewing.

Today they announced:

It is the foppery of hardliners in the US administration that, perceiving the US to be sick in fortune, they seek to make China guilty of being the cause of all the country's ailments. Having reexamined the US' engagement with China over the past more than 40 years, these ideological blowhards have concluded that China is not behaving to their liking and so have sought to exert comprehensive pressure on China in order to persuade it to change its ways. Now, as part of this campaign, the screws are being tightened on Chinese media organizations in the US. The five Chinese organizations that have fallen foul of the rivalry these ideologues imagine with China strictly abide by US laws and serve to promote greater understanding between the two peoples. However, the Cold War mentality that at present prevails in Washington means the administration now has these organizations in its sights. As such, China's counter-measures are fully justified. Although it does not seek to escalate the media war, Beijing has consistently made it clear it will act reciprocally in response to any pressure moves by Washington. But both sides should bear in mind that media organizations from the two countries have played indispensable roles in deepening Sino-US interactions over the past four decades by strengthening mutual understanding and trust between the two countries, which established their diplomatic relations at a time of great division in the world. Despite the ups and downs in bilateral political ties, economic and trade cooperation has thrived and human and cultural exchanges have continually expanded over the years since then, proving that the two sides can get along if they accommodate their differences.

Perhaps we should get our therapeutics out of there as well as many of the other things we now rely upon.

You Can't Make This UP!

Back a few years ago I suggested building what I termed a MAE Europe, a hub for European Internet Traffic. Simply stated at the time all Internet traffic went either to MAE East or MAE West in the US and was subject to surveillance by various US entities. By building a MAE East we have a non-US nexus and by putting it in Prague or Vienna we would be at the heart of then then expanding Internet. I actually built a mini version but for a variety of reasons it never got traction.

Now Ars Technica has a fantastic piece showing how US carriers allowed the routing of all traffic through China Telecom, the PRC's home turf! You cannot make this up. Any first year engineering student should know how to use the UNIX command tracent to see where the packets go. It even tells you the carriers and IP addresses as it sends a message. Thus if one sent a message say from Lockheed in San Jose to the CIA in Langley one would see the path. If one did this simple task one would perhaps have seen what is in the article, the packets were circling around in China!

Now the carrier should have been doing this as a matter of common network management, we did! So I guess China does not have to sneak in, we are sending them everything as a matter of course! Now who did they hire to manage the network?

So What is New?

Bloomberg news reports on China planting microchips in computer mother boards for the purpose of cyber whatever. They state:

The companies’ denials are countered by six current and former senior national security officials, who—in conversations that began during the Obama administration and continued under the Trump administration—detailed the discovery of the chips and the government’s investigation. One of those officials and two people inside AWS provided extensive information on how the attack played out at Elemental and Amazon; the official and one of the insiders also described Amazon’s cooperation with the government investigation. In addition to the three Apple insiders, four of the six U.S. officials confirmed that Apple was a victim. In all, 17 people confirmed the manipulation of Supermicro’s hardware and other elements of the attacks. The sources were granted anonymity because of the sensitive, and in some cases classified, nature of the information. One government official says China’s goal was long-term access to high-value corporate secrets and sensitive government networks. No consumer data is known to have been stolen.

And you are worried about Russia. The US has been trusting on the kindness of strangers in China since the beginning of the Clinton Administration, This even extended to critical infrastructure and defense and intelligence elements. So what did they expect. Out telecommunications business are defunct and reside in China. This is akin to relying on Russian launch vehicle to protect us against a Soviet attack. Nothing new, it is just Government.

Now if you think this is bad hold on to your hat. Massive amounts of our pharmaceuticals are made in China! Yes, key drugs. China has developed with the help of US educational institutions a massive and world class pharmaceutical capability. That means two things. First they can run circles around us. Second, and this is critical, then can put into therapeutics all sorts of other stuff to do everything from creating massive cancer outbreaks to mind control. They do not need Facebook, that have half the population in the US hooked on their drugs, and I am not speaking of opioids.

Would we have allowed this in the Cold War with Russia? No. So why do we allow this with a declared adversary? Profit? For whom and of course at what cost.

This will make a great suspense novel. Can't wait to get started. And, oh to you folks out there with whatever derangement syndrome you profess, than Beijing, I think.

Rare Earths Redux

Some eight years ago we wrote extensively about rare earths and China's actions to control the market. We further noted that for decades the US was the world's supplier of them. We did not run out, we just closed the mine! It was in California and they wanted it closed. The elements are still there folks, lots of them.

Then along comes the NY Times, the paper which seems to be a bit short sighted. They note:

Rare earth refining is done on a large scale in only two places on earth: China, and Lynas’s plant here in Kuantan, Malaysia, a sprawling industrial area on the coast of the South China Sea. The company mines rare earths out of a collapsed volcano in Australia and ships them to Kuantan to be refined. Building that plant nearly sank Lynas. When Ms. Lacaze was named chief executive in June 2014, the company was struggling with $450 million in debt. Design flaws had delayed full production. It faced criticism from environmentalists (NOTE: which by the way was the California problem). China is her most immediate challenge. Lynas is now profitable, but Ms. Lacaze sees a potential trade war between China and the United States as more of a threat than an opportunity. Beijing could keep rare earths off the market, depriving many American and European manufacturers of the minerals they need. Lynas couldn’t compensate for it all. It accounted for only about 12 percent of world output of rare earths last year, according to Adamas, the research firm. Chinese companies accounted for more than four-fifths.

But the US could compensate, and actually dominate the world market. See the MIT status updates. The Times continues:

Even if it doesn’t disrupt the supply, China will likely keep its grip over the market for rare earths for a long time to come. It also dominates research and development of these minerals, giving it a leg up on the future, Ms. Lacaze said. “I think there’s about 100 Ph.D.s in rare earths working in applications inside China and working in technology development,” she said. “To my knowledge, do you know how many Ph.D.s there are outside of China?” With the fingers of her right hand, she made a zero.

I believe she is grossly in error. But leave that aside. Steel and aluminum are important but rare earths are truly strategic. Furthermore the PLA controls Chinese production. Perhaps some one in the current Administration will catch on. The last one never did. Now we have a real problem!

Now Bloomberg notes:

China’s grip on rare-earths supply is so strong that the U.S. joined with other nations earlier this decade in a World Trade Organization case to force the nation to export more of the materials, not less, after prices spiked amid a global shortage. The WTO ruled in favor of the U.S., while prices eventually slumped as manufacturers turned to alternatives. Imposing duties will “bring home to the American public the reality of how much of what they use in everyday life contains these technology metals,” Jack Lifton, the Michigan-based founder of rare earth consulting service Technology Metals Research LLC, said by phone. “The Chinese mine the rare-earths, they separate them, they refine them. This is the long-term trend and a 10 percent tariff will not do anything to stir any domestic production in the U.S.”

The real problem is that the US has the largest Rare Earth reserves, closed down a few decades ago due to "environmental" concerns.  Like the Times, Bloomberg seems to be totally oblivious to the availability and the amount in the US. To some degree this is a "Yellow Journalistic" approach in my opinion. The US should and must reinvigorate its own sources, now. Just look at the USGS map!

Technology, China and Competition

The Telegraph has a good short piece in China's technological development. They note:

AI director at the Turing Institute in London, believes that while the UK has made “great progress in certain areas” we are “very far off” in others. “To date, the West has been leading research across many areas of AI but clearly China is catching up quickly and may be overtaking us in some areas,” he says. “Chinese students are coming to the UK and US and going back to China, and the government is making sure that it is a leader in these areas. Like us, they want to do well in the space.”

 We have argued before that the students coming to the US, and whose studies are often paid for under US DoD or similar university contracts, take what they have learned and go back to China and compete with the West. That seems to be an area that the current Administration, like all previous ones, seem to ignore to the benefit of China.

They continue:

The strengths and weaknesses of each region differ greatly. The US is more steeped in technological expertise and has the deep pockets of Silicon Valley. Most of the technology revolves around automation, typically with the goal of cutting cost or generating revenue. This has seen human jobs replaced by AI to cut costs or time. Companies have created AI designed to do a better job at sentencing prisoners than judges, and many job interviews are now conducted using AI-fuelled programmes to cut HR budgets.

 The question is not what AI can do but who will it replace. There must be buyers for products, even products produced by AI. Who then will do this? Somehow the lack of coverage of this by US media is appalling.

Are You Out of Your Mind?

The issue is Qualcomm. The NY Times states:

The extraordinary decision by the president underscored the increasingly protectionist stance his administration has taken in recent weeks to shelter American companies and ward off foreign investment in the United States.

The above are the original Qualcomm chips made for CDMA back in 1992. They were given to me when I was COO of Wireless.

Before commenting let me present some bona fides. The founder of Qualcomm was my advisor at MIT decades ago. At NYNEX I ran the venture investment fund and we along with two other Telcos invested a total of $15 million in the company. It also was one of the best if not the best investment made by the company.

Then as COO of the wireless company, now Verizon Wireless I circled the world convincing many manufacturers and carriers of the benefits of CDMA and thus fully monetizing the company. Thus I have some knowledge to say the least. Second the proposed buyer is alleged to have close ties with various Mainland Chinese entities who in turn are close to the PLA, the Communist Chinese Army!

Now does it make sense to have a potential adversary own and run a company whose products are used in strategic US systems? Hopefully any moron would know the answer to that. Thus Trump's decision is hardly protectionist, it is the only decision he could ever make as the President of the United States! Next we could have seen the chips in North Korean Ballistic Missiles on their way to San Diego or elsewhere.

Thus one wonders who writes these absurd pieces for the NY Times. Fake News, no, Dumb News, yes!

China Waves its Sickle

China Daily states:


Engaging with China has always been a political compulsion for US administrations. Former US president Barack Obama's "pivot to Asia" strategy and incumbent President Donald Trump's "Indo-Pacific" strategy suggest the United States will increase its presence in Asia. Though the "Indo-Pacific" strategy is still a work in progress, it is set to pose new challenges to the China-proposed Belt and Road Initiative, and regional cooperation as a whole. The foremost of those challenges is the Democratic People's Republic of Korea's nuclear issue, where China and the US still have much room for cooperation, and fortunately some substantial efforts in that direction are being made. But the de-escalation of tensions on the Korean Peninsula and the ultimate resolution to the issue depend on continued cooperation between China and the US. Or else, it will become even more difficult to resolve the issue. China plays an important but limited role in the issue, and what the US expects it to do is simply not possible, as the two sides employ different approaches to resolve the issue. Besides, other issues such as the Tai-wan question may jeopardize Sino-US relations.

 When a country with a nuclear capability threatens to obliterate you, perhaps you should not just try to "engage" them. As it stands, no one has threatened China. The US on the other hand has both NOKO and Iran threatening death to America. With Iran we allow students to come here and study nuclear engineering, perhaps a rather risky strategy. For NOKO we really should be tracking and articulating the sources of their capabilities. Complex guidance systems are well beyond the expertise of NOKO, but well within that of China. Cooperation between the US and China are of course important. But that cooperation is made nil by cooperation between China and NOKO.

As for Taiwan, that is a question between China and Taiwan. Regrettably Taiwan can look at Hong Kong and wonder if any deal would be worth it.

Freedom of Speech?

Just saw this on China Daily. Worth thinking about.

The open trial of Peng and Lee will also help the public to know that the two defendants attempted to subvert State political power by forming online chat groups, and used them in a planned way to spread the idea of political subversion. Their activities violated China's Constitution and laws. And no country, let alone China, will tolerate such activities. The case once again shows the judiciary's determination and ability to safeguard State security and maintain social stability in accordance with the law.

No other comments!

China and Trump

The current Administration seems fixated on the power of RT to influence Americans. Then there is such sites as China Daily which lays bare threats and uncertainty.

China Daily states:

...professor and chair of the department of political science at the University of St. Thomas in Houston, Texas, said: "Trump is about to create a very difficult period in China-US relations, one that may rival that of the 1950s and 60s. I am deeply concerned that Trump is rapidly moving US foreign policy toward a deep Cold War mindset regarding China. "My profound fear is that Trump has surrounded himself with anti-China hardliners who have little experience with or expertise on China, have rarely, if ever, visited the country, and have little understanding beyond textbooks and oped pieces of the nuances and subtleties of China's history, culture, and political system."

I am not aware of this Professor of what appears to be a small Catholic college in Texas, but it seems that he has become a statement maker for the Regime. Surprised no Harvard, Stanford, Yale or Princeton types.

In contrast the article continues:

...deputy director of research at the School of Regional and International Studies at the Far Eastern Federal University in Vladivostock, Russia, said the exchange of goodwill between Trump and Moscow signals subtle changes in Russia's ties with China. According to public opinion surveys, Russia was the only country to prefer Trump over Hillary Clinton, the Democratic Party's presidential candidate. "Since 2012, ties between Moscow and Beijing have been expanding and deepening, especially in the political-military domain," Lukin said. If Moscow normalizes relations with Washington, "the Sino-Russian partnership will continue, with the emphasis shifting to economics and trade", he added.

How much of this is game playing and muscle stretching and how much reflects a fundamental change is yet to be played out. China and Russia have had a tenuous relationship at best over the decades. You cannot buy anything Made in Russia at Walmart but there are still tons of Made in China.

It is surprising that the organ that the Chinese use to send out a message  use Academics so far from the base. Vladivostok is not Moscow, but it is quite reputable. Houston is not Cambridge yet it is no where close to Vladivostok.

One should ask; what this message means and to whom was it directed?

Some Have Long Memories

China Daily reports:

Japanese Prime Minister Shinzo Abe's visit to Pearl Harbor, criticized by China as lacking in sincerity, was quickly followed by one of his Cabinet ministers visiting a Tokyo war shrine on Wednesday. According to analysts, Abe's visit to Pearl Harbor, the target of the 1941 Japanese surprise attack on Hawaii, had hawkish intentions at heart, not pursuing peace and reconciliation. The purpose, they said, was to broaden Japan's military capabilities and curb the rise of China by strengthening the alliance with the United States. On Tuesday, Abe and US President Barack Obama laid wreaths at the USS Arizona Memorial. Afterward, in a speech, Abe said that Japan would never again wage war. On Dec 7, 1941, the Japanese attack on Pearl Harbor killed more than 2,400 US citizens and drew the US into World War II. Not long after Abe spoke, Masahiro Imamura, the minister in charge of reconstruction of northern Japan after the 2011 tsunami, offered prayers at the Yasukuni Shrine, which honors Japan's war dead, including 14 Class-A war criminals from World War II. Class-A convicts were found guilty of plotting and carrying out the war. Chinese Foreign Ministry spokeswoman Hua Chunying said Japan should reflect upon its war crimes in a sincere manner rather than "make political shows repeatedly". She spoke at a regular news conference on Wednesday.

 For almost fifteen years Japan raped and plundered China so it is reasonable to have some lingering recollection. Also from 1941 through 1945 Japan slaughtered Americans and Allied forces as well as their own people.

Perhaps China has a point. For everyone.

Spin

The recent events surrounding the taking of the US underwater drone is interesting. It was some 60 miles north west of Subic Bay.

That is about about 60 miles north west of the red dots. About a third the way to the upper left hand corner.

Now as China Daily states:

The US drone that China seized in the South China Sea has been successfully returned, China's Defense Ministry said. "After friendly negotiation, the drone was transferred to the US at a location in the South China Sea on Tuesday noon," the ministry said in a press release. The drone was discovered and retrieved by Chinese Navy last Thursday to "prevent danger to the safe navigation of passing ships and personnel", the ministry said. It was operating about 93 kilometers northwest of Subic Bay off the Philippines.

Just a friendly removal of a sea lane obstacle or Act of War?

 Step back a bit, the location is just a small distance off the coast of the Philippines in International waters, a quite a distance from China.

So what are you to believe. The Chinese or your lying eyes?

Science makes an interesting statement:

For ocean scientists who have worked with the U.S. military, today’s news that Chinese forces seized an oceanographic glider launched by an unarmed U.S. Navy research ship working in the South China Sea has a familiar ring. It’s not the first time that Chinese ships have confronted the USNS Bowditch or one of its five sister oceanographic ships, a little-known U.S. Navy fleet operated mostly by civilians that conducts mapping and ocean data collection cruises around the world. In 2001 and 2002, for instance, Chinese Navy frigates dogged the Bowditch as it worked in the Yellow Sea, leading to an exchange of diplomatic complaints. In general, the Chinese object to the U.S. Navy conducting research activities within China’s exclusive economic zone (EEZ), which stretches some 320 kilometers off its coastline. But U.S. officials have long held that the United Nations Convention on the Law of the Sea specifically allows military ships to conduct research cruises within a nation’s EEZ.

One should also remeber for whom ths shipe is named, the great New England navigation expert.

China Down Another 5.5%

Shanghai is down 5.5% and dropping. This AM in US markets we saw an almost 1100 point drop. It was like watching the White Ford on the LA Freeway. Deer in the headlights.

Tuesday will be another round, possibly not as bad. We are going from a "Correction" to a massive down turn. And where are our glorious leaders? On the golf course, of course.

The key question is a two part question; (i) our exports are low as compared to imports so who cares, and if China drops values we get cheaper imports, (ii) what about the debt on the fracking companies now that oil is in the tank? The China issue may be secondary to another financial collapse hidden in low cost but un-payable debt, close to a trillion.

I guess that pipeline can wait?

But then again for China look at the past ten years. They collapsed in 2008-2009 but what we see is really a bubble bursting. So we are still on good growth if we take out the bubble. So possibly China is not a problem. Debt is however.

China Down 7.5% at the Start

There seems to be a total collapse in China. This was not fully expected but the ripples will be significant. Remember the China Sovereign Fund holds several trillion US Debt. This will be a very very bumpy week!

Let the Sales Begin!

China Daily reports that it is negotiating sales of an F 16 knockoff to Iran in anticipation of the deal.

As they state:

The China-made J-10 multi-role fighter jet is a suitable choice for Iran if the Middle East power decides to upgrade its aging military aircraft fleet, Chinese aviation experts said. "Once the sanctions against Iran are completely lifted, the country will definitely renovate its civilian and military aircraft fleets. The J-10 is a good option for the Iranians because it can fulfill all operations they want to conduct," said Wang Ya'nan, deputy editor-in-chief of Aerospace Knowledge magazine. "In addition to air combat, our J-10 is also capable of performing air-to-surface strikes and anti-ship operations," he added. "Moreover, the Iranians must have known that China, among other major weapon exporters, is the most reliable supplier when it comes to arms deals. China is also very flexible in payment issues."

Thus the immediacy to see the market opportunity and arm Iran is at the top of the list of advantages of this deal. The idea of unintended consequences may not have been fully appreciated!

One should read and re-read Kennan's short work, American Diplomacy, and better understand all the mistakes the US has made over the years.

Having been a small part of the CTBT during the Carter period, verification of compliance is essential. Second is consequences to violations. Verification here appears to be near zero, since one could not tell until after an explosion.