The Limits to Sino-Russian Cooperation

Mahima Duggal 

Sino-Russian ties initially seem a pragmatic alignment of partners. However, several structural barriers—an asymmetric economic-security calculus, persisting investment challenges, and significant geopolitical deviations—limit bilateral cooperation.

The China-Russia relationship has historically been punctuated by epochs of cooperation and bitter political-military rivalry since the Cold War. In recent years, the West’s attempts to isolate Russia after its Crimean annexation drove the country towards China, as Moscow sought to balance deteriorating ties with Washington and Brussels. US policies of sanctioning Russia coupled with the US-China trade war have given both revisionist powers common grievances with the US. Their shared aversion of the US-dominated international order has pushed them into a substantive, dynamic, and ‘comprehensive strategic partnership for a new era’. Amidst restrictive Western sanctions, Moscow began expanding trade ties with China, with a focus on exporting defence equipment, giving rise to an unprecedented level of comfort in Sino-Russian ties.

Skewed Economic Balance

While China has a booming economy which has recorded growth (although at a reduced rate) even during the current downturn in the global economy, Russia is facing an economic crisis exacerbated by the pandemic. China today enjoys a competitive edge in value-added goods like arms and technology, and has already replaced Russia as the world’s second largest arms producer. As China becomes increasingly sophisticated and moves higher on the value supply chain, Russia’s reliance on it is bound to rise.

More importantly, Beijing is Moscow’s largest trading partner and export destination. Russia’s exports to China account for as much as 12.4 per cent of its total exports. In contrast, China’s exports to Russia comprise merely 0.8 per cent of total exports. Russia’s economic interest in the relationship is therefore much higher than China’s, whose interests are limited to oil and gas exports and access to Russia-controlled shipping routes. Moscow’s weakened global position has allowed Beijing to negotiate deals to its advantage. The US$ 400 billion Power of Siberia pipeline project, for instance, offered Beijing a discounted rate and partial ownership of the pipeline infrastructure.

Moreover, China has stepped in to fill the gap left by withdrawal of Western financing. It is providing loans worth billions of dollars in exchange for oil and partnership in Arctic projects—like the Yamal LNG project. Amidst the West’s efforts to isolate Russia, the country has found a necessary partner in China. Any damage to their trade ties could prevent Moscow access to its most important export market and would be a disastrous outcome for Russia. As the economic disparity grows, China will be able to command incredible influence as an indispensable buyer, leaving Moscow with few diplomatic options to protect its interests vis-à-vis Beijing.

Investment Challenges

Russia’s experience under China’s Belt and Road Initiative (BRI) has not met its expectations. Instead of initiating a new chapter in Sino-Russian ties, the high-risk-and-low-reward BRI projects have failed to deliver as promised amid multiple delays and cancellations. Of the 200 projects announced in 2009, less than 10 per cent actually progressed. Only six of the 20 special economic zones created in the Far East attracted Chinese investments, which equaled merely US$ 38 million. Strategic caution among both Russian and Chinese financiers has prevented Russia from securing investments. This indicates a limit to their warming ties. Although Moscow may offer some strategic advantages, it cannot be a major market, a profitable investment destination, or offer an edge in advanced technologies to China. Rather than substantive and tangible cooperation, their economic collaboration in the region is little more than a status-seeking venture.

Geopolitical Divergences

Notwithstanding strategic convergences, Russia and China have diverging national interests in other regions including Central and East Asia, Russia’s Far East, the South China Sea (SCS), and the Arctic.

Recently, China has recalibrated power dynamics in Central Asia. Beijing has carefully leveraged its economic strength to expand political influence. It has also enhanced activities in the Arctic—traditionally Moscow’s strategic bastion—while Russia has done comparatively little to enter China’s backyard, East Asia. In the SCS, Chinese pressure to halt all activities have harmed Russian interests, with Russian companies forced to suspend drilling operations with Vietnam. Meanwhile, Chinese presence in Russia’s Far East, perceived as its territorial expansionism, has become a source of resentment in the region. Russia and China are unaligned on India, with Moscow denying Beijing’s requests to halt arms exports to New Delhi.

Russia will remain concerned about President Xi Jinping’s talks of a Chinese “rejuvenation” and return to medieval glory that inevitably puts their interests in conflict. Neither power will be willing to compromise its core national interests and power aspirations. Additionally, as China-Russia relations become increasingly lopsided, the disparity in their abilities will push Moscow towards subordination. Much of President Vladimir Putin’s authority comes from his strongman image and promise of restoring Russia as a great power. It thus seems unlikely that Moscow would consent to being a ‘junior’ partner with a peripheral global role. Rather, it will attempt power parity, if not dominance, in the partnership. This makes both states poised for a future of friction.

These factors will place limits on China-Russia cooperation. Therefore, although their synergy may appear to be an axis-forming exercise in light of a gradually developing new Cold War, bilateral ties are significantly vulnerable to strategic constraints and uncertainties.

The UK is Out of the EU, But the Balance of Power in Europe has Tipped Permanently Against It

Patrick Cockburn

The view from the top of the Western Heights, the great fortified hill overlooking Dover, has the advantage of taking in many of the key features shaping life in Britain in the age of Brexit and Covid-19. The most important of these is the proximity of the French coast, glittering on the horizon 22 miles away, a fact of geography that will continue to determine what happens in Britain more than any trade deal or withdrawal agreement with the EU.

If proof of this were needed, it was provided over Christmas by the devastating impact of the French ban on untested lorry drivers crossing the Channel in a bid to stop them spreading the new variant of the virus to France. The giant backlog of stranded trucks and trapped truck drivers graphically illustrated the dependence of Britain on unhampered links to continental Europe.

The brief fracas reinforced the menacing message already sent during the course of the negotiations with the EU that, when push comes to shove, the UK will always have to play the weaker hand in any confrontation. We have already witnessed this permanent tilting of the balance of power away from Britain and towards the 27 EU nations, with the UK agreeing to shift the commercial border between Northern Ireland and the Irish Republic to the middle of the Irish Sea.

Journalists briefly poured into Dover to report on how the super-efficient port, normally capable of sending 10,000 trucks a day to-and-fro between Britain and France, had been brought to nearly a complete halt. Few drew attention to another fact about Dover, more damaging to Britain than any short-term impediment to trade, which goes a long way to explain its decision to leave the EU.

A few hundred yards from the thriving port is the moribund town of Dover, whose people draw almost no benefit from the £122bn a year in trade that flows past their doors. Instead, they have seen the disappearance of big employers – marine services, paper factory, barracks, prison – from Dover in the 48 years that their country has been a member of the EU.

Brussels may not be responsible for this economic decay – it was, rather, the unwitting scapegoat – but it paid the price for presiding over what many people in Dover rejected as an unacceptable status quo. The Brexit campaign and the Johnsonian version of the Conservative Party, now transformed into a thorough-going English nationalist party, became the convenient vehicle for their grievances over being left behind or left out.

Dover provides a telling parable about modern England because it not only contains side-by-side examples of the success and failure of globalisation, but it is filled with reminders of a more glorious past. Henry II’s magnificent 12th century fortress, the greatest medieval castle in the country, is close to the headquarters of the Dunkirk evacuation, dug deep into the White Cliffs. Both sustain the nationalist conviction that Britain is better off on its own. But an undiluted diet of ancient victories and achievements, with all the defeats and humiliations left out, fosters an over-confidence based on wishful thinking about the real world and a dangerously misleading belief that “we did it before and we can do it again”.

Such magical thinking is not exclusively English. On the contrary, what is striking about English “exceptionalism” is that it is so unexceptional. All nationalist movements down the centuries, from Hanoi to Warsaw and Harare to Philadelphia, have cultivated a sense of ethnic or cultural superiority or, at least, difference. A mistake of the Remainers in the referendum and in subsequent years was their failure to understand that the national state remains the focus of collective loyalty and identity for much of the population, a feeling reinforced by the relentless onslaught of cultural and economic globalisation.

A measure of English provincialism is that Dominic Cummings won both wide praise and condemnation for the supposed demonic cunning with which he devised all-embracing nationalist slogans, such as the notorious “Take Back Control”, which differs little from those chanted by liberation movements everywhere. Leave supporters would be horrified by the idea, but the mantras of the Brexiteers resemble closely those of Sinn Fein (“Ourselves Alone”), previously the most successful nationalist movement in the British Isles.

The remodeled ultra-English nationalist version of the Conservative Party shares the strengths and weaknesses of all nationalist movements. Boris Johnson is often accused by the media of “over-promising and under-delivering”, but this is the common behaviour pattern of nationalist leaders.

Such promises invariably bump into reality, but nationalists seldom own up to their mistakes, instead blaming hidden enemies inside and outside the country. The Brexiteers claimed during the referendum that personal and national liberty were the same thing. But once in power, it is the former – in the shape of courts, parliament, free press – that is swiftly sacrificed in the interests of the national project.

Such projects are usually in trouble because they are  confected from dreams. Donald Trump promised to Make America Great Again, but he leaves it weaker, and more divided and discredited than ever. Johnson promises that Britain will “prosper mightily” outside the EU, though none of the Brexiteers have been able to produce a rational explanation as to why this should be so.

I have always argued that the greatest danger lies not in Brexit but in the Brexiteers themselves because they were selling political and economic snake oil and would go on doing so. Moreover, they were selling it to different people under different labels: the anti-EU coalition combined free-market, Thatcher-worshipping activists working in temporary concert with those who saw themselves as Thatcher’s victims.

Until recently, the Brexiteers seemed to be swimming with the tide. Everywhere, international alliances and global organisations like the UN, EU and NATOs appeared to be on the wane. A former British diplomat remarked to me in 2016 that “Europe is full of think tanks and academic institutions studying integration, but it turns out that they should have been studying disintegration”.

His prediction seemed to be unpleasantly justified by events at the time and his thesis received further proof when the supreme test of the Covid-19 pandemic in 2020 saw nation states look exclusively to their own interests. But since the summer there are signs of a turn in the tide. Trump was capsized by his mad-cap incompetence during the epidemic. The EU set up a common €750bn relief fund. Whatever radical plans Johnson may have had to remake the British state may have been permanently holed below the waterline by his own incompetence and the calamitous economic damage inflicted by the epidemic.

Back in 2016 it did not look inevitable that the EU would become, at least temporarily, more united because of Brexit, while the UK would become more divided, probably permanently, with Scotland and Northern Ireland more and more detached from the union. As for England, Brexit was a symptom of terrible problems for people living in places like Dover, but there is no reason to believe that it will do anything to help them.

The Necessary, Endless Fight for Free Speech

Joseph Grosso

In August 2018, a series of internet giants including Facebook, Apple, YouTube, and Spotify banned content belonging to Alex Jones and his website Infowars. Infowars gets millions of visits a month, Donald Trump himself appeared on an Infowars broadcast during his 2016 election campaign, and Jones’ YouTube channel had over 2 million subscribers. It would be a grand understatement to call Jones a crank. He has spent decades pushing conspiracy theories from the absurd to the outright twisted and hateful. Perhaps most infamously, Jones pushed the theory that the Sandy Hook massacre (in 2012 Adam Lanza murdered 20 first-graders and six staff members of Sandy Hook Elementary school in Connecticut) was an orchestrated hoax. Such rhetoric was not exactly harmless. Families of the victims have faced death threats and harassment from Jones’ minions (Jones is being sued for defamation by eight of the parents and a FBI agent who responded to the shooting). Jones’ banning therefore elicited little public sympathy and few rallied to the free speech banner. Yet such actions always come with an implicit warning that once enacted they have a tendency to metastasize.

Fast forward to October 2020. Just weeks before Election Day the New York Post published a front- page story about emails and alleged photos of Hunter Biden, the son of now president-elect Joe Biden. The emails dealt with Biden’s shady dealings with a Chinese energy company CEFC China. Twitter initially blocked the link to the article from being posted or even sent via direct message on the platform (the New York Post was locked out of its account for over a week). Facebook also reduced distribution of the story. The revelation was deemed probable Russian disinformation in a letter signed by 50 former intelligence agents- the letter read that the signees were ‘deeply suspicious that the Russian government played a significant role in this case.’ That theory was quickly absorbed by most TV networks which ended up not pursuing the story, though in the very same letter the intelligence officials admitted to having no solid evidence for the claim. The FBI has found no such evidence. In recent years, former intelligence officials, many of whom peddled the fiction of Iraq’s weapons programs in the lead-up to the U.S. led invasion back in 2003, have scored lucrative roles as TV pundits simply due to their current anti-Trump credentials. The seriousness of the charges against Biden remain unclear. Weeks after the story was broken, Biden announced he was under investigation by the U.S. Attorney for Delaware over $400,000 in undeclared income. There are reports suggesting the investigation may be more extensive than Biden claimed.

Big tech companies and TV news attempting to prevent the story from spreading, of course, had no real effect. The story was available on the New York Post’s webpage and plenty of other places. If anything, nowadays killing a known story only shines more light on it. Still it was obvious that Trump supporters would shout hypocrisy after years of news reporting speculated about Trump’s ties to the Russian government, with much of the reporting turning out to be bogus.

Meanwhile on December 9th, YouTube announced that going forward it would enforce what it calls its Presidential Election Integrity policy. A company statement described it as ‘meaning we remove content that misleads people by alleging that widespread fraud or error changed the outcome of the 2020 U.S. presidential election uploaded on or after December 9.’ Trump and his lawyers’ crackpot assertions of hacked software and global communist plots to rig the election against him (while the Republican Party as a whole had a strong showing) is the stuff of psyche wards when it is not pure cynicism. This hardly nullifies the poisonous effects of censorship.

On one hand, it risks further radicalizing die-hard Trump voters who can clearly see the deck is stacked against them. Far worse is the banning of crazy narratives inevitably serves only to strengthen official narratives. An astute observer would have noticed that Trump was not the only ‘anti-establishment’ type painted with the Kremlin brush. In February 2020, it was reported that Russia was attempting to assist the presidential campaign of Berne Sanders. Sanders, a self-described socialist, was an early frontrunner for the Democratic nomination. Jill Stein, the 2016 Green Party candidate, faced the same accusations. Stein felt compelled to declare ‘I am not a Russian spy’ in October 2019 shortly after a bitter Hillary Clinton accused her of being a FSB agent.

This past November there was a movement to ban Abigail Shrier’s new book Irreversible Damage: The Transgender Craze Seducing Our Daughters. Amazingly, this effort had some support within the American Civil Liberties Union (ACLU). The ACLU once defended the right of neo-Nazis to march through a Chicago suburb. Yet here the ACLU’s Deputy Director for Transgender Justice, Chase Strangio, tweeted ‘Abigail Shrier’s book is a dangerous polemic with a goal of making people not trans…Stopping the circulation of this book and these ideas is 100% a hill I will die on.’ Going further, and inching toward Ayatollah Khomeini’s fatwa against Salman Rushdie’s novel The Satanic Verses, Grace Lavery, an English professor at the University of California, Berkeley, tweeted ‘I DO encourage followers to steal Abigail Shrier’s book and burn it on a pyre’ (Lavery later claimed she was joking before proceeding to make a bizarrely arcane case for censoring the book). Amazon denied the publisher permission to run a sponsored ad on the site. The chain store Target pulled the book from its shelves before reversing amid a backlash.

Defenders of the companies resort to a legalistic reading of the First Amendment which states that the Amendment only applies to government censorship not the actions of private entities such as tech companies, newspapers, publishers, etc. After all, publishers and editors reject submitted work all the time. Indeed no one is under threat of arrest for saying anything. Still, it should be obvious that the spirit of the law that counts just as much as the letter. The logic of regulating speech always boils down to a version of the ‘shouting fire in a crowded theater’ idea, that the speech in question will cause a greater, unnecessary harm. It is worth remembering that the ‘shouting fire’ example goes back to Supreme Court Justice Oliver Wendell Holmes in 1919 when the court was deciding if the government could imprison Charles Schenk, a general secretary of the Socialist Party, for distributing a leaflet against involuntary conscription. Holmes wrote in the decision that upheld Schenk’s conviction under the Espionage Act:

We admit that, in many places and in ordinary times,

The defendants, in saying all that was said in the circular,

would have been within their constitutional rights. But the

character of every act depends upon the circumstances in which

it is done. The most stringent protection of free speech would not

protect a man in falsely shouting fire in a theatre and causing a panic.

It does not even protect a man from an injunction against uttering words

that may have all the effect of force.

     The premise of the argument is the concept of the exceptional time. The true and obvious implication is that times will always be exceptional. This is why we now have liberals siding with intelligence agencies, online mobs striving to ban books, and tech companies acting as official fact-checkers. It is far better to recall the words of George Orwell: ‘If large numbers of people believe in freedom of speech, there will be freedom of speech, even if the law forbids it. But if public opinion is sluggish, inconvenient minorities will be persecuted, even if laws exist to protect them.’ Protecting inconvenient minorities has always been a core progressive demand, and by definition so has protecting free speech. To have again to fight for it is both tragic and necessary.

COVID-19 cases rise sharply in China

Lily Zhao

In the last two weeks of 2020, China has seen a sharp increase in Covid-19 infections, with clusters in three very large cities. The spread of the virus, despite China’s relatively strict testing, quarantine, and contact tracing measures, is a serious warning of how dangerous and highly infectious this coronavirus is.

In December, according to the National Health Commission of China, 122 cases of Covid-19 infections have been recorded, a 107 percent increase from the 59 cases in November. Among the 122 cases in December, more than two thirds occurred in the last two weeks of the month.

People wearing masks in China [Credit: AP Photo/Kin Cheung]

These infections took place in three major cities: 24 cases in Beijing, 17 cases in Shenyang, and 43 cases in Dalian. Both Shenyang and Dalian are located in Liaoning Province in northeastern China—the former is its capital and the latter its major port city.

It is particularly disturbing that China has had three almost simultaneous but separate clusters of outbreaks, something that has not been seen in the past few months. As the weather gets colder with ventilation more limited, and as the Lunar New Year approaches where hundreds of millions will travel back to their hometowns, infections could escalate and spread much more widely.

An examination of the chain of infections in these three cities further underscores the highly contagious nature of the COVID-19 virus. It not only poses a huge challenge to China in keeping the infection rate relatively low as in the past months, but could pose further dangers for countries like the United States and Britain where the virus is basically spreading freely under the murderous “herd-immunity” policy.

Beijing

The infections in Beijing all originated from a common source. On November 26, a 28-year-old man flew into China from Indonesia. Another passenger on the same flight tested positive on arrival, but the young man tested negative. He was quarantined for 14 days in Fujian Province, where he entered China. After he tested negative, he left for Beijing where he lived. A month later, on December 26, his nucleic acid test still yielded negative results, but his IgM antibody test showed positive results, indicating he had already been infected. He was then hospitalized, and only two days later, on December 28, his nucleic acid result turned positive as well. After a whole-genome sequencing of the virus, it was determined that the virus most likely came from Southeast Asia, from where he had traveled.

His flat mate was also infected and passed the virus to a staff member at a local supermarket. Then, the staff member infected her husband, her co-workers, a cab driver, and two friends who she went out with. Both of her friends then infected their husbands. Four of the infected people were working at an industrial complex in the suburbs of Beijing and transmitted the virus to five other co-workers. Since December 25, a lockdown was imposed over this industrial complex. The 2,340 people kept inside were tested overnight, and all tested negative. A second round of testing was performed on December 30, and a third round has been planned.

Shenyang

The cluster of infections in the city of Shenyang also started with a person who had traveled internationally: a 67-year-old woman who returned from South Korea on November 29. She was quarantined in Shenyang after her flight and underwent two nucleic acid tests and one antibody test during her quarantine. All results were negative, but she later tested positive on December 23.

During the interim, the woman transmitted the virus to her husband, granddaughter, and a few neighbors. She visited a clinic on December 18. Even though she wore a face mask throughout the entire visit, a nurse and a physical assistant still tested positive later on December 28.

Some 706 people were identified as close contacts, and another 1,833 people were identified as secondary close contacts. They were all tested and collectively quarantined. Another 3,716 close contacts of secondary contacts were tested and quarantined at home. Residents, staff members and students in five neighborhoods, five health clinics and three schools where cases were found, roughly 20,000 people, were tested by December 28, five days after the initial case was detected.

Dalian

The city of Dalian recorded the highest number of cases in the last two weeks of December, 43 symptomatic cases on top of another 36 asymptomatic ones.

As a major Chinese port city, Dalian has a vast industry dealing with imported goods, including a large number of cold-stored products. The initial infections in Dalian were found among porters at a company that handles such goods. Four workers tested positive during a regular screening ordered by the company on December 15, but all of them were asymptomatic. Then, through the screening of their close contacts, more cases were detected each day. People in contact with the virus were concentrated in the district where this cold-storage company operated, including street vendors, small-shop owners, restaurant workers and service workers. The exact chain of transmission has not been completely identified.

Since December 22, an effort was made to test everyone in the city. Now, more than 6 million people have been tested across the city. According to People’s Daily, instructions were issued to vaccinate all workers handling frozen goods by the end of 2020 and to put them in soft quarantine. These workers would only be allowed to leave their workplace area if they had two recent negative test results. A weekly screening with nucleic acid tests among these workers was also planned.

The very detailed contact tracing provided by public health organizations points to multiple health and political issues bound up with the COVID-19 pandemic.

First, people who contracted the virus in this wave of infections are overwhelmingly working class. As is the case in the mass infections in factories, meat-packing plants, schools and Amazon supercenters in many other countries, workers have been put on the frontline of the pandemic.

The cases published by health organizations in China point to the difficult living and working conditions of these workers. For example, one worker at the industrial complex in Beijing who contracted the virus also worked part-time at a transit center for SF Express, the leading package-delivery company in China. On top of a regular workday at the industrial complex, he also worked from 10 p.m. to 2 a.m. at the transit center every day.

Second, the COVID-19 virus is highly infectious. Even though China has been able to keep the number of cases relatively low by carrying out large-scale testing and detailed contact tracing after an infection was identified, the spread of the virus could still not be halted and is potentially escalating.

The cases that initiated the clusters of outbreaks in Beijing and Shenyang, were both properly quarantined for 14 days after international travel and tested negative several times but the virus was still transmitted to their close contacts.

The cases in Dalian were not the first to be infected by the coronavirus carried on the surface of frozen goods. In November, a number of port workers in Tianjin, another port city in northeastern China, were infected by imported frozen pork from North America. A truck driver, who did not handle the frozen goods, was infected by helping porters pick up a bag of frozen meat which carried the virus on the outer package.

Moreover, a report released on December 31 by the Municipal Health Commission in Chengdu, a city in southwestern China where a cluster of infections were reported in early December, found the first case was very likely infected by picking up trash. The trash was thrown out from a quarantine center housing five people who had travelled back from Nepal.

What all these clusters powerfully demonstrate is that the pandemic is fundamentally a global issue that could not be resolved on a national level. It is extremely difficult, if not impossible, for any country to prevent the virus from entering its borders.

All countries are part of globalized production chains, and as long as the pandemic is still raging and killing tens of thousands of people around the world, no country is a safe, virus-free bubble.

UK in third national lockdown as coronavirus surges out of control

Robert Stevens

Prime Minister Boris Johnson announced a third national lockdown in England yesterday. He said that people must stay at home for at least six weeks, except to go to workplaces, to buy food or medicines or exercise once a day. All schools, colleges and universities are closed from Tuesday.

The lockdown is not as stringent as that imposed last March, with Johnson insisting that people should go to work if they cannot work at home to keep profits rolling in for the major corporations.

Detailing the horrific consequences of his murderous “herd immunity” agenda, Johnson said, “In England alone, the number of Covid cases in hospitals has increased by almost a third in the last week to almost 27,000. And that number is 40 percent higher than the first peak in April.” On December 29, more than 80,000 people tested positive for Covid across the UK, “a new record,” and “the number of deaths is up by 20 percent over the last week and will sadly rise further”.

Prime Minister Boris Johnson addressing the nation from No10 Downing Street, on the new Covid-19 national lockdown restrictions. (picture by Andrew Parsons / No 10 Downing Street-FlickR account)

The National Health Service (NHS) could no longer cope with the spread of the disease. The “UK’s chief medical officers [of England, Wales, Scotland and Northern Ireland] had advised that the entire country should move to alert level 5, meaning that if action is not taken NHS capacity may be overwhelmed within 21 days,” he said. It was previously at 4 across the UK. The Guardian reported that going to level 5 was recommended by the Joint Biosecurity Centre before receiving the agreement of the chief medical officers.

The scale of deaths in Britain is staggering, with the record for new cases broken almost on a daily basis. On Monday, another 407 deaths to COVID-19 were announced and a record 58,784 new cases. In the 10 days since December 26, 5,205 people have died of COVID-19, with 490,412 new cases disease recorded. This represents 18 percent of the total of 2,713,563 cases since the virus was first detected in the UK just over 11 months ago, on January 31, 2020.

Before Johnson spoke, Scotland’s First Minister Nicola Sturgeon announced a national lockdown beginning at midnight until the end of January. Laws will require people to stay at home and work from home where possible, with outdoor gatherings cut back allowing people to meet only one person from one other household. Schools will operate via online and remote learning.

The spread of the virus is rocketing in Scotland, with positive cases reaching a record high 2,464 Sunday. The new variant of the virus, first detected in England in September, is responsible for at least 50 percent of cases. Sturgeon said that there was “compelling” evidence the new variant was about 70 percent more infectious, meaning it could force up the R (Reproduction) rate of the virus by 0.7. “That increased faster spread is undoubtedly driving the very serious situation we now face… Today’s case numbers—1,905 new cases, with 15% of tests being positive—illustrate the severity and urgency of the situation.”

Wales Health Minister Vaughan Gething said that positive test results in Wales stood at a massive 25 percent.

Parliament, which was due to return from an extended Christmas recess next week after voting through the Brexit deal on December 30, is being recalled Wednesday to debate the new measures—mostly online.

Labour Party leader Sir Keir Starmer rushed to back Johnson, continuing his policy of “constructive opposition” to a hated government he has helped prop up since April. “These measures are necessary and we support them,” he tweeted.

London and the south east of England is the epicentre of the pandemic. The i newspaper reported Sunday, “More than one in four people being tested for Covid-19 in London is infected with the virus...” The “daily average as at 29 December… shows a test positivity rate of 26.8 per cent, up from 24.3 per cent on the previous day. This figure has risen sharply in a week, from 22 December when the case positivity rate was 15.7 per cent.”

Over Christmas, cases rose in two-thirds of London’s 32 boroughs, with the number of Covid patients in the capital’s hospitals hitting a peak of 5,524 on December 30. The most ever in hospital in London at the height of the first wave, on April 9, was 5,201.

In the greater south east of England (London, South East and East) Covid hospitalisation admissions are 16 percent above the peak in the spring crisis. In the south east of England, there are almost 50 percent more Covid patients in hospitals than during the spring peak.

The average of new cases per 100,000 population across England is 400 per 100,000. In London it reached more than double that rate with a record 902.5 per 100,000 recorded to December 30—up from 817 a week ago. London’s Evening Standard reported, “Hardest hit for its size is [the borough of] Barking & Dagenham, with 2,764 new cases in a week, and the highest rate of new cases in London at 1,298 per 100,000 population.”

Johnson is once again belatedly taking limited action because of mounting public opposition. Since imposing the full lockdown in March, which it abandoned in June with lies about the virus being on a “downward slope” to reopen the economy, its partial restrictions and vastly inadequate circuit breaker November lockdown have allowed the rapid spread of the virus and its deadly new variant. Non-essential workplaces have been open for months, and despite warnings by scientists—including the government’s own Scientific Advisory Group for Emergencies—schools, colleges and universities were opened from September.

School are among the main vectors for the spread of the disease, as Johnson acknowledged yesterday. But the government were determined to keep the vast majority of primary schools open nationally this week for the new term so that they could act as holding pens for children while parent go to work. In his speech Johnson was obliged to excuse the fact that he insisted schools opened earlier that day with the claim that every day in school was “important.”

Despite the government’s diktats, hundreds of primary schools across the UK did not open Monday because staff refused to attend. The Manchester Evening News reported of an outbreak of Covid at a local primary school: “The acting headteacher at Holy Family Catholic Primary School, in Seedley, Salford, and another staff member are both said to be ‘seriously unwell in hospital’. A number of other staff also tested positive for the virus, and became ‘very unwell’ over the Christmas break and are ‘too unwell to return to work’”.

In the county of Norfolk more than 130 primaries did not fully open. In the Greater Manchester region, around 50 primary schools did not and 23 were closed in nearby Merseyside. More than 40 schools did not open in the city of Durham, 21 in North Tyneside, 26 in Newcastle, 10 in Reading, and nine in Northumberland.

This was despite the sabotage of the education trade unions, whose main demand—up until the weekend—was that Johnson only delay the reopening of secondary schools to allow for the testing of pupils in that age group. On Monday, even with talk of an impending national lockdown being trailed everywhere, the unions stepped up their collaboration with the government. The National Education Union (NEU) NAHT, NASUWT, GMB, Unison and Unite signed a joint statement co-ordinated by the Trades Union Congress, calling on a prime minister whose government is responsible for the deaths of at least 75,000 people and in reality well over 90,000 and edging towards 100,000, to “sit down with unions to discuss a joint approach to ensuring safe working arrangements in all schools…”

EU–US tensions mount after EU signs trade deal with China

Alex Lantier

The trade agreement European Union (EU) officials reached with Chinese President Xi Jinping on December 30 has vastly intensified EU–US tensions. The deal was reached as Joe Biden is to take office in Washington, calling to build a “bloc of democracies” to confront Russia and China. After the EU–China deal, however, it is clear that powerful forces in the European bourgeoisie, their faith in the NATO alliance with America undermined after Trump’s presidency, intend to pursue a policy conflicting with Washington.

Washington’s catastrophic “herd immunity” policy on the COVID-19 pandemic, the debacle of the US presidential elections, and Trump’s refusal to acknowledge his election defeat are setting explosive international conflicts into motion—including inside NATO itself.

Chinese President Xi Jinping, right, German Chancellor Angela Merkel, center, French President Emmanuel Macron, left background, and European Commission President Jean-Claude Juncker, left foreground, at the Elysee presidential palace in Paris, Tuesday, March 26, 2019. (AP Photo/Francois Mori)

The EU and Beijing had discussed this deal since 2012 and, the Swiss Neue Zurcher Zeitung wrote, “in autumn it seemed unlikely due to many differences.” But after the US elections in November, it emerged on December 18 that the EU had taken “a political decision in principle” to clinch a deal. By all accounts, this was done in just two weeks thanks to heavy personal involvement by German Chancellor Angela Merkel—assisted by her former defense secretary, EU Commission President Ursula von der Leyen, and French President Emmanuel Macron.

Officials of the incoming Biden administration protested and sought to mobilize their supporters in Europe to halt the deal. On December 22, acting US National Security Advisor Jake Sullivan tweeted: “The Biden-Harris administration would welcome early consultations with our European partners on our common concerns about China’s economic practices.”

With US influence in the EU undermined by London’s Brexit from the EU, it fell to the far-right Polish regime to criticize the deal. Polish Foreign Minister Zbigniew Rau said the EU should consult with Washington: “Europe should seek a fair, mutually beneficial Comprehensive Agreement on Investment with China. We need more consultations and transparency bringing our transatlantic allies on board.”

EU officials ignored these objections, however, agreeing to the deal just before Germany’s EU presidency concluded at the end of 2020. With France now in the rotating EU presidency, its details are to be finalized by 2022.

The deal is a bid by European corporations to increase their share of the profits extracted from the Chinese and international working class at the expense of US rivals and of China’s own Stalinist bureaucracy. It allows European automobile, transport and medical equipment, energy and financial industries unprecedented access to Chinese markets. It also limits China’s state-owned enterprises’ ability to compete with European firms. China committed to ratify ILO Fundamental Conventions on Forced Labor—apparently in response to allegations over Xinjiang.

US officials fumed at the deal to the Financial Times. “Jake’s tweet was very, very careful in the text but the message was unmistakable. … Jake basically said ‘hey slow things down,’ and that’s not happening,” a former Obama administration official said. “By any measure it’s a setback.”

EU officials are bitterly divided over the deal. While EU Trade Commissioner Valdis Dombrovskis called it “the most ambitious outcomes that China has ever agreed with a third country,” several EU officials denounced it. EU Parliament delegation on China chair Reinhard Bütikofer—a Green Party official and ex-Maoist—called the deal with Beijing a “strategic mistake.” He tweeted: “Should we really help Xi Jinping, showing Joe Biden the middle finger?”

French EU parliamentarian Raphaël Glucksmann, the son of post-1968 Maoist “New Philosopher” André Glucksmann, also denounced the deal. Echoing US National Security Council spokesman John Ullyot’s criticism that its measures on Xinjiang are “not accompanied by strong enforcement and verification mechanisms,” Glucksmann said: “No external witness can enter factories exploiting Uighur slaves. So it is all just talk.”

Glucksmann’s outbursts are reactionary propaganda. His moral outrage is inevitably in direct proportion to the size of the profits the NATO powers aim to extract from the region involved—be it the Caucasus, Syria, and now China. His denunciations of prison camps in Xinjiang, taken straight from CIA talking points, is all the emptier in that it accommodates itself quite well to mass refugee prison camps the EU is building across the Mediterranean and the Balkans.

In contrast, as Beijing seeks allies against Washington, the Chinese state press held out hopes that the deal would gradually relieve tensions, restrain US threats against China, and ensure a peaceful future for world capitalism.

The Global Times wrote, “The reason why many Western media outlets keep a close eye on the deal is the timing, or we can say regarding its influence on the China-US relationship over the next period. … If China and the EU reach free trade agreements, that would mean much closer connectivity between Europe and Asia. Thus, in terms of economy, this will be consolidating the foundation of globalization. Once the base of globalization is safeguarded, moves for prevailing confrontation and a new Cold War will lose their motivation.”

In fact, the pandemic is a trigger event that has massively intensified intractable international and class conflicts of global capitalism. The rising economic weight of Asia and China cannot be accommodated within this outmoded system, whose bankruptcy has been exposed by the failure to contain COVID-19 by the wealthiest countries of Europe and North America—who then spread lying war propaganda blaming China for deaths from the disease. The only force that can avert catastrophic conflict is the revolutionary mobilization of the international working class.

Far from stabilizing world politics, the China–EU deal is inflaming historically rooted conflicts between US and European imperialism that erupted in two world wars in the 20th century. The 1991 Stalinist dissolution of the Soviet Union fatally undermined NATO by depriving it of its common enemy. Inter-imperialist conflicts over the division of the spoils in the neo-colonial wars of the subsequent decades across the Middle East and Africa have now reached a fever pitch.

In 2015, the EU countries bucked US opposition and signed up for China’s Asian Infrastructure Investment Bank (AIIB) to fund Beijing’s massive Belt and Road Initiative (BRI) infrastructure projects. This decision testified to the collapse of US economic and geopolitical influence, which continues to this day.

Since Merkel reacted to Trump’s election in 2016 and his threats to boycott German car exports by declaring in 2017 that Europeans “have to fight for our own future ourselves,” tensions have kept mounting inside NATO. The EU powers are chafing at sanctions Washington tries to use to lock them out of Iran, Russia and now China, by threatening these countries with trade war or outright military conflict. Now, even as it lets COVID-19 ravage the working class, the EU is diverting billions of euros to re-militarize and prepare a more independent foreign policy.

Europe will not “let itself be trapped in a hard conflict with China,” Le Monde wrote of the latest deal, adding: “The chancellor knew the opportunity was unique: Germany’s [EU] presidency gave her the necessary energy and authority; the transfer of power in Washington gave a window of opportunity that could close once Joe Biden was inaugurated, on January 20, 2021. This year, the COVID-19 pandemic strengthened the view in Germany that it is urgent to reinforce European ‘sovereignty,’ especially on health and technology, amid the Beijing-Washington showdown.”

Writing in Foreign Policy, Noah Barkin—a fellow at the German Marshall Fund of the United States think-tank—warned of the EU–China deal’s implications. He wrote: “It is hard not to view it as a geopolitical gift to Beijing and slap in the face to an incoming Biden administration that has vowed to repair trans-Atlantic ties and work more closely with Europe on the strategic challenges posed by China.”

Significantly, Barkin added that Berlin had concluded from the 2020 US election crisis that it must guard against a collapse of NATO by developing strategic links to powers Washington targets for war and regime change.

He wrote, “Trump did lose to Biden in November. But the number that truly reverberated in Berlin, I am told, was not the 306 electoral votes that put Biden over the top but the 74.2 million votes that Trump received. Trump may soon be gone, but his followers are here to stay. It is only a matter of time before someone else takes up his nativist battle cry. Against this backdrop, the only responsible path forward, in Merkel’s view, is to hedge.”

Those arguing that an EU–China “hedge” against a disintegration of NATO will prevent catastrophic wars and loss of life are however placing heavy bets against history. The fight against war, like the fight to halt the COVID-19 pandemic, falls to the international working class.

Bitcoin hits new record as Wall Street mania continues

Nick Beams

The year 2020 saw the greatest speculative binge in history on Wall Street, with all major indexes finishing at record highs on the back of the supply of essentially free money by the US Federal Reserve. The New Year has started the same way.

On Sunday, the price of bitcoin rose to $34,000 before sliding slightly to $33,000. In January 2020, it was trading at around $7,194. And it may have further to go.

According to Marcus Swanepoel, chief executive of the London-based cryptocurrency platform Luno, the persistent build-up to the latest high “sets bitcoin up extremely well for this year.” Swanepoel added that it could reach “something approaching the $100,000 mark” before the year is out.

The latest rise, which has seen bitcoin surge by 10 percent in the first few days of January, has been fuelled, at least in part, by the fact that the cryptocurrency is becoming more integrated into the global financial system amid rampant speculation that has lifted all financial assets.

In October, PayPal said US customers would have the option of holding bitcoin in their digital holdings. Major investors, including Paul Tudor Jones and Stanley Druckenmiller, have moved into the bitcoin market, as hedge funds focusing on cryptocurrencies have recorded bigger returns than others.

The basis of bitcoin is blockchain technology, which provides a ledger system for recording transactions without the need for a central authority, such as a central bank. This technology has some applications that are productive in monitoring and recording economic transactions.

But the rise and rise of the cryptocurrency bitcoin is purely speculative. It is the most egregious expression of the mania that has gripped Wall Street since the Fed stepped forward in mid-March as the guarantor of all asset classes following the freeze of financial markets as the first wave of the COVID-19 pandemic hit. The Fed alone has expanded its balance sheet by more than $3 trillion and is purchasing bonds at the rate of $120 billion a month—more than $1.4 trillion a year.

Fed chief Jerome Powell has committed to continue the central bank’s purchases indefinitely, and will hand out even more money if the markets undergo a meltdown.

As Financial Times columnist Edward Luce noted in a piece published yesterday: “Courtesy of the US Federal Reserve, asset buyers in general have had a stellar pandemic. Whether it was US Treasuries or junk bonds, equity portfolios or high-end property, the free money gusher has lifted all asset prices. Nor is he Fed inclined to stop the party. This year could offer a similar kind of boom to last.”

While it has justified its actions on the grounds that it is “rescuing the economy” and preventing a plunge into a depression, the Fed, amidst death and economic devastation for millions of workers, has organised the greatest transfer of wealth to the financial elites ever seen in history.

And there are warning signs that a massive financial disaster is in the making. For example, one of the reasons for the rise in bitcoin is the fear that the steady decline in the value of the US dollar, which has been accompanied by a sharp rise in the price of gold, could undermine the dollar’s role as the world economy’s reserve currency.

As Luce noted in his comment, the Fed is reprising the role it played after the 2008 crisis on a bigger scale, with the risk that “each new chapter tightens a doom loop in which the US sovereign must eventually reckon with the ever-widening class of risk it is underwriting.”

US national debt has doubled since 2008 and is on the rise again, a trend that has particular significance because of the dollar’s global role.

But an even greater fear is what Luce termed a “Great Gatsby-style boom at the top” while “the majority of people are suffering” will bring a resurgence of class struggle that he designated as a rise of “populism.”

Those such as Luce who point to the threats to the ruling class and the system over which they preside call for some kind of reform, in the form of fiscal measures to provide a boost to the real economy. But if there were reforms to be had, they would have already been implemented. The reality is that there are no reforms in the offing.

The present crisis did not emerge overnight as a result of the pandemic. Rather, it is the outcome of the program initiated under Reagan and Thatcher some four decades ago, which involved a new mode of profit accumulation based on financial market operations, coupled with the evisceration of the social gains made by the working class during the post-World War II boom.

No reforms were implemented after the 2008 crisis. Rather, the attack on the working class was stepped up. Now it is further accelerated. This is because any reform measures, starting with meaningful measures to deal with the pandemic, would necessitate a deduction from the flow of surplus value extracted from the working class, needed to sustain the mountain of fictitious capital created by the stock market. This would sooner or later bring about a collapse in the financial house of cards.

Consequently, as Marx noted, every capitalist and every capitalist nation operates according to the watchword après moi, le déluge, and so the speculative mania continues.

Just when one might have concluded that the means of speculation and the development of further arcane mechanisms for the making of money had been exhausted, a new scheme emerges.

With the share markets reaching new highs—the S&P 500 has risen by 66 percent since the mid-March meltdown—this year has seen a record for initial public offerings (IPOs). Companies raised $167.2 billion this year, compared to the previous high of $107.9 billion in 1999 at the height of the dot-com bubble. Much of that, some $67.3 billion, was raised in the last three months in a bid to take advantage of the market mania financed by the Fed.

But there is a new twist. The IPO market received a major boost through the expansion of special purpose acquisition companies (SPACs). These are empty or shell companies that raise money and then look for firms with which to merge. The investors in the SPACs count on finding a company whose stock value will rapidly rise, while the company merging with the SPAC can get into the share market without the often lengthy procedures associated with a regular IPO.

According to the Wall Street Journal, nearly half of all funds raised in the IPO market last year were for SPACs, with the total raised by this means some six times the previous record year of 2019.

The Wall Street mania has vast political implications. It arises from the contradictions of a terminally diseased social and economic order and is creating the conditions for the eruption of explosive social struggles, for which the working class must prepare through the building of a new revolutionary leadership.