China struggles with Belt and Road pushback

James M. Dorsey

China, in an implicit recognition that at least some of its Belt and Road-related projects risk trapping target countries in debt or fail to meet their needs, has conceded that adjustments may be necessary.

“It’s normal and understandable that development focus can change at different stages in different countries, especially with changes in government. So China can also make some strategic adjustments when cooperating with these countries, but it’s definitely not a reconsideration of the B&R (Belt and Road) initiative,” Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges told the Chinese Communist Party’s Global Times newspaper.

The Chinese concession, initially made public in an August 27 speech by President Xi Jinping and reaffirmed by the Global Times. came in the same week that Pakistan during a visit of Chinese foreign minister Wang Yi demanded that China expand its US$50 billion plus investment in the China Pakistan Economic Corridor (CPEC), the single largest country infrastructure investment related to the People’s Republic’s Belt and Road initiative, to include manufacturing and poverty reduction projects.

The change in China’s approach towards Belt and Road would in the case of Pakistan involve a substantial recast of CPEC that appeared to position Pakistan as a raw materials supplier for China, an export market for Chinese products and labour, and an experimental ground for the export of the surveillance state China is rolling out, particularly in its troubled north-western province of Xinjiang.

The focus of Chinese investment takes on added significance as Pakistan weighs options to solve its financial crisis, including a request for up to US$12 billion in assistance from the International Monetary Fund (IMF) that would involve a straightjacket for structural reform.

An IMF assistance package would require Pakistan to provide chapter and verse of the finances of Belt and Road-related projects that have so far been kept under wrap.

Mr. Wang, the foreign minister, seemed despite the statements suggesting change, cautious in his response to the Pakistani demands. He indicated that that expansion, if not re-orientation of CPEC, would not be immediate. “The two sides have agreed that the CPEC cooperation will gradually shift to industrial cooperation,” Mr. Wang said during his visit.

Pakistan was not the only country that was pushing back at China’s approach towards the Belt and Road. Nepal joined Pakistan last November in withdrawing from dam projects because of China’s commercial terms.

More recently, protests against the forced resettlement of eight Nepali villages have apparently persuaded CWE Investment Corporation, a subsidiary of China Three Gorges, to consider pulling out of a 750MW hydropower project. CWE said it was looking at cancelling the project because it was “financially unfeasible.”

Malaysian prime minister Mahathir Mohamad has suspended or cancelled US$26 billion in Chinese-funded projects since his election victory in May.

Similarly, Myanmar is negotiating a significant scaling back of a Chinese-funded port project on the Bay of Bengal from one that would cost US$ 7.3 billion to a more modest development that would cost US$1.3 billion in a bid to avoid shouldering an unsustainable debt.

China has written off an undisclosed amount of Tajik debt in exchange for ceding control of some 1,158 square kilometres of disputed territory close to the Central Asian nation’s border with China’s troubled north-western province of Xinjiang.

Zambia, following in the footsteps of Sri Lanka that was forced to give China a major stake in its port of Hambantota because it could not service its debt, saw itself this month left with no choice but to hand over control of its international airport as well as a state power company.

The Chinese concession also comes amid increased international attention on China’s crackdown on Turkic Muslims in Xinjiang, including, the roll-out of its 21st century Orwellian surveillance state.

The concession is part of a concerted effort to downplay the geopolitical nature of the Belt and Road initiative and stress its sustainable development and job creation aspects.

Ray Washburne, president and CEO of the Overseas Private Investment Corporation (OPIC), an intergovernmental agency that channels US private capital into overseas development projects, earlier depicted the Belt and Road initiative as a ploy to ingratiate itself with other countries by funding infrastructure projects.

China ”is not in it to help countries out, they’re in it to grab their assets,” Mr. Washburne said. He charged that China was intentionally plunging recipient countries into debt, then going after “their rare earths and minerals and things like that as collateral for their loans.”

That view persuaded Greenland this month to select a Danish rather than a Chinese company to build and upgrade three airports.

“The big fear is that even a small Chinese investment will amount to a large part of Greenland’s GDP, giving China an outsized influence that can be used for other purposes,” said Danish foreign and defence policy scholar Jon Rahbek-Clemmensen.

Mr. Rahbek-Clemmenen’s concern reflects a widespread belief that the sheer scale of Belt and Road, involving up to US$1 trillion in investments in scores of countries across the globe lends it significant geopolitical attributes irrespective of what Chinese leaders may have had in mind.

A recent study by the Washington-based Center for Strategic and International Studies (CSIS) argued that the Belt and Road is driven by “interest groups within and outside China (that) are skewing President Xi’s signature foreign policy vision.” The study argued that the positioning of the initiative persuaded Chinese local and regional authorities as well as companies to brand their activities as Belt and Road-related to gain economic and political advantage.

Earlier, the Washington-based Center for Global Development warned that “there is…concern that debt problems will create an unfavourable degree of dependency on China as a creditor. Increasing debt, and China’s role in managing bilateral debt problems, has already exacerbated internal and bilateral tensions in some BRI (Belt and Road initiative) countries.”

Plastic Pollution: The Age of Unsolvable Problems

Ugo Bardi

How bad is the situation with plastic pollution? Rather bad, by all means. Citing from a recent paper by Geyer et al., more than 8 billion tons of plastic have been produced since the 1950s. Of this plastic, 9% percent was recycled, 12% was incinerated, the rest is in part still in use, in part dispersed in the ecosystem. It is this mass of plastics, billions of tons, which form the pollution we see today. It is almost one ton of plastic waste for every human being living today. Imagine if it were magically to appear in your living room: one ton for every member of your family. 

Still following Geyer et al., in 2015 the world produced 380 million tons of plastics from fossil hydrocarbons. To get some idea of how polluting this mass is, we can compare it to the total carbon emissions produced by hydrocarbon combustion, which today can be estimated to be around 9 billion tons of carbon per year. Plastic is mainly carbon, but we should take into account that the process of creating it cannot be 100% efficient. Anyway, we are interested here only in an order of magnitude comparison so we can say that about 4% of the fossil hydrocarbons we extract become plastics.  

4% doesn’t seem to be a large amount, but it is not negligible, either. Apart from the horrible state of some beaches, the islands of plastics in the oceans, it is a lot of carbon pumped into the ecosystems and its effects are scarcely known, especially on humans: we are all eating microplastic particles, today. What will that do to our health, nobody knows — we are all guinea pigs in a great experiment. The long-run problem is that all this plastic is made from fossil hydrocarbons, it is going to be gradually oxidized and turned into gaseous CO2. Then, it will contribute to global warming.

So, we have a problem and not a small one. Then, how do we deal with it? The Greens in their various shades will respond with the magic words “recycle!” or “reuse!” but there is a little problem with this idea: you can’t recycle or reuse anything for more than a limited amount of times. Recycling plastics is just a way to procrastinate the unavoidable: you may know the quote (attributed to Christopher Parker) that says “Procrastination is like a credit card; it’s a lot of fun until you get the bill.” Eventually, even recycled/reused plastics must become waste and at that point, we get the pollution bill to pay.

A different brand of problem solvers, maybe we could call them the “anti-Greens,” will come up with a completely different strategy: “let’s burn it!” Yes, sure, after it is burned, we don’t see it anymore — which means it has disappeared, right? And, in the process, we magically create energy! Isn’t that a good idea? Maybe, but if there ever was a perfect illustration of the concept of “sweeping the problem under the carpet” this would be it. When burned, the stuff plastic is made of doesn’t disappear — it is simply turned into CO2 which goes into the atmosphere to create more global warming. And the energy we can get from incineration is just a trifle and it is obtained in a dirty and inefficient manner.

There is a third brand of people whom I could call the “bring me a problem and I’ll show you an opportunity” brand. They take notice that there exists something called “bioplastics” which doesn’t generate extra greenhouse gases (at least in principle) and is bio-degradable, at least in principle. So, it could solve the problem while keeping everything the way it is in the best of possible worlds. They will notice that, nowadays, weight for weight, bioplastics cost 2-3 times more than ordinary plastics made from fossil fuels but, hey, higher prices mean higher profits! After all, the fraction of the budget that an ordinary family can’t be but small, so they can surely afford to pay a little more. Besides, technological progress will surely bring costs down. And when they discover that bioplastic production today is only about 4 million tons (1% of the total production of plastics), wow! Think of the possibilities of growth!!

But is bioplastic the solution to the problem? As it often happens, quantification makes short work of ideas that seemed to be good in theory. Today, bioplastics are made mainly from cereals (corn) or directly from sugar. According to the data from Statista, the world’s production of sugar was about 170 million tons in 2017, less than half the amount needed to make the currently produced amounts of plastics even in the wildly optimistic assumption of a 100% efficient process. About grain, the data tell us that in crop year 2016/2017, a total of approximately 2.62 billion metric tons of grain were produced worldwide. Again in the wildly optimistic assumption of a 100% efficient production process, it means we should set aside about 15% of the world’s grain production – more realistically about 20%-25%. 

Think for a moment of what losing 25% of the food production would mean for a world where billions of people live on the edge of starvation and you see that we have a little problem, here — similar to the one that would come if we were to try to switch from fossil fuels to biofuels. And I am not saying anything about the fact that agriculture is far from being fossil-free, not at all: think of fertilizers, pesticides, transportation, refrigeration, processing, and more. Think also that, the way it is performed nowadays, agriculture is an unsustainable process that destroys the fertile soil that it needs to produce food. There is just so much that agriculture can do: it can’t feed more than 7 billion people and, at the same time, provide chemicals and fuel for everybody. 

Does that mean that the problem of plastic pollution unsolvable? No. It is, actually, a minor problem in comparison to other, much more difficult problems we face. We need to phase out fossil fuels from the world’s economy but, if we were to do that very rapidly, the world’s economy would cease to function. But we could phase out fossil-based plastics tomorrow. It would be uncomfortable and complicated, but nobody would die and we would rapidly adapt to new ways to do everything we do today, just using something else: metals, paper, ceramic, tissue, or whatever at hand — even nothing in some cases. And we don’t even need to phase-out plastics completely: in some areas, plastic materials are really indispensable, think of one-use medical equipment or rubber tires for road vehicles. But, in that case, we can use bioplastics: if we use it in limited amounts, it is possible. What we have to do is just to eliminate the wasteful and frankly stupid one-use plastic items: plastic bottles, for instance.

It is, in the end, not a technological problem: it is a problem of governance: we (intended as humankind) have been able to manage reasonably well the elimination of some harmful substance from industrial production. Think of lead as a component of paints or in gasoline. Think of mercury in thermometers, beryllium in some alloys, CFCs in refrigerators, DDT as an insecticide, and many more cases. International agreements were discussed, approved, and implemented. Then, these and many more substances were banned and removed from industrial use. It is possible and it has been done.

So, it would be perfectly possible to develop and implement international agreements that would curb the use of plastics made from fossil fuels and eventually ban it completely. That implies changing something in our everyday life: the “overpackaged” products that today are so common in supermarket aisles would have to disappear. But packaging is not evil: it is a way to store food more efficiently. We need to learn how to be much more efficient with it.

So theoretically, it should be possible — even reasonably easy — to eliminate plastics pollution by means of international legislative action but, in practice, it looks difficult. Over the years, efficient technologies of anti-governance (aka good old disinformation) have been developed and honed to near perfection — we saw them applied to the issue of global warming. These technologies can be used by industrial lobbies to stop all legislative changes that would reduce their profits. That has suddenly made every problem impossible to solve.

Right now, the fossil fuel industry is desperately fighting to survive. It has been able to successfully stop many attempts to do something against climate change. It is at least unlikely that it will stay silent while it loses a market worth some 600 billion dollars per year. So, expect soon a loud campaign in favor of plastics: some hints are already starting to appear. And they will blame you for not differentiating your waste well enough!

If the campaign to keep fossil plastics will work, then the only way to get rid of the stuff will be a full-fledged Seneca Collapse — that, too, has happened in the past to take care of the things that humans were unable to care for by themselves. It can surely happen again. Even in the age of unsolvable problems, collapse is a feature, not a bug.

Needled Strawberries: Food Terrorism Down Under

Binoy Kampmark

There is something peculiar doing the rounds in Australian food circles.  The land down under, considered something of a nirvana of fruit and vegetable production despite horrendous droughts and calamitous cyclones, is facing a new challenge: human agency, namely in the form of despoliation of strawberries.

The results have knocked Australia’s highly concentrated supermarket chains, with both Coles and Aldi withdrawing all their fruit with a nervousness that has not been seen in years.  A spate of incidents involving “contamination”, or pins stuck in the fruit, have manifested across a range of outlets.  Strawberry brands including Donnybrook Berries, Love Berry, Delightful Strawberries, Oasis brands, Berry Obsession, Berry Licious and Mal’s Black Label have made it onto the list of needled suppliers.  There have been possible copycat initiates doing the rounds.  “This,” exclaimed Strawberries Australia Inc. Queensland spokesman Ray Daniels, “is food terrorism that is bringing an industry to its knees.”

The game of food contamination, infection or, as Daniels deems it, food terrorism, is the sort of thing that multiplies in fear and emotion.  It targets the industry itself (the strawberry market is already frail before the effects of pest and blight), and ensures maximum publicity for the perpetrator.  Then there is the constant fear of a potential victim, the all stifling terror of legal action that might find a target in the form of a provider.  Federal Health Minister Greg Hunt has already boosted such feelings, ordering the Food Standards Australia New Zealand to investigate the matter.  “This is a vicious crime, it’s designed to injure and possible worse, members of the population at large.”

Out of 800,000 punnets of strawberries, notes Daniels, seven needles were found.  “You’ve got more chance of winning lotto than being affected.”  Take your chance, and, as with all food production, hope for the best as you would hope for the arrival of a green goddess.

Others such as Anthony Kachenko of Hort Innovation Australia have also moved into a mode of reassurance, a salutary reminder that Australia remains in the stratosphere of food excellence despite such adventurous despoilers.  Sabotage it might be, but it was surely isolated, a nonsense that could be dealt with surgical accuracy. “Australia prides itself on safe, healthy, nutritious produce and we have the utmost confidence in the produce that we grow both for the domestic and the export markets.”

Such attitudes mask the fundamental bet that has characterised human existence since these unfortunate bipeds decided to experiment with the cooked and uncooked.  History shows that wells have been poisoned and fields salted.  The divorce from hunter gatherer to industrialist consumer oblivious to the origins of food made that matter even more poignant, and, in some cases, tragic.  The consumer is at the mercy of the production line, and everything else that finds its way into it.

The food science fraternity are being drawn out to explain the meddling, pitching for greater funding, and another spike in industry funds.  “The things we’re usually concerned about,” suggests Kim Phan-Thien of the University of Sydney, “are the accidental contaminants; spray drift or microbial contamination [which is] a natural risk in the production system.”  What was needed, claimed the good food science pundit, was an examination, not merely of “unintentional adulteration and contaminants but the intentional adulteration for economic gain or a malicious reason for a form of terrorism.”

Take a punt (or in this case, a punnet), and hope that source, process and final destination are somehow safe.  The cautionary note here is to simply cut the suspect fruit to ensure no errant needles or pins have found their way into them.  (This presumes the needle suspect was probably hygienic.)

But the strawberry nightmare highlights the insecurity within the food industry, the permanent vulnerability that afflicts a multi-process set of transactions, recipients and consumers.  Purchasing anything off the stands, and in any aisle of a supermarket is never a guarantee of safety, a leap of faith based upon a coma inflicted by industrial complacence.  We are left at the mercy of speculative fancy: the item we take home is what it supposedly is, irrespective of labelling, accurate or otherwise.

The scare, as it is now being termed, has had the sort of impact any fearful threat to health and safety does: an increased focus on security, a boost in food surveillance and the gurus versed in the business of providing machinery.  Strawberry Growers Association of Western Australia President Neil Handasyde revealed that growers were being pressed for increased scanning in the form of metal detectors.  “As an industry we are sure that [the needles] are not coming from the farm, but we’re about trying to get confidence into customers that when they buy a punnet of strawberries, that there isn’t going to be anything other than strawberries in there and they’re safe to eat.”

Possibly guilty parties have been distancing themselves with feverish necessity.  This, as much as anything else, reeks of the legal advice necessary to avoid paying for any injury that might result.  Mal’s Black Label strawberries, one of the growing number of needle recipients, has taken the line that the farm is above suspicion, with the suspects to be found elsewhere.  Strawberry grower Tony Holl suggested that some figure was floating around, needle and all, intent on fulfilling the wishes of “a real vendetta”.

A reward of $100,000 has been offered by the Queensland government for capturing the villain in question, if, indeed, there is a conscious, all-rounded creature doing the rounds.  He, she, or it, has now assumed various titles from the Queensland authorities.  The “strawberry spiker” or “strawberry saboteur” seem less like life-threatening agents than lifestyle names intent on an encyclopaedic entry.  But biosecurity, and matters of food health, are matters that throb and pulsate in Australia.  Authorities are promising to find the culprit.  The culprit may have other designs.

China’s $60 billion in aid and loans to Africa in context

Gabriel Black 

Earlier this month, Chinese President Xi Jinping pledged $60 billion in aid and loans to African countries over the next three years.

The expected announcement came at the opening ceremony of the 2018 Forum on China-Africa Cooperation (FOCAC) conference in Beijing on September 3-4. The event, which is held every three years, includes African heads of state and leaders of the Chinese Communist Party (CCP). It is the principal forum for Beijing to announce near-future loan and aid commitments to African countries and strengthen economic and political ties.

Following the announcement, a barrage of articles in the US and its principal allies ran articles questioning whether China’s loan and aid package was a “new colonialism,” in the words of the Telegraph. The Washington Post, for example, referred to unnamed “critics” who say that “China is luring needy countries into ‘debt traps.’”

The New York Times sought to backhandedly characterize Chinese investment as fundamentally different from Western investment because it comes “without demands for safeguards against corruption, waste and environmental damage.” The US is notorious for exploiting aid and loans, either directly or through the IMF and World Bank, to further its economic and strategic interests. The NYT article reflects concerns in Washington that countries can turn to China as a means of maneuvering around US demands.

China’s aid package is somewhat vague and more of a target goal than a guaranteed commitment. According to Xi, the total includes $15 billion in grants, interest-free loans and concessional loans, all of which are a form of official development aid. It also includes $20 billion in commercial interest lines, a special $10 billion fund for “development financing,” and another special $5 billion fund for financing imports from Africa to China.

China’s role in the African economy and African development has dramatically expanded in the past 15 years. For example, its foreign direct investment (FDI) has increased from less than $US1 billion in 2003 to $40 billion in 2016. By comparison, US FDI to African countries went from $20 billion in 2003 to $69 billion in 2014, and then dropped to $52 billion in 2016. While China’s FDI has increased, it lags behind that of the top three investors—the US, the UK ($58 billion, 2015), and France ($54 billion, 2015).

While China’s role in Africa, specifically in energy and resources, has significantly expanded, its critics of the “new colonialism” are largely based in the old colonial powers that divided up Africa into spheres of influence more than a century ago. China’s need for energy and raw materials for its industry—much of which is to supply Western corporate giants—is bringing it into collision with established powers in Africa and elsewhere. The objections to Chinese influence are aimed at defending longstanding neo-colonial interests by stoking up anti-Chinese sentiment and, ultimately, preparing for war.

While the US press whips up concerns about “China’s debt trap” in Africa, the China Africa Research Initiative, run by Johns Hopkins in Washington D.C., at the heart of US imperialism, concluded earlier this year in a briefing paper, “We find that Chinese loans are not currently a major contributor to debt distress in Africa.”

The paper analyzed 17 African countries that had debt distress. Of those 17 countries, eight were found to have either no debt or barely any debt from China. In six other countries, “Chinese loans are larger but the countries have also borrowed heavily from other financiers.”

For example, while China has issued loans to the populous country of Ethiopia ($12.1 billion since 2000), the country has a total debt of $29 billion, with the rest of it primarily owed to the World Bank and Middle Eastern states. Or, as a second example, Ghana owes $25 billion of debt, less than $4 billion of that is towards China.

The report found that in only three of these African countries, Djibouti, Republic of Congo and Zambia, was China “the most significant contributor to high risk of actual debt distress.” In the case of the Congo, the majority of Chinese investment was in mining copper and cobalt, minerals which are critical to electronics; electronics that are primarily produced in China for export by foreign companies.

The report makes clear that while Chinese loans have grown significantly and play an important role in African development, they are still dwarfed by those of the World Bank and the major imperialist powers, who are responsible for the vast majority of debt in the continent.

Another area where this is expressed is in official development assistance. In Xi’s announcement this month he stated that China would give $15 billion of foreign aid over the next three years to African countries. The $5 billion per year pledge is its largest ever, however, it is still less than half that of the US, who gave $12.25 billion to African countries in 2017.

While Chinese aid has increased, its total pledge of interest-bearing loans has declined. In 2012, China committed to $35 billion of interest-bearing loans at its summit in Johannesburg. However, this year it is only committing to $20 billion.

This reflects a general decline in Chinese loans to Africa since 2013. With an important exception, Chinese loans to Africa, according to data from the China Africa Research Initiative, declined each year from $18 billion in 2013 to $9 billion in 2017. This decline reflects both the slowing down of economic growth in China as well as the slowdown of exports coming from sub-Saharan Africa.

In 2014, there was a sharp drop of sub-Saharan exports from roughly $450 billion worth of goods in 2013 to $300 billion in 2014. The decline has only marginally been reversed. The underlying reason for this drop-off was the decline in global commodity prices and the purchasing of raw materials following both a slowdown of growth in China as well as an oil glut in the US produced by widespread hydraulic-fracturing.

The resulting fall in Chinese loans to Africa highlights the complex and contradictory character of China’s capitalist development, particularly its unrealized ambition to transcend its role as a cheap-labor platform.

The one exception to the decline in Chinese lending to Africa was a massive, $19 billion loan to Angola between 2015 and 2016. In 2017, Angola was the 9th largest oil exporter in the world, with over $30.5 billion worth of oil exports, almost 4 percent of the global total. It is China’s third largest source of oil after Russia and Saudi Arabia.

Oil is a critical aspect of Chinese loans and development aid in Africa. Since the late 1990s, China’s domestic oil supply has been unable to meet its surging demand, due, principally, to a physical lack of oil. Chinese loans to Angola, for infrastructure and to survive the commodity downturn, are paid off with oil. However, the Angolan state faces a potential crisis. Its oil production is declining, due to the aging of its fields and inadequate funds for the expensive off-shore investment needed to revitalize it.

A crisis of the Angolan state and economy would endanger the Chinese economy, or at least force it to become more reliant on oil produced by the US and its allies. China’s desperate need for oil, and its difficulties in procuring supplies through its own means, likewise expresses the complex and precarious character of its capitalist development, especially in relation to the imperialist powers.

South Korean president in Pyongyang for summit on denuclearization

Ben McGrath

South Korean President Moon Jae-in arrived in Pyongyang Tuesday morning for a three-day trip and his third summit with North Korea’s Chairman Kim Jong-un. Moon becomes just the third sitting president to visit the North Korean capital after Kim Dae-jung in 2000 and Noh Moo-hyun in 2007. Talks will be held today and Wednesday.

According to Seoul, the summit includes three agenda items: improving inter-Korean relations, promoting US-North Korean talks for denuclearizing the Korean Peninsula, and reducing military tensions.

As in the past, Moon has portrayed his trip as one of peace, claiming on Monday that the purpose of the summit was to “remove the tension and possibility of armed conflicts caused by the military confrontation between the South and the North, and to reduce fears of war.”

This will likely include discussions on Moon’s call in his August 15 Liberation Day address for economic cooperation. He proposed special economic zones along the North-South border in Gangwon Province and an “East Asia Railroad Community” linking the South with other countries in the region.

However, Moon also stated that he was pushing for Pyongyang to conform with US demands for denuclearization, saying that “a new declaration or agreement between the South and the North is no longer important.”

Moon emphasized his role as mediator for Washington, saying, “Because [denuclearization] is not something we can address ourselves, I plan to hold candid talks with Chairman Kim Jong-un on where we can find an intersecting point between the United States’ call for denuclearization steps and the North's demand for corresponding steps to guarantee its security and end the hostile relationship [between the US and North Korea].”

A contingent of around 200 people joined Moon for the trip. This included Lee Hae-chan, Jeong Dong-yeong, and Lee Jeong-mi, the heads of the ruling Democratic Party of Korea, the Peace and Democracy Party, and the Justice Party respectively. All three are from so-called “liberal” parties in the National Assembly while the main opposition Liberty Korea Party and the Bareun Mirae Party, both right wing, were invited but chose not to take part.

In addition, Moon is travelling with a contingent of corporate leaders including Samsung Group Vice Chairman Lee Jae-yong, Hyundai Motors Group Vice Chairman Kim Yong-hwan, SK Chairman Chey Tae-won, and LG Group Chairman Koo Kwang-mo, among others.

That such a large number of business officials are included is indicative of the South Korean bourgeoisie’s agenda in North Korea. Whatever Seoul’s pretensions, “peace” on the Korean Peninsula means creating the conditions to open North Korea to economic exploitation, as an ultra-cheap labor platform. Genuine reunification, a legitimate desire among Korean workers that would include the ability to travel, work, and live where one chooses, is not on the table.

Japanese Prime Minister Shinzo Abe last week in Vladivostok summed up more succinctly what is in store for North Korea’s working class, saying, “North Korea enjoys copper, gold, iron ore, and abundant mineral resources. Its population of 25 million will no doubt become one of the world’s leading hardworking labor forces.”

Also in attendance to support these economic plans are the leaders of South Korea’s two major trade union groups, the Federation of Korean Trade Unions (FKTU) and the so-called militant Korean Confederation of Trade Unions (KCTU).

KCTU leader Kim Myeong-hwan stated on Sunday, “The KCTU will independently participate during this North-South summit in order to realize self-reliant unification and the establishment of a permanent peace. We will emphasize the need for an end-of-war declaration within the year and the suspension of sanctions on North Korea.”

He continued: “We will also demand the removal of all weapons of war including [the US anti-missile] THAAD (Terminal High-Altitude Area Defense), a product of the war era. We will call for solving the polarization of society through peaceful disarmament for an era of peace and the sweeping expansion of people’s and workers’ welfare.”

The KCTU hopes to convince workers to place their faith in Moon while obscuring the true nature of the talks with Pyongyang. The mass exploitation of North Korean workers will lead to attacks on wages and conditions of workers in South Korea in the name of “remaining competitive.” As it has previously, the KCTU will enforce these attacks on workers in both countries.

The KCTU also hides US war preparations against China. If a peace treaty existed, according to the unions, then there would be no need for US forces in South Korea. However, the KCTU purposely ignores US preparations for war against China and instead lends credibility to the claims that North Korea is the cause of regional instability.

Any declaration formally ending the Korean War would include the US and would cut across Washington’s rationale for maintaining forces in South Korea. That the KCTU believes it can push for “self-reliant unification” or other parochial approaches to inter-Korean relations, while ignoring US military plans, is proof that the unions and their supporters have no interest in waging a genuine anti-war struggle.

War on the Korean Peninsula is also still a reality, especially as US-North Korean negotiations appear to be at an impasse. Washington is demanding North Korea denuclearize before offering any supposed relaxation of sanctions or security guarantees.

It is within this context that the inter-Korean summit takes place. Moon’s offers of economic development are in contrast to threats from Washington, which the South Korean president will no doubt emphasize to Kim Jong-un. The “olive branch” US President Donald Trump held out to Kim Jong-un at their June 12 summit in Singapore was in effect an ultimatum to Pyongyang: join the US war drive against China or be destroyed.

However, North Korea is not yet prepared to abandon its connections with China as it tries to gain some concessions from Washington. Kim expressed support recently for relations with Beijing, saying, “I will join hands with President Xi Jinping to work actively to further develop the relations and friendship and continue close cooperation.”

In the end, Moon’s summit with Kim or a potential second summit between Kim and Trump will not resolve the issues in East Asia. Regardless of which direction Pyongyang takes, US war plans for China will only intensify, which inevitably involve the Korean Peninsula.

London: 8,000 council homes set for demolition

Alice Summers

Over 100 council housing estates across London are to be demolished in the latest bipartisan attack on social housing in the UK’s capital.

The continuing social cleansing of the city, euphemistically labelled “redevelopment,” will see over 31,000 social housing residents forced to leave their homes, with 118 housing sites set to be demolished or “regenerated” over the coming years.

This could lead to the loss of as many as 8,000 homes.

The figures, obtained through a BBC Freedom of Information request, show that of the 118 estates to be regenerated, over 80 of them will be fully or partially demolished.

On the Ebury Bridge estate in the London Borough of Westminster, for example, the local council plans to pull down 300 social homes, to be replaced by 750 new properties. Most of these properties will be sold at prices far exceeding the budgets of most social housing tenants. Only around 340 of the new homes will be classed as “affordable,” of which 287 will be council properties. However, given that “affordable” housing is defined as a property costing up to 80 percent of the average local market rent—which in Westminster stands at a staggering £2,247 a month—claims that these properties are a viable option for Westminster’s evicted working-class residents are bogus.

The London borough set to see the biggest loss of homes in the coming years is Southwark in South London, whose Labour-run council has given planning permission for hundreds of “regeneration” schemes. This will see the loss of 2,196 socially rented homes, according to data collated by Green party co-leader Sian Berry.

These are only the most recent developments, following decades of social cleansing in the capital—carried out under the auspices of successive Labour and Conservative mayors—which have seen thousands of working-class people forced out of the city.

Southwark has already been the stage for fierce battles over regeneration schemes, particularly on the Heygate and Aylesbury estates. Over 1,200 council homes on the Heygate estate were flattened between 2011 and 2014, with a luxury development named Elephant Park built on the site. Just 82 of the 3,000 new homes built on the site were socially rented.

Out of 3,000 people housed in 1,276 units on the former Heygate Estate, only three could afford to come back to the area after it was demolished in 2014. Those evicted received just 40 percent of the value of their homes. The council sold the land for Elephant Park to private developer Lendlease for just £50 million. It is estimated that Lendlease will return a profit of £200 million from the Heygate gentrification.

According to Berry’s data, 624 council properties have already been lost in Southwark in the 15 years since 2003. Across the whole of London, the number of council homes demolished in redevelopment schemes since 2003 stands at 4,142.

Between 2016 and 2017, London suffered a net decrease of 3,620 council homes, according to the government’s own annual figures on housing stocks in London. This is the first time since 2014 that new council builds did not make up for the loss of council homes though regeneration projects and through “Right to Buy” schemes.

When “Right to Buy” and stock transfers to housing associations are taken into account, the number of local authority homes in London has fallen by around 100,000 since 2003, according to figures from the Ministry of Housing.

In response to this drive to socially cleanse the capital, Labour Party London Mayor Sadiq Khan criticised the government for failing to give London councils the freedoms required to ensure that homes sold under the “Right to Buy” scheme are replaced. In May, he pledged to build a further 10,000 council homes over the next four years. In July, Khan brought in legislation requiring London councils to ballot residents on major regeneration plans if they wish to secure City Hall funding.

The inadequacy and hypocrisy of Khan’s supposed solutions are stunning.

With currently around 250,000 Londoners on housing waiting lists, the proposed 10,000 home increase will do virtually nothing to reduce London’s enormous housing shortfall. Furthermore, Labour councils are every bit as complicit as Conservative-run local authorities in the reduction of council housing across the capital.

If anything, Labour councils are by far the worst culprits. Of the 10 London boroughs with the worst records for social housing destruction through regeneration, seven have Labour-run councils. This includes the Labour-run boroughs of Southwark, Greenwich and Barking—the three councils planning the destruction of the most social housing in the coming years, at a total of 2,196, 1,238 and 969 homes to be lost respectively. With 353 socially rented homes lost in Greenwich since 2003, these figures represent a marked increase in the projected loss rate.

With the loss of these socially rented properties, many working-class tenants (or at least those who can afford it) will be forced onto expensive and insecure private rental contracts. But with London private rental costs consistently rising year on year—with average rent in the capital now standing at £1,632 a month as of August this year—lower-paid workers and their families will be forced to London’s fringes and beyond. In some areas of London, including Camden, Lambeth and Westminster, average rent has reached the astronomical heights of more than £2,000 a month.

In Haringey, supporters of the Momentum group, who back Labour leader Jeremy Corbyn, are now in control of the council after winning their seats in May’s elections based on pledges to oppose a massive £2 billion sell off of public assets, including the demolition of 1,400 council houses on seven estates. Since their election, while formally ending the selloff plans, the programme of social cleansing is being continued by the new council leadership in other forms.

These include plans to demolish the Love Lane estate as part of Lendlease’s £1 billion “regeneration” project, High Road West. Some 297 council houses will be flattened to make way for the development.

Despite being promised it in Labour’s election manifesto in May, tenants at two tower blocks in the borough’s Broadwater Farm area are not being allowed a say, via a ballot, on proposals to demolish the blocks. Also in the Tottenham area of Haringey, property developer Argent is proceeding with plans to build the luxury Tottenham Hale Centre development, including 38 storey towers. This will comprise 1,036 homes with housing available for a “social rent.”

The reduction in council housing is not just limited to London but is a nationwide phenomenon. According to government statistics, since 2010, the total stock of local authority housing has decreased by some 184,000 homes, from 1.78 million in 2010 to 1.6 million in 2017. Around half of councils in England have no social housing at all.

In August, Theresa May’s Conservative government released a social housing green paper, in which it promised to “[build] a new generation of council homes to help fix our broken housing market.” However, the green paper did little more than propose minor reforms to the way in which councils can use profits from “Right to Buy” schemes and proposed to scrap a planned asset levy on higher value council housing.

European Union launches disciplinary procedure against Hungary

Markus Salzmann 

The EU has launched disciplinary proceedings against Hungary. Last Wednesday, a two-thirds majority in the European Parliament voted in favour of a procedure that could, ultimately, lead to the withdrawal of the country’s voting rights in the Council of Ministers. Following Poland, Hungary, too, now faces sanctions for serious violations of EU core values.

A so-called Article 7 procedure under the EU Treaty is the EU’s “strongest weapon” against a member state. Some 448 members of the European parliament (MEPs) voted in favour of the procedure, 197 against, with 48 abstaining. EU Commission President Jean-Claude Juncker supported the procedure, saying it must “apply where the rule of law is in danger.” Similar comments were made by many other EU representatives.

The vote was preceded by a report that Green MEP Judith Sargentini had prepared this spring on behalf of the parliament. The report charges Prime Minister Viktor Orbán and his right-wing government in Budapest of representing a “systemic threat to democracy, the rule of law and fundamental rights in Hungary.” The text refers to the undoubted restrictions on freedom of expression, research and assembly and to a weakening of the constitutional and judicial system in Hungary. Details about violations of the rights of minorities and refugees as well as the action taken against NGOs are also included in the report.

The decision of the European Parliament now goes to the European and foreign ministers of the member states. If at least four-fifths agree with the European Parliament, the EU Council must give the Hungarian government the opportunity to comment. The member states must vote unanimously for a possible withdrawal of voting rights, although Hungary itself would not participate in the vote. However, such unanimity is unlikely.

It is beyond question that the right-wing government of Orbán has been building up an authoritarian regime for the last three legislative periods, which systematically abrogates democratic rights and acts brutally against refugees and their supporters. The European Union’s criticism, however, is pure hypocrisy.

As far as the refugee question goes, the EU states and Hungary are on the same page. At the urging of the EU, Orbán systematically sealed off the so-called Balkan route, along which refugees try to reach Europe via the Balkan states. European politicians, such as German Interior Minister Horst Seehofer or Austria’s Chancellor Sebastian Kurz, praised him expressly for it.

Orbán never made a secret of using barbed-wire fences and paramilitary units from right-wing groups against refugees. The European People’s Party (EPP) faction in the European Parliament also supported Orbán.

Most recently, it became public knowledge that conditions prevail in the camps on the Hungarian-Serbian border that are comparable only with the concentration camps of the Nazis. Refugees are systematically denied food if they do not voluntarily agree to leave for Serbia. The criminalization of refugee aid workers in the context of the “Stop Soros” package was also tolerated by the EU. Governments in which right-wing extremist parties participate, such as in Austria and Italy, are not criticized in Brussels.

The attack on democratic rights and the rule of law in Hungary is also part of a rightward development across Europe, for which the adoption of drastic police laws and the censorship of the internet in Germany provide clear examples.

Even though the government in Budapest is the strongest expression of a pan-European rightward development, the Article 7 procedure against the country reveals the fierce conflicts within the EU. The attempt to subordinate the EU to the dictates and interests of the most powerful European states has strengthened nationalist tendencies in many countries.

“The vote of the EU parliamentarians in Strasbourg welds the front in Eastern Europe even closer together. An Eastern bloc is emerging,” remarked finance daily Handelsblatt. Poland has already announced its veto if it comes to a vote in the Council. “Every country has the sovereign right to implement the reforms in the country that it considers appropriate,” the Foreign Ministry announced in Warsaw immediately after the vote in Strasbourg. An Article 7 case has also been running against Poland since December. For his part, Orbán had already announced that he wants to block the procedure against Poland with a veto.

The Czech Republic also declared its support for Orbán. “We are allies,” said right-wing Prime Minister Andrej Babis in Prague. After the formation of a government this year, the coalition of the right-wing liberal ANO, the Social Democrats and the Communist Party is taking a much more EU-critical course. Similar voices prevail in Slovakia as well.

The impact of the Article 7 vote on the balance of power in the EU parliament could be serious; Orbán and others could leave the EPP and join the nationalists. Even the ultra-conservative leader of the EPP, Manfred Weber (Christian Social Union, CSU), said last Tuesday that he voted in favour of Article 7. “We’ve had enough dialogue,” he explained. For a long time, Weber was considered a close ally of Orban. Other CSU MEPs, however, voted against launching the procedure.

The breakup of the EU is progressing rapidly even before the European elections and the official withdrawal of Britain from the EU in the coming year. “The division between East and West, between South and North is already clearly visible,” the political analyst Radu G. Magdin in Bucharest told the Handelsblatt.

The deep conflicts in the EU take place against the background of ever more open geopolitical tensions. While there have been widespread fears in the EU that Orbán might have enjoyed too close ties with Russia, this is now increasingly true in relation to the US.

Under the Obama administration, the relationship between Hungary and the United States had always been tense. However, Trump recently signalled greater commitment and closer ties with Hungary, similar to the case with Poland.

For example, the US announced in July that it would cancel a $700,000 grant from the State Department to independent media outlets in Hungary. The State Department wants to use the money instead in other parts of Europe, it said. The message arrived. “A huge victory,” the New York Times quoted Andras Simonyi, Orbán’s former ambassador to NATO and later Hungarian ambassador to Washington. “This sends a message that Hungary is OK, that Hungary is a democracy.”

With Washington increasingly seeing the EU as an opponent and less as a partner, and German Foreign Minister Heiko Maas recently saying he wanted to “recalibrate” the transatlantic alliance and build up the EU as a “counterweight” to the United States, the US is seeking to take greater advantage of conflicts within the EU.

Typhoon Mangkhut kills dozens in the Philippines, leaves trail of destruction in China and Hong Kong

Oscar Grenfell 

At least 100 people are presumed dead in the Philippines after Typhoon Mangkhut, described by experts as the most severe storm of 2018, struck the country’s north on Saturday. Over the following days, the typhoon left a trail of destruction across parts of Asia, including Hong Kong and southern China.

According to Philippine authorities, 64 people have been confirmed dead in the wake of the storm. Many of them were killed by landslides, flash flooding and the collapse of makeshift accommodation that stood no chance of withstanding the storm, which was the equivalent of a category five hurricane when it battered the Philippines.

There are fears that the death toll will rapidly rise. Rescue teams are only beginning to arrive in the most remote rural areas, and an unknown number of people remain buried after extensive landslides. Hundreds more have suffered injuries. Dozens of villages have been effectively cut-off from the outside world, as a result of the damage to roads. It is estimated that the storm affected some 5.7 million people across the Philippines.

As in previous disasters to hit the storm-prone country, the poor and sections of the workforce engaged in low-paid, precarious work have been the hardest hit.

At least 43 gold miners perished in a landslide in the municipality of Itogon in the northern province of Benguet. They were among hundreds of small-scale miners prospecting at a site that had been abandoned by Benguet Corporation, a major mining entity. The workers and their families were in makeshift shelters that were inundated with mud and top soil.

According to the New York Times, the workers claimed to have formed a collective and struck a deal with Benguet to mine the site, in exchange for the company receiving a cut of any profits. The corporation has denied the claim.

The Philippines president, Rodrigo Duterte, declared at a press conference on Monday that it was necessary to “Give Mother Earth a respite from endless digging.” His administration has claimed that it will investigate the mining operation at Itogon, and has posted troops at the site to prevent any further prospecting.

Duterte’s move is cynical posturing, aimed at defusing growing anger over the degradation of the environment and the tragic death of the miners. Successive governments and local authorities have tacitly endorsed illegal mining and logging activities that involve major corporations.

The prevalence of small-scale mining, which involves up to 400,000 people across the country, is an expression of endemic poverty and limited job opportunities. One of the surviving miners at the site told the New York Times that he began working in the mines at the age of 15, and would work round-the-clock, two-week shifts, during which he would conduct dangerous dynamiting, punctuated only by occasional five-hour breaks.

Farmers and other sections of the rural and regional poor have also been devastated by the storm.

In comments to the Guardian, residents of Tuguegarao, the capital of the country’s northern Cagayan province, described fear and panic as the storm struck in the early hours of Saturday morning.

One woman commented, “I was scared, it was the sound of the wind that scared me, and then I heard a loud crash.” She pointed to a tree that had pummelled a piece of corrugated metal that appeared to have been part of a fence before the storm.

Local authorities declared a “state of calamity” in the city, as its streets were strewn with polls, and many of its houses and small businesses were destroyed.

Farmers desperately sought to save their crops, but in many cases, to no avail. Some have lost acres of rice and food crops, which will exacerbate already high rates of poverty and food insecurity.

One petrol station attendant told the Guardian, “We have had no electricity here since 8pm on September 14, before the typhoon hit. It could take weeks or months to fix. This puts me out of work. And we are already struggling with funds for food. Maybe the government will help. The problem is with a food shortage, prices will rise.”

Questions are already emerging about the extent of government preparedness for the disaster. In many affected areas, there were no official evacuation centres. In some cases, those that did exist were ill-equipped to cope with the magnitude of the storm.

The rescue efforts in rural areas also appeared a shambles and lacking in funds. Rescue workers, along with locals, have been forced to dig through mud in a bid to find survivors. Workers without electricity or running water have no indication as to when their basic utilities will be restored. This has also prompted warnings of disease outbreaks.

This mirrors previous natural disasters in the Philippines. In 2013, the country was battered by Typhoon Haiyan, which killed over 7,000 people. Government agencies had not worked out any coordinated response before the storm struck. For days afterwards, survivors were forced to seek out food, water and shelter with virtually no government assistance.

Typhoon Mangkhut also left a trail of destruction in Hong Kong and Southern China. More than 1,000 roads were blocked in Hong Kong yesterday, after the storm felled trees and powerlines and knocked out traffic lights.

An estimated three million people were evacuated from southern China. Four people reportedly perished in the storm, which lashed the country with gale force winds and resulted in flooding in some areas. Widespread damage was also reported in the gambling hub of Macau, which was struck by head-high flash-flooding amid the disaster.

While storms are not uncommon in the region at this time of year, scientists have noted an increase in their frequency and intensity.

While there is no data directly linking Typhoon Mangkhut to climate change caused by human activity, Katharine Hayhoe, a Texas University professor and atmospheric scientist, told the Huffington Post: “We do know that, on average, climate change is making storms stronger, causing them to intensify faster, increasing the amount of rainfall associated with a given storm, and even making them move more slowly.”

The implications of US-China trade war

Nick Beams

In the aftermath of the global financial crisis ten years ago, the leaders of the world’s major powers pledged that never again would they go down the road of protectionism which had such disastrous consequences in the 1930s—deepening the Great Depression and contributing to the outbreak of world war in 1939.

Yesterday US President Donald Trump announced tariffs on $200 billion worth of Chinese goods in what the Washington Post described as “one of the most severe economic restrictions ever imposed by a US president.”

A levy of 10 percent will be imposed starting from September 24 and will be escalated to 25 percent in 2019 if the US does not receive what it considers to be a satisfactory agreement. The new tariffs, which will cover more than 1000 goods, come on top of the 25 percent tariff already imposed on $50 billion worth of industrial products. Trump has threatened further measures on the remaining Chinese exports to the US totalling more than $250 billion.

China has threatened retaliatory action including tariffs and other, as yet unspecified measures, against the US, meaning that the world’s number one and number two economies are locked into a rapidly escalating trade war that will have global consequences.

Announcing the decision, Trump called on China to take “swift action” to end what he called its “unfair trade practices” and expressed the hope that the trade conflict would be resolved.

But there is little prospect of such an outcome because, while the US is demanding that the trade deficit with China be reduced, the conflict does not merely centre on that issue. China has made offers to increase its imports from the US, all of which have been rejected. The key US demand is that the Chinese government completely abandon its program of economic development and remain subservient to the US in high-tech economic sectors.

As the position paper issued by Washington in May put it: “China will cease providing market-distorting subsidies and other types of government support that can contribute to the creation or maintenance of excess capacity in industries targeted by the Made in China 2025 industrial plan.”

In other words, China must completely scrap the foundational structures of its economy so that it presents no threat to the economic dominance of US capitalism, a dominance which the US intends to maintain, if it considers necessary, by military means. This was made clear earlier this year when Washington designated China as a “strategic competitor,” that is, a potential military enemy. This is the inherent, objective, logic of the latest trade war measures.

Their full significance can only be grasped when viewed with the framework of the historical development of the global capitalist economy.

After the disastrous decade of the 1930s, and as the world plunged into war, leading figures within the Roosevelt administration recognised that this situation was due in no small measure to the division of the world into rival trade and economic blocs which tariff and other trade restrictions had played a major role in creating.

Post-war planning centred on trying to overcome this contradiction between the global economy and its division into rival great powers and blocs through the development of a mechanism that ensured the expansion of world trade. This was the basis of the series of measures set in place in the immediate aftermath of the war: the Bretton Woods monetary system which tied major currencies to the dollar in fixed exchange rates, the General Agreement on Tariffs and Trade that sought to bring down tariff barriers and the establishment of the International Monetary Fund and the World Bank to ensure international economic collaboration.

These measures, however, did not overcome the inherent contradictions of capitalism, above all between the global economy and the nation-state system. Rather, they sought to contain and mitigate them within a system based on the overwhelming economic dominance of the US.

But the growth of the world capitalist economy and the strengthening of the other major powers undermined the very foundations on which they were based—the absolute dominance of the US. Within the space of a generation, the weakening of the US position was revealed in August 1971 when it scrapped the Bretton Woods monetary system declaring that the dollar would no longer be redeemable for gold.

The period since then has seen the ongoing weakening of the position of the US, which was graphically revealed in the financial meltdown a decade ago when the US financial system was shown to be a house of cards based on rampant speculation and outright criminal activity. This situation has continued in the subsequent decades, threatening, another, even more disastrous, financial crisis.

The US is now not only confronted with the economic power of its European rivals but a major new one in the form of China. It is striving to reverse this situation. As Leon Trotsky explained some eighty years ago, the hegemony of the US would assert itself most powerfully not in conditions of boom but above all in a crisis when it would use every means—economic and military—against all rivals to maintain its position.

The trade war measures against China are only one expression of this process. The US has already carried out protectionist measures against Europe and Japan through the imposition of tariffs on steel and aluminium and has threatened tariffs on cars and auto parts, which will be invoked unless they join its push on China.

And as the China tariffs are imposed, top officials of the European Union are meeting to discuss how they might overcome the financial sanctions the US will impose against European companies if they maintain economic ties with Iran after November 4 following the unilateral abrogation of the Iran nuclear deal.

The deal was not overturned because Iran had breached the agreement—international agencies found that it had fully complied. Rather, the United States unilaterally abrogated the treaty in order to strengthen the strategic position of the US in the Middle East by countering the influence of Iran, and because European corporations stood to benefit from the opening up of new economic opportunities in that country at the expense of their US rivals.

Now the State Department has warned that European companies are “on the railroad tracks” if they defy US sanctions and firms that deal with the “enemy” will be barred from access to the US financial system.

Writing in the 1930s, Leon Trotsky explained that the interdependence of every country in the global economy meant that the program of economic nationalism, of the kind now being practised by the Trump administration, was a reactionary “utopia” insofar as it set itself the task of harmonious national economic development on the basis of private property.

“But it is a menacing reality insofar as it is a question of concentrating all the economic forces of the nation for the preparation of a new war,” he wrote five years before the outbreak of World War II.

This “menacing reality” is now once again expressed in the fact that the trade war measures against China, as well as those against Europe and Japan, have all been invoked on “national security” grounds. Just as the US prepares for war, so too are all the other major powers. This drive does not arise from the heads of the capitalist politicians—their actions are only the translation into politics of the objective logic and irresolvable contradictions of the capitalist system over which they preside.

But there is another more powerful logic at work. The very development of globalised production, which has raised the contradiction of the outmoded nation-state system with its rival great powers to a new peak of intensity, has laid the foundations for a planned world socialist economy. And it has created in the international working class, unified at an unprecedented level, the social force to carry it out.