Solve for the equilibrium

This one concerns China:

A person familiar with the negotiations said Myanmar’s government reached out to the U.S. to request help reviewing the contract [with China] to ensure it didn’t include any hidden traps. This person said other Western countries, including the U.K. and Australia, provided similar assistance.

The negotiations “were very much Burmese-led but armed with the advice of the Americans and others as well. We were able to go to the Chinese [and say], ‘This part is OK, this part is problematic in terms of debt,’” the person said, referring to the country by its previous name.

The Myanmar port deal is part of an economic and diplomatic influence campaign known as the Belt and Road Initiative, a signature effort by Chinese President Xi Jinping to dot the globe with Chinese-funded infrastructure projects.

Here is the full WSJ story by Ben Kesling and Jon Emont.

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Like the Huawei 5G scare, this is overdone IMO. The template is Montenegro and Sri Lanka, which supposedly took on too much debt and had to give up some national sovereignty over lands. But according to the Coase theorem as well as Ricardian equivalence, there's no harm in taking on debt, insofar as the world is concerned. There's a YouTube channel, "China Exposed" that constantly harps on this theme. It's xenophobia.

Agreed. Still no evidence of Huawei's evil doings except for a bug in their software because software never has bugs. UK and Germany refuse to go along with the Orange One's evidence-challenged protestations. Has Bloomberg media been investigated for their uncorroborated report on Apple and Amazon using Supermicro boards supposedly chipped with Chinese spyware? China hawks are quite vocal with disinformation these days. Why? It is the one issue that Trump supporters and the Never Trump Deep State can agree on even if they hate each other's guts. Enemy of my enemy.

Evidently, Herr Hitler only wants peace for our time.

Brazilian apologists for Hitler would know. "Rivlin rebukes Bolsonaro: ‘No one will order forgiveness of the Jewish people'":

https://www.timesofisrael.com/yad-vashem-rebukes-bolsonaro-no-ones-place-to-say-holocaust-can-be-forgiven/

You lie, boy. When everything seemed lost and Americans had thrown Netanyahu under the bus, who went to the Zionist Entity support Netanyahu's re-election bid? President Captain Bolsonaro. Who, despite being the biggest halal chicken meat seller in mankind's history, recognized Jerusalem as undivisable capital of the Zionist's Israel even facing Hamas' criticism? President Captain Bolsonaro. Who refused was the first Brazilian president to go with a seating Zionist prime minister to the famous Waal of Lamentations? President Captain Bolsonaro. Who wore a Zionist hat to pray in the Zionist Entity? President Captain Bolsonaro? Who has been baptized in the Jordan River? President Captain Bolsonaro. Maybe a little gratitute is in order.

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It was confirmed recently that China was behind the OPM hack. Still think they are benign? They'll use Huawei's ability to eavesdrop on communication the minute they have good market penetration.

Do you think hardware is so esoteric and difficult to understand that there's backdoor circuits, like the Intel commands for BIOS and mobos, that can be activated secretly without anybody detecting it? You must have very little faith in competent EE hardware engineers.

lol, hardware isn't as easy as you think. Plenty enough of flaws when try to code well. It's really easy hen you intend to eavesdrop on the traffic.

https://www.zdnet.com/article/cisco-patch-routers-now-against-massive-9-810-severity-security-hole/ as an example. They had a very serious issue a few years ago.

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In what authoritarian state (or state of mind) do you reside where media organizations are "investigated" for uncorroborated reports?

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The US used to own all the platforms and do all the snooping. It might be a bit ingenuine to say "not fair" when other people do it too, but that is not to say everything is fine either. We need a new strategy to you go with competitors who are much better at tech.

As I have said, I think the only answer is to fully embrace strong encryption. To the extent that nobody can break it, no one will.

@anonymous - quite true, and unfortunately NDAs from my former life when I was working prevent me from commenting further. I can say this, as is well known, encryption will slow down communications a bit, similar to how https is slower than http. But if that's the price people are willing to pay, and already with IMAP and Google Gmail people are willing to pay it, for greater security, that's fine.

Those weren’t NDAs those were checks you made out to pimps for jail bait prostitutes.

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Red China builds the world's infrastructure while America can't even build trains, planes or automobiles. Like a malfunctioning Boeing 737 Max taking a nosedive, such is life in Trump's America.

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It is a pretty normal thing to do to use a third party advisor with experience if you have to negotiate an important contract. Usually big businesses use independent law firms, but I guess the Burmese felt they could trust the US state department lawyers who were probably providing their advice for free. I don't know exactly what Tyler means by solving for the equilibrium here - perhaps he means that the US ends up morally obliged to enforce a contract that they helped negotiate?

Equilibrium here is like will we give advice to benefit them, or benefit us.

I would think that in Belt and Road contracts, advice from the US meant to benefit the US would line up pretty neatly with the interests of the country receiving the infrastructure. The US’ interest is in curbing Chinese influence, which in these cases means limiting the ability of China to use debt as leverage over the country and its infrastructure. The country wants the best deal it can get, which is a deal which will limit their debt and China. It’s a win-win for the US and the country.

If anything, I would think that the hidden equilibrium would be how China responds if it is limited in its ability to use this kind of Infrastructure diplomacy to extract something of geopolitical or economic value. If the US (and other countries) just act as advisors and help countries get deals for infrastructure which connect them to the global trade network, China will have spent trillions of dollars in strengthening a neo-liberal world order that is hostile to the CCP.

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'reached out to the U.S. to request help reviewing the contract'

And we Amazon Primed them this book - Confessions of an Economic Hit Man/wiki/Confessions_of_an_Economic_Hit_Man

It’s funny because the title is so clearly a reference to chuck Berris’s fabricated memoir that it almost boggles the mind that anyone would actually take that book seriously. And even if they did- China is that book on gingseng poppers and rhino horn dick pills.

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Here is the story of an inflated price tag for the delayed high speed rail project in Malaysia, the inflated price meant to cover bribes and kickbacks to local politicians: https://www.nytimes.com/2019/04/12/business/chinese-high-speed-rail-malaysia.html As indicated in the story, China has agreed to cut the price tag by a third to induce Malaysia to restart the project. Of course, the road to Singapore runs through Malaysia.

+1

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This could also be filed under “those new service sector jobs.” I keep reading about developing countries hiring very expensive US law firms to negotiate contracts, which is amazing. Are those just anecdotes or is this a significant export industry for the US? In any event, it looks like the Burmese got a good deal on legal advice in addition to the port.

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The "equilibrium" is no US-China trade agreement, while the State Department goes along with its business, independent of Executive leadership?

I thought the equilibrium looked like this: China: "Hey Americans, we'll make concessions on your trade deal if you actively help us bamboozle our shithole neighbors into signing exploitative contracts."

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New colonialism same as the old colonialism.

How would China collect when the loans default? Gun boats?

It's a port. Many ports in the US are foreign operated. According to the New York Times, foreign-based companies own and/or manage over 30% of US port terminals. According to Time Magazine, over 80% of the terminals in the Port of Los Angeles are run by foreign-owned companies, including the government of Singapore.

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Equity for debt.

Maybe air and naval contingency operations bases.

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Dani Rodrik on the practical approach to the US-China trade relationship: https://www.project-syndicate.org/commentary/sino-american-peaceful-economic-coexistence-by-dani-rodrik-2019-04

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Seems like a lot of historical analogy, but not much in the way of putting anything concrete on the table.

It always seems when reading Rodik that, for whatever his deep experience of how trade deals are made, he always seems to end up siding with virtually unilateral openness for the West (to paraphrase) "because China is poor, and there are vested interests in the West". As if there is some duty to favour Chinese vested interests over Western ones, and as if there is some duty to "pull China out of poverty".

When he talks about "peaceful coexistence would require that US and China allow each other greater policy space" he is not actually talking about equalising trade policy space between the two nations, and for the US to be as free to exclude China for the sake of concentrating development in the US as China is. He's willing to criticise ' “hyper-globalism,” under which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies or social models" but does not seem willing to countenance that the consumer economies that have fueled export led growth in Asia Pacific insist on symmetrical barriers to entry.

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Please send an email to Mr. de Blasio, New York City mayor, reminding him that there will be elections in 2020 and in 2021 and his rabid anti-Brazilian line can hurt the Democratic Party's electoral prospects. Remind him President Captain Bolsonaro is one of the few leaders who have recognized Jerusalem as the Zionist Entity's indivisible capital and, when Americans betrayed Likud, he traveled to the Zionist Entity and supported Mr. Netanyahu, winning him an election who seemed last and earning him an unprecedent electoral victory.

Short version: “Please support the right of the hated Zionist Entity to have as its capital any city it chooses.”

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This article is related to the Sri Lanka port deal, and the big question is: why does the mainstream media not attempt to determine whether the Sri Lankan government was corrupt or incompetent or both. This is a repeat of the housing crash coverage, where the agency of the borrowers is being implicitly denied.

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It is a large, illiquid deal. Small, developing nations whose government takes on a larger, long term debt arrangement with a much more developed nation? I predict the belt and road will fall apart, organizationally. It degenerates into a rail road line, with some utility.

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