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China’s economy slows down, as Huawei war with Justin Trudeau heats up (Video)

The Duran Quick Take: Episode 60.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at China’s economic slowdown and how this will affect the world economy in 2019.

China’s surging tech industry is also undergoing rough patches as the Huawei conflict with Canada (and by extension the United States) reached fever pitch levels with executive espionage intrigue in Poland. In retaliation, China blasted Canadian PM Justin Trudeau’s and his government as being White Supremacists by the Chinese ambassador to Ottawa.

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Via Zerohedge


As more signs of stress in the world’s second-largest economy emerged during the latter half of last year, factory orders and consumption indicators slumped and its housing bubble on the verge of bursting, China is expected to report later this month that its GDP expanded by 6.6% in 2018 – the weakest rate since 1990.

 

This is hugely problematic for the PBOC, which abandoned plans for a macroprudential deleveraging to slash taxes and boost bank lending last year to try and stabilize its economy. But in keeping with China’s legacy of economic goalseeking, in addition to redoubling its stimulus efforts in 2019, Beijing is reportedly planning to move the goal posts.

According to Reuters, China is planning to set a lower economic growth target of 6% to 6.5% in 2019, compared with last year’s target of “around” 6.5%, as Beijing braces for weaker domestic demand and more fallout from the US-China trade war.

The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting’s outcome.

Data later this month is expected to show the Chinese economy grew around 6.6 percent in 2018 – the weakest since 1990. Analysts are forecasting a further loss of momentum this year before policy support steps begin to kick in.

As the world’s second-largest economy loses steam, China’s top leaders are closely watching employment levels as factories could be forced to shed workers amid a trade war with the United States, despite a more resilient services sector, policy insiders said.

Fortunately for the Communist Party, the country only needs to show 6.2% growth over the next two years to achieve its goal of doubling GDP in the decade to 2020. Achieving this would transform China into a “modestly prosperous” country.

No matter what happens, Reuters’ source said the Communist Party needs to show growth of “at least 6% this year” (and given China’s reputation for doctoring its data, we imagine this will be a self-fulfilling prophecy). Still, adopting such a wide range for its GDP growth target would give the Party “room to maneuver.”

Though China is revising its growth target thanks to signs of slowing growth, the same cannot be said for its inflation target, despite signs of weakening price pressures due to the weakening yuan (data this week showed China’s CPI slowed to 1.9%).

The government plans to maintain a 3 percent consumer inflation target for 2019despite a recent softening in price rises, leaving some space for the government to stimulate weaker consumption.

The discussion about changing the GDP target reportedly took place during a Central Economic Work Conference meeting last month, where tax cuts and further stimulus were also discussed.

However, it’s important to keep in mind that China likely inflates its GDP figures, though one academic who recently suggested that growth in 2018 might have been below 2% was subject to an aggressive government censure.

That should tell you all you really need to know about growth in China.

Meanwhile Zerohedge reports that in the op-ed, published by Ottawa’s the Hill Times newspaper, ambassador Lu Shaye lashed out at Canadian “elites [who] completely dismissed China’s law and presumptuously urged China to immediately release their citizens.” He also accused Canada of enforcing a double standard by detaining Huawei CFO Meng Wanzhou despite her not having committed a violation of Canadian law. Canadians have shown intense concern over the wellbeing of their citizens, but Lu accused them of behaving thoughtlessly and cruelly toward Meng.

However, on the prior groundless detention of Chinese citizen Meng Wanzhou by Canada at the behest of the United States, these same people made utterly different comments. They insisted that Canada’s detention of a Chinese citizen who was transferring planes at the airport was “acting in accordance with law,” though Meng has not been charged with any violation of Canadian law.

It’s understandable that these Canadians are concerned about their own citizens. But have they shown any concern or sympathy for Meng after she was illegally detained and deprived of freedom?

Without violating any Canadian law, Meng was arrested last month and put in handcuffs just as she was changing planes at the Vancouver International Airport. It seems that, to some people, only Canadian citizens shall be treated in a humanitarian manner and their freedom deemed valuable, while Chinese people do not deserve that.

Lu pointed out the hypocrisy in Canadian officials’ insistence that Meng’s detention was just because Canada is a country that respects the “rule of law,” implying that China isn’t.

When China called on the Canadian side to release Meng and ensure her legal and legitimate rights and interests, those elites claimed in the media that Canada is a country of rule of law and has an independent judiciary, and therefore it must comply with the judicial proceeding. However, in the case of detention of Canadian citizens in China who violated China’s law, those elites completely dismissed China’s law and presumptuously urged China to immediately release their citizens. It seems that, to those people, the laws of Canada or other Western countries are laws and must be observed, while China’s laws are not and shouldn’t be respected.

In a repudiation of the US’s accusations that Huawei has helped the Chinese government spy on western rivals, Lu pointed out that while Canada has objected to Huawei, it hasn’t shown a similar level of concern about cyberespionage efforts carried out by the US – including those that were exposed in the sensitive NSA documents stolen by former contractor Edward Snowden.

Some people in Canada, without any evidence, have been hyping the idea that Huawei is controlled by the Chinese government and poses security threats to Canada and other Western countries, and that Chinese law requires China’s enterprises to collaborate with the government in espionage activities. However, these same people have conveniently ignored the PRISM Program, Equation Group, and Echelon—global spying networks operated by some countries that have been engaging in large-scale and organized cyber stealing, and spying and surveillance activities on foreign governments, enterprises, and individuals. These people also took a laissez-faire attitude toward a country that infringes on its citizens’ privacy rights through the Patriot Act. They shouted for a ban by the Five Eyes alliance countries (Australia, Canada, New Zealand, the United Kingdom, and the United States) on the use of Huawei equipment by these countries’ own enterprises, which is literally a government-controlled action.

When Canada creates its national security laws, Lu says, it seems espionage carried out by western governments is deemed essential to national security, while China’s espionage efforts are branded a threat.

When making laws for national security and intelligence, China has drawn references from the relevant laws of the U.S., Canada, and other Western countries. Something is considered as “safeguarding national security” when it is done by Western countries. But it is termed “conducting espionage” when done by China. What’s the logic?

Though Canada considers itself a bastion of liberal values, Lu claimed that double standards like this one stem from the same western “white supremacy” that has made “the rule of law” nothing more than a tool for political ends – despite the seemingly endless stream of virtue-signaling.

The reason why some people are used to arrogantly adopting double standards is due to Western egotism and white supremacy. In such a context, the rule of law is nothing but a tool for their political ends and a fig leaf for their practising hegemony in the international arena. What they have been doing is not showing respect for the rule of law, but mocking and trampling the rule of law.

Meanwhile, China has clearly indicated that it intends to prosecute Michael Kovrig and Michael Spavor for threatening national security – though they’ve offered the caveat that both cases are still “under investigation”, leaving an opening to release the two men, presumably if Canada decides to drop its prosecution of Meng. Both men have been denied access to legal representation.

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If Canada insists on causing trouble with China , as a Canadian ,I have to ask just who are they planning to sell the natural gas to with the proposed pipeline that they are having so much trouble rushing through to the West coast . Hello Alberta ,wakie,wakie .

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The fellows at World Alternative Media (WAM) did a piece on the Chinese economy a couple of months ago. Seems as though this has been going on for a while and The Donald has a few of these things in mind as he knows a little bit about real estate and vacancy issues as they apply to economics. The issue seems to be effecting “make-work” redundancy as a means to put the folks to work while really having no market for their production. If a trade war begins, the Chinese might find themselves with even more production with nowhere to… Read more »

Olivia Kroth
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The Chinese have the whole free world to sell their goods to: Russia, Iran, South East Asia, Africa, Latin America …
And they DO SELL a lot there!

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Airline wars heat up, as industry undergoes massive disruption (Video)

The Duran Quick Take: Episode 145.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine the global commercial airline industry, which is undergoing massive changes, as competition creeps in from Russia and China.

Reuters reports that Boeing Co’s legal troubles grew as a new lawsuit accused the company of defrauding shareholders by concealing safety deficiencies in its 737 MAX planes before two fatal crashes led to their worldwide grounding.

The proposed class action filed in Chicago federal court seeks damages for alleged securities fraud violations, after Boeing’s market value tumbled by $34 billion within two weeks of the March 10 crash of an Ethiopian Airlines 737 MAX.

*****

According to the complaint, Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by rushing the 737 MAX to market to compete with Airbus SE, while leaving out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.

It also said Boeing’s statements about its growth prospects and the 737 MAX were undermined by its alleged conflict of interest from retaining broad authority from federal regulators to assess the plane’s safety.

*****

Boeing said on Tuesday that aircraft orders in the first quarter fell to 95 from 180 a year earlier, with no orders for the 737 MAX following the worldwide grounding.

On April 5, it said it planned to cut monthly 737 production to 42 planes from 52, and was making progress on a 737 MAX software update to prevent further accidents.

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Via Zerohedge…

Step aside (fading) trade war with China: there is a new aggressor – at least according to the US Trade Rep Robert Lighthizer – in town.

In a statement on the USTR’s website published late on Monday, the US fair trade agency announced that under Section 301 of the Trade Act, it was proposing a list of EU products to be covered by additional duties. And as justification for the incremental import taxes, the USTR said that it was in response to EU aircraft subsidies, specifically to Europea’s aerospace giant, Airbus, which “have caused adverse effects to the United States” and which the USTR estimates cause $11 billion in harm to the US each year

One can’t help but notice that the latest shot across the bow in the simmering trade war with Europe comes as i) Trump is reportedly preparing to fold in his trade war with China, punting enforcement to whoever is president in 2025, and ii) comes just as Boeing has found itself scrambling to preserve orders as the world has put its orderbook for Boeing 737 MAX airplanes on hold, which prompted Boeing to cut 737 production by 20% on Friday.

While the first may be purely a coincidence, the second – which is expected to not only slam Boeing’s financials for Q1 and Q2, but may also adversely impact US GDP – had at least some impact on the decision to proceed with these tariffs at this moment.

We now await Europe’s angry response to what is Trump’s latest salvo in what is once again a global trade war. And, paradoxically, we also expect this news to send stocks blasting higher as, taking a page from the US-China trade book, every day algos will price in imminent “US-European trade deal optimism.”

Below the full statement from the USTR (link):

USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies

The World Trade Organization (WTO) has found repeatedly that European Union (EU) subsidies to Airbus have caused adverse effects to the United States.  Today, the Office of the United States Trade Representative (USTR) begins its process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes those subsidies.

USTR is releasing for public comment a preliminary list of EU products to be covered by additional duties.  USTR estimates the harm from the EU subsidies as $11 billion in trade each year.  The amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.

“This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” said U.S. Trade Representative Robert Lighthizer.  “Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft.  When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”

In line with U.S. law, the preliminary list contains a number of products in the civil aviation sector, including Airbus aircraft.  Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist.

Background

After many years of seeking unsuccessfully to convince the EU and four of its member States (France, Germany, Spain, and the United Kingdom) to cease their subsidization of Airbus, the United States brought a WTO challenge to EU subsidies in 2004. In 2011, the WTO found that the EU provided Airbus $18 billion in subsidized financing from 1968 to 2006.  In particular, the WTO found that European “launch aid” subsidies were instrumental in permitting Airbus to launch every model of its large civil aircraft, causing Boeing to lose sales of more than 300 aircraft and market share throughout the world.

In response, the EU removed two minor subsidies, but left most of them unchanged.  The EU also granted Airbus more than $5 billion in new subsidized “launch aid” financing for the A350 XWB.  The United States requested establishment of a compliance panel in March 2012 to address the EU’s failure to remove its old subsidies, as well as the new subsidies and their adverse effects.  That process came to a close with the issuance of an appellate report in May 2018 finding that EU subsidies to high-value, twin-aisle aircraft have caused serious prejudice to U.S. interests.  The report found that billions of dollars in launch aid to the A350 XWB and A380 cause significant lost sales to Boeing 787 and 747 aircraft, as well as lost market share for Boeing very large aircraft in the EU, Australia, China, Korea, Singapore, and UAE markets.

Based on the appellate report, the United States requested authority to impose countermeasures worth $11.2 billion per year, commensurate with the adverse effects caused by EU subsidies.  The EU challenged that estimate, and a WTO arbitrator is currently evaluating those claims

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Mueller report takes ‘Russian meddling’ for granted, offers no actual evidence

RT

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Via RT…


Special counsel Robert Mueller’s ‘Russiagate’ report has cleared Donald Trump of ‘collusion’ charges but maintains that Russia meddled in the 2016 US presidential election. Yet concrete evidence of that is nowhere to be seen.

The report by Mueller and his team, made public on Thursday by the US Department of Justice, exonerates not just Trump but all Americans of any “collusion” with Russia, “obliterating” the Russiagate conspiracy theory, as journalist Glenn Greenwald put it.

However, it asserts that Russian “interference” in the election did happen, and says it consisted of a campaign on social media as well as Russian military intelligence (repeatedly referred to by its old, Soviet-era name, GRU) “hacking” the Democratic Congressional Campaign Committee (DCCC), the DNC, and the private email account of Hillary Clinton’s campaign chair, John Podesta.

As evidence of this, the report basically offers nothing but Mueller’s indictment of “GRU agents,” delivered on the eve of the Helsinki Summit between Trump and Russian President Vladimir Putin in what was surely a cosmic coincidence.

Indictments are not evidence, however, but allegations. Any time it looks like the report might be bringing up proof, it ends up being redacted, ostensibly to protect sources and methods, and out of concern it might cause “harm to an ongoing matter.”

‘Active measures’ on social media

Mueller’s report leads with the claim that the Internet Research Agency (IRA) ran an “active measures” campaign of social media influence. Citing Facebook and Twitter estimates, the report says this consisted of 470 Facebook accounts that made 80,000 posts that may have been seen by up to 126 million people, between January 2015 and August 2017 (almost a year after the election), and 3,814 Twitter accounts that “may have been” in contact with about 1.4 million people.

Those numbers may seem substantial but, as investigative journalist Gareth Porter pointed out in November 2018, they should be regarded against the background of 33 trillion Facebook posts made during the same period.

According to Mueller, the IRA mind-controlled the American electorate by spending “approximately $100,000” on Facebook ads, hiring someone to walk around New York City “dressed up as Santa Claus with a Trump mask,” and getting Trump campaign affiliates to promote “dozens of tweets, posts, and other political content created by the IRA.” Dozens!

Meanwhile, the key evidence against IRA’s alleged boss Evgeny Prigozhin is that he “appeared together in public photographs” with Putin.

Alleged hacking & release

The report claims that the GRU hacked their way into 29 DCCC computers and another 30 DNC computers, and downloaded data using software called “X-Tunnel.” It is unclear how Mueller’s investigators claim to know this, as the report makes no mention of them or FBI actually examining DNC or DCCC computers. Presumably they took the word of CrowdStrike, the Democrats’ private contractor, for it.

However obtained, the documents were published first through DCLeaks and Guccifer 2.0 – which the report claims are “fictitious online personas” created by the GRU – and later through WikiLeaks. What is Mueller’s proof that these two entities were “GRU” cutouts? In a word, this:

That the Guccifer 2.0 persona provided reporters access to a restricted portion of the DCLeaks website tends to indicate that both personas were operated by the same or a closely-related group of people.(p. 43)

However, the report acknowledges that the “first known contact” between Guccifer 2.0 and WikiLeaks was on September 15, 2016 – months after the DNC and DCCC documents were published! Here we do get actual evidence: direct messages on Twitter obtained by investigators. Behold, these “spies” are so good, they don’t even talk – and when they do, they use unsecured channels.

Mueller notably claims “it is clear that the stolen DNC and Podesta documents were transferred from the GRU to WikiLeaks” (the rest of that sentence is redacted), but the report clearly implies the investigators do not actually know how. On page 47, the report says Mueller “cannot rule out that stolen documents were transferred to WikiLeaks through intermediaries who visited during the summer of 2016.”

Strangely, the report accuses WikiLeaks co-founder Julian Assange of making “public statements apparently designed to obscure the source” of the materials (p.48), notably the offer of a reward for finding the murderer of DNC staffer Seth Rich – even though this can be read as corroborating the intermediaries theory, and Assange never actually said Rich was his source.

The rest of Mueller’s report goes on to discuss the Trump campaign’s contacts with anyone even remotely Russian and to create torturous constructions that the president had “obstructed” justice by basically defending himself from charges of being a Russian agent – neither of which resulted in any indictments, however. But the central premise that the 22-month investigation, breathless media coverage, and the 448-page report are based on – that Russia somehow meddled in the 2016 election – remains unproven.

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Rumors of War: Washington Is Looking for a Fight

The bill stands up for NATO and prevents the President from pulling the US out of the Alliance without a Senate vote.

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Authored by Philip Giraldi via The Strategic Culture Foundation:


It is depressing to observe how the United States of America has become the evil empire. Having served in the United States Army during the Vietnam War and in the Central Intelligence Agency for the second half of the Cold War, I had an insider’s viewpoint of how an essentially pragmatic national security policy was being transformed bit by bit into a bipartisan doctrine that featured as a sine qua non global dominance for Washington. Unfortunately, when the Soviet Union collapsed the opportunity to end once and for all the bipolar nuclear confrontation that threatened global annihilation was squandered as President Bill Clinton chose instead to humiliate and use NATO to contain an already demoralized and effectively leaderless Russia.

American Exceptionalism became the battle cry for an increasingly clueless federal government as well as for a media-deluded public. When 9/11 arrived, the country was ready to lash out at the rest of the world. President George W. Bush growled that “There’s a new sheriff in town and you are either with us or against us.” Afghanistan followed, then Iraq, and, in a spirit of bipartisanship, the Democrats came up with Libya and the first serious engagement in Syria. In its current manifestation, one finds a United States that threatens Iran on a nearly weekly basis and tears up arms control agreements with Russia while also maintaining deployments of US forces in Syria, Iraq, Afghanistan, Somalia and places like Mali. Scattered across the globe are 800 American military bases while Washington’s principal enemies du jour Russia and China have, respectively, only one and none.

Never before in my lifetime has the United States been so belligerent, and that in spite of the fact that there is no single enemy or combination of enemies that actually threaten either the geographical United States or a vital interest. Venezuela is being threatened with invasion primarily because it is in the western hemisphere and therefore subject to Washington’s claimed proconsular authority. Last Wednesday Vice President Mike Pence told the United Nations Security Council that the White House will remove Venezuelan President Nicolás Maduro from power, preferably using diplomacy and sanctions, but “all options are on the table.” Pence warned that Russia and other friends of Maduro need to leave now or face the consequences.

The development of the United States as a hostile and somewhat unpredictable force has not gone unnoticed. Russia has accepted that war is coming no matter what it does in dealing with Trump and is upgrading its forces. By some estimates, its army is better equipped and more combat ready than is that of the United States, which spends nearly ten times as much on “defense.”

Iran is also upgrading its defensive capabilities, which are formidable. Now that Washington has withdrawn from the nuclear agreement with Iran, has placed a series of increasingly punitive sanctions on the country, and, most recently, has declared a part of the Iranian military to be a “foreign terrorist organization” and therefore subject to attack by US forces at any time, it is clear that war will be the next step. In three weeks, the United States will seek to enforce a global ban on any purchases of Iranian oil. A number of countries, including US nominal ally Turkey, have said they will ignore the ban and it will be interesting to see what the US Navy intends to do to enforce it. Or what Iran will do to break the blockade.

But even given all of the horrific decisions being made in the White House, there is one organization that is far crazier and possibly even more dangerous. That is the United States Congress, which is, not surprisingly, a legislative body that is viewed positively by only 18 per cent of the American people.

A current bill originally entitled the “Defending American Security from Kremlin Aggression Act (DASKA) of 2019,” is numbered S-1189. It has been introduced in the Senate which will “…require the Secretary of State to determine whether the Russian Federation should be designated as a state sponsor of terrorism and whether Russian-sponsored armed entities in Ukraine should be designated as foreign terrorist organizations.” The bill is sponsored by Republican Senator Cory Gardner of Colorado and is co-sponsored by Democrat Robert Menendez of New Jersey.

The current version of the bill was introduced on April 11th and it is by no means clear what kind of support it might actually have, but the fact that it actually has surfaced at all should be disturbing to anyone who believes it is in the world’s best interest to avoid direct military confrontation between the United States and Russia.

In a a press release by Gardner, who has long been pushing to have Russia listed as a state sponsor of terrorism, a February version of the bill is described as “…comprehensive legislation [that] seeks to increase economic, political, and diplomatic pressure on the Russian Federation in response to Russia’s interference in democratic processes abroad, malign influence in Syria, and aggression against Ukraine, including in the Kerch Strait. The legislation establishes a comprehensive policy response to better position the US government to address Kremlin aggression by creating new policy offices on cyber defenses and sanctions coordination. The bill stands up for NATO and prevents the President from pulling the US out of the Alliance without a Senate vote. It also increases sanctions pressure on Moscow for its interference in democratic processes abroad and continued aggression against Ukraine.”

The February version of the bill included Menendez, Democrat Jeanne Shaheen of New Hampshire, Democrat Ben Cardin of Maryland and Republican Lindsey Graham of South Carolina as co-sponsors, suggesting that provoking war is truly bipartisan in today’s Washington.

Each Senator co-sponsor contributed a personal comment to the press release. Gardner observed that “Putin’s Russia is an outlaw regime that is hell-bent on undermining international law and destroying the US-led liberal global order.” Menendez noted that “President Trump’s willful paralysis in the face of Kremlin aggression has reached a boiling point in Congress” while Graham added that “Our goal is to change the status quo and impose meaningful sanctions and measures against Putin’s Russia. He should cease and desist meddling in the US electoral process, halt cyberattacks on American infrastructure, remove Russia from Ukraine, and stop efforts to create chaos in Syria.” Cardin contributed “Congress continues to take the lead in defending US national security against continuing Russian aggression against democratic institutions at home and abroad” and Shaheen observed that “This legislation builds on previous efforts in Congress to hold Russia accountable for its bellicose behavior against the United States and its determination to destabilize our global world order.”

The Senatorial commentary is, of course, greatly exaggerated and sometimes completely false regarding what is going on in the world, but it is revealing of how ignorant American legislators can be and often are. The Senators also ignore the fact that the designation of presumed Kremlin surrogate forces as “foreign terrorist organizations” is equivalent to a declaration of war against them by the US military, while hypocritically calling Russia a state sponsor of terrorism is bad enough, as it is demonstrably untrue. But the real damage comes from the existence of the bill itself. It will solidify support for hardliners on both sides, guaranteeing that there will be no rapprochement between Washington and Moscow for the foreseeable future, a development that is bad for everyone involved. Whether it can be characterized as an unintended consequence of unwise decision making or perhaps something more sinister involving a deeply corrupted congress and administration remains to be determined.

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