Moon of Alabama Brecht quote
December 12, 2018

Short Term Thinking Dooms U.S. Anti-China Strategy

The United States issued an arrest warrant against the chief financial officer and heir apparent of Huawei, Meng Wanzhou. At issue is a six years old alleged violation of sanctions against Iran. Mrs. Meng was arrested in Canada. She has been set free under a stringent $10 million bail agreement. An extradition trial will follow in February or March.

It is unprecedented that an officer of a large company is personally indicted for the alleged sanction violations by a subsidiary company:

The US rarely arrests senior businesspeople, US or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes (such as embezzlement, bribery or violence) rather than their company’s alleged malfeasance.
...
Meng is charged with violating US sanctions on Iran. Yet consider her arrest in the context of the large number of companies, US and non-US, that have violated US sanctions against Iran and other countries. In 2011, for example, JPMorgan Chase paid US$88.3 million in fines for violating US sanctions against Cuba, Iran and Sudan. Yet chief executive officer Jamie Dimon wasn’t grabbed off a plane and whisked into custody.

The U.S. indicted dozens of banks for violating its sanction regime. They had to pay huge fines (pdf) but none of their officers were ever touched.

We called this U.S. operation a hostage taking to blackmail China. President Trump confirmed that this is indeed the case:

U.S. President Donald Trump told Reuters on Tuesday he would intervene in the U.S. Justice Department’s case against Meng if it would serve national security interests or help close a trade deal with China.

The arrest of Meng is but one part of a larger political campaign against China directed out of the office of National Security Advisor John Bolton:

The Trump administration is preparing actions this week to call out Beijing for what it says are China’s continued efforts to steal American trade secrets and advanced technologies and to compromise sensitive government and corporate computers, according to U.S. officials.

Multiple government agencies are expected to condemn China, citing a documented campaign of economic espionage and the alleged violation of a landmark 2015 pact to refrain from hacking for commercial gain.

In typical propaganda style the U.S. media depict the Chinese as enemies:

Taken together, the announcements represent a major broadside against China over its mounting aggression against the West and its attempts to displace the United States as the world’s leader in technology, officials said.
...
The actions come amid mounting intelligence showing a sustained Chinese hacking effort devoted to acquiring sophisticated American technologies of all stripes. A number of agencies — including the Justice, State, Treasury and Homeland Security departments — have pushed for a newly aggressive U.S. response. A National Security Council committee coordinated the actions.

One wonders what those "mounting aggressions" are supposed to be. Is the U.S. not constantly spying and hacking for economic for political gain?

Other reports today of alleged Chinese hacking are obviously part of the concerted anti-China campaign. As usual no evidence is presented for the vague allegations:

U.S. government investigators increasingly believe that Chinese state hackers were most likely responsible for the massive intrusion reported last month into Marriott’s Starwood chain hotel reservation system, a breach that exposed the private information and travel details of as many as 500 million people, according to two people briefed on the government investigation.

These people cautioned that the investigation has not been completed, so definitive conclusions cannot be drawn. But the sweep and tactics of the hack, which took place over four years before being discovered, prompted immediate speculation that it was carried out by a national government.

The new anti-China campaign follows a similar push of anti-Russian propaganda three month ago.

China has taken first countermeasures against Canada's hostage taking on behalf of the United States. It detained Michael Kovrig, a former Canadian diplomat who now works for the International Crisis Group. Beijing suggest that the ICG is operating illegally in China:

“The relevant organization has violated Chinese laws because the relevant organization is not registered in China,” Foreign Ministry spokesman Lu Kang said at a press briefing Wednesday.

China sharply tightened its rules on NGOs operating in the country last year, ..

This will not be the sole Chinese measure against Canada for its role in enforcing extraterritorial U.S. sanctions.

The string of U.S. accusations and measures against China are partly to protect the market share of U.S. companies against better and cheaper Chinese products and partly geopolitical. Neither has anything to do with protecting the international rule of law.

After three centuries of anglo-american imperialism the economic center of the world is moving back to the east.


bigger

The U.S. is way too late to prevent this move. Its best and most profitable chance is not to challenge, but to accommodate it. That again would require to respect international laws and treaty obligations. The U.S. is not willing to do either.

Nothing except a large scale war that results in the destruction of the industrial centers of east Asia, while keeping the U.S. and Europe save, could reverse the trend. Nuclear weapons on all sides and the principal of mutual assured destruction have made such a war unthinkable. What we are likely to see instead will be proxy conflicts in various other countries.

The current U.S. strategy is to restrict China's access to foreign markets, advanced technologies, global banking and higher education. While that may for a moment slow down China's rise it will in the long run strengthen China even more. Instead of integrating into the world economy it will develop its own capacities and international systems.

The U.S. can temporarily hinder the telecommunication equipment provider Huawei by denying it access to U.S. designed chips. It will probably do so.  But that will only incentivize Huawei to start its own chip production. With a few years delay it will be back and out-compete U.S. companies with even better and cheaper products.

It is typical for the current U.S. to seek short term advantage while disregarding the long term negative effects of its doing. It is a major  reason for China's rise and its future supremacy.

Posted by b on December 12, 2018 at 07:07 AM | Permalink

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The reason she is violating trade sanctions against Iran is because Trump suspended the Iran Nuclear treaty. How short-sighted is that?

Posted by: ralphieboy | Dec 12, 2018 7:21:13 AM | 1

Well, all these sanctions are pushing target countries to be self sufficient. That's wonderful. Us are pushing countries for a better production and decrease itself. Smart.

Posted by: fayez chergui | Dec 12, 2018 7:21:43 AM | 2

the King Liar has spoken...the boss of the mafia group U$A...
the Chinese will interpret this as a kidnapping for blackmail and act accordingly...this can only get much worse...

way to go Donald...stupid is its own reward...

regards

OY

Posted by: oldenyoung | Dec 12, 2018 8:03:14 AM | 3

dh posted a link on the last thread to China banning import and sale of all iPhones in China (strange, I thought they were made in China? Must be exported and re-imported?). This concerns a patent dispute between US company Qualcomm and Apple, over which Qualcomm sued Apple in Chinese courts. The existence of the action in the courts must predate the Meng arrest, but the court decision to support Qualcomm could be influenced by the arrest.

https://www.cnn.com/2018/12/10/tech/china-iphone-ban/index.html
Posted by: dh | Dec 11, 2018 3:05:37 PM | 6

This is interesting. China hits a top US company manufacturing in China by granting an injunction in a case of one US company against another US company, in which one accuses the other of intellectual property theft. China was not expected to find in Qualcomm's favour, according to the article (perhaps in part because Apple manufactures in China therefore is a client of China, so it was expected China might favour Apple). If this decision was influenced by the arrest, the US can hardly point the finger at China!

It gets better: The Apple executive states in the article that they have stocks of all models in China and sales will not stop. How can this be, if sales are banned? Surely China can then arrest several Apple executives in China for breaking the injunction? Would depend of course on the terms of the injunction, of which the article gave no details.

In my opinion, China should make these criminal actions of the US extremely painful indeed, and as quickly as possible. One person arrested in China is not enough - it should be 10 Americans arrested for 1 Chinese, plus 5 Canadians. China should make sure the US and Canada understand that the ratio will stay constant if the US/Canada respond to the arrests in China. China should also take extremely painful action against US telecomms companies in China to compensate for the campaign against Huawei - it could include denying access to comms links, forcing US telcom communications to go through very expensive route, ceasing negotiations for investment consortia in favour of non-US companies, etc. The difficulty to navigate, of course, is the risk of inciting escalating actions against Huawei; but the Chinese will find excellent startegies I am sure.

Posted by: BM | Dec 12, 2018 8:42:16 AM | 4

It may be the case that the Huawei equipment is very, very secure, has much better performance. Soon, China will be the tech leader, hence the panic.
I have a snippet below, but peruse the article in full on the 5G landscape.

"Huawei has been pouring money into research on 5G wireless networks and patenting key technologies. The company has hired many experts from abroad as well to decide the technical standards for the next generation of wireless communication technology.
As of early 2017, 10% of 1450 patents essential for 5G networks were in Chinese hands in which majority belongs to Huawei and ZTE.
Huawei spent around $12 Billion on R&D in 2017, which was threefold of Ericsson’s spending of $4.1 Billion. This year, according to estimates, it will spend $800 million in 5G research and development alone.
The company wants to involve AI in 5G which according to them is a much more integral element of Huawei’s 5G strategy. The company also plans to launch a full range of Huawei commercial equipment including wireless access networks, core networks, and devices.
Huawei has also revealed its hopes to launch smartphones ready for supporting 5G networks by 2019 and starting selling in the mid-2019. The company is also said to be working on developing a brand-new chipset for 5G services.
Huawei and Vodafone made the 5G call using non-standalone 3GPP 5G-NR standard and sub 6 GHz spectrum. The two companies built a 5G NR end-to-end test network for the trial and used 3.7GHz spectrum. They also used Huawei Radio Access Network and core network equipment to support the test with microservice-centric architecture, control plane/user plane separation, and unified access and network slicing technology.
Huawei also started manufacturing products that provide 5G services. In Mobile World Congress, Huawei launched its 5G customer-premises equipment (CPE), the world’s first commercial terminal device supporting 3GPP standard for 5G. Huawei used its self-developed chipset Balong 5G01 – world’s first commercial chipset supporting the 3GPP standard for 5G, with downlink speed up to 2.3 Gbps."

https://www.greyb.com/companies-working-on-5g-technology/

Posted by: daffyDuct | Dec 12, 2018 8:44:52 AM | 5

With Trump's utterance, he also exposed how he/his government has abused Canada's extradition law for political purposes. Officially in this extradition procedure, the US now has 60 days to submit a complete extradition request which requires far more detail. Meng's court date is set for February. In any case, Canada's rubberstamping of extradition requests (90% are by the US)was already successfully challenged once in the Diab case with France, was criticized by Canada's Superior Court (extraditions are processed at the provincial judicial level), so Trudeau's hiding behind 'judicial process' is two-faced cowardliness. Canada needs to amend its extradition law, become much more stringent, and arm this law against the bullying and abusive southern neighbor who prefers to lord its own laws over others than abide by any kind of international law.

Posted by: Josh | Dec 12, 2018 8:47:39 AM | 6

We've been at war with Eurasia long enough. Time for Eastasia!

The main question is whether Putin will remain Emmanuel Goldstein or if someone Chinese will get the honor.

Posted by: Timothy Hagios | Dec 12, 2018 8:50:51 AM | 7

China should just dump US treasuries wholesale, and the US is done for within a week.

Posted by: bjd | Dec 12, 2018 9:02:26 AM | 8

Here's a counter-shot in the trade war.

China is set to introduce maximum residue limits (MRLs) of 200 parts per billion (ppb) or lower for glyphosate in all imported final food products and raw materials including grains, soybeans and other legumes before the end of 2019, according to Sustainable Pulse sources.....

It is expected that China will now import more grains from Russia, where glyphosate is not widely used as a desiccant. This also enables China to use glyphosate as a political tool in the current U.S. / China trade war, as food and raw material imports from the U.S., which often contain high levels of the weedkiller, will be put under major pressure.

https://www.gmwatch.org/en/news/latest-news/18647-china-set-to-shock-markets-with-low-glyphosate-residue-limits-in-food-imports

That'll hit Monsanto's Roundup pretty hard. Of course China doesn't really have any problem with glyphosate - it's long been a major producer and exporter itself. So this is obviously a trade war action.

Posted by: Russ | Dec 12, 2018 9:13:19 AM | 9

"It is typical for the current U.S. to seek short term advantage while disregarding the long term negative effects of its doing. It is a major reason for China's rise and its future supremacy."
Well, the economic and industrial rise of China is the ultimate proof of this. Instead of making sure China would have a limited and purely internal development and would never become such a fearsome rival, Western (specially US) capitalist fools decided to outsource their production there, creating the monster they feared and fear even more nowadays. I've never seen such a ridiculous and brilliant own goal in any World Cup. What's even more damning for the collective absolute stupidity of capitalist bigwigs is that I could see this coming more than 20 years ago, yet these idiots blindly charged as if short-term profits were all they wanted and would be enough to ensure their eternal dominance.

Posted by: Clueless Joe | Dec 12, 2018 9:14:45 AM | 10

I think it's pretty clear to China, Russia, India, and many others, that trading in dollars is a losing strategy.
Thus the dollar is very fast losing its position as the world reserve currency.
The EU is not using dollars for Iran's oil.
India is not using dollars for its purchase of Russia's S-400.
It's not only US anti-China strategy; but the US insistence to be the hegemon; the rest of the planet will not have it, period.
The US is done dictating what the rest of the planet will do/follow...
Bye, bye, American pie............

Posted by: V | Dec 12, 2018 9:19:57 AM | 11

Short term thinking dooms the US economically and politically.

Posted by: Entropy Wins | Dec 12, 2018 9:29:34 AM | 12

BM @4 I'm not sure where Qualcomm stands in relation to China. It could be a bargaining chip...excuse the pun.

The Apple ban applies to the older iPhone 8 & 7 not the new Xs & Xr......but that may change. Apple is already having trouble selling phones in China and the Huawei dispute won't help.

Posted by: dh | Dec 12, 2018 9:32:41 AM | 13

What is the legal basis for Meng's arrest? What Canadian law is she alleged to have violated? Or is American wish fulfillment now part of Canadian jurisprudence?

Posted by: pasha | Dec 12, 2018 9:52:18 AM | 14

As a non-American I've got half a mind to find a way to purchase some Iranian products and then send the US State Derpartment an e-mail telling them to suck it.

Posted by: flayer | Dec 12, 2018 9:55:11 AM | 15

What an empire does not control. They destroy.

Posted by: Fernando Martinez | Dec 12, 2018 10:11:44 AM | 16

Posted by: Clueless Joe | Dec 12, 2018 9:14:45 AM | 10

The "own goal" was not outsourcing manufacturing to China but in not isolating China by bringing Russia into the Western fold.

Instead, they kicked Russia while it was down via capitalist "Shock Doctrine" - hoping for total capitulation. Kissinger admits(*) this when, in his typical roundabout way, he says that no one anticipated Russia's ability to absorb pain.

* In his lunch interview with the Financial Times this past summer.

Posted by: Jackrabbit | Dec 12, 2018 10:38:23 AM | 17

@pasha #14

"What is the legal basis for Meng's arrest? What Canadian law is she alleged to have violated? Or is American wish fulfillment now part of Canadian jurisprudence?"

As I understand it, the USA and Canada have an extradition agreement, and corporate fraud is also a crime in Canada.

Posted by: ralphieboy | Dec 12, 2018 10:52:25 AM | 18

This idiocy seems certain to increase curiosity in Huawei products by telcos worldwide. Business managers use technical experts to evaluate available technologies when contemplating upgrades to their systems. They're certainly not swayed by MSM spin doctors.

This issue could soon be overtaken by a brand new reality. China is planning to launch a worldwide free wifi internet service based on more than 100 satellites, which could be interpreted as a Commie scheme to undermine the profitability of telcos.
https://www.abc.net.au/news/2018-11-30/chinese-company-to-provide-free-internet-worldwide-by-2026/10568434

Posted by: Hoarsewhisperer | Dec 12, 2018 11:08:40 AM | 19

Not clear exactly which officials said, "Taken together, the announcements represent a major broadside against China over its mounting aggression against the West... The actions come amid mounting intelligence showing a sustained Chinese hacking effort..." but do know it's very unusual to repeat a verb in consecutive sentences. Mantra alert! Mounting... mounting... mounting... hear the drums of war.

Posted by: Nick Baam | Dec 12, 2018 11:11:35 AM | 20

he says that no one anticipated Russia's ability to absorb pain

Does that moron Kissinger know nothing about WW2?

That Kissinger projects an inability to absorb pain onto the Russians suggests that Kissinger knows the Americans have no ability to absorb pain themselves

Posted by: Ghost Ship | Dec 12, 2018 11:15:24 AM | 21

Maybe now Shell executives will be arrested for crimes against humanity in Nigeria.

Posted by: Edward | Dec 12, 2018 11:22:50 AM | 22

Hoarsewhisperer says:

China is planning to launch a worldwide free wifi internet service based on more than 100 satellites, which could be interpreted as a Commie scheme to undermine the profitability of telcos

cool. digital nomadism and growing your own food will be the ticket.

Posted by: john | Dec 12, 2018 11:24:23 AM | 23

The story I heard was that it was a screw up. Mira Ricardel was fired because she pissed off Melania about airplane seats. She was fired before inter-agency coordination for the arrest but after the warrant for the arrest was issued - the warrant was issued back in August. That and the fact that Trudeau hates Trump explains this idiocy. Trudeau was left to weigh up the US request against the poor timing of the US request from the US point of view. No one from the WH got back to the Canadians to ask them to wait.

So Justin decided to go ahead to screw Trump.

Fun, no?

Posted by: Harry | Dec 12, 2018 11:26:07 AM | 24

ralphieboy | Dec 12, 2018 10:52:25 AM | 18: corporate fraud is also a crime in Canada.

More specifically, she's accused of inducing banks to provide financing that was illegal due to US sanctions.

It appears that as Huawei CFO, she certified that her company doesn't trade with Iran despite the fact that Huawei has an Iran-based subsidiary (SkyCom Tech).

Posted by: Jackrabbit | Dec 12, 2018 11:32:48 AM | 25

Is this an example of "US short term strategical thinking" or "Trump's-as-per-usual (non) thinking?"

After all, as you stated, these manoeuvres wrt Meng are emanating from John (I am the Eggman) Bolton's office and clearly evidence his trademarked hard-boiled belligerance which of course is heartily endorsed by Trump (as an "Art of the Deal" negotiating ploy by the master debater himself) who selected The Walrus in the first place. Or second place if you count Bolton's earlier appointment by that other intellectual giant of the GOP, GW Bush.

Please, the US voted less for Trump to be our trade representative then even the British voted for their own ridiculous "alt-right" trade adventure wildride, AKA "Brexit."

And we now have another pretty solid election behind us illustrating even further that Trump's worldview doesn't represent most of the US. He represents only a dwindling "base" of mostly old white male reactionary racist very scared supporters whose presence within the GOP has terrified the GOP toadies into supporting most everything Trump wants because he delivers judges and tax cuts to the rich.

But again, the majourity of the toadies don't support Trump on China. He has them by their shriveled up balls is all.

Posted by: donkeytale | Dec 12, 2018 11:44:22 AM | 26

Ghost Ship | Dec 12, 2018 11:15:24 AM | 21:

That Kissinger projects an inability to absorb pain onto the Russians ...

This is a misreading. Kissinger is not projecting but explaining. Look at the Financial Times interview for more clarity.

Also, they didn't fail to consider WWII. They miscalculated. And then they doubled down (as the neocons always do).

Posted by: Jackrabbit | Dec 12, 2018 11:52:01 AM | 27

Jackrabbit 17
"Kissinger admits(*) this when, in his typical roundabout way, he says that no one anticipated Russia's ability to absorb pain."
Then Kissinger is a bigger fool than I thought. He's old enough to know about WWII, and previous wars as well. I mean, he did study the Napoleonic wars...

Posted by: Clueless Joe | Dec 12, 2018 11:52:11 AM | 28

Clueless Joe | Dec 12, 2018 11:52:11 AM | 28

You have to remember, this was economic warfare, not military. And the USA/West were pretending to be helpful. IIRC, Yeltsin was happy for this "help" too.

Posted by: Jackrabbit | Dec 12, 2018 11:58:35 AM | 29

“The government and us are cut from the same cloth.” Sam Giancana, former Mob boss from Chicago. Deep State, you say? No way, Jose. More like the Gambino (Democrat’s) and the Genovese (Republicans). You don’t need “colors” to identify yourself as a gang member. You can wear double breasted suits and have the same bad intentions as any member of the Crips, Bloods, Mafia or Mexican Cartels. The US government is one great big Tammany Hall. Nothing has changed since the days of Boss Tweed. Instead of being centered in New York, it’s now in our nation’s capital. Mah Rohn! Forget about it!

Posted by: Jose Garcia | Dec 12, 2018 12:21:30 PM | 30

This is beyond outrageous. US law is not the law of the world. The Chinese may trade with whomever they choose.

Posted by: Fidelios Automata | Dec 12, 2018 12:22:34 PM | 31

Fidelios Automata | Dec 12, 2018 12:22:34 PM | 31:

The Chinese may trade with whomever they choose.

She's not being accused of trading with Iran. She's being accused of bank fraud (providing false information to obtain a loan).

Posted by: Jackrabbit | Dec 12, 2018 12:29:14 PM | 32

https://www.motherjones.com/politics/2003/07/sidestepping-sanctions/

According to the above article, American firms set up foreign subsidiaries to do business with sanctioned countries.
So if SkyCom is an Iranian subsidiary, what can be Sabrina Meng Wanzhou's crime?
Or even if SkyCom is a Hong Kong-based subsidiary? The city-state effectively maintains its own laws and financial architecture, as part of one country, two systems.

Posted by: LittleWhiteCabbage | Dec 12, 2018 12:37:53 PM | 33

It's a bit OT but this thing of Russia absorbing pain - to be fair, I always thought that producing Putin at the last moment was really stretching survival to a fine thread. The neocons almost won there. The country was almost done for. It took a man whose father nursed life back into his wife when medics figured she was done for...

Russia's ultimate salvation was way too close to the edge of the cliff for my taste.

Posted by: Grieved | Dec 12, 2018 12:41:16 PM | 34

two things of interest:

Canadian Telecoms Face $1 Billion Cost to Remove Huawei Gear, Globe & Mail Says.
https://www.bloomberg.com/news/articles/2018-12-08/canadian-telecoms-face-1-billion-to-remove-huawei-tech-g-m

South Korea to get the world's first 5G commercial network in Q1, 2019
https://www.youtube.com/watch?v=4nD-FnRSqfI

Posted by: Laura Rosiln | Dec 12, 2018 1:05:05 PM | 35

Ya'll know how the Chinese finger trap works, yes? Instead of his fingers, Trump's got his whole head inside, and he's stuck real good. There're only two ways out: Trump admits China can't be beaten so its better to join them or he cuts off his head to free his body--both are essentially suicide, although the former is merely political instead of actual.

Posted by: karlof1 | Dec 12, 2018 1:06:33 PM | 36

There is zero chance she gets deported to the US because doing so would mean a Canadian court blessing the idea that the US is the sole legal authority of every thing on planet earth. There isn't a a judge in Canada that is goin g to sign off on the idea that US law trumps Canadian law and international law in Canada.

Posted by: BraveNewWorld | Dec 12, 2018 1:12:55 PM | 37

There is a strange ambiguous nature to the post.
It seems there is a reluctance to address the issues.

It has long been claimed that China has a tendency to copy or steal intellectual property.
Most "I/P" is horse shit anyway - e.g. Apple and the rounded corners.
Apparently there has been some actual espionage, but that is probably pretty common its just that China has used it to good advantage (if we accept that they have used it - as I do).

It is quite odd to to make such a fuss in the absence of smoking gun - maybe Mueller is in need of something to investigate?

I am baffeled by the whole Iran thing and the nations in terror of U.S. sanctions. What is this "international law" of which we speak? The implication is that because Mr Trump (Bolton) does not approve of a treaty that now Iran and RoW has violated a law and are subject to sanction by the U.S.? I find it hard to comprehend.

Posted by: Jared | Dec 12, 2018 1:16:27 PM | 38

This first paragraph from a today's Global Times op-ed nicely summarizes the 21st Century:

For a long time in the future, the international situation will evolve around the rise of China, the decline of the US and the uncertain development level of Russia.

Posted by: vk | Dec 12, 2018 1:24:04 PM | 39

1993: "Israel accused of selling US secrets to China" https://www.independent.co.uk/news/world/israel-accused-of-selling-us-secrets-to-china-1510406.html

2004: "Israel secretly sells American nuclear weapons to China" http://www.theinsider.org/news/article.asp?id=776

2013: "Israel Passes U.S. Military Technology to China" https://www.military.com/defensetech/2013/12/24/report-israel-passes-u-s-military-technology-to-china
"U.S. Furious With Israel After Sale of Advanced Military Technology to China" https://www.algemeiner.com/2013/12/22/u-s-furious-with-israel-after-sale-of-advanced-military-technology-to-china/

2017: “Israel Steals US Technology” -- "Placing Israeli citizens in key industries is a secret to Israel’s success.” Phil Giraldi
https://gosint.wordpress.com/2017/05/11/former-cia-phil-giraldi-israel-steals-us-technology/

No arrests among the Israelis. None. The loyalty to Israel by Israel-firsters (and their corrupting influence on the US Congress) overpowers any loyalty to the US.

But to arrest a woman because of the illegal economic sanctions against Iran (on Israelis' prodding) is fine for US "deciders"

Posted by: Anya | Dec 12, 2018 1:24:42 PM | 40

Anya | Dec 12, 2018 1:24:42 PM | 40

Thanks for assembling those links. That is a good compilation. I was vaguely aware of those stories but had forgotten most of the details. It is so true. And you didn't even get to the Jonathan Pollard betrayal!

Posted by: ToivoS | Dec 12, 2018 1:38:52 PM | 41

thanks b! and thanks to the many informative comments.. i encourage others to read the jeffery sachs article in b's article near the top under the word 'unprecedented"...

@23 john.. thanks.. i will take a look..

@24 harry.. thanks.. that is an interesting conjecture..

@38 jared.. larvov made some comments on the use of the term 'rule of law' which is different from 'international law'.. i can't find the article from yesterday that i read on this, but essentially he is saying the usa wants to toss international law and replace it with 'rule of law', or 'law based rules' and do away with international law, as international law is not working in the usa's favour at this point..'rule of law' or 'law based rules' is something that a country can make up as it goes along.. the usa wants to drop international law essentially.. if i find larvov's comments, i will post them...

Posted by: james | Dec 12, 2018 1:48:53 PM | 42

Here's the legal mumbo-jumbo from B.C. which includes details on the charges against Meng. The poor banks were "victim banking institutions."

The investigation by U.S. authorities has revealed a conspiracy between and among Meng and other Huawei representatives to misrepresent to numerous financial institutions. . . .The motivation for these misrepresentations stemmed from Huawei's need to move money out of countries that are subject to U.S. or E.U. sanctions--such as Iran, Syria, or Sudan--through the international banking system. At various times, both the U.S. and E.U. legal regimes have imposed sanctions that prohibit the provision of U.S. or E.U. services to Iran, such as banking services....
Because Meng and other Huawei representatives misrepresented to Financial Institution 1 and the other financial institutions about Huawei's relationship with Skycom, these victim banking institutions were induced into carrying out transactions that they otherwise would not have completed. As a result, they violated the banks' internal policies, potentially violated U.S. sanctions laws, and exposed the banks to the risk of fines and forfeiture. .

Posted by: Don Bacon | Dec 12, 2018 2:41:01 PM | 43

Very accurate. Yes of course the smart move would have been to welcome China into a multi-polar world, but it is too late now, and I doubt the US could ever have managed that.
Trade war and probable actual war has been inevitable for some time. An alien visiting earth would want to view every event through the prism of imminent US-China war.
Right now we see a US circling of the wagons, with threats against outsiders. In particular Iran, NK and Russia are villified because the message is "look what happens if you don't come in on our side". We think the casual slanders about these countries are just vulgar Americans, but they are really calculated warnings to other countries.

Posted by: Michael Droy | Dec 12, 2018 2:49:03 PM | 44

The charges against Meng were brought by Richard P. Donoghue, the United States Attorney for the Eastern District of New York. Donoghue was appointed as Interim United States Attorney for the Eastern District by Attorney General Jeff Sessions on January 3, 2018, and as Attorney on May 3, 2018.
Donoghue is one of five U.S. attorneys serving in a “working group” under the Justice Department’s recently announced China Initiative. Launched by then-Attorney General Jeff Sessions, the China Initiative is a broad-based strategy designed to counter Chinese economic espionage and a range of other national security threats. Donoghue has been leading an investigation of Huawei since 2016 for possible violations of U.S. sanctions against Iran.
The Eastern District serves over eight million residents through its Criminal Division, with approximately 115 Assistant U.S. Attorneys, and its Civil Division, with approximately 60 U.S.Attorneys. But what the heck, forget New Yorkers, Donoghue has bigger fish to fry.

Posted by: Don Bacon | Dec 12, 2018 2:49:15 PM | 45

If one has an interest on seeing how the war-mongers visualize the US-China standoff, check out this blog where I regularly get roasted. (roasted bacon?)

Posted by: Don Bacon | Dec 12, 2018 3:00:54 PM | 46

@43 DB

Not to be confused with actual "victim banking" customers - of which there are legion

Great comments on this thread - always worth the drive...

Posted by: xLemming | Dec 12, 2018 3:03:18 PM | 47

Posted by: Grieved | Dec 12, 2018 12:41:16 PM | 34

Hmmm... following the downfall of the drunkard Yeltsin (the first miscalculation of the Empire, hubris strikes again), they put their money on Medvedev, the 'Atanticist'. Bad move! Putin was the response. Nationalism bad? I don't think so, it's what enabled Stalin to win WW2 and it enabled Putin to pull the country, but as said, only just! Phew.

70 years of isolating the Soviet Union meant that they really didn't have a handle on the Western propaganda machine. In the 80s the North Koreans made the same mistake.

A slight aside: I and a bunch of other journos, activists were invited to a wonderful slap up meal held at the N.Korean UN delegation HQ in Manhattan. Food great but the video they showed horrendous! Imagine 1 1/2hrs of the Great Leader and endless displays in stadiums waving flags in unison. They then asked us what we thought of it (that was the purpose of 12 course meal). When they were told it would go down like a lead balloon, they just didn't get it. They lived in a different world, ditto the Soviets.

BTW, the video was made for US consumption.

On the other hand, Verso brought out a book (I have it somewhere) on the aesthetics of East European cityscapes during the Soviet period and lamented on the loss of individuality, following the fall of socialism and the rise of McDonaldism. How ironic. And we though (were taught) that E. European design and architecture was drab!

Posted by: William Bowles | Dec 12, 2018 3:26:48 PM | 48

MBA ideology, which is narrowly focused on the next quarter results, bottom line, and bonuses for executives has devastated / destroyed industrial base of the 5 eyes!

Posted by: ex-SA | Dec 12, 2018 3:32:40 PM | 49

Don Bacon @ 46:

I saw the discussion thread at that BreakingDefense.com post you linked to, and I must say you should seek help for that masochistic tendency that drives you to post there and risk being savaged by armchair generals whose idea of military strategy comes from playing wall-2-wall computer games.

I should think a better example from Ancient Greek history that we should heed, rather than Thucydides' Trap (discussions of which use very selective examples to "prove" its premise) is Athens' military expedition to Syracuse to conquer the city and all of Sicily in 415 BCE. How did that turn out for Athens?

http://www.livius.org/articles/concept/peloponnesian-war/sicilian-expedition/
http://www.livius.org/sources/content/thucydides/destruction-of-the-athenian-army/?

Posted by: Jen | Dec 12, 2018 4:42:32 PM | 50

September 3, 2018: Huawei unveils Kirin 980 CPU, the world's first commercial 7nm system-on-chip (SoC) and the first to use Cortex-A76 cores, dual neural processing units, Mali G76 GPU, a 1.4 Gbps LTE modem and supports faster RAM. With 20 percent faster performance and 40 percent less power consumption compared to 10nm systems, it has twice the performance of Qualcomm's Snapdragon 845 and Apple's A11 while delivering noticeable battery life improvement. Its Huawei-patented modem has the world’s fastest Wi-Fi and its GPS receiver taps L5 frequency to deliver 10cm. positioning.

September 5, 2018. China’s front-end fab capacity will account for 16 percent of the world's semiconductor capacity this year, increasing to 20 percent by 2020.

September 15, 2018. China controls one third of 5G patents and has twice as many installations operating as the rest of the world combined.

I should add that the US put China under total embargoes on food, ag equipment, finance, technology for 25 years during Maos' tenure. Yet he grew the economy by 7.25% annually, doubled the population, its life expectancy and literacy during that time.

Posted by: Godfree Roberts | Dec 12, 2018 4:54:40 PM | 51

BraveNewWorld@37...If there is any question whether Canadian courts will side with American laws you only need to google Qmar Khadr to answer the question.

Posted by: Hodi | Dec 12, 2018 4:56:46 PM | 52

@46 don bacon.. thanks for the link.. in it admiral davidson says “I see a fundamental divergence of values that leads to two incomparable visions of the future. I think those two incomparable visions are between China and the rules-based international order.”

there is that ''rules-based international order'' quote again - which i was mentioning to @38 jared in my post @42..
what the fuck is ''rules-based international order'' supposed to mean? you mean like - ignore international law and replace it with ''rule-basd international order''??

i agree with jen... don, you must be a bit of a masochist!

Posted by: james | Dec 12, 2018 4:59:06 PM | 53

@ Don Bacon

I definitely second Jen's remark about BreakingDefense. Reading that post was very distressing and I can imagine they would roast you and many who follow and admire b. But, as the saying goes, it is also good to know "how the enemy" thinks. Or in this case how our gov + thinks.

Posted by: RibCluck | Dec 12, 2018 5:03:48 PM | 54

@don bacon... you are doing okay in the comments section.. i added a post to the thread as well, lol..

Posted by: james | Dec 12, 2018 5:12:36 PM | 55

@6 Josh

Canada's rubberstamping of extradition requests (90% are by the US)was already successfully challenged once in the Diab case with France

Not exactly. Diab was arrested in 2008 and, after a long series of legal proceedings (ending with the refusal of the Canadian Supreme Court to hear his appeal), finally extradited to France in 2014. The case against Diab was flimsy to nonexistant to begin with, but "good enough" to meet Canadian standards. In spite of the continued insistence by French prosecutors that they had a legitimate case, multiple judges disagreed and Diab was finally released earlier this year and allowed to return to Canada.

The bottom line is that the bar for extradition from Canada is extremely low, which should worry Ms Meng.

Posted by: farm ecologist | Dec 12, 2018 5:16:31 PM | 56

The way the U.S. seems intent on punishing Australian Assange for exposing U.S. secrets exhibits the same determination to apply U.S. law to everyone all over the world.

Posted by: lysias | Dec 12, 2018 5:24:56 PM | 57

@52 James -
http://www.mid.ru/en/foreign_policy/news/-/asset_publisher/cKNonkJE02Bw/content/id/3413324

20 November 201815:24
Foreign Minister Sergey Lavrov’s remarks at the general meeting of the Russian International Affairs Council, Moscow, November 20, 2018

" The historical West is still violently opposed to the objective rise of a fairer and more democratic polycentric world order. Clinging to the principles of unipolarity, Washington and some other Western capitals appear unable to constructively interact with the new global centres of economic and political influence. A wide range of restrictions are applied to the dissenters, ranging from military force and unilateral economic sanctions to demonisation and mud-slinging in the spirit of the notorious “highly likely.” There are many examples of this dirty game...This has seriously debased international law. Moreover, attempts have been made to replace the notion of law with a “rules-based order” the parameters of which will be determined by a select few.

We are especially concerned about the activities of the US administration aimed at destroying the key international agreements. These include withdrawal from the Joint Comprehensive Plan of Action known as the Iran nuclear deal, the declared intention to withdraw from the Intermediate-Range Nuclear Forces Treaty (INF Treaty), an open line for revising the settlement principles in the Middle East, as well as sabotaging the Minsk Agreements on overcoming the internal Ukrainian crisis. The trade wars that have been launched contrary to the WTO principles are rocking the global economic architecture, free trade and competition standards. The US establishment, blindly believing in the idea of their exceptionalism, continues to appoint rivals and adversaries, primarily among the countries that pursue an independent foreign policy. Everyone can see that Washington is a loose cannon, liable to act incongruously, including regarding Russia where any steps taken by US President Donald Trump to develop stable and normal channels of communication with Moscow on the biggest current problems are promptly blocked by those who want to continue or even strengthen the destructive approach to relations with Russia, which developed during the previous US administration.

Overall, it looks as if the Americans and some of our other Western colleagues have forgotten the basics of diplomacy and the art of dialogue and consensus over the past 25 years. One result of this is the dangerous militarisation of the foreign policy thinking. As RIAC Director General Andrey Kortunov recently pointed out at a Valdai Discussion Club meeting, the Clausewitz formula can be changed to a mirror image, “Politics is a continuation of war by other means.”

Russia is a consistent supporter of the development of international life based on the principles of the UN Charter. We are a serious obstacle in the way of different destructive undertakings." etc

Lavrov is always an interesting read.

Posted by: Loz | Dec 12, 2018 5:35:37 PM | 58

Second Canadian detained in China, according to Freeland.

Posted by: spudski | Dec 12, 2018 5:36:27 PM | 59

Considering the eventual results of the Peloponnesian War for all combatants, Thucydides' Trap turned out to be a trap for everyone. They all would have been better off peacefully settling their differences. Same goes for World War One. And the same goes for a declining U.S. facing a rising China.

What the U.S. should do is to negotiate with China a deal which recognizes the status of China as a superpower in return for an economic relationship that preserves the U.S. standard of living.


Unfortunately, the U.S. ruling class cares more about the psychic gratification it derives from dominating the world.

Posted by: lysias | Dec 12, 2018 5:39:32 PM | 60

@ 52 james
re: "rules-based international order"
This is widely and repeatedly used by the Pentagon; I've also seen it used by the Australia government (no surprise there from a US puppet).
Of course we know that it's a code-phrase for. . .let's not change the current US-dominated world disorder with its US-led wars, assassinations and torture.

Other pet phrases, taken from my blog link above:
... revisionist great powers like China and Russia
... China’s state-led, market-distorting economic model
... democratic, liberal values that draws us together with our allies and differentiates us from China.”

Posted by: Don Bacon | Dec 12, 2018 6:03:18 PM | 61

@ 57 Loz
Russia's Lavrov is a smart guy and gets it right, as a realist, but I prefer Iran's Khamenei who always looks on the bright side.

. . .from a speech delivered on November 3, 2018, by Ayatollah Khamenei

. . . the US waged military wars and military actions,
. . .There has also been an economic war in this 40-year challenge
. . .They have waged a media war as well.
Well, there is an important truth which is sometimes not seen by some people: its dazzling clarity makes it go unnoticed. This truth is a bright and shining one, which is the fact that in this 40-year challenge, the side which has been defeated represents the US and the side which has achieved victory represents the Islamic Republic. --This is a very important truth. What is the reason behind America’s defeat? The reason for their defeat was that it was they who began the attack. It was they who initiated corrupt actions. It was they who imposed sanctions, and it was they who launched a military attack, but they have not achieved their goals. --This is the reason why the US has been defeated.

And he's right, Iran has defeated the US, which is why Washington is so down on Iran. The defeats have come in Iraq, and Syria, and next in Afghanistan . . .plus in Iran itself, which has stood up to the greatest world power for forty years full of sanctions and assaults, and thereby served as a model and inspiration for other countries large and small.

Posted by: Don Bacon | Dec 12, 2018 6:19:44 PM | 62

The prosecutor’s case against Meng is fundamentally weak. For instance, there is no identification of a “co-conspirator”, necessary to a charge of conspiracy. It does not seem to have been developed much beyond the information developed in the 2013 Reuters investigation. At least half of that relies on unnamed “former employees” and unnamed persons who claimed to have dealt
with Skycom in Iran. If these persons cannot be produced then all that evidence cannot rise above hearsay. The coincidences left to the prosecutors to suggest a shell corporation should be then overwhelmed by the perfectly legal offshore documentation, which represents common corporate practice worldwide. If the US courts still nail Huawei, the precedent could put all large businesses and business persons everywhere at criminal risk for currently accepted practices.

The exit door could be a finding by the Canadian court, tacitly ok’ed by the Americans, that the case lacks merit and Meng is freed sometime in the spring to a chorus of self-congratulatory hurrahs over “rule of law”. If the intent was to damage the Huawei brand in the West, then mission already accomplished.

Posted by: jayc | Dec 12, 2018 6:46:23 PM | 63

@57 loz... thanks for finding that! that is basically it... ditto don's comments which reflect this same mindset from the exceptional nation...

@58 spudski.. thanks for the update on that.. it would seem china has been reading @4 Bm's comments!!!

Posted by: james | Dec 12, 2018 6:49:31 PM | 64

here is our canuck foreign affairs minsiter freeland using the term as well.. "It, I think, is quite obvious that it ought to be incumbent on parties seeking an extradition from Canada, recognizing that Canada is a rule-of-law country, to ensure that any extradition request is about ensuring that justice is done, is about ensuring that the rule of law is respected and is not politicized or used for any other purpose," she said."
https://www.cbc.ca/news/politics/china-missing-person-questioned-1.4943591

Posted by: james | Dec 12, 2018 6:54:41 PM | 65

last paragraph in that link is even better - here.. ""I think in the world today, where the rule of law is under threat in some parts of the world, being a rule-of-law country is more important now than ever," Freeland said. "And what I can commit to for Canadians, and for our partners around the world, is that Canada will very faithfully follow the rule of law."

Posted by: james | Dec 12, 2018 6:55:45 PM | 66

BM @ 4:

My suggestion in the previous comments thread was noticed only by one (James) but I'm sure it still holds up well.

Huawei could undertake to pay Sabrina Meng's bail or at least her security detail when she has to leave her house. Huawei then sends the amount paid to Beijing and Beijing charges Ottawa for the amount paid ... and includes interest payment for each and every day that Ottawa declines to pay the principal.

Tit-4-tat actions against US companies, however desirable, might have unfortunate long-term consequences especially if elements in the US Deep State are expecting them and are prepared for them.

Posted by: Jen | Dec 12, 2018 7:07:04 PM | 67

Loz @57--

Thanks for reposting Lavrov's acute observations, thus revealing that Russia and China already know the what and why of the Outlaw US Empire's doings. Frankly, I was surprised nobody commented about my Monopoly Game analogy from yesterday which illustrates the situation the Outlaw US Empire finds itself in thanks to its unilateral and exceptionalisms. Indeed, for its opponents, moves made by the Outlaw US Empire can fairly well be anticipated and thus quickly countered. And thanks to the desire by most nations for multilateralism, Russia and China find receptive audiences and ready allies in their campaign to neuter the international outlaw bully.

A Must Remember: The USA has never wanted to subordinate itself to any rules other than its own that it can change whenever it suits itself. The key evidence of this is that while the Senate was ratifying the UN Charter in late July of 1945, the Executive branch was embarking on its terroristic Anti-Communist Crusade by arming and facilitating the infiltration of former Nazi SS and Gestapo agents into the Soviet-held regions of Eastern Europe thereby violating the newly negotiated international system of law and its own Constitution, and making itself THE primary International Outlaw Nation, which it proudly continues to be to this day.

Posted by: karlof1 | Dec 12, 2018 7:21:25 PM | 68

Don Bacon Lettuce and Tomato @ 61

Excellent post.

Posted by: donkeytale | Dec 12, 2018 7:21:36 PM | 69

Great article and I would say that you are getting the political implications, the hypocrisy and the rest of it pretty much spot on.

I'll add this just for the heck of it.

This case started a while back when ZTE narked out Huawei for using third party cutouts to avoid the sanctions. The ZTE case was in England. Because Hauwei is not the legal owner of these chips or code it makes it "theft by conversion". Using banks to launder the money is bank fraud as well.

What a lot of people are missing, legally, is that this is not the same at all as violating sanctions by selling your own products. They do not own the chips or proprietary software in any legal sense. The chips and code are still owned by the parent company that developed them, China has what amounts to a licensing agreement with the parent companies. If Weng had violated the sanctions by transferring her own code and her own chips then it would be out of our jurisdiction. However, once they violated the terms and conditions of the contract they not only have committed fraud they have committed theft by conversion of a US owned product and they used US banks to launder the money. This is why she is actually being charged with fraud and not sanctions violations. I'd bet that if they go full hardball she would be charged with Bank Fraud as well. That's the one that comes with the most prison time.

In short, violating sanctions doesn't usually get you arrested because it doesn't also include theft, fraud although money laundering gets them sometimes. But of course we also know that the rest of the article is pretty much correct. She was actually arrested as part of the entire back and forth over trade and all the rest. Our government normally would not pick a top dog to do jail time, so why now and why her? 5G and access to markets are a big part but so is a real concern over the constant pirating, malware, spyware, backdoor access to the Chinese government to all the encryption they use, etc. etc.

I'm only adding my comments to remind people that the US actually does have a rock solid case against her company, so don't be at all surprised if she isn't eventually charged unless Trump does something to stop it. They were caught red handed committing fraud by using third party cut outs and lying to the banks involved as well. If the US really wants to push it they are within their legal rights under our laws to do it. She essentially stole US property and laundered the proceeds with US banks. Go ahead and try that yourself and see if you get away with it.

Transferring a product you do not own to a third party in violation of a contract is theft by conversion. It's the same as if I recorded a football game and then sold it against their wishes and then laundered the money. It's not the violation of the sanctions per se that will get her in trouble, it's transferring stolen property, fraud and money laundering that they are actually holding over her head. If they want to, they can send her away for a long time and they know it. This could get really ugly.

Posted by: Brad Smith | Dec 12, 2018 7:21:46 PM | 70

Don That breakingdefence seems as broken as other neo-lib sites such as Lawyers, Guns and Money.

BTW, we are coming up for the sixtieth anniversary of the the Cuban revolutionaries kicking out the dictator Batista. Cuba, which then went on to impose massive defeats on Reagan and Thatcher by bringing down their beloved (Reagan and Thatcher's, that is) apartheid in South Africa. We are repeatedly told that it was Russian MiGs which it did but they were operated and flown by Cubans, and if Castro hadn't sent them to defeat the apartheid state in Angola, it's doubtful the conservatives in the Soviet Union would have done so. So, Cuba has been in the trenches for twenty years more than Iran and still appears to be undefeated.

Finally, the Angry Arab has an essay up at Al Akhbar about the US secret war on Communism that is worth a read. The machine translation is readable.

Posted by: Ghost Ship | Dec 12, 2018 7:24:31 PM | 71

Sorry, but the readers here seem to have no clue whatsoever about Putin's past.
Putin was part of the group under the St. Petersburg mayor - it was because of this that he was put in power as Yeltsin's 2nd in command. And equally it was because of Putin's position under Yeltsin which made him acceptable to foreign powers as Russia's new head.
Medvedev has always been an Atlanticist; much like the 1% in the US, his background is global technocracy which naturally gravitates him toward the US. Having a close relative on Gazprom doesn't hurt either.
Point is, Putin didn't come out of nowhere nor was he a nobody.
That he is a very articulate and thoughtful leader - that was the only surprise.

Posted by: c1ue | Dec 12, 2018 7:30:44 PM | 72

China just ordered a boatload or more of soybeans and says they wont let this interfere with trade talks.

Just the way Trump likes to deal. Meng will work out of her expensive Vancouver home as hostage until a trade deal is done. Then she gets released w/o extradition

Posted by: Pft | Dec 12, 2018 7:36:17 PM | 73

"Top Ten American War Criminals Living Freely Today:" https://rense.com/general69/tpten.htm

Posted by: Anya | Dec 12, 2018 7:37:03 PM | 74

Brad Smith @69--

How many US corporations are guilty of doing the same do ya think? As for industrial espionage, I have just one word--ECHELON.

There's an excellent reason why the Outlaw US Empire wants to change the rules of the game that it initially designed: It can no longer win using them; indeed, it can be defeated by what it emplaced. Reminds me of an old Sting hit Fortress Around Your Heart; in fact, it's quite apt.

Posted by: karlof1 | Dec 12, 2018 7:40:48 PM | 75

From Christopher Black

http://pacificfreepress.com/2018/12/10/opinion/taking-huawei-hostage-the-canadian-angle-on-meng-arrest.html

“The pretext for her arrest is that Huawei has violated US sanctions against Iran. But the “sanctions” imposed on Iran by the US recently are illegal under international law, that is under the UN Charter that stipulates that only the Security Council can impose economic sanctions on a nation..... There is, therefore, no law that she or Huawei is violating. ....

(Trudeau stated) that this arbitrary arrest was not politically motivated ...... Article 2 of the Treaty (with the US) requires that Canada can only act on such a request if, and only if, the offence alleged is also an offence by the laws of both contracting parties. But the unilaterally imposed and illegal sanctions placed against Iran by the USA, are not punishable acts in Canada and even in the USA the “sanctions” are illegal as the are in violation of the UN Charter.

Article 4 (1) of the Treaty states:
“Extradition shall not be granted in any of the following circumstances:
(iii) When the offense in respect of which extradition is requested is of a political character, or the person whose extradition is requested proves that the extradition request has been made for the purpose of trying to punish him (or her) for an offense of the above-mentioned character.....

So, Prime Minister Trudeau cannot evade responsibility for this hostage taking, this arbitrary arrest and detention since his government had to consider the US request and consider whether it was politically motivated. ....... It was a political arrest. The rule of law in Canada has been suspended, at least in her case, and so can be in any case.

Posted by: Pft | Dec 12, 2018 7:51:51 PM | 76

Trudeau's insinuation that extradition is a purely judicial process in Canada is simply wrong. The "International Assistance Group" in the Department of Justice works actively with the requesting state against the person sought for extradition, and this can be a hugely political process involved outright lies to the court, as the Diab case revealed. Extradition law in Canada is so politicized that even when a judge commits someone for extradition, the matter is then referred to the Minister of Justice, who has the ultimate say. All of this is to maintain Canadian political alliances at the expense of the rights of the accused. Extradition, kidnapping and extraordinary rendition are almost indistinguishable in Canada.

Posted by: No Pasaran | Dec 12, 2018 8:08:10 PM | 77

@75 "Canadians should be angry about their nation being led by people whose loyalty is to Washington instead of to the Canadian people whose interests they care nothing for."

So is Christopher Black suggesting Canada put Meng on a plane back to China and give Trump the finger? How would that be good for the Canadian people?

Posted by: dh | Dec 12, 2018 8:14:16 PM | 78

Brad #69
She is being charged with bank fraud. That is why she is being threatened with up to 60 years in prison. But the attribution of the cut out or shell company, Skycom, with Huawei is based on anecdotal evidence which can be effectively challengd. Alleging that Meng herself knowingly conspired to make false representation is a huge stretch, and none of the evidence assembled comes close to that. Also, the sanction violation involved less than $2 million of Hewlett Packard “gear”, not high-end proprietary tech.

Posted by: jayc | Dec 12, 2018 8:14:18 PM | 79

Your opinion on this? How could China win a trade war since it is relying on its large trade surplus with the US? As Trump said, trade-surplus countries suffer more in trade wars, as it is they who get hit with tariffs.

In Giant Trade War Concession, China Prepares To Replace "Made In China 2025"

https://www.zerohedge.com/news/2018-12-12/giant-trade-war-concession-china-prepares-replace-made-china-2025

In First Major Purchase Since "Trade War Truce", China Buy 500,000 Tonnes Of US Soybeans

https://www.zerohedge.com/news/2018-12-12/first-major-purchase-trade-war-truce-china-buy-500000-tonnes-us-soybeans

Posted by: T | Dec 12, 2018 8:16:03 PM | 80

Karlof1 I agree, it's damage control at this point in time.

And yeah they have wanted "total information awareness" for a while. I think that was the term they used in the "Project for a new American Century" talking points wasn't it? They wanted to grab every bit of data produced in the entire world and store it. TOTAL information awareness. And they published that plan right out in the open for everyone to read. Then they went right ahead and built the facilities, infrastructure, hired all the people to man it and nobody did jack nothing to stop em either. (dem terrorsts might get us if we complain too much)

Why we didn't run those neo-con fools out of town on a rail is beyond me but the reality is that people will put up with damn near anything before they really demand change.

By the way which would you prefer, a phone with a backdoor by China or a backdoor by the US? Pretty lousy choice either way if you ask me. I bet if Heuwei would give our "intel" agencies the backdoor key to their devices they would be just fine with that as a "settlement".

Posted by: Brad Smith | Dec 12, 2018 8:17:12 PM | 81

Finnian Cunningham's OP/ED serves as a complementary to b's. A taste:

"The US has increasingly been wielding its legal definitions and measures as if it is the world’s judge and jury.

"In recent years, American lawmakers have created a slew of legal weapons, including the Magnitsky Act, the Global Magnitsky Act, the Countering America’s Adversaries Through Sanctions Act, which give Washington the supposed power to penalize any country it deems to be in breach of its national laws.

"The arbitrariness of US “justice” has got to the febrile point where Washington is threatening all nations, including its supposed European allies, with legal punishment if they don’t toe the line on its designated policy."

His conclusion:

"Washington’s lawless pursuit of its nationalistic interests is turning the globe into a seething jungle of distrust and resentment. The political chaos in Washington – where even the president is accused by domestic opponents of abusing democratic norms – is fanning out to engulf the rest of the world.

"America’s erstwhile claim of being the world’s sheriff has taken on a macabre twist. Increasingly in the eyes of the world, it is a renegade state which absurdly justifies its criminality with lofty claims of rule of law."

IMO, the world can do very well without the English-speaking nations of the Western Hemisphere. Containing them would be far easier than Eurasia, even with bases strewn globally, for they must trade with the rest of the world to keep their current standard of living whereas the rest of the world doesn't need to reciprocate. Yes, there's a very good reason why the USA called its late 19th Century trade policy the Open Door--a policy that continues today. Trump seems to want autarky, so give it to him by calling his massive bluff. Leave Uncle Scam sitting alone at his Monopoly Board masturbating while the rest of the world plays Diplomacy and Go! Send an unmistakable message that he's the Bullying Misfit and shatter his exceptional ego. Hopefully if the correct psychological approach is used, a planet devastating war can be avoided; but the latter cannot be feared when dealing with the International Bully as it must be taught a lesson it will never forget.

Posted by: karlof1 | Dec 12, 2018 8:20:28 PM | 82

@79 I'm not sure anybody will come out a clear winner....though Trump will claim victory for sure. A large order of soy beans makes a nice gesture, so would buying a few airplanes from Boeing, but the Chinese still have a few red lines they won't cross. All depends how hard Trump wants to push.

Posted by: dh | Dec 12, 2018 8:20:58 PM | 83

"Moreover, attempts have been made to replace the notion of law with a “rules-based order”

About time this was voiced publicly and Lavrov is the man to do it. It has been very noticeable over the last few years that our western or five eyes "rule of law" narrative has been replaced by "rules based order" or so called "international norms".

Posted by: Peter AU 1 | Dec 12, 2018 8:21:29 PM | 84

@ james, in a snarky response to a warmonger at Breaking Defense, who misunderstood a previous james comment: --
. . ."thanks for yours as well.. usually the american trolls are always reminding others of how they abide by law, when in fact, it is quite the opposite..."
...a classic put-down. kudos.

Posted by: Don Bacon | Dec 12, 2018 8:39:04 PM | 85

Brad Smitrh @80--

Thanks for your reply! I own the most fundamental of cell phones used for rudimentary texting and emergencies as I have no need for further sophistication, and I had to be talked into buying that one! So, I'd prefer to have no backdoors anywhere near my person at anytime and strive to establish that condition.

Indeed, this entire situation ought to bring governmental interference in citizen privacy to the fore so it can finally have the debate it deserves--Constitutionally, the government is in violation, it knows it, but tries to circumvent Primary Law by using the National Security canard. Should the citizen have an expectation of privacy within his/her own space or not? If not, then the entire Bill of Rights is null and void.

Posted by: karlof1 | Dec 12, 2018 8:42:08 PM | 86

@ 79 T
In Giant Trade War Concession, China Prepares To Replace "Made In China 2025"
The revised plan would play down China’s bid to dominate manufacturing and be more open to participation by foreign companies, these people said.

That's what the US has been complaining about, isn't it? The American manufacturers are invited in and then have to give up all their trade secrets to be allowed to manufacture in China, until the locals take over with their newly acquired knowledge.

Regarding soybeans, China needs it to feed their hogs. Apparently Brazil didn't work out in the long term.

Posted by: Don Bacon | Dec 12, 2018 8:57:49 PM | 87

@Don, Thank you for the great brave job of posting on the out of realty redneck' site. A daily dose of reality comments should really F*s the warmonger bastard' day.

Posted by: kooshy | Dec 12, 2018 8:58:14 PM | 88

Dh@77

I fail to see how exercising their sovereign right is giving Trump the finger, or bad for the Canadian people. However Canada has basically become the US 51st state since NAFTA and the first Gulf War, so they follow orders

The new NAFTA will push up drug prices even more so they may soon join their brothers south of the border and enjoy declining life expectancy due to unaffordable Drug prices

Posted by: Pft | Dec 12, 2018 8:59:54 PM | 89

From ZeroHedge "Below we present some pertinent thoughts on the arrest of Huawei CFO Meng Wanzhou from former Fed Governor Larry Lindsey and current head of the Lindsay Group."

.. Then along comes a story in the South China Morning Post about an October meeting with employees in which Meng said that there are cases where, “the external rules are clear-cut and there’s no contention, but the company is totally unable to comply with in actual operations. In such cases, after a reasonable decision-making process, one may accept the risk of temporary non-compliance.”

That statement is full of euphemisms, but it makes putting the corporate interest ahead of complying with the law the official position of management. Put that in the context of a four-year anti-corruption campaign by Xi and a purge of top-level tech executives who have gotten too big for their britches. In Xi’s new world it may be one thing to have said that it was ok to put China’s interests first, but she is putting the corporate interests ahead of China’s interests.

Also note that these comments were in quotes from an internal (and closed) Huawei meeting. How did the SCMP acquire these direct quotes? The SCMP is one of the world’s truly great papers, publishing candid news and commentary focused on getting to the truth in a way that is only a distant memory in American newspapers. That said, it is also like Hong Kong – one nation, two systems. If Beijing really wanted a story out, it would provide the sources and the reporters would do the rest. And if they really wanted a story spiked it probably would be spiked. Those direct quotes obviously came from Chinese authorities and the story was printed at a very inconvenient time for Meng – when she was protesting her innocence. Somebody in Beijing thinks Meng is a loose cannon.

Let’s be a little conspiratorial or, more precisely, try and create a narrative that fits the facts. It arguably serves everyone’s interests for Ms. Meng to be taught a lesson. It is in Bolton’s and the DoJ’s interest to send a message that access to power
and connections does not buy you a get out of jail free card. It is in Xi’s interest, or at least in the interests of major portions of the Chinese government, to send a signal that even the extremely well-connected still have to toe the party line.

...The detention did not involve any surprises. The charges against Meng were leveled three months before her arrest. The market reaction seemed to be based on the notion that this was a last-minute surprise. As for the Chinese, Xi and Company knows where everyone is going and when. They certainly knew that Meng was traveling to Vancouver, that she had a warrant for her arrest outstanding, and that Canada extradites to the U.S. They did nothing to warn her.

... Our conspiracy theory holds that she will be released when everyone thinks the lesson has been learned. America scores a win in terms of signal value about enforcing Iran sanctions whether Meng spends two weeks, two months, or the rest of her life behind bars. Xi will have signaled what he thinks about prioritizing corporate interests over national interests and bending regulations.

... One does not have to buy this conspiracy theory in all its detail to get at the essential truth that markets need to digest. Meng’s arrest is not going to affect the outcome of the trade talks. Xi (and China) have too much of a stake in this to let the antics of a close friend’s naughty daughter stand in the way of him getting what he wants. And once an example is made, America also has too much to lose.

https://www.zerohedge.com/news/2018-12-12/larry-lindsey-something-about-huawei-cfo-arrest-doesnt-make-sense

Posted by: daffyDuct | Dec 12, 2018 9:11:26 PM | 90

@88 "I fail to see how exercising their sovereign right is giving Trump the finger..."

ReallY? Then you haven't been watching Trump. He would go ballistic. He would probably renegotiate NAFTA ....again. He could put thousands of Canadians out of work overnight if he felt like it.

Posted by: dh | Dec 12, 2018 9:12:23 PM | 91

@ 69 BS
". . .the US actually does have a rock solid case against her company,"

. . .to repeat from 43:

The investigation by U.S. authorities has revealed a conspiracy between and among Meng and other Huawei representatives to misrepresent to numerous financial institutions. . . .The motivation for these misrepresentations stemmed from Huawei's need to move money out of countries that are subject to U.S. or E.U. sanctions--such as Iran, Syria, or Sudan--through the international banking system. At various times, both the U.S. and E.U. legal regimes have imposed sanctions that prohibit the provision of U.S. or E.U. services to Iran, such as banking services....
Because Meng and other Huawei representatives misrepresented to Financial Institution 1 and the other financial institutions about Huawei's relationship with Skycom, these victim banking institutions were induced into carrying out transactions that they otherwise would not have completed. As a result, they violated the banks' internal policies, potentially violated U.S. sanctions laws, and exposed the banks to the risk of fines and forfeiture.

So if Skycom belonged to Huawei, and the banks were "induced," there were problems --
1. violation of banks' internal policies
2. potentially violated US sanctions
3. exposed banks to US punishment
But if Skycom was an independent corporation the sanctions violations would have been okay? What am I missing. And why would the US punish banks when they were knowingly duped.

Posted by: Don Bacon | Dec 12, 2018 9:17:49 PM | 92

T@79

“ How could China win a trade war since it is relying on its large trade surplus with the US? As Trump said, trade-surplus countries suffer more in trade wars, as it is they who get hit with tariffs.”

Well, you do know tarrifs on imports are paid by the US importer and on to the consumer. China pays not a dime of US tarrifs

Now it could be hurt if US buyers could order from other countries. However, this is not an option for every import as there are production capacity, quality and price constraints. In the short term orders to China would not be affected much since there are not many good alternatives

China has some weapons of their own. US military required certain rate metals from China for weapons, China basically clothes America and of course many electronics , furniture, tools and toys come from China. Witholding or taxing these exports is a weapon they have yet to use.

Furthermore, much of the profits of US companies come from manufacturing or buying from China. Prices get marked up as much as 10 times what China receives

18% of its exports go to US. With 20% of GDP based on exports that means US is responsible for 3.6% of Chinas GDP. Tarrifs might affect 20% of exports meaning the hit on GDP would be 0.7%. With GDP growth over 6% they wont feel too much pain.

Posted by: Pft | Dec 12, 2018 9:21:36 PM | 93

Re:Brad Smith @69

"hey do not own the chips or proprietary software in any legal sense. The chips and code are still owned by the parent company that developed them, China has what amounts to a licensing agreement with the parent companies. If Weng had violated the sanctions by transferring her own code and her own chips then it would be out of our jurisdiction. However, once they violated the terms and conditions of the contract they not only have committed fraud they have committed theft by conversion of a US owned product and they used US banks to launder the money. This is why she is actually being charged with fraud and not sanctions violations." -

I've heard US government make this argument in courts before and historically US courts have generally agreed with it. However, this legal argument ignores the huge practical consideration of this rule within the current international economic system (i.e. the real world). Namely, for the last 70 years (post-WW2) the US has encouraged and promoted Liberal free market world economic integration, that each country should focus on the specialization of their economies to produce a small number of goods at a low production cost and then purchase all other goods they needed from other countries that specialized in that good (i.e. internal economic self-sufficiency is bad). Generally people hear this and immediately think of how Germany specializes in mechanical engineering, Japan specializes in high-tech computer and so on. However the realty in the world today is that is specialization goes much further in that a single circuit board in a computer WILL contain transistors made in Korea, Inductors made in Japan, Capacitators made in Taiwan, Transistors made in the US and then assembled in China. At each stage of the manufacturing / assembly process costs are carefully analyzed to minimize costs based on the provider, transportation costs, etc... to produce the goods at the lowest possible cost and maximize profits. This is what people call the Global Supply chain that has for the last 30 years underpinned the entire world manufacturing economy. N(OTE: I'm not saying this is good or bad from a moral stance, merely that this is what it is and the motive for it)

What the US is doing, by asserting that US law indefinitely applies to any component (including intellectual or financial) that is made in or travels through the US and is then subsequently assembled or sold in a 3rd (or 4th or 5th or 6th....) country that is subject to US sanctions is a direct attack on the Global Supply Chain economy and is extremely dangerous to standard of living we've become accustom to in the Western world. Historically, when the US used sanctions like this against Cuba, North Korea, Iran, China and the Soviet Union, these countries were relatively much weaker than the US and not integrated into the Western World economy (nor were they well integrated with each other economically speaking), so the US was able to retard their economic development. However after more than 40 years of increasing integration the Western world (US, Canada, Mexico, Europe) is totally dependant on the Global Supply Chain, so now that the US is expanding their sanctions to everyone they are effectively sabotaging their own economy and the economies of their allies/vassals. Conversely, the US rivals (Particularity Russia, China & Iran) are become more economically integrated with each other and are already experienced with economic independence from the Western Market.

The two most likely outcomes from the US actions are 1) The non-western world becomes more integrated with each other and independent of the Western market, effectively re-dividing the world like we saw during the Cold War, only now instead of Capitalist vs Socialist, it will be Neo-Liberal Fascism vs National independence (i.e. a return to the pre-1914 concept of the state) 2) The Western World will become more divided with their economies weakened as the US asserts more direct control over their vassals, impoverishing their vassals' economies in order to consolidated wealth & power into their preferred elites who will ensure their control over their vassal countries. As the quality of life of the average citizen declines and Western countries become more politically unstable and economically stagnate, we may even see a "Prague Spring" type of event, where a Western government moves away from the US/NATO/EU alliance only to suffer a US/NATO backed invasion similar to the Soviet invasion of Czechoslovakia in 1968.

Posted by: Kadath | Dec 12, 2018 9:38:57 PM | 94

>> Well, you do know tarrifs on imports
>> are paid by the US importer and on to
>> the consumer. China pays not a dime of
>> US tarrifs

No, I don't know that. It depends.

If China's exporters have tiny margins and the consumer can afford to pay more, then yes.

If China's exporters have big margins and fear losing market share (not necessarily to domestic American manufacturers but to other foreign manufacturers), they might choose to sell at a "lower but still profitable" price in order for the POS price to remain nearly the same and for them to retain their market share.

Posted by: dumbass | Dec 12, 2018 9:49:01 PM | 95

>> With GDP growth over 6% they
>> wont feel too much pain.

Pft, I agree bigly there. (And thanks for doing the math.) Despite my prior post, I doubt China cares about "maintaining market share" to ship real product to a nation that provides almost nothing but threats in payment.

Posted by: dumbass | Dec 12, 2018 9:54:11 PM | 96

>> we may even see a "Prague Spring" type
>> of event, where a Western government moves
>> away from the US/NATO/EU alliance only to
>> suffer a US/NATO backed invasion similar
>> to the Soviet invasion of Czechoslovakia
>> in 1968.

As a small step in that direction, someone mentioned a few French "police" vehicles bore EU insignia.

Posted by: dumbass | Dec 12, 2018 9:57:57 PM | 97

@Pft 92

"18% of its exports go to US. With 20% of GDP based on exports that means US is responsible for 3.6% of Chinas GDP. Tarrifs might affect 20% of exports meaning the hit on GDP would be 0.7%. With GDP growth over 6% they wont feel too much pain."


This 18 - 19 percent export number is not true, as in does not take into account exports to the US via Hong Kong. This is only mainland exports. But China also "exports" a lot to HK, and then these goods are exported to the rest of the world. So exports to the US are more than 18 percent.

https://tradingeconomics.com/china/exports-by-country

Second, the biggest China trade surplus is with the US. Its trade surplus with the EU or Russia is far smaller. If they lose it, they lose a lot.

As for tarrifs, they encourage companies to move away from China to other asian countries.

South-east Asia will gain from a prolonged trade war, analysts say

https://www.straitstimes.com/asia/east-asia/south-east-asia-will-gain-from-a-prolonged-trade-war-analysts-say

And the US is waging the trade war via other means, for example it is urging allies to drop China's IT companies. New Zealand and Japan are dropping Huawei and ZTE. EU is warning too. No doubt there will be other US allies following. So costs for China will be substantial.

Japan sets policy that will block Huawei and ZTE from public procurement as of April

https://www.japantimes.co.jp/news/2018/12/10/business/japan-sets-policy-will-block-huawei-zte-public-procurement-april/

Europe should be wary of Huawei, EU official says

https://www.reuters.com/article/us-eu-china-huawei/europe-should-be-wary-of-huawei-eu-tech-official-says-idUSKBN1O611X

What happens if the West and probably India block Chinese Tech companies? Costs for China will be substantial.

Posted by: T | Dec 12, 2018 10:01:23 PM | 98

Btw latest estimates show Chinese GDP growth dropping below 6 % after 2020. As opposed to India's nearly 8 %.

Posted by: T | Dec 12, 2018 10:04:52 PM | 99

China's trillion dollar Belt & Road Initiative will change everything, so why get hung up on the past. The BRI provides China with an opportunity to use its considerable economic means to finance infrastructure projects around the world.

Posted by: Don Bacon | Dec 12, 2018 10:23:01 PM | 100

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