US policies: killing our region while we sit silent

Feb 6, 2023
Planet Earth globe. Australia, Oceania and Southeast Asia.

We live in an integrated and connected world, not well understood by political leaders or military moguls. Nowhere is this more important than in East Asia. Destructive action towards important neighbours who are central to our trade with the world is of course contrary to our national strategic interests. We should not sit silent.

For Japan, South Korea, and Taiwan, the highest percentage of their trade is with China. With accompanying patterns of investment. Some data is accessible here and here (and many other places). This commentary on relations with the mainland by the Taipei foreign ministry is essential reading, standing in stark contrast to the portrayal of the situation by the American political leadership.

It is necessary to see of course the complex history of these places in themselves as well as in their relations with each other. Predominantly reporting on them into Australian media has been on the economic pages. But these places have minds and souls. Because of COVID-19 restrictions on travel, gaps in human contact increased, as has been the case for the human links between Australia and China. This is not healthy.

In Japan there continues to be a conservative prime minister, now planning doubling of defence expenditure and intensification of the security connections with the US, see Gavan McCormack’s recent essay here. Some leftish opinion on that subject from South Korea here. South Korea last year narrowly elected a conservative president who has revived hostile and pre-emptive ideas of dealing with North Korea, the Democratic Peoples Republic of Korea (DPRK). ROK president Yoon’s popularity as also that of Japanese Prime Minister Kishida has declined quickly. Like Australia, South Korea’s political balance is conservative.

In the DPRK, the 2019 Congress of the Korean Workers Party resolved to put aside connections with Seoul and Washington, to concentrate on relations with socialist neighbours China and Russia, of Russia recently making the observation “we are in the same trench”.

South Korea tends not to be mentioned in discussion of the Taiwan issue, but South Korea is in the middle of the issue and the geography and the overall security situation sees Japan and ROK hesitate when they need to take charge of economic issues in relation to China.

There is surprisingly little coherent focus on the impact on the region of the new inflation reduction and CHIPS acts recently passed into law in the US. Ukraine casts a long shadow over clear thinking, everywhere. See the IRS information on aspects of the inflation reduction law, offering discounts on electric and clean vehicles… provided that the manufacturer is not doing business with China. Before this, Hyundai was the top seller of electric cars in the US. But Hyundai is embedded in China. China is the big country next door. We have yet to see the fallout from this in Korean opinion. The United States under the CHIPS Act wants to cut connections in IT with China and gather Japan, ROK, and Taiwan into an alliance for that. The problem for the lesser parties is that it’s a vampire system, to suck computer, memory and microprocessor business into the US (without a lot of thought about lack of human resources, or even water, in destinations for big new projects in the US. This was a useful overview by the Turkish national broadcaster half a year ago. It’s not up to date but nor would be today’s news tomorrow, as the US ferrets for more to sanction.

There are two areas of concern in this gigantic perilous nonsense. First, the great damage to these friends of ours in East Asia by ripping apart their economies. Second, the ignorant presumption by neocons commanding government policy and the top people paid vast amounts of money in the IT industry that America and Americans can and want to do the intellectually high level, difficult and demanding work in these fields. So: smash East Asia, and smash a lot of the western IT industry… while compelling China to increase the speed of its independent technological development.

This regional nonsense takes place with broader contexts. Including:

  • Can the US Congress solve the debt ceiling issue or will US treasury paper be downgraded again.
  • The entanglement of Japan, China and smaller Asian countries because of their holdings of US Treasury papers. Click on ‘expand’ at the bottom of the bar chart at link to see the fuller extent.
  • Note that far away in Zambia, where US Treasury Secretary Yellen has just visited, blaming China’s debt policies for Zambia’s problems, the local Chinese embassy has slapped back saying “the biggest contribution that the U.S. can make to the debt issues outside the country is to act on responsible monetary policies, cope with its own debt problem, and stop sabotaging other sovereign countries’ active efforts to solve their debt issues.” This is a reminder that in various initiatives including by BRIC+ efforts are being made to unseat the US dollar from its preeminence.
  • The dominance of what John Menadue refers to as White Man’s Media in passage of power-connected information. The factors pulling the present international financial system apart are weak forces which may however be strengthened by self inflicted strategic errors by the United States. East Asia is a little isolated from those radical trends, but they have big implications for East Asia. The blinding of public awareness by poverty of news coverage of new trends in less rich countries has potential to deliver sudden shocks to East Asia.

Destructive action towards important neighbours who are central to our trade with the world is of course contrary to Australia’s national strategic interests. We should not sit silent.

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