Can You Mirror the Whole Internet?
Council on Foreign Relations predicts 2019 is the beginning of the end of the open Internet era.
In the next decade, China will establish a separate root system for their share of the internet. This will mark the end of the global internet era. When the root splits, the United States and its allies should establish a coalition of democratic nations that would offer a stark choice and clear alternative to the Chinese internet governance model for the rest of the world
On Dec. 31, 2019, China’s Ministry of Industry and Information Technology did announced such approval to establish China’s domain name root server (工业和信息化部关于同意中国互联网络信息中心设立域名根服务器（J、K根镜像服务器）及域名根服务器运行机构的批复) . However, Chinese newspaper Southern Metropolis Daily points out
The (so-called) root server is a mirror server, not the root server itself.
“Introduction of the root mirror server will improve Chinese internet users’ efficiency when accessing the domain name root server in (China)…strengthen the protection from cyber attacks and reduce the impact of international link failures on China’s internet security.
🙈 An anonymous CONTRAST memeber comments:
This could China’s prevention act to prepare for an internet shut down from the U.S. , because currently 10 of the world’s 13 main root servers are located in United States.
Time To Kiss Good Bye…
Last November, Henry Kissinger predicts a “catastrophic” conflicts unless China and US settle their differences. Kissinger warns:
It will be worse than the world wars that ruined European civilization.
Jane Doe, a MarketWatch reader commented:
Confirmation bias. China’s ascent to economic world dominance was in no small part facilitated by Kissinger. Xi should thank him.
Robert Spalding, a retired U.S. General, former Senior Director for Strategic Planning at the National Security Council, and author of Stealth War further differs:
This is the same language that was used to convince America that we should not stand up for our interests as we faced Soviet aggression. The challenge for today is that influence is not achieved through force of arms, but using data and economics. America must 1) Secure its institutions from the undue influence of the Chinese Communist Party. 2) Design a military that efficiently creates a deterrent against CCP military aggression, and 3) Quickly shift defense funding toward Infrastructure (Secure Internet), Industrial Base, STEM and R&D.
Asian Rise; Asian Fall?
#The future is Asian
In his book The Future is Asian, author Parag Khanna predicts
In the 19th century, the world was Europeanized. In the 20th century, it was Americanized. Now, in the 21st century, the world is being Asianized and the main thesis is based on the multi-polarity of Asia’s growth and influence, and what consists of the Asian systems – technocracy, illiberalism, meritocracy, economic dynamism and free trade.
#The End of the Asian Century
However, in The End of the Asian Century author Michael R. Auslin lays out the risk map of the many dangers that could derail Asia’s growth and stability.As Stephen Aguilar-Millan, a researcher at European Futures Observatory summarized:
- Failure in economic reform led by crony capitalism… (the author) divides the Indo-Pacific area into three risk categories – the sluggish (e.g. Japan), the soon to be sluggish (e.g. China), and the vibrant (e.g. Indonesia).
- Growing old before growing rich … the old (e.g. Japan), the becoming old (e.g. China), and the young (e.g. Indonesia).
- Unfinished internal political reform. This risk is viewed as the extent to which the various nations have moved to become liberal-democracies. The range is from the ‘democratic’ (e.g. India) to the ‘autarchic’ (e.g. China).
- The lack of a cohesive international political community. Why there is no Asian equivalent of the EU?
- The risk of war. … There are a number of border disputes, disputes over sovereignty, and historical grievances to keep this risk high in our thinking.
#GDP growth winner in 2020?
As for who will win the GDP growth race in 2020, Fortune India predicts the winner is
Bangladesh, which has been forecast to grow at 8% in 2020, most likely Asia’s fastest growing economy.
The Art of No Deal
While the world-awaiting the Phrase I of U.S.-China trade deal is rumored to be sealed on Jan.15, 2019, China sent out mix signals on such deal.
Global Times Chinese on Jan 6, 2020:
China, US shouldn’t rush phase one deal
Global Times English on Jan 7, 2020
China, US could possibly sign phase one trade deal next week
Eunice Yoon, the Beijing Bureau Chief of CNBC points out a few clauses on the Phrase I agreement that could “irritating Chinese trade experts”:
1) assertion China agreed to end “forcing” tech transfers (China balks transfers forced); 2) mention of devaluations (feels one-sided, and economy slowdown=weaker CNY); 3) no WTO reference to settle disputes(so again unequal)
A two page brief of Phrase I deal can be found here.
China’s digital sovereign currency has a hardware problem?
In October, Chinese politician Huang Qifan announced:
China is ready to launch its digital sovereign currency OCED (Digital Currency/Electronic Payment), a tool to replace MO (money order or cash) but not to replace RMB.
This month, according to SCMP, POBC, China’s central bank reassured its commitment to China’s sovereign digital currency. Mu Changchun, newly appointed head in charge of its development, was quoted by Shanghai Securities News last month as saying that
The “top-level design, formulation, functional research and testing” of the digital currency electronic payment, as it is formally known, had been completed.
However, Mark, a fintech entrepreneur points out the hardware challenge for digital sovereign currency development in such scale. He comments
Hardware is the ultimate blockchain enabler. Imagine switching transactions on or off with a button… that big… software alone will never be successful in blockchain.
Grey Rhino or Grey Rhinos?
Grey Rhino, a concept referring to a highly probable, high impact yet neglected threat, is a new keyword to monitor China’s economy. Even President Xi borrowed it to issue his warning during a speech he gave at the Party School of the CPC Central Committee （中央党校）in January 2019.
China must be on guard against highly improbable, unimaginable “black swan” events while also fending off highly probable but often neglected “gray rhino” risks.
Turning into 2020, Grey Rhino was again frequented in headlines on media outlets including New York Times and BBC .
Many China-watchers believe heavily leveraged state-own enterprises and local banks’ bad debt can trigger a Grey Rhino moment in China, however, ShengJun Huang (黄晟俊) , a Shanghai-based finance editor believes there are more than one Grey Rhino threats:
In addition to the shadow banking, real estate bubble, high leverage of state-owned enterprises, and local debt, there are also high unemployment, capital outflows, aging population, and wealth disparity.
To add to the herd, New York Times included
Taiwan 2020 election and Hong Kong protest (are also) potential threats.
Michele Wucker, the economist who coined the Grey Rhino concept, warns via a tweet
The correct term for a group of rhinos is not herd, but “crash.”
Liu Cixin: Chaos Butterfly
Chaos Butterfly, a 2016 short novel by world-acclaimed Chinese SiFi writer Liu Cixin (The Three Body Problem), is a popular read amid current U.S.-China trade tension. In Chaos Butterfly, Yugoslavia meteorologist Alexander tries to engineer a scientific “bufferfly effect” to avoid his home country being bombed by the American military, but the effort eventually led to the the death of his family. Popular reviews include
One could engineer the butterfly effect in nature, but would fail to engineer one among people.
However, twitter user Justo denounced this novel and the author Liu Cixin as a whole (paraphrase):
After World War II, a watershed event of human civilization, less developed nation is not destined to be destroyed by developed ones; often it is the authoritarian regime, who rejects democratic value and freedom of choice among the people, destroyed its own sovereignty…Therefore, Liu’s novel is misleading and his work often promotes superiority under Tito-style autocratic totalitarian.