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The Two Giants are Talking

A One-on-One summit of extreme significance

On Monday, the world two most powerful leaders spent 3.5 hours talking through FaceTime in the first face-to-face virtual summit of significance between the two world most powerful leaders.

This summit is taking place at a time where tensions between the two super-powers are perceived to be extremely high with numerous areas of contention between the two countries.

The video conference got under way about 8 p.m. on Monday night in Washington. China’s state-run CCTV confirmed that the meeting lasted for more than three hours.

“I look forward to a candid and forthright discussion,” Biden told Xi at the start of the summit, adding that they had a responsibility is to ensure that competition between the countries doesn’t veer into conflict.

“It seems to me we need to establish some commonsense guardrails, to be clear and honest where we disagree, and work together where our interests intersect, especially on vital global issues like climate change,” Biden told Xi.

Xi started his remarks by calling Biden an “old friend” while saying the U.S. and China “need to increase communication and cooperation.” The two nations should work to find effective responses to global challenges including climate change and the pandemic”

“China and the United States should respect each other, co-exist in peace, and pursue win-win cooperation,” Xi said, adding that they should work “to build consensus, take active steps and move China-U.S. relations forward in a positive direction.”

Chinese Foreign Ministry spokesman Zhao Lijian said Monday that relations are at a “critical crossroads” and Beijing hopes they will return “to the right track of healthy and steady development.”

Xi Jing Ping came to the summit in a strong position politically, having cleared a major hurdle last week to securing a third term as Communist Party chief next year.

Our Take on the Summit

1. Credit must be given to Joe BIDEN

After four years of a Trump administration that has confronted China and heightened the anti-Chinese sentiment worldwide, Joe BIDEN is demonstrating once again his stature as a true world leader and a seasoned statesman.

The President of the world’s most powerful nation is acting like a responsible leader, privileging dialogue to confrontation and aiming at solving problems rather than retaking them.

Joe BIDEN knows full well that there is no positive future for the world if the two largest nations fall in the proverbial Thucydides trap of confrontation.

America needs China and China needs America and the world needs both Nations to talk.

In a globalised world no nation has anything to win for a military or an economic confrontation. Dialogue, sincerity, cooperation are the only way forward and BIDEN must be credited for taking the initiative and correcting the damaging dysfunctional strategies of his predecessor.

Xi Jing Ping and China showed a lot of patience over the whole period and always kept its hand opened to dialogue and cooperation.

Well done Mr. Biden ! It takes a lot of political courage to open your hand..

2. Hong Kong, Taiwan and military confrontation

The past few years have seen heightened tensions over the issue of Chinese sovereignty, the clamp down on Hong Kong and heightened military activity over the future of Taiwan.

Commentators should start from the beginning and from history to understand the issues at stake.

In Chinese History, Hong Kong’s 100 years of British rule were extorted by the British following the opium wars of the lost century that allowed foreign Nations to exploit an extremely weakened Chinese dynasty and establish their own sovereignty over parts of the Chinese Nation, through concessions first, and then invasions as was the case with the Japanese invasion of Manchuria.

Under Queen Victoria, the British Empire was a huge market for Chinese teas, but the Qing refused to engage in trade negotiations, rather demanding that Britain pay for the tea in gold and silver. Instead, Britain began a lucrative and illicit trade in opium, traded from British imperial India into Canton, far from Beijing, causing millions of Chinese to become addicted to the substance, weakening the productivity of the economy and the hold of the Chinese imperial administration on the country.

The Chinese authorities burned 20,000 bales of opium, and the British retaliated with a devastating invasion of mainland China, in two wars known as the Opium Wars of 1839–42 and 1856–60.

Completely unprepared for such an onslaught, the Qing dynasty lost, and Britain imposed unequal treaties and took control of the Hong Kong region in 1897, along with millions of pounds of silver to compensate the British for the lost opium. This humiliation showed all of China’s subjects, neighbours, and tributaries that the once-mighty China was now weak and vulnerable.

With its weaknesses exposed, China began to lose power over its peripheral regions. France seized Southeast Asia, creating its colony of French Indochina. Japan stripped away Taiwan, took effective control of Korea (formerly a Chinese tributary) following the First Sino-Japanese War of 1895–96, and also imposed unequal trade demands in the 1895 Treaty of Shimonoseki.

By 1900, foreign powers including Britain, France, Germany, Russia, and Japan had established “spheres of influence” along China’s coastal areas. There the foreign powers essentially controlled trade and the military, although technically they remained part of Qing China. The balance of power had tipped decidedly away from the imperial court and toward the foreign powers.

In 1900, Chinese peasants raised a huge anti-foreigner movement called the Boxer Rebellion. They initially opposed both the Qing ruling family and the European powers and Japan. Eventually, the Qing armies and the peasants united against the foreigners, but they were unable to defeat the foreign powers. This signaled the beginning of the end for the Qing dynasty.

The crippled Qing dynasty clung to power for another decade, behind the walls of the Forbidden City, but the Wuchang Uprising of 1911 put the final nail in the coffin when 18 provinces voted to secede from the Qing dynasty.

The Last Emperor, 6-year-old Puyi, formally abdicated the throne on Feb. 12, 1912, ending not only the Qing dynasty but China’s millennia-long imperial period.

The fall of the Qing dynasty in 1911 -1912 marked the end of the nation’s incredibly long imperial history. That history stretched back at least as far as 221 BCE when Qin Shi Huangdi first united China into a single empire and even before when taking into consideration the preceding Middle Kingdom Dynasties.

The Republic of China was born and Sun Yat-Sen was elected the first president of China.

At the beginning of the 20th century, many parts of the Chinese empire were occupied militarily and administratively by foreign nations with no justifications other than the economic benefits they could yield from such occupations.

The Chinese empire had lost its sovereignty and millions of Chinese were living under foreign rule.

The Republic of China lasted from 1911 to 1949, with great instability and a constant fight between Sun Yat Sen’s party the Kuo Min Tang and the Chinese Communist Party founded in 1921.

In 1949, after a devastating civil war and the Long March the Chinese Communist Party prevailed over the KMT and P established the People’s Republic of China in Beijing, with the KMT being expelled to Taiwan where the initial Republic of China thrived.

Because of its history, the issue of sovereignty is a very touchy issue in China and its official doctrine is non-intervention. China never interferes in the internal problems of other nations and expects other Nations never to interfere in what it considers to be its national sovereignty.

The Hong Kong Issue

In 1997, China regained sovereignty over Hong Kong and later over Macau, while leaving the two with a large level of autonomy through the One Country-Two systems formula.

As highlighted many times in previous articles, China’s sovereignty over Hong Kong was never an issue in international law or even domestically.

But what led to the 2019 clampdown by China on Hong Kong was the erupting of civil unrest following the implementation of an extradition law for criminals form Hong Kong to China.

This unrest took both the HK SAR authorities and the mainland Government by surprise, as in Law, its is perfectly normal for a sovereign nation to be able to judge its own citizens. But the Protests turned into a real questioning of China’s sovereignty over the Special Administrative Region, something China could not accept, as no nation can accept its sovereignty to be questioned.- see what happened to the Catalan uprising for independence in Spain in 2019 -.

After a period of official protests and press campaigns, America and the rest of the world have now accepted that Hong Kong is a pure domestic Chinese issue and that its future does not depend on Washington.

For 30 years since 1997, China was perfectly happy to let Hong Kong live with autonomy, now that it is no longer a sovereignty issue, the Chinese government will integrate it further into the mainland economy and its natural hinterland, the Guangzhou and ShenZhen region and that will be beneficial for Hong Kong

The Taiwan Issue

The issue of Taiwan is a far more tricky issue as in international Law, Taiwan – still officially the Republic of China – is the legacy of the republic of China that ruled mainland from 1911 to 1949 when the Kuo Ming Tang took refuge in Formosa.

Taiwan was a founding member of the United Nations and a member of various international organisations where it was replaced by the People’s Republic of China in the 1970s.

The situation of Taiwan could be compared to a situation where French Emperor Napoleon would have taken refuge in Corsica after being deposed and continued to rule Corsica as the French Empire until today.

For the People’s Republic of China which replaced the Republic of China in 1949, Taiwan has no sovereignty and no historical justification. the Island of Taiwan – Formosa was always part of its territory or owned by the Japanese. Its people are Chinese, although not Han for the native population.

Over the past 50 years, China was focusing on building its own society and economic prosperity and was happy to leave Taiwan develop in parallel. The official policy was similar to the philosophy of one country – two systems and the flow of business and investments between Taiwan and mainland China has been considerable over all these years, with no claim by China to integrate Taiwan by force.

The escalation of tensions over the past three years came mainly form two phenomena :

The local population, frightened by the clampdown of China over Hong Kong veered from pro-China political parties to anti-China Political parties.

America and the West became more active at supporting an independent Taiwan and even putting military forces there or expressing willingness to provide it with armaments.

As would be expected, China cannot accept foreign interference and military build-up in Taiwan which it legally considers as an integral part of the Chinese Nation, the republic of China having been replaced by the People’s Republic of China in 1949.

China has strictly no intention to invade Taiwan militarily. It does not see that option as a viable option.

HOWEVER, it will not allow America or anyone else to arm Taiwan or make it dependent form the West, something that would immediately resonate as yet another foreign occupation of Chinese territory.

The recent demonstration of force over Taiwan and in the South China Sea are messages sent to America and the rest of the world to stay away from what China considers to be its internal affairs.

The question then becomes,:

Will America provoke a third world war to guarantee the independence of the 23.5 million Taiwanese ?

Or will it use of its influence to ensure that Taiwan retains a certain level of autonomy while working towards a better integration into mainland China.

China has become far too powerful militarily for the US to engage in yet another military conflict after all the disasters of the past decades in foreign territories. China d recently tested supersonic missiles, something the US has not yet developed and that would give it a significant advantage in a world war.

Joe BIDEN is intelligent enough to know that negotiating will always be more efficient than confronting and even the People of Taiwan will not want to engage in a military conflict.

Moreover, neither America nor Europe resorted to confront Russia militarily when Russia annexed parts of Ukraine militarily. It is highly unlikely that they will want to go down that route when it comes to Taiwan.

The Taiwanese issue will ultimately be resolved by Chinese-Taiwanese negotiations, not by acts of war.

3. The Uigour Issue

There again, the Uigour issue is an internal issue of China and America knows full well that it cannot do much on this issue apart from voicing declarations of principles of the menas and methods used by China to solve a problem that the West is itself facing; counting the rise of radical Islam.

4. Military Build-up in the South China Sea

Military build-ups are an integral part of a logic of maintaining peace. The South China Sea is the hinter Sea of China and a strategic way of passage as well as a strategic defensive area for the PROC.

America does not do anything else with the number of military bases it maintains very far from its own territory and it has no real means to prevent China from building its own defensive infrastructure.

Once again, western commentators should refer to the Chinese history and its culture of non-confrontation.

China knows full well that the battle for world dominance is economic and not military, but it will not allow what it considers to be its sovereignty of waters close to its coasts to be hampered or contained.

5. Economic Cooperation and Sanctions

Most probably, the most visible improvements will lie in the bettering of the economic cooperation between China and the US and both countries want it.

The prerequisite here will be the lifting by the US of the sanctions and tariffs imposed on China and Chinese corporations. US Businesses want it and China is far too important a market to pursues a strategy that has demonstrated its lack of efficacy.

Donald Trump’s sanctions and Tariffs have done nothing but hampering the access of US corporations to the Chinese market and a major rejection by the Chinese of American products and brands. It will take a long time for the confidence to be rebuilt and cooperation to happen in full scale.

But we would not be surprised to see announcements very soon on this front that will benefit the Chinese stock market ultimately.

6. Bi-Lateral and Multi-Lateral cooperation

There again, the summit is probably paving the way for a much more aligned positioning of both countries on world wide issues such as Climate Change, energy bottle necks, phasing out of coal, development of Electric Vehicles, Ocean pollution and world stability.

These are all issues where America and China will both benefit greatly from a close cooperation and where their interests are the mots aligned.

The Big loser stands to be Europe as a warming up of the Chinese – America relationship will lead to a truly bi-polar world, where Europe, because of the inherent weakness of its Governance will gradually lose power and significance.

In Conclusion

Even if the press coverage of the event has been relatively muted, by lack of information filtering, we see the Summit of the 15th November 2021 as a MAJOR MILESTONE in the development of the world in this decade.

Now that the communication channels have been established directly between the two leaders, the momentum will build up for a stronger cooperation and better management of world issues.

Last but not least, anyone thinking that China is veering away form free enterprise, vibrant financial markets or from the rule of law is making a major analytical mistake.

China’s regulated free markets and efficient political system will continue to propel it forward even if it has to manage excesses such as its real estate sector or the accumulation of corporate and regional debt, things that are an intrinsic part of economic development and that are showing that the economy is becoming more and more difficult to manage due to its size.

The Biden-XI summit is a major positive for China’s stock markets as well.



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