As noted yesterday, Asia, specifically China, is providing some interesting bits of news this week. On Sunday some 2 million Hong Kongers protested in the streets over China’s attempt to subvert their rights within their legal justice system. Carrie Lam, Hong Kong’s chief executive officer, may have been the target of their immediate anger. However, clearly China is their concern.
The heavy-handed response by Lam, rubber bullets and tear gas, against protesters who were peaceful has brought at least silent condemnation from most of the civilized world. This was no UC-Berkley protest. There were no fires in the streets. There were no broken windows. There was no looting. Emergency vehicles that needed to get through were allowed to pass. There were more than 70 injuries from the police response.
China does not need this. Before the US tariffs were imposed, China’s economy was in trouble. The inherent weaknesses of the Chinese “one belt, one road” economy can now be seen. This does not bode well for Xi Jinping who has become politically vulnerable. The tariffs are making things worse. In addition, Xi’s threat against companies doing business in China is making these companies re-assess their need to be located in or do business with China.
Add to this the withdrawal of a law in Hong Kong that was widely seen as sponsored by Beijing and Xi is weakened even further. The Chinese leadership cannot afford civil unrest at a time that their economy is imploding. Such unrest could spread to the mainland.
On top of this African Swine fever is loose within the pig population in China. Pork is a huge item in the Chinese diet. China consumes almost half of the world’s supply of pork. That supply is threatened in a big way. At this point more than a million pigs have been culled. It is unclear how much of the pig population may have to be destroyed. China will have to import more food to feed their people. This is at a time when Chinese tariffs on American food stuffs are making these more expensive.
Then there is the caterpillar, specifically the invasive fall armyworm. Native to Central America, it was first detected in China in January. It does not appear to have any native predators in China. Crops losses in other parts of the world have been as high as 50% in maize (corn) and grains. It is expected to arrive in China’s North China Plain where much of their corn is grown later this year. Concerns about its impact on corn production are significant.
Much of this may be the reason China suddenly pivoted and scheduled a trip to North Korea before the upcoming G20 summit.
According to Reuters,
No Chinese leader has visited North Korea in 14 years. Will this be the face-saving approach Chairman Xi Jinping needs with regards to restarting the US trade negotiations? After the embarrassing “temporary” retreat in Hong Kong and the bad world press, a “breakthrough” in curtailing N. Korea’s nuclear program would re-establish Xi’s rational, peacemaker Panda status to the world. This is opposed to the fire breathing irrational Dragon and bully of Hong Kong.
Hat Tip…CTH
Time will tell. The next few weeks should be interesting.