China and US Relations Will Define The Decade

April 13, 2020

“In the midst of chaos, there is also opportunity”

“To win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.”

― Sun Tzu

Image via Getty Images

A Wild Animal A Day Keeps The Doctors Stressing Today

Chinese authorities determined wild animals were too dangerous for their population to eat, so a ban was imposed in February on the sale and consumption of wild animals, due to their potential risk to public health. But that concern disappeared when it came to overseas markets and a weakened domestic economy.

In March Chinese officials began offering tax breaks to the multibillion-dollar animal-products industry for exporting some of the creatures overseas. Value-added tax rebates were raised on nearly 1,500 Chinese products, including a nine percent rebate on exports of animal products, like edible snakes and turtles, primate meat, beaver and civet musk and rhino horns.

An analysis by the nonpartisan Congressional Research Service concluded the move was designed to support Chinese industries suffering amid a sharp global downturn and a prolonged trade war with the US. The new tax incentives are tied to a wide array of exports from steel and construction to agricultural products. However, China is also a major exporter of medicines and medical equipment; the new tax incentives make no mention of goods in short supply during the global pandemic.

Vietnam is the largest importer of China’s live animal exports — almost all edible reptiles — followed by South Korea, Japan, Hong Kong and Indonesia. The US was the biggest importer of China’s animal products used in pharmaceuticals, such as civet and beaver. Yet as some Chinese reports suggest, even small amounts of animal exports could pose a risk to global markets, should wild animals be shown to be the source of pandemics.

US’s global reputation hits rock-bottom over Trump’s coronavirus response (Guardian) (Other countries are use to the USA helping them but can they expect the USA to help them if we can’t help ourselves?)
How China could use this moment to charge ahead with its geopolitical agenda (CNBC)
Beijing tightens grip over coronavirus research, amid US-China row on virus origin (CNN)
China’s new coronavirus cases near 6-week high, Russian border new battleground (Reuters)
China Hawks in Congress See an Opportunity in Coronavirus (NYT)
The Changing World Order (Ray Dalio)
The U.S. vs. China: Who Is Winning the Key Technology Battles? (WSJ, $) (As we have said several times over the past few years, we think the most important global event the next few years to decades will be centered on Sino-US relations, and how the two countries interact with one another. COVID-19 has only accelerated the importance of this bilateral relationship.)

Global Collusion & Price Fixing: When What You Sell is a Commodity That’s Not Wanted

Over the weekend 23 oil producing nations agreed to major production cuts, after the coronavirus and a Saudi-Russian feud reduced demand and devastated oil prices. The countries committed to collectively withhold 9.7 million barrels of oil a day from global markets, amounting to over 13 percent of world production. The pact was finalized Sunday after President Trump intervened to help resolve a Saudi-Mexico standoff that had jeopardized the larger deal.
Trump’s allies in the oil industry had prodded him to press international rivals to cut supply before it caused a wave of US bankruptcies. The resulting agreement, reached before markets opened Monday, was a diplomatic victory for the president.
However, some analysts say while the curbs will mitigate some issues in oil markets, they’re really too little, too late. Amid travel restrictions and work stoppages, oil consumption is expected to fall by as much as 30 million barrels a day this month. (WSJ)
All gassed up and nowhere to go: Gasoline prices are at multi-year lows, but no one is driving (CNBC)

Hack Them While They’re Down

The digital arm of the UK’s National Health Service, NHSX, has contracted with tech companies to help build a “Covid-19 datastore” designed to give ministers and officials “real time information about health services, showing where demand is rising and where critical equipment needs to be deployed.”
Officials defend the activity, in which technology firms process large amounts of confidential patient information, as necessary data mining to facilitate part of the government’s response to the coronavirus outbreak. “The companies involved do not control the data and are not permitted to use or share it for their own purposes,” a spokesperson said.
Documents seen by the Guardian reveal that one portion of the project gives leaders in the NHS, Cabinet Office and Downing Street a live feed of “aggregate” statistics on hospitalizations, availability of critical care beds, ventilator orders and oxygen supplies.
However, they also show the accumulation of large volumes of individuals’ personal data, including protected health information, Covid-19 test results, the contents of people’s calls to the NHS health advice line and clinical information about those in intensive care. (Guardian)
UK spy agencies urge China rethink once Covid-19 crisis is over (Guardian)
Answering the 12 biggest questions about apple and google’s new Coronavirus tracking project (The Verge)
Legal Activists Question India’s Surveillance Measures To Contain Coronavirus (NPR)

COVID-19

To Rule With Iron Twitter Fingers: Kiss The Godfather’s Ring

The 50 states of the United States operate under a federalist compact, by which they are both autonomous and bound in a national union. Clashes between presidents and states are nothing new, but political analysts say President Trump’s rattling of the compact is unprecedented in modern history.
Even Republicans were shocked when the president begrudged federal aid for Puerto Rico after Hurricane Maria, and for California during its deadly 2018 wildfires, and blamed those places for those natural disasters. No one recalled a president publicly complaining about the federal disaster relief role, or expressing resentment toward the victims.
In the current crisis, Georgetown Law professor David Super says Trump has the states’ elected leaders acting less like governors and more like provincial chiefs: “Governors must grovel to the president.” Those that do get some cooperation; those that don’t suffer the consequences.
Experts believe the vacuum of federal leadership that has led to states fighting over medical equipment could make it harder to reach agreement later about how to reopen the economy. Patchwork state plans for absentee voting and voting by mail in November could undermine the legitimacy of the presidential election. “…if we want to restore federalism in this country we will have to make some very dramatic changes after this is over,” Super warned. “If we don’t, federalism is dead.” (Guardian)

Spencer Platt via Getty Images

You’ve Got Mail (For Now)

The United States Postal Service consistently rates as the most popular government agency. It employs a lot of unionized workers, and its costliest business practices help out rural communities that are given disproportionate weight in the political process. But during the coronavirus crisis, the USPS is suffering like other American businesses from sharply declining demand.
Last week it advised Congress it would “run out of cash” in September without federal assistance. Democrats have added USPS funding to their list of priorities for a fourth Covid-19 relief bill. But Republicans have long wanted to privatize the post office. And the Trump administration is hostile to the idea of a bailout, although that seems mostly to hang on the president’s hatred of Jeff Bezos, owner of Amazon and the Washington Post.
Bezos hasn’t kissed up to the president like some major tech CEOs, and Trump has made no secret of his desire to punish Amazon financially unless the Washington Post changes its coverage of him. Add to that, Trump incorrectly thinks all it would take for the USPS to solve its insolvency problem would be to double the rates it charges to ship Amazon packages.
Some solution is needed. Considering the collapsing national economy, it’s a census year, people are more dependent on delivery services, and the entire fall election may have to convert to vote-by-mail, laying off tons of postal workers seems unhelpful. (Vox)
The pandemic is playing to almost every one of Amazon’s strengths (CNN)

Additional USA News

Additional Reads

Rolling Stone is rolling out some great reporting: Greta Thunberg: How She Became a Leader of the Global Climate Movement (Rolling Stone) & Rising Tides, Troubled Waters: The Future of Our Ocean (Rolling Stone)
Short on Cash? Here’s Some Advice For Families Stretching Their Budgets (NPR)
Lawmakers Want to Know: WTF Is Jared Kushner Doing? & How Did the U.S. End Up with Nurses Wearing Garbage Bags? (Americans didn’t want Hilary Clinton to win 2016 partly because we were tired of Bush I, Bill Clinton, Bush II, and the possibility of Clinton II. But instead of avoiding American dynasties we ended up with American nepotism).
Choose your apocalypse journey: plague, zombies, or Terminators: Robots Welcome to Take Over, as Pandemic Accelerates Automation (NYT)
Plagues, zombies and vampires: How Hollywood handles deadly viruses (BBC) On Friday while talking to colleagues about what they were going to watch over the weekend we learned about Kingdom, a Korean show on Netflix. We were skeptical as we very much value our time and we don’t like the zombie-horror genre. But nonetheless we gave the show a try. And we came away super impressed: Kingdom season 1 trailer and season 2 trailer. If there’s a third season we just can’t see it living up to the first 2.