10 October 2017   Leave a comment

Andrew J. Nathan has written a very nuanced essay entitled “The Chinese World Order” for the current issue of the New York Review of Books.  The essay reviews several recently written books on the rise of China and the extent to which China represents a serious threat to either American interests or to the liberal international order once supported by the US.  Nathan importantly addresses the major issue concerning China’s return to global power:  what concessions should both sides make to each other as a new balance of power is established in the world?  Unfortunately, he does not answer the question, but poses the risks of the recalibration of power in the world system:

“Some have suggested that the US scale back its position in Asia to accommodate China’s desire for greater military influence in its own region. In his 2011 book On China, Henry Kissinger proposed that the two sides agree on a ‘Pacific Community’—’a region to which the United States, China, and other states all belong and in whose peaceful development all participate.’ Graham Allison’s ideas for how to avoid war are equally anodyne: ‘Understand what China is trying to do,’ ‘Do strategy,’ and ‘Make domestic challenges central.’

“Other strategists have been more specific, proposing that the US and China establish a mutually acceptable security balance by making concessions to each other over Taiwan, the Senkakus, military deployments, and offensive and defensive missile systems. Through such an approach, Washington and Beijing could demonstrate that each does not seek to threaten the other’s core security interests.4

“The difficulty with such proposals is that Beijing is likely to interpret them as asking it to accept an intrusive American presence just when the shifting power balance should allow that situation to be corrected. And on the US side, yielding preemptively to Chinese ambitions would destroy its credibility with all of its allies, not only in Asia but elsewhere as well. The resulting destabilization would not serve American or Chinese interests.

The question we all face is whether the Americans and the Chinese are wise enough to respect each other’s interests without compromising their own central interests.  A difficult political task in any circumstance.

 

Catalan President Carles Puigdemont has asked for talks with Madrid on Catalonian independence.  He thus avoids an immediate crisis over Catalonian secession.  Addressing the Catalonian parliament in Barcelona, Puigdemont said: “We propose the suspension of the effects of the declaration of independence for a few weeks, to open a period of dialogue.”  Whether both sides can now back off from a major crisis remains to be seen.  But the last few days have seen major pushbacks to Catalonian independence by many Catalan protestors as well as by the European Union which stated that Catalonia, if independent, could not be a part of the Union.

Spanish business leader: Catalonia split would be a 'disaster'

 

A new study by three economists, Annette Alstadsæter, Niels Johannesen and Gabriel Zucman, has provided more detailed information on tax dodging in the world.  Using leaked information from two sources (from accounts held in Switzerland by the bank, HSBC, and from a Panamanian law firm, Mossack Fonseca), the economists were able to determine the degree of income hidden from tax authorities by individuals in Denmark, Norway and Sweden.  The Economist summarized the conclusions of this paper in this way:

“First, tax evasion is extremely concentrated. The average Scandinavian household paid around 3% too little in taxes in 2006; the richest 1% of households, with net assets of at least $2m, underpaid by around 10%. The truly rich, though, behave truly differently. The top 0.01% of households, with net assets of over $40m, short-changed the taxman by a whopping 30%.

“Second, the numbers imply that previous estimates of wealth inequality, often based on tax data, have understated the problem. And the Scandinavian statistics may provide a conservative estimate of worldwide tax-dodging: only around 2% of Scandinavian household wealth is held in offshore accounts, compared with the global average of 4%.”

Unfortunately, globalization has made tax evasion more possible, but it favors the owners of capital far more than those who earn their incomes through labor.

Posted October 10, 2017 by vferraro1971 in World Politics

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