Lobster Review of Book on the Real Reasons for Trump’s Hostility to China

The conspiracy/parapolitics magazine Lobster has put up a fascinating piece by Scott Newton, ‘The USA, China and a New Cold War?’ reviewing Jude Woodward’s The US vs China: Asia’s New Cold War?, published in 2017 by Manchester University Press. Woodward’s book is an examination of how Western attitudes towards China fell from being extremely positive in the first decade of this century to the current state of tension and suspicion. The chief causes for this, according to the pronouncements of our politicos and the media, are concern over massive human rights abuses in Sinjiang, Hong Kong and elsewhere, Chinese territorial claims to islands in the South China Sea, which threaten western strategic interests and the other neighbouring countries, and the threat to national security posed by Chinese companies, particularly in telecommunications and social media. Woodward’s book turns these assumptions upside down. She recognises that there are real concerns about Chinese human rights abuses and the persecution of the Uighurs, but argues that this situation is far more complicated. And the real reason for America’s change of attitude to China is due, not to Chinese authoritarianism, but because China represents an emerging threat to America’s status as the world’s dominant superpower and their attitude towards capitalism is very different from American neoliberalism.

Relations between China and the West were initially positive and very good because the new, capitalist China had helped prop up the global economy after the financial crash of 2008. The development of the country’s infrastructure created a huge demand for raw materials, which benefited other countries around the world, including the west. The introduction of capitalism is also transforming China. It’s gone from a largely agricultural nation to an industrial and commercial superpower. In 2013 it passed America as the world’s largest trading nation. later on this century it is expected to surpass America as the world’s most prosperous nation both as a country and in terms of per capita GDP.

China’s build up of military forces in the South China Sea is seen by Woodward as a defensive posture against the Americans. They’ve assembled a large naval force in the area, which poses a threat to Chinese access to the Straits of Malacca. 80 per cent of the oil imported by China and much of its merchant shipping pass through the Straits, hence Chinese determination to defend them. Woodward believes that China believes in a multipolar world, and has neither the economic power nor the will to establish itself as the world’s ruling nation.

Nor is China pursuing its economic and commercial interests at the expense of everyone else, as has also been alleged. Woodward argues that while western capitalism views trade as a competition between two parties, in which one party must beat and impoverish the other, the Chinese instead really do see it instead as benefiting both parties.

The oppression of the Uighurs and suppression of democracy in Hong Kong by the Chinese government are real and matters of serious concern, but the West is also covertly attempting to interfere in China’s control of these regions. This is through the National Endowment for Democracy, the non-state outfit to which the American state has given the task of regime change after it was taken away from the CIA in Hong Kong, and through sponsorship and funding of various extreme nationalist and Islamist groups in Sinjiang. Newton writes

But the picture is not clear cut. The Chinese government has
complained about unhelpful ‘foreign interference’ in Hong Kong and there
is evidence to support this. Senior US politicians such as Vice-President Mike Pence have met leading members of the opposition in Hong Kong,
and civil society organizations there have received significant financial
support from the National Endowment for Democracy (NED), a CIA spinoff established in 1983 to promote what later became known as ‘regime
change’. This has, of course, always been change to one committed to a
political economy characterised by neoliberalism, in other words by free
market capitalism. In Hong Kong the NED has been financing groups
since 1994. A China Daily article from 2019 stated that the NED has been
financing groups in Hong Kong since 1994 and that the Hong Kong Human
Rights Monitor received $1.9 million between 1995 and 2013. A search
of the NED’s grants database further reveals that, between 2016 and
2019, the (US-based) Solidarity Center received more than $600,000 and
the (US-based) National Democratic Institute $825,000.

As far as Xinjiang is concerned, the real story is complex. This area is
rich in oil, gas and ‘other natural resources and profoundly important to
China’s national security’. The region borders Kazakhstan, Kyrgyzstan,
Tajikistan, Afghanistan, Pakistan and India. At times of invasion and civil
war in Chinese history it has tended to fall under foreign influence: for
much of the twentieth century until the mid-1980s the Soviet Union
played a powerful role in the province’s politics, backing separatist
groups. This role has now been taken by the USA, which is funding a set
of far-right and fundamentalist Islamic organisations such as the Victims
of Communism Memorial Foundation in a bid to promote instability in
Xinjiang and perhaps even its detachment from China itself.

The efforts of these shadowy parapolitical outfits have been
supported by another NED-financed group, the World Uyghur
Congress(WUC), which is keen to promote the creation of a separate
Turkic State out of Xinjiang. WUC is linked to the extreme Right in Turkey,
notably to the Fascist Grey Wolves organization. Finally there is the East
Turkestan Islamic Movement (ETIM) whose objective is also the
establishment of an independent state carved from Xinjiang, known as
East Turkestan. The EU, UN Security Council and indeed the US
government have all identified ETIM as a terrorist organization linked to
Al-Qaida. In addition to its activities in the Middle East, during the last
twenty years ETIM has carried out terrorist attacks in China, including in
Xinjiang. Given Xinjiang’s strategic importance to China’s security and
territorial integrity and given the nature of the externally-trained and
funded agencies at work in Xinjiang, the attitude of the Chinese State to
dissidents there cannot be called surprising, even if the taking of a
repressive line has exacerbated problems in the region. It has also
provoked increasing global disquiet and has contributed to international
tension, though it cannot be said to be the root cause of this, which stems
from changing geopolitical conditions.

Woodward also argues that current American hostility to China comes from the conviction that America really is divinely ordained to be the world’s governing nation with a particular mission to promote free market capitalism. America demands trade at the expense of privatisation, the suppression of organised labour, and the free movement of capital. The Chinese have no interest in promoting any of this. They’re solely interested in trade, not in the economic and political transformation of their partners. Newton writes

It may not seem rational for the US to pursue a confrontation here but two quotations explain the reality from Washington’s perspective. The first is the comment of former French Foreign Minister Hugo Vedrine that ‘most great American leaders have never doubted . . . that the United States was chosen by Providence as the “indispensable nation” and that it must remain dominant for the sake of humankind’. The second is a comment by Perry Anderson that the US state acts ‘not primarily as a projection of the concerns of US capital, but as a guardian of the general interest of all capitals, sacrificing – where necessary and for as long as needed – national gain for international advantage in the confidence of the ultimate pay-off’.

In other words, the US both writes and polices the rules of the game
and the rise of China represents a de facto challenge to this hegemony.
On the surface this seems a strange observation. China has engaged very
successfully and indeed supportively (shown by its reaction to the 2008-9
Crash) with global capitalism. But it does so in a qualified way, or, to
paraphrase Xi Jinping, ‘with Chinese characteristics’. Not only does the 33
Chinese economy continue to operate a large state-owned sector but its
financial system is closely regulated, with controls over the currency and
over capital movements. China does not possess the conviction that
private economic activity trumps public enterprise, that government
should be small, organised labour suppressed, trade free and
international capital flows unhindered. Its assistance for developing
nations is not accompanied by requirements that states cut spending,
privatise public industries and services and liberalise the foreign trade
sector. In short China has never, in practice, endorsed the neoliberal
norms of the ‘Washington consensus’ established during the 1980s and
there is a real prospect that, if it does become the world’s largest
economy, it will seek to re-write the rules of the game in a way that is not
compatible with free market capitalism. This is what the US fears and its
strategy is therefore directed to forcing China to accept Washington’s
leadership and ‘enter the world family of nations’ on US terms or it would
face the likelihood of pre-emptive diplomatic, economic and, if necessary,
military action to halt its rise. As Woodward points out, this approach is
designed to ensure not only protection of the interests of global capital
but to secure ‘a longer-term pay-off’ for US domestic industry and finance
‘by preventing China reaching the point of competing at US levels of productivity and technology’.

It’s very doubtful if this new policy towards China will succeed. Many of the surrounding Asian countries have embraced China as a new market for their goods, while much of the American commercial hostility comes from firms and industries threatened by Chinese competition. Newton concludes that other countries may choose not to follow America’s lead but there will be considerable pressure on Britain to do so following Brexit. He writes

There is clearly a strong push within the British establishment, coming mostly from within the Tory Party and its friends in the City and the armed
services, in favour of military deployment in support of US forces in the
Far East, even if few other nations are willing to join. This might make
sense for the complex of defence industries, banks, hedge funds and
private equity firms at the core of modern British Conservatism but it is
hard to see what benefit there is for the rest of us in the UK from
confrontation with a nation which appears to harbour no aggressive
intentions to foreign countries and seems destined to become within a
short time the world’s largest economy.

See: https://www.lobster-magazine.co.uk/free/lobster80/lob80-usa-china-cold-war.pdf

In short, the new strained relations between China and America are a result, not so much of Chinese aggression, but due to Trump’s America trying to maintain itself as the world’s dominant nation economically and militarily. In this America is determined to promote its own very predatory form of capitalism, which is challenged by the less extreme form embraced by China. And it’s a situation that may benefit the military-industrial complex and financial sector that supports to the Tories, but won’t provide it to anyone else.

‘I’ Newspaper: Tories Selling Off Mental Health care to Americans

And it’s a disaster.

This is another story from yesterday’s I, this time written by Ian Birrell. It’s titled ‘NHYS for sale? Our mental health services are’ with the subtitle ‘Fatcat US operators already have their claws into our psychiatric services’. It’s a comprehensive discussion how big American private medical companies are acquiring British healthcare companies and NHS contracts, and how patients are suffering through the deplorably bad care they provide.

Birrell begins with Jeremy Corbyn’s statement last week that the documents of the negotiations between Trump and Johnson showed that the NHS were being sold off to private American companies. Birrell denied this, and instead stated that not even Boris would dare sell off the NHS went it is so highly valued by the British public. He then moved on to the strenuous denials by the Tories that they were planning any such thing, before attacking them in turn as lies when it came to mental health. He wrote

Yet hang on a second. One key slice of the NHS is already lying in a distressed state on the operating table, where it has been chopped up for profit-hungry private firms. And giant US health corporations, along with hedge funds and private equity firms, are already here and bleeding dry this profitable of the corner of the NHS – with often disastrous consequences for some of our most desperate patients. Sadly, no one seems to care much since it is “only” the mental health sector – for so long the neglected Cinderella service.

Yet in recent years a small cluster of fatcats have got their claws into Britain’s psychiatric services, exploiting the struggles of the health service to cope with surging demand. These operators have grabbed nearly £2bn of business, providing almost one quarter of NHS mental health beds and soaking up close to half the total spend on child and adolescent mental health services.

This means they own many NHS-funded units holding people, such as teenage girls who self-harm and adults with suicidal thoughts, along with hundreds of people with autism and learning disabilities scandalously locked up due to lack of support in their local communities. These firms benefit as overloaded mental health services and risk-averse officials send more and more troubled citizens into secure units. It is a lucrative business when it costs up to £730,000 per patient a year. Bosses can pocket millions – but many frontline workers earn little more than minimum wage and the use of agency staff is routine, despite the need to develop patient relationships.

Acadia, a Tennessee-based health giant, spent £1.3bn buying the Priory Group and now boasts of earning more than £188m in just three months from British public services. “Demand for independent-sector beds has grown significantly as a result of the NHS reducing its bed capacity and increasing hospitalisation rates,” said its last annual report.

Operating profits at Cygnet, owned by another huge US firm, have surged to £45.2m due to deals with 228 NHS purchasing bodies after it bought a rival group last year. Another outfit called Elysium, backed by private equity through a Luxembourg firm, only launched three years ago, but is already earning revenues of £62.2m from at least 55 units.

But a study by the Rightful Lives campaign group has found these three firms alone own 13 of the 16 mental health settings judged “inadequate” by the Care Quality Commission watchdog, since it found some teeth after the furore over abusive detention of people with autism and learning disabilities exploded a year ago. Cygnet runs eight of these “inadequate” units, although its US boss is reportedly the richest chief executive in the hospital industry, who collected more than £39m in one year from pay, bonuses and stock. Priory and Cygnet also owned hospitals exposed by disturbing undercover television documentaries over the past year.

I have heard a stream of horror stories from despairing families and former patients involving solitary confinement, forcible injections, abuse and overuse of restraint, during investigations into this area. Some were detained in NHS psychiatric units. But most involve privately run units. People such as Megan, who was sectioned for self-harm, suicidal thoughts and later found to be suffering post-traumatic stress from childhood traumas. She was in four clinics – but in one run by the Priory, aged just 16, she was even held stark naked for one month to prevent self-harm until her parents delivered a “safe suit”. “It was the most degrading time of my life,” she told me. The firm was fined £300,000 earlier this year for failings after the suicide of a 14-year-old girl at the same unit.

Despite the ample demonstration that private healthcare doesn’t work and is just simple profiteering, Birrell is at pains to say that he has nothing against the involvement of the private sector in state healthcare. He just wants it to be better regulated. He ends his piece with these two paragraphs

Unlike many voters, I have no problems with private providers in healthcare if the service remains free at the point of use, especially after seeing their role in European systems with superior patient outcomes to our own health service. But seeing these mental-health firms has shaken my faith.

Clearly all private operators need to be effectively regulated, especially when providing sensitive frontline services. Sadly, it seems our politicians on all sides prefer to posture over whether the NHS is really for sale to “mega-corporations” while ignoring those that have already arrived and are pocketing vast sums while offering inadequate services to so many despairing citizens. Once again, we see how little Westminster really cares.

Actually, I think these paragraphs say much about the I and the political ‘centrism’ it supports. The NHS has been privatised piecemeal since the days of Thatcher, who was prevented from privatising it outright by a cabinet revolt. Blair’s government did much to hand it over to private firms, though much had already been done in this direction by the Private Finance Initiative introduced by the Tories and Peter Lilley. The Conservatives haven’t reversed the policy of privatisation, and are instead ramping it up even further.

The result is massively poor performance. Jacky Davis and Ray Tallis argue very strongly in their book on the privatisation of the NHS, NHS-SOS, that on their own private healthcare can’t compete with state. The service provided will always be inferior, as the profit-motive doesn’t work when it comes to the long-term sick or those with acute conditions. Private hospitals have fewer beds than state hospitals. And those who cannot afford healthcare are simply left to sicken and die. A few years ago the private healthcare system in America nearly collapsed. It’s why the American healthcare giants are so keen to acquire pieces of ours.

Yes, continental healthcare which often does involve the private sector can perform better than ours. But that’s because our National Health Service has always received comparatively less funding than theirs. It’s been the case, sadly, since the NHS was set up. On the other hand, our healthcare results are far, far better than Americas and were comparable to those on the continent. Until the Tories took over, and decided to cut things back and privatise even more.

But Birrell cannot criticise private medicine, because privatisation is still part of ‘Centrist’ political dogma. Moreover, the press is now owned by immensely rich men, often with commercial interests in other sectors of the economy. As a result, the supposedly liberal I and Guardian continue to flog Centrist economics even though these are so well-past their sale-by date that they’ve been dubbed ‘zombie economics’.

As for Corbyn, I believe very strong that rather than playing political football with the issue of NHS privatisation, he’s very aware of what’s going on and how it is failing Britain’s sick and ill. That’s why he wants to end it and renationalise the NHS. Birrell tries desperately to avoid that conclusion, because like all Centrists he wants the NHS privatisation to continue thanks to the Thatcherite dogma he’s imbibed and promotes.

But Thatcherism has had its day. It is bringing nothing but misery, deprivation and death. It’s time the Tories were out, Jeremy Corbyn was in, and the NHS renationalised. 

Now!

More from Private Eye on BoJob’s Connections to the Hedge Funds

I’ve found a few more little snippets from Private Eye about how Boris is being funded by hedge funds, the financial speculators looking forward to a no deal Brexit, as they’ll clean up when the country and its businesses go bust. In their issue for 14th-27th June 2019, the Eye ran an article, ‘Backing Boris’, about how Boris’  campaign to be selected leader of the Tory party was being funded by Jon Wood, another hedge fund manager. The article, on page 7 of the magazine, ran

The launch video for Boris Johnson’s leadership campaign was full of soft “Cameroon” social messages, fretting that “too many people feel left behind” and excluded from “opportunity and success”. Odd, then, that his largest financial backer seems keener for the government to look out for the big guy.

Hedge-fund manager Jon Wood gave Johnson £25,000 in May, according to the latest register of MPs’ interests. (He had already given the former foreign secretary a £50,000 donation for “office and staffing costs” in October). His hedge fund, SRM Global, was a major investor in Northern Rock, the bank that collapsed in the financial crisis and was nationalised by the Labour government in 2008. Shareholders like Wood’s firm got nothing: the government judged it had made a bad bet.

Wood’s company argued, however, that it had a human right to compensation for its bad investment, and took the government to the high court and then to the European court of human rights. In 2012, the latter rejected the laughable claim brought by SRM Global and other investors, calling it “manifestly ill-founded and therefore inadmissible”.

The court said the government was quite right to take over the bank but not to compensate the big investors. There was “no duty owed by the State to the shareholders to protect their investments in Northern Rock”. That Johnson’s biggest backer is a man with experience of “manifestly ill-founded claims” is perhaps, er, no surprise.

The edition for the 26th July – 8th August carried another such story on page 7, ‘Fine By Them’, reporting how Johnson was being funded by a private equity boss, who had been an officer in the Vote Leave campaign. The article ran

Why should breaching electoral law stand in the way of becoming key backer to the favourite in the prime ministerial race?

Boris Johnson certainly saw no problem as he accepted £100,000 for his leadership bid, declared last week, from private equity boss Jon Moynihan. The hard Brexit-favouring businessman also happens to have been finance director of the official Vote Leave 2016 referendum campaign. That’s the same Vote Leave that was fined £61,000 by the Electoral Commission for breaching campaign spending limits by channelling large sums to young Darren Grimes’ BeLeave youth group (Eyes passim).

The 25-year-old “BeLeaver”, meanwhile, was jubilant last week after he successfully challenged his £20,000 fine from the commission, incurred for acting as a funnel for the over-spend. The judge, who upheld Grimes’ appeal said that even if the wee scamp had committed an offence, it wouldn’t have justified fining him £20,000, the maximum allowed.

While Darren basks in congratulations from Vote Leave pals, less attention has been paid to the main Vote Leave appeal against its £61,0000 fine. This appeal has been quietly dropped, with Vote Leave admitting defeat and covering the Electoral Commission’s legal costs, footing a £200,000 bill.

The Electoral Commission itself now looks embattled on all sides, with both Leavers and Remainers furious over its handling of the 2016 referendum, and with all major parties irate at past fines for election spending irregularities. Defenders of the agency argue that if it’s annoying everyone, it must be doing something right.

Our boorish, anti-democratic joke of a prime minister is being funded by financial speculators, who are determined to have Brexit, and have not been above breaking the law to make sure they get it. And they stand to make millions from the misery it will cause if their puppet, Johnson, does manage to deliver it.

Get them out of politics – get him out of No. 10!

Private Eye on the Failure of Private Law Enforcement Firms

One of the ideas floated by the Tories under John Major way back in about 1992-3 or so was that law enforcement should be privatised. Instead of the police patrolling our neighbourhoods to protect us from crime, citizens should be free to hire private security firms to do the same. It’s an idea they nicked from the American Libertarians, though unlike Rothbard, the author of the idea, they didn’t go as far as recommending the privatisation of the courts. The Mail on Sunday ran an article promoting this and other Neo-Lib Tory ideas in their issue that winter.

In their issue 9th – 22nd December 2005, Private Eye ran an article on how one Private Law enforcement firm, had not lived up to the hype, and had spectacularly failed to catch many criminals.

Private Equity
Drake’s Progress

The woeful performance of private law enforcement firms has been exposed once again in a Norwich courtroom.

The Eastern Daily Press recently reported how the firm paid to enforce arrest warrants on people failing to serve community punishment orders managed to catch on 31 out of 260 offenders over the summer, while its success rate before then wasn’t much better.

The company responsible, Drakes (“total civil enforcement and debt recovery solutions”), is one of a breed of companies operating in the criminal justice system that are part of the secretive and avaricious private equity industry. it is part of the Bridgman group that says that it is owned by funds managed by an outfit called Gresham, including the mysterious South Place Zurich Partnership 2002, none of which supply accounts.

Bridgman gets nearly all its funding in the form of loans totalling £10m from anonymous creditors at inflated interest rates, a standard feature of the private equity industry that allows financiers to strip out profits asap and often leads to the kind of cost-cutting that makes chasing offenders look distinctly uneconomical.

Gresham is unabashed about its approach, boasting of its “strategy for exit to deliver maximum value to all investors”. So the uncooperative small-time crooks of East Anglia might soon be somebody else’s problem, but not before the private equity funds have got away with a few quid.

Many of the care homes that collapsed a few years ago, or were so disastrously run that the inmates were abused and neglected, were also owned or managed by these private equity firms. It’s clear that these firms can’t manage services, as they’re simply not interested in them, except as a source of profit.

Private Eye on the Perils of Healthcare Ownership: The Winterbourne View Hospital Scandal

I’ve blogged today about how the government has privatised the NHS blood plasma service to a private equity firm. It was a private equity firm, Lydian Capital Partners, that owned Castle Holdings, which in turn owned CB Care Ltd. CB Care Ltd was the parent company of which Castlebeck Care was a part, which ran the Winterbourne View Residential Hospital near Bristol. Winterbourne View was the subject of a massive scandal after the BBC’s documentary programme, Panorama, uncovered the horrific abuse of its residents by the staff who were supposed to be caring for them. Winterbourne View was a home for people with learning difficulties. The programme showed the brutal treatment of the patients, including physical violence. It made for difficult, unpleasant viewing. An official investigation and court case followed. This revealed that many of the staff employed at the hospital had little training in the care of such vulnerable handicapped people.

Private Eye published their own investigation of the firm in their issue for the 10th to 23rd of July 2011 in their In The Back section devoted to investigative reporting. The piece was entitled ‘Financial Jiggery Pokery: The Idolatry of False Profits’. It ran as follows:

‘Both Southern Cross and the company behind the Winterbourne View residential hospital, whose management failed to respond to concerns well before Panorama exposed them, ought to have paid more attention to care, and less to financial engineering.

Winterbourne is run by Castlebeck Care, which is part of the CB Care Ltd group. This group, accounts filed at Companies Hpouse reveal, is owned by a Jersey company called Castle Holdings Ltd, which in turn is controlled by the Jersey limited partnership, Lydian Capital Partners LP, through which the group was acquired in 2006 by the Swiss-based private equity group Lydian.

The main backers of Lydian are Irish financiers JP McManus, John Magnier and Denis Brosnan, whose son Paul chairs CB Care; and they also include Irish Billionaire Dermot Desmond, who in 2007 and 2008 donated £100,000 to the Conservaitve party through another of his firms, Venson Automotive.

Having an offshore setup is, of course standard fare for private equity owhnership, which invariably entails stripping out as much profit from businesses as possible in the form of tax-deductible interest payments. This leaves margins in the companies that are supposed to be doing things like caring for people thin (to say the least) and makes decent management a luxury.

CB Care’s most recent accounts show it saddled with £233m bank debt and £195 subordinated debt, on most of which investors earn interest at, ahem, 15 percent. The total annual interest bill of £38m a year left the group with losses in 2008 of £19m and 2009 of £10m. Naturally it hasn’t paid a bean in tax. Even a move in April last year to convert £100m of the debt to an interest-free loan – quite possibly at the behest of the taxman – is unlikely to turn the business around.

More importantly, the figures reveal the priorities of private equity-owned care businesses: taking short-term profits out, not putting long-term care in. One of the crucial questions now facing the government is whether foreign foreign equity firms are the best stewards of British social care., As men like Desmond fund the Conservative party, it may be a question it will try to avoid.

* Castlebeck issued an immediate statement after Panorama, detailing its plans to deal with the matter. Unfortunately7, even after the story broke the company’s website was still displaying a logo proudly telling visitors it was the “overall winner of the 2010 Healthcare 100 Best Employers Award”. This bit of self-aggrandising has been quietly removed.’

This is the type of firm the Coalition has decided to sell the NHS Blood Plasma Service to. Still, no doubt they’ve got utter confident in the situation.