Tag Archives: China

Asian Governments Making Social Moves Together

I expect Asian governments to manifest a low-key but characteristically firm and absolute (and often official) position against Islam. Actually, I don’t expect it, I’m watching it happen and just now recognizing a fairly uniform trend. Something is going on in Asia with regard to this, and I don’t know quite what it is, but there is no doubt that doors are closing all across Asia for Muslims in general.

I think the timing is not a coincidence — the nature of Islamic threats are changing, becoming more diffuse, and taking on a different character just as a new generation of indoctrination is beginning across the West and Asia.

  • Myanmar has found something much more compelling than mere domestic political expediency to engage in its current operations (ISIS returners, as are turning up in Malaysia, Indonesia and the Philippines, is one possibility).
  • China has begun confiscating the Koran and categorized it as a book containing extremist political sentiment.
  • Thailand is readying a firm move against the southern Muslim rebels — and at the same time ISIS returners are very effectively influencing the young generation throughout the old Pattani region.
  • Saudis and other donors are standing up madrasas throughout Malaysia and Indonesia, and the Malaysian government is both unable to stop the trend while at the same time higher-ups in Putrajaya are strangely blind to the problem while also complaining about it.
  • The Philippines is obviously on a “you’re with us or against us” path politically and socially. And a certain of portion of the younger Muslim generation today is much more willing to take that as a challenge instead of an offer to pledge fealty (or at least negotiate terms).
  • Japanese are, at least anecdotally, becoming increasingly uneasy with the idea of accepting any Muslims, even as guest workers. The striking thing there is that ten years ago (well after 9/11) the topic of religion would never have been mentioned discussing this issue socially, but now it is brought up. This change over the last year or two coincides with the first mosque in Kyoto trying to promote itself via online ads and Japanese demonstrating an instant and strong aversion to the very concept of proselytization. They are now in “wait and see” mode socially — to watch and see how things turn out in Europe.
  • South Koreans seem to be on the same page as the Japanese — the attitude toward Islam having soured considerably over the last five years or so. Once again, this is anecdotal, but the subject has come up more than once, and many South Koreans keep up with news of attacks in France, Sweden and the UK.
  • Indonesia is seeing the rise of extra-judicial Islamic enforcement gangs.
  • Malaysia is seeing a similar rise in extra-judicial Islamic enforcement gangs, but the effect is somewhat muted by considerable repression by the special police and more active engagement with the group leaders.
  • Returners, returners, returners. ISIS veterans are flooding into various part of Asia, fresh off a tour in Syria, North Africa, Iraq or Afghanistan with ISIS and keeping in touch with one another. Of course, nobody feels comfortable with that. Unlike in Europe, though, well-known jihadis are not left to their own devices and most go missing somewhere in transit — but it is clear and evident that many are still returning and building new lines of communication and influence locally.

Any one of these issues, from official government actions to simple social reactions, would be grounds for certain groups to rally large responses — Islamic groups as well as Western-based political groups with strong anti-Asian nationalist agendas (something I’ve always found very odd). But the only thing making the news is Myanmar right now, and that’s a pretty hopeless fight to try to pick in terms of political pressure. Myanmar is about as pliable as North Korea as long as China is on their side, and China is indeed on their side with regard to this detail.

I do not see a future where Asian governments will feel compelled to do anything other than increase their resistance to an increased domestic Muslim presence. I fully expect that religious questions will be incorporated on visa applications to places like China eventually (not that repression of religion is anything new there).

I have no idea how any of this is going to turn out, but I find this trend notable and the timing troubling. I don’t know exactly what is triggering this much activity just now (why not a decade ago?), but something is clearly going on. It could be the outcome of some government assessments, or simply a change in the domestic social outlook, or both — but something is going on with this. And, of course, it is impossible to say “they are wrong”. It is just what they are doing and I’m just pointing it out.

China: Yuan Will Be a Reserve Currency, Come What May

EDIT: Indeed, it has been made a reserve currency, or at least it looks like announcements have already been made to pave the way.

The IMF is considering adding the Yuan to the group of reserve currencies. That would put it alongside the U.S. Dollar, the Japanese Yen, the English Pound, and the Euro in terms of “officially perceived” stash-your-value-here viability. As far as actual criteria for inclusion go, the Canadian Dollar, Australian Dollar, and very likely the Russian Ruble are probably actually closer to being genuine reserve currency material than the Chinese Yuan.

But… politics.

China is much closer to a total financial collapse and internal civil disruption* than recovery and stability in its current form. Long-term, of course, China will still be right where it is and the people there will still be Chinese (but there will eventually be far fewer of them, at least for a few generations). A Chinese collapse right now would be a major disaster for everyone. The commodity markets are depressed more than they have been for several decades (in relative terms, actually, I’m not sure that we actually have a post-WWII precedent for what is happening), energy is cheap, credit is massively overleveraged, and yet people aren’t buying enough stuff to keep the wheels spinning.

What does that have to do with the Yuan becoming a reserve currency? It does three things:

  • Gives China access to an external aggregate value device to prop up the yuan if necessary (links their economy to everyone else’s by failure, similar to the way subsidies can do this within a national economy). This effect is actually more a hoped-for psychological effect on the market than a tangible superpower China is being granted by the rays of a yellow sun.
  • Makes the Yuan a necessary holding for anyone trying to carry a balanced basket of reserve currencies (temporarily spikes demand for the Yuan).
  • Promotes an impression of stability in the Yuan (well-founded or not).

Why would the West agree to this? (And I say “the West” because, let’s face it, Washington and London are pretty much the ones who will be deciding.) Because if China were to fail right now it would be a severe annoyance for the U.S. and a complete disaster for Europe and Russia. Nobody really knows what the fallout of that would be, but it wouldn’t be pretty.

The Yuan will be made a reserve currency, whether it makes sense or not, and whether it actually fits in the reserve currency club by the standards and rules the IMF itself has laid out. These are scary times and nobody has any good levers to pull to “fix the economy” so national governments and central banks are pulling at straws because there is simply nothing left to try. All the control rods have been yanked out and tossed already, or shoved in and locked tightly; all the red buttons have been mashed; all the hyperbolic rhetorical devices have been so over-used at this point that the only thing that might actually influence market participants is a frank exposition about the truth rather than more “we’ll do whatever it takes!” and other gung-ho, “it’ll work this time” and “this is the lastest of the last rounds of QE, and this time it will really be the most effectivest of effective measures… I promise!” blather.

[* China is due for two painful corrections which will likely occur together, as they are linked. The first is a political correction; China’s geography does not lend itself to a central command economy. The second is a property-claims correction; when basic goods cannot be had at any price it means the entire system is so out of whack due to government interventions that only a hard reset can fix things. This will likely take the form of a civil war, but who knows. It could be gradual decline toward state failure followed by a logical and non-violent nation-wide roundtable discussion, or even a bloodless revolution coupled with a voluntary capitulation of material holdings by the power elites. But seriously, this has never happened in history and there is no reason to expect China’s inevitable transitions to occur independently of one another, or for either to be non-violent.]