Don’t Mention the War? — Economic Reversal in the Global Economy

Don’t Mention the War? — Economic Reversal in the Global Economy

What would you have done in 1939 if you had known about the Holocaust and its victims?

Would you have acted?

Or would you have abdicated responsibility, claiming the word ‘genocide’ is an ‘extremely loaded’ term?

Would you have argued in 1941 that ‘When it comes to the application of the very specific word genocide, we simply need to ensure that all the i’s are dotted and t’s are crossed before a determination like that is made.’

Would you have abstained from voting to call out the genocide that was taking place?

That’s what Canada’s prime minister did. Not in 1939, but a month ago. And not about the Holocaust, but about the genocide currently taking place in Xinjiang, China.

Justin Trudeau made all those extraordinary comments. They still make my blood boil a month later.

Despite Canada’s government abstaining from the vote, the Canadian Parliament showed some backbone and voted 266–0 to declare China’s actions genocide.

Now, I’m the first to point out that what a parliament declares isn’t necessarily so. But, for once, I agree with the majority of politicians.

Australia has been similarly active on the Uighur front, if I might call it that. In fact, we’ve been leading the world on calling out China’s crimes. And we’ve paid the price in China’s response.

The UK’s government managed to do what Canada’s government couldn’t and it obfuscated the vote on a similar declaration. So they haven’t joined the fight, which is somewhat ironic given the historical context.

But where is this all going?

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Genocide is no longer a ‘loaded term’ (if it ever was)

Matters recently escalated. The Guardian broke the story brilliantly, reminding me why I read it at all:

The Chinese government has breached every single article of the UN genocide convention in its treatment of Uighurs in Xinjiang, and bears responsibility for committing genocide, according to a landmark legal report.

The 25,000-word report, published by a non-partisan US-based thinktank, is one of the first independent, non-government legal examination of China’s treatment of Uighurs under the 1948 genocide convention.

Under the UN convention, signed by 152 countries including China, a finding of genocide can be made if a party violates any one of five defined acts. Tuesday’s report by the Newlines Institute for Strategy and Policy found that the CCP had violated all of them and accused the party of clearly demonstrating an “intent to destroy, in whole or in part, a national, ethnical, racial or religious group”.

“The intent to destroy the Uighurs as a group is derived from objective proof, consisting of comprehensive state policy and practice, which President Xi Jinping, the highest authority in China, set in motion,” the report said.

It’s a cut-and-dried case. Five out of five. Hopefully that convinces people. Because the British barrister who prosecuted Slobodan Milosevic wasn’t convincing enough when he came to the same conclusion way back in September…

But who cares?

Now you might think that the world would do something about all this. I mean we wouldn’t tolerate another genocide, would we? Especially one that we all know about. No excuses this time, folks.

But do what?

Well, who would be happy to buy Nazi German goods, host Nazi institutes at universities, welcome Nazis to study at universities, or buy the goods produced by slave labour?

(If your t-shirt is made of cotton, there’s a good chance you’re on that list.)

When I first warned readers about all this in January, I wanted to scream it from the rooftops. I thought people would be up in arms if they knew about what was going on in Xinjiang. Perhaps even literally.

But I was told people just don’t care about what’s going on in China unless it affects them. I had to find that angle.

I was going to reply, ‘Well people probably should’ve cared about what was happening to the Jews in Germany in the ‘30s,’ but thought better of it…after all, the people who warned about the Holocaust taking place were ignored too.

There has been some political backlash against China, of course. And it has caused some economic impact too. But not much considering what’s happening in Xinjiang.

At some point in genocide, apathy dies too

I remain convinced the world’s silence will have to change. Genocide is tough to ignore, even for politicians like Canada’s prime minister.

Just in case the genocide taking place in China doesn’t interest you — it’s ‘a quarrel in a faraway country between people of whom we know nothing,’ you might say — here’s how all this impacts you…

China’s emergence has dominated the global economy for decades

The problem with behaving like Trudeau is that China’s integration into the global economy has been the central story of the past few decades. It explains a great deal of the lack of inflation, supposed inequality, trade deficits, deindustrialisation, and plenty more in the West. Aussies haven’t felt this because China’s rise meant more resource exports. But elsewhere, people are angry.

If China were to face consequences for its genocide, we may be talking about a major economic reversal in the global economy. In financial trends that have held for a very long time now.

And Australia could be hammered, as our number one trading partner is isolated.

Speaking of which, there’s an angle I haven’t discussed before. Let me explain it with a little story. I take you back to Christmas two years ago…

The Austrian incident

My Japanese in-laws were having Christmas dinner with my German mum at her home in the Austrian mountains. We’d been staying there for a few days by then, so everyone was finally getting comfortable with each other. Even with my mum’s Scottish partner, although less so…

Then my mum dropped the bombshell after a particularly severe loss at Uno: ‘It’s such a relief you’re so nice,’ she told my parents-in-law. ‘We were worried because you’re Japanese. But you’re so relaxed and easy going.’ My parents-in-law began to smile until my mum continued with, ‘So, why did you bomb Pearl Harbour?

I don’t really remember what happened next. It was such a severe moment that even my mum’s Scottish partner knew better than to make a joke about it.

Eventually, my Japanese father-in-law inhaled deeply and began to explain that the US had cut off Japan’s oil supplies. Japan had waited to the last possible moment it could launch an offensive with its remaining oil reserves, and then attacked.

My mum was fascinated. I remained mortified.

All of this is good fun to remember in hindsight, but it is also damn relevant to today. History is about to rhyme, in China.

Nazis, Imperialists, and Communists need the same thing

Why did the Americans place an oil embargo on Japan? We never got to that question during the Christmas dinner…

The answer is that the US wanted to punish Japan for its invasion of China. And ‘invasion’ is as polite as you can be about what they did there. But, just in case this reaches my in-laws somehow someday, I’m not going to go into the details of that…

The fascinating thing, which I only recently learned, is that Germany’s ‘Lebensraum’ argument was closely related to Japan’s justification for Pearl Harbour. Germany’s expansion and the beginning of the Second World War was actually about resources, not the literal translation of the word Lebensraum, which means ‘living space’.

Germany had been blockaded from its African colonies in the First World War. This meant it lacked critical resources at the time. The Germans didn’t want a repeat, nor to be at the continued mercy of its Allied masters indefinitely. And so the argument was to go east, where the Royal Navy couldn’t reach them.

My point is that the German and Japanese aggression had surprisingly similar origins. They were both about a race for resources. An attempt to secure them. And, as they saw it, a race that their enemies had forced on them by taking away those resources. Thus supposedly justifying their attacks. Well, making it politically popular, anyway…

Now I’m not making excuses or justifications for any of it. But I would like to point out how similarly China’s story is facing up…

This is looking mighty familiar

If the genocide story finally catches on, as I’ve been hoping, and nations begin to impose economic sanctions on China, what do you think China will do?

I think they’ll copy Japan and Germany, not implode like the Soviet Union.

As Frederic Bastiat wrote, ‘When goods do not cross borders, soldiers will.

Usually that’s seen as an argument for free trade. But if you have genocide on your hands in a foreign country and you’re intending to impose economic sanctions in response, it becomes a prediction about what happens next…

Given I’m writing this a few kilometres from the Japanese Air Force base, which will be scrambled when China invades Taiwan, I’ll be sure to let you know when things kick off…

Until next time,

Nick Hubble Signature

Nickolai Hubble,
Editor, The Daily Reckoning Australia Weekend

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