Youths’ desperate ‘four no’ attitude worries China

The Chinese government is being called upon to take action to stimulate the economy and create jobs at a time when young people in substantial numbers have adopted an attitude that’s termed the “four nos”: no interest in dating, getting married, buying a home or having a child.

When National Bureau of Statistics spokesperson Fu Linghui said on June 15 that only about six million people between 16 and 24 in China were still searching for jobs, he did not count the 11.6 million new graduates about to enter the job markets.

His figure also excluded the many in their 30s who’ve been suffering from unstable income. Some of these people now refer to themselves as the youth of “four nos,” a trending term on the internet in China.

“A lot of people expect their partners to be homeowners, but property prices are really too high,” a 30-year-old man says in an interview with a video channel. “It’s not that I did not work hard – my hard work did not produce good results,” he says, adding that he has worked for a small food delivery firm in Beijing since 2020 but is owed 20,000 yuan (US$2,791) in service fees. A decade ago he could afford to date but now he can’t, he says, – and if he has children, they will suffer in this world.

The video was originally posted on a channel called “Under the Moonlight” on Bilibili, a Shanghai-based video-sharing website, in April. It was then blocked. It is still available on social media overseas.

Lying flat. Image: Twitter

Some young Chinese adopted a “lying flat” attitude a few years ago as they were suffocated by the societal pressures upon them to overwork and over-achieve in order to buy homes and have families. Now many are suffering from unemployment or unstable income and want to be free from financial burdens.

A document, reportedly issued by the Communist Youth League of Guangzhou City, says a recent survey interviewing 15,501 college students and young workers found that 1,215, or 8% showed characteristics of having the “four nos” attitude. It called on all parties in the society to try to change these youngsters’ attitude into “four wants.”

This came after the National Bureau of Statistics said on June 15 that the unemployment rate of people aged between 16 and 24 in China’s urban areas had reached 20.8% while that of those aged between 25 and 59 was 4.1% in May.

The Chinese Academy of Social Sciences’ Institute of Finance and Banking said in a report on Tuesday that many highly-educated young people could not find proper jobs as the property, internet and tutorial sectors have been hurt by the government’s regulatory rules in recent years.

“A series of tightening measures launched in 2021 has helped regulate the property, internet and tutorial sectors but at the same time hurt them seriously,” Zhang Chong, a researcher at the institute, said in a media briefing in Beijing on Tuesday. “Although the number of unemployed people in these sectors has fallen this year from 2022, it still stays at a high level.”

“Due to an industry upgrade, China’s labor market has undergone significant changes with a stronger focus on service industries and a decline in manufacturing jobs,” Zhang said. “This trend has hit many young people.”

He said many highly-educated young people found themselves mismatched with jobs in the market, where the emphasis is on technician skills, not academic results. Besides, he said, slowing economic growth, the delayed negative impact of the pandemic on the service sector and the use of robots and artificial intelligence also pushed up China’s jobless rate.

For Chinese graduates it’s hard to find jobs. Image: China Daily

Zhang suggested that the government should use monetary and fiscal policies and supportive measures to boost the Chinese economy and create new jobs. He said it’s also important to support property developers and change the education system to help students fit into the job market.

Low fertility rate

China’s Ministry of Civil Affairs announced last month that a total of 6.83 million couples got married in 2022, a decrease of about 800,000 couples from 2021. The 2022 figure is also the lowest since 1986.

The number of couples getting married has been declining since 2014. It fell gradually from 13.47 million couples in 2013 to 9.47 million in 2019, and further down to 7.64 million in 2021.

He Dan, director-general of the China Population and Development Research Center, said China’s fertility rate fell to 1.07 last year from 1.52 in 2019. It means a woman only gives birth to about one child in her whole life. A threshold of 2.1 is required for an expansion of population.

China’s latest fertility rate is even lower than that of Japan, which fell for the seventh year to 1.26 in 2022. Population researchers said many young Chinese couples were scared off by the high costs of living and child-raising.

Back in mid-2021, the Chinese government encouraged young families to have three children by offering them tax exemptions, suppressing property prices and banning tutorial classes on holidays.

That last was supposed to cut down the advantage wealthier families had in paying for tutoring and thus in getting their kids into the top schools. Wealthy families can pay for tutorial classes with ease. Middle-class families can afford them but the competition is endless, like a nuclear arms race.

Chinese attend a tutoring session in preparation for the annual admission examination. Photo: Asia Times files / AFP / Wang feng / Imaginechina

Now local in-person tutorials are banned and China-based tutors have no jobs. Wealthy families pay overseas tutors for online classes.

The measures failed to prevent China from experiencing in 2022 the first decline in its population in 61 years. China’s population decreased by 850,000, or 0.06%, to 1.412 billion at the end of last year from a year earlier, the National Bureau of Statistics (NBS) said in January this year.

China lost its title of the world’s largest population to India, which saw its population increase by 9.6 million, or 0.68% year-on-year, to 1.417 billion last year.

The ‘four wants’

Some netizens say the government and party are not giving what young people want. The demand is for dwellings, stable jobs and subsidies to raise families in urban areas but the authorities instead ask them to help upgrade the rural areas.

On February 20, for example, the Communist Youth League in Guangdong Province launched a three-year plan that aims to arrange 300,000 young people to work in rural areas between 2023 and 2025. It said it expects that 10,000 of them will continue to work in the rural places while 10,000 others will start businesses there.

A Chinese writer says in an article published on Wednesday that the Communist Youth League in Guangzhou wants young people to have a “four wants” spirit but he thinks chanting slogans is not helpful. He says it’s important for the government to understand why young people have a pessimistic sentiment.

Read: China’s demographic timebomb starts ticking down

Read: China needs its consumers to consume, workers to work

Follow Jeff Pao on Twitter at @jeffpao3

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US F-35 production shortfalls favor China, Russia

The US needs to ramp up F-35 production as China and Russia steam ahead with their fifth-generation fighter programs, which increasingly threatens to open a fighter gap between the US and its near-peer adversaries.

This month, Air & Space Forces Magazine reported that the Mitchell Institute for Aerospace Studies has urged US services and the Pentagon to increase production and F-35 industrial capacity so US and allied F-35 users don’t have to wait too long for their new jet orders.

The report notes that the US Air Force initially ordered 110 F-35s per year but has gradually downscaled its orders to 80, 60, 48, or fewer.

Air & Space Forces Magazine noted that Lockheed Martin is in negotiations with the F-35 Joint Production Office (JPO) for production lots 18 and 19, which consist of 156 aircraft. Lockheed Martin has said that with additional resources it can push F-35 production above 220 aircraft annually.

However, the report also mentions that US Air Force Acquisition Chief  Andrew Hunter told the Senate Armed Services Committee that Lockheed Martin would struggle to produce 156 aircraft annually, stating that the defense giant would have to increase tooling and add more shifts to its skilled workers, which have been hard to hire.

It also says that Lockheed Martin has attributed some delivery delays to worker shortages at component and material companies as they recover from the Covid-19 pandemic.

Air & Space Forces Magazine also quotes Hunter as saying that making F-35 bodies is a significant limitation, as the program initially relied on Turkey to manufacture some of the bodies. Turkey was removed from the F-35 program in 2019 due to its purchase of Russian S-400 air defense systems.

The US-made F-35 is plagued with shortcomings. Image: US Air Force

Despite the setback, in a press release this month, German defense giant Rheinmetall said it plans to open an ultramodern factory for F-35A bodies at Weeze, North Rhine-Westphalia. Rheinmetall says that production for 400 F-35A bodies will start in 2025 in cooperation with Northrop Grumman and Lockheed Martin.

Despite the massive manufacturing effort and costs going into F-35 production, the aircraft may not be the high-tech wonder weapon it is billed to be.

In a March 2023 Progressive article, Alfred Meyer claims that the F-35 is a high-maintenance plane plagued with software and jet engine troubles. Meyer says that, after flying a mission, the F-35 needs three days of maintenance and repair before it can fly again in a battle-ready and mission-capable state, unlike older planes that can fly three to five missions a day.

For example, Defense One reported in May 2023 that a December F-35 crash was caused by “harmonic resonance,” which resulted in the jet’s fuel tube fracturing. Defense One notes that a band-aid fix has been implemented as an “orifice” that reduces the impact of a loss of engine control if the fuel tube fractures due to harmonic resonance.

The report also notes that as the Pentagon continues investigating problems with the F-35’s Pratt and Whitney F135 engines, the number of US F-35s ready for duty remains below 70% for F-35As and 75% for the B and C models, with a 56% mission-capable rate this April for all types.

Meyer notes that at the end of the fiscal year 2021, the F-35 still had 800 deficiencies that needed remediation, meaning that the US and its allies are paying for the potentially faulty F-35 while struggling to keep older planes in the air. He also mentions that the F-35 has suffered multiple crashes, with one of each variant crashing in 2022.

In a January 2021 Stiftung und Wissenschaft article, Dominic Vogel stated that the F-35 might be a technology “black box” whose software and hardware are inaccessible or too complex to understand for export users.

That gives the US leverage over F-35 end users, as the latter surrender critical military capabilities and, by extension, a degree of sovereignty in exchange for a supposedly top-of-the-line fighter jet that can not be operated without US assistance.

China and Russia have also made strides in their respective fifth-generation fighter programs, putting pressure on the US to crank up F-35 production to maintain its lead.

This month, Asia Times reported that China’s J-20 stealth fighter may have flown for the first time with game-changing WS-15 engines, ditching less-reliable Russian and earlier Chinese models.

While the WS-15’s performance parameters have not been disclosed, they are most likely on par with the US Pratt & Whitney F119 engine used in the F-22 Raptor.

Moreover, Asia Times reported in February 2023 that China is using pulsed production lines to speed up J-20 production with new production techniques and improved domestic engines, pushing the number of J-20 airframes equal to or exceeding the F-22, whose production was stopped in 2011 with only 187 airframes built.

Based on J-20 serial numbers seen at the 2022 Zhuhai Air Show, China may already have up to 200 J-20s.

China’s J-20 fighters fly in formation at an air show. Image: China Daily

Defense Post reported this April that Rostec Corporation segment Ruselectronics had developed an AI-powered radio system to boost the Su-57’s resistance to reconnaissance and interference, with the new radio featuring technologies such as noise-resistant coding, improved cryptography and real-time signal processing synchronization.

That upgrade allows the Su-57 to transmit messages through different channels, increase connection stability and improve communications quality between air and ground units.

In addition, Dzen reported this month that the Su-57 had been tested with a “sixth-generation engine” that features flat nozzles, adding to the type’s supermaneuverability and stealth.

Both the J-20 and Su-57 have reportedly seen action in the South China Sea and Ukraine, with the former flying patrol missions and the latter flying suppression of enemy air defense (SEAD) missions.

To counter those developments, Asia Times noted in September 2022 that the US must maintain a production target of 72 fighters per year and keep its allies at a comparable level of capability, with a 4+1 fighter mix for the 2030s consisting of F-22s, F-35s, F-15EXs, F-16s, and A-10s.

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Belt and Road a net benefit for Bangladesh

In recent years, China has emerged as Bangladesh’s largest trading partner and one of its biggest providers of development assistance. Since 2016, the two sides have been a strategic partnership.

Like 150 other countries, Bangladesh joined China’s Belt and Road Initiative (BRI). Since then, nine BRI projects have been agreed upon, including the Padma Rail Link, the Bangabandhu tunnel under the Karnaphuli River and the Dasherkandi sewerage treatment plant.

These three are on the verge of completion while six other projects are either underway or waiting to begin. Apart from the BRI, China provides development finance in various forms including public-private partnerships and soft loans. As Bangladesh accepted these loans and projects cordially, there has been a boom in Chinese projects across the country in the last eight years.

While the specter of a “debt trap” has hung over the relationship, as skeptics drew parallels with the Hambantota port lease deal in Sri Lanka, it seems Bangladesh has proved the specter – in its own case, at least – to be a myth thanks to Dhaka’s sustainable infrastructure drive.

Bangladesh’s deepening trade and financial engagement with China has created the image of a “China-tilting country” in the eye of the US – even though Bangladesh is determined to remain neutral amid the superpower rivalry. Despite worries about a debt trap, it seems Bangladesh has gain a net benefit from BRI and other Chinese projects.

A caveat: Net benefit refers to summing up all benefits and then subtracting the sum of all costs of a project. Net benefit provides an absolute measure of benefits rather than the relative measure provided by a benefit-to-cost ratio, which in today’s neoclassical economics may be the more popular approach to determining success and failure.

While net benefit normally would be expressed as a crunched number, i.e. a specific amount of money, I am not aware of any quantitative analysis specifically on Bangladesh’s BRI projects.

Here I use the term in a qualitative sense, to provide only an overview of the idea. My argument is that the input for Bangladesh is money while the outputs are diverse – and, subjectively, are clearly greater. In this sense, I posit that there has been a net benefit.

Bangladeshi Prime Minister Sheikh Hasina gives flowers to Chinese President Xi Jinping before their meeting at the Prime Minister’s Office in Dhaka on October 14, 2016. China is an important geopolitical player in Bangladesh. Photo: Asia Times Files / Anadolu Agency / Stringer

Bangladesh’s infrastructure drive

In the last decade, Bangladesh focused national policy on developing physical infrastructure to boost connectivity. The riverine country with a fast-growing economy identified infrastructural development as a prerequisite for expanding the size of the economy as well as socio-cultural development.

In the absence of significant infrastructure, it was difficult for Bangladesh to expand its economic activities outside of the capital and coastal region. For instance, the North Bengal and North-West region could not be industrialized without smooth connectivity and logistical infrastructure, both of which it lacked.

Development finance was needed to fill the gaps. But until China arrived, the existing development finance market could not raise the required funds for several projects in the billion-dollar range. In this context, Bangladesh’s demand met with China’s ambition to expand its geo-economic ambition under BRI.

Take, for instance, the new benefit accrued from the BRI-funded Dasherkandi treatment plant. As in many developing countries, rainwater and household waste combined in primitive systems that stank and caused severe health problems.

Now, the new treatment plants refine these dirty waters before they get to water bodies – from where the water is again collected, treated and supplied for household use. Besides Dasherkandi, which I have seen, there is also another Chinese treatment plant in Dhaka. The advantage of having those, if not priceless, surely is worth more than Bangladesh’s cost.

Other Chinese-funded or assisted projects are also benefitting the country. The Padma Bridge – the country’s first self-funded project implemented by Chinese engineers and using Chinese technology – is already bringing benefits to Bangladesh’s north and northwestern regions. It has shortened transport routes significantly and connected these regions directly with the capital, Dhaka.

The economy is already expanding and the circular economy – sharing, leasing, reusing, repairing, refurbishing, recycling – is also becoming larger in terms of geography. The bridge has also reduced pressure on internal waterways, which benefits commercial carriers greatly.

It is eye-popping that a single bridge is estimated to have increased the entire country’s GDP by 1% and reduced poverty by 0.84% at the national level. Other Chinese-funded or assisted projects are also benefitting Bangladesh as they contribute to the country’s effort to revamp the circular economy and address energy demand.

BRI and other Chinese projects are also introducing the country to sophisticated technologies. Take, for instance, the Bangabandhu tunnel project under the Karnaphuli River, marking the first time a tunnel-boring machine has been used in Bangladesh.

It has also marked the first time the country has undertaken underwater excavation. As Bangladesh now has a tunnel-boring machine in the country, the technology will be used for the underground section of the country’s first metro-rail.

Bangladeshi’s Bangabandhu tunnel under the Karnaphuli River. Photo: Pakistan Today / Twitter

Besides technology transfer, revamping and increasing the circular economy and growing the overall economy, BRI projects are also benefitting the country by increasing connectivity and trans-border trade.

Although BRI projects are providing net benefit for the economy and improving living standards, the sudden surge of Chinese funding in Bangladesh since 2016 has drawn the attention of the US. Washington now perceives Bangladesh as a China-tilting country, even as Dhaka aims to maintain an equal balance among the great powers.

The key to avoiding unnecessary costs and a debt trap is to equalize odds in geopolitical aspects, assess the economic viability of projects and stick to sustainable financing.

Bangladesh has showed prudence in these aspects as it scrapped or declined many proposed projects that may not be viable economically and is only opting for crucial projects that address its “infra-shortage” without giving geopolitical advantages to one superpower over the other.

Doreen Chowdhury is a Doctoral Researcher at the University of Groningen.

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Questions remain about Indonesia’s reparations program

Last month, Indonesian President Joko Widodo announced a reparation program for victims of past human-rights abuses. Speaking in Aceh province, Widodo stated that this resolution “is needed to heal the nation’s pain caused by past gross human-rights violations, which have left a heavy burden for the victims.”

Reparations will come in the form of financial settlements, scholarships and cash payments for victims and their families.

The comes after Widodo expressed his “deep regret” in January for historical abuses committed on behalf of the Indonesian state. This was a result of an unprecedented investigation by the National Commission on Human Rights, a key election promise by the president.

At the time, the United Nations High Commissioner for Human Rights welcomed Widodo’s comments as a “step on the long road to justice for victims and their loved ones.”

The 12 abuses eligible for reparations occurred between 1965 and 2003, including a deadly purge of suspected communists from 1965, the shooting of protesters in 1982 and 1985, and the gunning down of students in the late 1990s.

Severe abuses were also documented during conflicts in the Aceh and Papua regions. Overall, is it estimated that more than 500,000 people were killed.

These steps are a culmination of attempts by Widodo to deal with past human-rights abuses since he was elected in 2014. The announcement offers more than just an apology and is a historic opportunity to right the wrongs of Indonesia’s dark past.

But there are problems – and detractors. 

The government’s announcement lacked crucial detail. The number of people who will be eligible for reparations was not disclosed, nor any targets, and the process for applying for compensation is unclear. 

The National Commission on Human Rights has estimated there are between 500,000 and 3 million victims and survivors from 1965 purges alone and that, so far, only 6,400 victims had been verified from eligible atrocities.

Rights groups express concerns

This raises questions about how serious the government is in rolling out the program and justifies fears that victims and their families will not be identified, and that only a small fraction will have access to reparations. 

Human-rights groups have been critical, claiming Widodo has ignored some atrocities, such as those carried out by Indonesian security forces in Timor-Leste between 1975 and 1999, extrajudicial killings in Tanjung Priok district, North Jakarta, in 1984 and the killing of civilians in Paniai, Central Papua province, in 2014.

The same groups also argue that reparations do not go far enough and that the government’s expressions of regret are meaningless unless crimes are legally resolved in the courts and perpetrators tried and jailed.

This includes Amnesty International, which welcomed the announcement but warned it “must include accountability” and that it was crucial to “bring all those suspected of criminal responsibility for crimes under international law and human-rights violations to justice in fair trials before ordinary civilian courts – and put an end to impunity.”

A representative for Human Rights Watch reacted to the announcement by saying it was a “step forward” and “better than nothing” but that it was “not enough.”

Widodo has confirmed that while the government was focusing on a “non-judicial resolution” through reparations, this will not come at the expense of or replace any legal action taken by victims and their families.

But critics are right to worry. Indonesia has a history of not holding perpetrators to account.

A report from the Commission for Missing Persons and Victims of Violence found that police and security forces were responsible for 72 extrajudicial killings last year.

While six soldiers have been arrested for their involvement in the deaths of four Papuans in Mimika regency of the Papua region, the vast majority of Indonesian security forces continue to enjoy a large degree of impunity.

It also remains commonplace for prominent military figures associated with past atrocities to hold key positions in government.

For example, Major-General Untung Budiharto, alleged perpetrator of enforced disappearances under the Suharto regime, was appointed as commander of the Greater Jakarta Command Area last year. Prabowo Subianto, Budiharto’s commander, was made minister of defense in 2019.

If Widodo is serious about providing justice for victims of human-rights abuses, his administration needs to walk the talk.

This can be achieved by thoroughly and impartially investigating anyone suspected of past abuses, including government officials, the military and police. If there is sufficient evidence, these people should be prosecuted publicly in criminal, not military, courts.

The government should also work to ensure that the reparations program is adequately funded and has the resources and scope to identify as many past victims and their families as possible.

Finally, human-rights abuses should be prevented in the present and future. Indonesian security forces continue to commit abuses, particularly in the remote Papua region, and against journalists and human-rights activists. The government should take a no-tolerance approach to human rights and hold any perpetrators accountable.

Indonesia is taking legitimate steps to reckon with its dark history, but more needs to be done. Until this occurs, victims and their families will not get the justice they deserve. 

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US intel report casts new doubt on Wuhan lab leak theory

This article was originally published by ProPublica, a Pulitzer Prize-winning investigative newsroom.

A recently declassified intelligence community report on the origin of Covid-19 has taken a benign view of biosafety training that took place at a government lab in Wuhan, China, in November 2019, not long before the pandemic began there.

The safety training for staff at the Wuhan Institute of Virology was an aspect of an interim report by the Republican oversight staff of a Senate committee that last year concluded the pandemic was “more likely than not, the result of a research-related incident.”

Last October, ProPublica and Vanity Fair delved into the inner workings of the team that produced that interim report and some outside experts’ views of its findings. Asia Times republished that story.

The intelligence report was issued in June in response to a law, passed unanimously, that required the director of national intelligence to declassify information regarding the origins of Covid-19. The report confirmed prior news accounts that the intelligence community is divided about the cause of the pandemic, but it did not provide specifics about how different agencies reached their conclusions.

While some believe the virus likely first infected a human through a research-related accident, others say it’s more likely that the contagion naturally spilled over from animal to human. The report stated that “all agencies continue to assess that both a natural and laboratory-associated origin remain plausible.”

Last year’s report by the Republican oversight staff of the Senate Health, Education, Labor & Pensions Committee pointed to November 2019 safety training at the WIV, as well as patents and procurements, as evidence of biosafety-related problems at the lab complex around the time the virus emerged in Wuhan.

Hazard suits at the high-security National Biosafety Laboratory in Wuhan. Photo: Wuhan Virology Institute

On November 19, 2019, a senior Chinese government safety official arrived at the WIV to discuss a “complex and grave situation currently facing [bio]security work,” the report said. On the same day that the official arrived, the WIV sought to procure a costly air incinerator. The following month, WIV researchers applied for a patent for an improved device to contain hazardous gases inside a biological chamber, like ones used to transport infected animals.

In contrast, the intelligence report said the November 2019 safety training appeared to be run-of-the-mill rather than a response to a biosecurity breach. “We do not know of a specific biosafety incident at the WIV that spurred the pandemic and the WIV’s biosafety training appears routine, rather than an emergency response by China’s leadership,” said the report, which was drafted by the national intelligence officer for weapons of mass destruction and proliferation and coordinated with the intelligence community.

The intelligence community agencies agreed on the underlying facts in the report but drew different conclusions from that information, according to an official familiar with the report.

The intelligence report is brief and does not mention the incinerator or device patent. It said that WIV officials in mid-2019 were “evaluating and implementing biosafety improvements, training, and procurements” in the context of Chinese biosecurity legislation.

Some WIV scientists have genetically engineered coronaviruses, the report said, but the intelligence community has no information “indicating that any WIV genetic engineering work has involved SARS-CoV-2, a close progenitor, or a backbone virus that is closely-related enough to have been the source of the pandemic.”

At the same time, the intelligence report did point to biosafety concerns. “Some WIV researchers probably did not use adequate biosafety precautions at least some of the time prior to the pandemic in handling SARS-like coronaviruses, increasing the risk of accidental exposure to viruses,” the report said.

The intelligence report confirmed previous news reports that several WIV researchers became sick in the fall of 2019, though it stated this was not proof that the scientists were infected through their work. The intelligence community “continues to assess that this information neither supports nor refutes either hypothesis of the pandemic’s origins because the researchers’ symptoms could have been caused by a number of diseases and some of the symptoms were not consistent with Covid-19,” the report stated.

The US Centers for Disease Control and Prevention have a four-point rating system for biolabs based on the threats posed by the infectious organisms agents allowed there. Biosafety level 4, or BSL-4, labs are the most restrictive and designed to handle the most dangerous pathogens.

According to the intelligence report, as of January 2019, WIV researchers were performing experiments with coronaviruses in BSL-2 labs, which have far fewer safeguards, despite knowing of “these virus’ ability to directly infect humans.”

“Separately, the WIV’s plan to conduct analysis of potential epidemic viruses from pangolin samples in fall 2019, suggests the researchers sought to isolate live viruses,” the intelligence report said.

While not revealing the evidence underlying its assessments, the report laid out the divisions within the intelligence community. The National Intelligence Council and “four other IC agencies” assess that the natural spillover of a virus from an infected animal is the most likely cause of the pandemic, according to the intelligence report.

The report did not name the other four intelligence agencies.

The Huanan Seafood Market in Wuhan is also widely suspected to be the epicenter of the virus outbreak. Photo: RTHK

Two federal intelligence agencies — the Department of Energy and the FBI — have landed on the other side of the bitter debate over the origins of the pandemic, assessing that a laboratory-associated incident is the most likely cause of the pandemic.

The Wall Street Journal reported in February that the Department of Energy, which had previously been undecided about how the pandemic began, had come to support the lab-leak position with “low confidence” in response to new intelligence; the FBI reached its conclusion with “moderate confidence.” The intelligence report doesn’t mention the confidence levels of any agency.

While the Department of Energy and the FBI agree that the pandemic most likely resulted from a lab incident, the agencies reached the same conclusion for “different reasons,” according to the intelligence report. But the report didn’t say what those reasons were.

Although the March law required the director of national intelligence to declassify “any and all information” relating to potential links between the WIV and the origin of Covid-19, an annex to the report remains classified. According to the report, this was necessary “to protect sources and methods.”

Several Republicans were critical of the intelligence report and demanded more details. [Congressional opinion has divided along party lines, as seen in a House oversight committee hearing held on Tuesday. -Asia Times editors]

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Sorry Gina, the chip industry isn’t coming back to America

Contrary to US Commerce Secretary Gina Raimondo and other high-tech nationalists’ wishes, the semiconductor industry is not migrating back to America any time soon.

On the contrary, the globalization of production capacity and new technology development is accelerating away from the US. Ironically, Biden administration subsidies for establishing semi-conductor factories in the US and export restrictions on high-end chips and chip-making equipment are helping to drive the process – and not just in China.

Last February 23, Raimondo delivered an impassioned speech to students at Georgetown University’s School of Foreign Service, at which she said:

I want the United States to be the only country in the world where every company capable of producing leading-edge chips will have a significant R&D and high-volume manufacturing presence…. It is America’s obligation to lead. We must push like no time before.

That is an ambitious goal, to say the least, but the reality is Europe, Taiwan, South Korea and Japan want to keep their leading-edge technologies at home; China must develop its own, in the face of US sanctions; and, in some cases, establishing a manufacturing presence in the US just doesn’t make economic or commercial sense.

Logistically, why should Sony make image sensors in the US for cell phones that are assembled in Asia? Why should Samsung Electronics make memory chips in the US when it has the world’s greatest economies of scale in South Korea?

Samsung is building a new logic integrated circuit (IC) contract manufacturing facility in Taylor, Texas. The project is now about 50% over budget due to construction cost inflation, according to reports.

On July 7, the European Union and the government of Flanders announced a 1.5 billion euro (US$1.65 billion) investment in the Interuniversity Microelectronics Center (imec), headquartered in Belgium.

On June 28, imex and ASML announced joint plans “to intensify their collaboration in the next phase of developing a state-of-the-art high-numerical aperture (High-NA) extreme ultraviolet (EUV) lithography pilot line at imec.”

A silicon wafer is seen through a scaled lens element. Credit: ASML

“This groundbreaking new high-NA technology is crucial for developing high-performance energy-efficient chips, such as next-generation AI systems… Significant investments are needed to secure industry-broad access to high-NA EUV lithography beyond 2025 and retain the related advanced node process R&D capabilities in Europe,” they said.

Imec is a world-leading R&D center for the semiconductor industry. ASML, headquartered in the Netherlands, dominates the global market for semiconductor lithography equipment and has a monopoly on leading-edge EUV lithography. It assembles its lithography systems in Veldhoven in the Netherlands using components sourced in Europe, the US and Taiwan.

It would probably not make logistical sense for ASML to replicate its exceedingly efficient assembly operations in the US, which accounted for only 15% of its lithography system sales in Q1 of 2023. But its two small competitors, Nikon and Canon, would arguably benefit if they merged their operations and created an ASML-like company in Japan.

Meanwhile, Intel, an enthusiastic recipient of the Biden administration’s CHIPS Act subsidies, has tellingly announced plans to invest more money outside the US than inside. Its new factory investments include:

  • $20 billion in Arizona
  • $2+ billion in Ohio
  • More than 30 billion euros ($33+ billion) for new wafer processing facilities in Germany, plus up to $4.6 billion for assembly and test facilities in Poland
  • $25 billion in Israel – more than the $17 billion Intel has invested there since 1974

TSMC is also building factories in Arizona, but it has established a joint venture with Sony and Denso in Japan as part of an advanced IC packaging development project in the Japanese science city of Tsukuba. TSMC is also likely to build a factory in Germany once the level of government subsidies is decided.

In Taiwan, TSMC is now preparing for trial production using 2nm process technology – the world’s most advanced in terms of miniaturization – with mass production likely to begin in 2025. In Arizona, TSMC plans to start mass production at 5nm in 2024 and at 3nm in 2025 or 2026, according to a EE Times industry report.

On June 8, TSMC announced the opening of its “Advanced Backend Fab 6, the company’s first all-in-one automated advanced packaging and testing fab to realize 3DFabric integration of front-end to back-end process and testing services.”

This Taiwan-based facility “enables TSMC to flexibly allocate capacity for … advanced packaging and silicon stacking technologies, such as SoIC, InFO [Integrated Fan-Out wafer level packaging], CoWoS [Chip-on-Wafer-on-Substrate wafer level system integration platform] and advanced testing, improving production yield and efficiency.” 

In the meantime, South Korea’s Samsung is reportedly planning to build a test line for the development of new semiconductor packaging technology in Yokohama, Japan. Like TSMC, it will work with the world’s best packaging equipment companies, which are Japanese.

South Korea’s Samsung is caught in the middle of the US-China tech war. Image: AFP

America’s Micron Technology, meanwhile, announced plans in June to invest more than $600 million in new packaging and test facilities at its factory in Xi’an, China, to “enhance the company’s flexibility in manufacturing a variety of product portfolios” for Chinese customers. Micron also intends to acquire the local packaging facilities of Taiwan’s Powerchip Semiconductor Manufacturing under a previous agreement.

This is the context in which we should consider Secretary Raimondo’s statement that the US “will develop multiple high-volume advanced packaging facilities, and become a global leader in packaging technologies.”

On July 5, Powerchip announced plans to build a 12-inch wafer fab and R&D center in Japan to serve auto and industrial machinery makers. SBI Holdings, a Japanese financial services company, will assist with fund raising, including application for government subsidies, and finding construction sites.

Following the example of TSMC, Powerchip seeks to take advantage of Japan’s desire to increase its own semiconductor production capacity and decrease its dependence on Taiwan.

Previously a DRAM maker, Powerchip has transformed itself into an IC foundry with both memory and logic manufacturing capabilities. It aims to supply its Japanese customers starting with 22/28-nm process technology, working with industry, academia and government institutions to become part of Japan’s supply chain and develop more advanced products.

Raimondo also tellingly said in her speech, “If we don’t invest in America’s manufacturing workforce, it doesn’t matter how much we spend. We will not succeed.”

That is probably correct given that China graduates several times more engineers than the US and that both East Asian and European schools are arguably more rigorous. Some studies conclude that American students are more knowledgeable but they are outnumbered many times over by students in other countries with high-tech ambitions.

Chinese graduates. Photo: China Daily.

This is a long-term problem for the US, but the impact of deindustrialization on education and training is already being felt.

In June, TSMC announced that it would be sending a large number of experienced workers to Arizona – more than 500, according to one report – to ensure its new factory is finished on time. American workers are paid more, but technicians and supervisors familiar with the semiconductor industry are in short supply.

Also according to Raimondo, “If we don’t act, the US will have an estimated shortfall of 90,000 skilled technicians by the year 2030.” But there is a shortfall right now.

She adds, that “colleges and universities need to partner with industry to align their programs with the needs of positions in fabs, and ensure graduates have the practical skills they need for success.” That’s a good idea, but Taiwan and Korea are doing the same thing.

That all said, the US has a large and competitive semiconductor industry that is less in need of government assistance than politicians would like to believe. New production capacity is being added and the level of technological sophistication is very high.

The bigger point, though, is that there is no way to turn back the clock to a time when there wasn’t much global competition and the US dominated the industry.

Like TSMC, Samsung plans to begin mass production at 2nm in 2025. Intel, hoping to leapfrog both of them and regain its industry leadership, aims to introduce its 18A (18 angstrom, or 1.8nm) process the same year.

Whether that will be possible or not, that means there are three companies from three different countries competing to lead the logic IC and foundry market. Globalization is alive and well in the chip industry.

Follow this writer on Twitter: @ScottFo83517667

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Has Australia outgrown its subservience to the US?

The starting point for any review of Australia’s international strategy must be an assessment of the future US-China relationship, focusing on possible threats and opportunities. 

A good start was made in a speech by Australian Foreign Minister, Penny Wong, in April 2023. While Wong thinks that the United States will remain “indispensable,” she understands that it will no longer be the dominant power in Asia.

Instead, Wong said that Australia’s national interest is to bring about a region where all countries benefit from a strategic equilibrium where no country dominates and no country is dominated.

The Chinese economy overtook the US economy in 2016 based on purchasing power parity and has continued to grow much faster since. The idea that the United States can continue to dominate is not a sound basis for Australia’s international strategy.

Yet the United States does not seem to recognize the change in its position in Asia. The United States, with Australia’s support, says that it wants to preserve the so-called “rules-based order.” But that order is not the one enshrined in the UN Charter. Instead, it was established by the United States and was intended to serve US interests.

Understandably, China might want to make changes to the US rules-based order — changes that could readily be accommodated by the other nations in the Indo-Pacific.

As Australia’s former ambassador to China Geoff Raby says: “An inclusive framework of norms, rules and habits of consultation which include China and of which it is an author, will be the best means of constraining bad behavior [emphasis added].”

But there is also the problem of the United States not always abiding by the present rules-based order. Instead, it is happy to ignore or bend rules when rules don’t suit it.

For example, US trade sanctions on China have never been authorized by the World Trade Organization. But when China introduced trade sanctions on Australia, the United States quickly jumped in to replace the import market.

Chinese restrictions on Australian wine imports hit the industry hard. Photo: AFP

A multipolar system of international governance offers the only sustainable way forward. Australia should be working to encourage the United States to accept this new reality where it needs to share power.

The problem is that both Australia’s foreign and defense policies are based on a contradiction. Australia recognizes the reality that it is living in a multipolar region, but it ties itself to an alliance partner that doesn’t.

The rest of the region doesn’t want to be forced to take sides. Like Australia, other regional members depend upon both major countries and share a common interest in establishing a set of ongoing governance arrangements that accommodates the reasonable demands of all member countries.

For Australia, this would represent a return to the former position where Australia was clear that it didn’t wish to take sides in the struggle for influence between the United States and China. But under former prime minister Scott Morrison, Australia was seen as a mouthpiece for the United States so often that it weakened its regional credibility.

As former Singaporean diplomat Kishore Mahbubani said, ASEAN countries want to have good relations with both the United States and China, and the wisest policy for Australia is to align itself with the ASEAN position where possible.

That way, it could play a significant bridging role between Beijing and Washington. Plus, Australia could enhance its standing with other countries in the region if it played a leading role in persuading the United States to accept the reality of a multipolar region.

The key to Australia’s subservience to the United States, and its engagement in so many US wars, has been its perception that it depends upon the United States for defense. But Australia needs to identify its own interests clearly and all actions should be determined accordingly.

Right now, the most immediate threat to Australia’s sovereignty would be a US-China conflict over Taiwan. Should Australia not join the United States in defense of Taiwan, the issue might impact the AUKUS agreement and Australia’s purchase of nuclear submarines.

While many have argued that China has no intention of attacking Australia, intentions can change quickly. Hence defense forces are usually structured against an assessment of the capability of potential adversaries, and China’s capability is rising rapidly.

In that context, it is a legitimate response for Australia to buy nuclear submarines to strengthen its independent defense capability. But that equally requires that it controls the use of these submarines. If AUKUS is not compatible with Australia being able to determine and protect its long-run regional interests, then Australia should be prepared to let the agreement go.

Australia can and should push back when its interests and values are challenged by China. The government is right when it says that “we will cooperate where we can, we will disagree where we must, and we will engage in our national interest.”

Australian Prime Minister Anthony Albanese and Chinese President Xi Jinping meet and greet at the Bali G20 Summit on November 15, 2022. Image: Twitter

But Australia needs to work with other nations on specific issues of national interest, even where they are not like-minded in terms of adherence to liberal values, including respect for human rights. Australia’s ability to push back will be enhanced if it maintains ongoing dialogue, especially with China. 

For example, the renewed discussion at the ministerial level has meant that issues that offend Australian values — such as unexplained detention of Australian citizens in China, human rights matters, and press and religious freedoms — can now be raised and discussed at senior government levels.

It is clearly in Australia’s interests to work with both China and the United States. That will require Australia to work closely with the many other like-minded countries in the region, and, if necessary, be less subservient to the United States.

Michael Keating is former Secretary of the Department of Prime Minister and Cabinet, the Department of Finance and the Department of Employment and Industrial Relations. He is presently a visiting fellow at The Australian National University.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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China banks under pressure as local debt crisis mounts

Large Chinese banks are under pressure from Beijing to sacrifice their margins and extend new loans to cash-tight local government financing vehicles (LGFVs).

Bloomberg reported that state banks have in recent months been offering LGFVs loans with a maturity period of 25 years, instead of the normal 10 years. Some of the loans came with waivers on any interest or principal payments for the first four years, though the interest will be accrued for later payment, unnamed sources were quoted as saying in the report.

Since the Bloomberg report appeared on July 4, the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China’s shares have fallen by 15.1% and 15.6% respectively. The Bank of China’s stocks have lost 12.7% while the China Construction Bank has declined 14% over the same period.

Some analysts surmised that the central government is dumping local debt problems on the big banks by making them lend more to developers and expand their loan books generally.

The People’s Bank of China (PBoC) said on July 11 that local financial institutions extended 3.05 trillion yuan (US$423 billion) worth of new loans in June, compared with 2.8 trillion yuan a year ago in the same month. The figure is above economists’ forecasts of 2.3 trillion yuan.

The Shanghai Securities News said on July 11 that China is expected to accelerate its policy roll-out in order to promote the “stable and healthy” development of the beleaguered real estate market.

Wang Qing, chief macro analyst at Golden Credit Rating, said policymakers may take further measures such as relaxing property purchase and mortgage rules as well as cutting mortgage rates to achieve a “soft landing” for the property market.

Goldman Sachs in the crosshairs

The recent downward pressure on Chinese bank shares was fuelled partly by a Goldman Sachs report published on July 5 that downgraded five Chinese lenders to “sell” ratings based on various downcast assumptions.

After being criticized by Chinese media, Goldman Sachs said on July 6 that its research report is not bearish as it had also rated four Chinese banks as “buy” and three others as “neutral.”

“Goldman Sachs’s report has made some investors worry about China Merchant Bank (CMB)’s asset quality,” a CMB spokesperson told the Shanghai Securities journal on July 10. “The report used data from the 2022 annual report, without any new numbers,” the spokesperson claimed.

The spokesperson also said the report was misleading as it has made errors in its calculations of CMB’s and LGFVs’ data.

Goldman Sachs has a “sell” on China Merchants Bank. Image: Twitter

He said CMB’s on-balance sheet local debt amounted to 132.56 billion yuan, or about 2.32% of the bank’s total loans, at the end of 2022. He added that the size of the bank’s LGFV loans is small and far below Goldman Sachs’s estimation of one trillion yuan. He asserted the bank’s overall risk exposure to local debt is manageable.

Other state banks have not yet commented on the Goldman Sachs report.

The Shenzhen-based Securities Times on July 7 published an article with the title “It’s undesirable to misunderstand the fundamentals of Chinese banks.” It said the Goldman Sachs report is misleading as it used “pessimistic” assumptions to recommend selling Chinese lenders’ shares. 

It noted that the PBoC launched 16 measures in November to ensure stable and healthy growth of property markets. It said due to the lagged effect of these measures, banks may still record more non-performing loans (NPLs) this year but their risk associated with LGFV loans is declining not rising. 

On Monday, the PBoC extended the implementation period of the 16 measures from this month to the end of 2024, aiming to help property developers and homebuyers borrow money more easily. 

No bailout?

There are two kinds of local debt in hina. Local governments are given an annual quota by the Ministry of Finance to issue bonds, which they rely on taxes, fees and land sales to pay. These bonds are welcomed by state banks as they are collateralized with high-quality assets and backed by the central government.

China’s outstanding local government bonds rose from 30.47 trillion yuan at the end of 2021 to 35.06 trillion yuan at the end of last year. The 2022 figure included 14.39 trillion yuan of bonds for “general purposes” and 20.67 trillion yuan for “special projects.” 

Local bonds for general purposes have 8.5-year maturities on average while those for special projects have a 10-year-maturities. The two categories together had an average coupon rate of 3.39% at the end of last year.

Another kind of local debt are LGFV loans. Most local governments set up LGFVs to finance their infrastructure and city renewal projects. They rely mainly on land sales revenue to repay their LGFV loans.

Homebuyers in China have been refusing to make mortgage payments. Image: Twitter Screengrab

Most of these LGFV loans, which often lack transparency, are off-balance-sheet items for their lenders. Chinese media estimated that all outstanding LGFV loans in China amounted to 65 trillion yuan at the end of last year, up from 56 trillion yuan at the end of 2021. 

On January 8, Chinese Finance Minister Liu Kun was quoted as saying by the National Business Daily that the central government will not bail out heavily-indebted local governments as it follows the principle of “all parents raise their own children.” Liu also said, however, the central government plans to launch a system for LGFVs to default.  

In the intervening months, Guizhou, Guangxi and Yunnan provincial governments  have said they cannot resolve their local debt problems and may default if Beijing does not intervene.

Property crisis

Some economists said the current local debt crisis is a result of the property market collapse that began in July 2021.

Li Chao, chief economist at Zheshang Securities, said in an interview earlier this year that the ongoing property crisis is having a negative impact on local governments and LGFVs. He said the central government should avoid a situation where the property and local debt crises form a vicious cycle and create systemic risks to the banking system.  

Last month, more economists and property experts called on the central government to stimulate home prices and resolve local debt problems.

An article published last month by a Henan-based columnist said that if local governments fail to generate enough revenue from land sales, they should sell their state-owned enterprises.

Read: China urged to boost home prices or face recession

Follow Jeff Pao on Twitter at @jeffpao3

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Embracing the US-Japan-South Korea trilateral

Japan and South Korea are strong US allies, and these three countries also share mutual interests in reinforcing the so-called “liberal and rules-based order” in the Indo-Pacific region as well as the international community.

The national security of Japan and South Korea has been drawn together through common threats and their security ties with the US. Recently, the three countries agreed to work toward establishing a mechanism for sharing real-time data on several missile launches by North Korea this year. 

The trilateral mechanism among Japan, South Korea and the US improved in 2022, inspired by North Korea’s nuclear ambitions and the election of South Korean President Yoon Suk Yeol. Most noteworthy in recent times was the Phnom Penh statement in November 2022 on a Japan-US-Korea trilateral partnership for cooperating in the Indo-Pacific region.

However, historical hostility between Japan and South Korea has been a challenge to this trilateral cooperation. Both nations host a high number of US troops and both have also signed security partnerships with the US.

However, in March this year, President Yoon and Japanese Prime Minister Fumio Kishida held a meeting that was a big step toward rebuilding their security and economic ties, and the two nations sought to unite through mutual concerns over North Korea’s nuclear capabilities and China’s expansionist behavior. 

It is clearly beneficial for both Japan and South Korea to cooperate with the US to be realistically prepared for uncertainties on the Korean Peninsula. These three nations aim to attenuate the North Korean threat and embrace the concept of hedging against China’s rise.

The North Korean threat has intensified over time as it fired a record number of missiles in 2022, and this has further propelled Japan-South Korea-US trilateral cooperation. Therefore, North Korean threats will perhaps keep trilateral cooperation in place. Moreover, South Korea’s aim of nuclear planning and Japan’s aim to possess long-range strike capabilities could be issues boosting trilateral cooperation. 

Regarding growing Chinese assertiveness, Japan aims to oppose China’s attempts to alter the status quo, while South Korea has adopted a relatively appeasing approach aimed at maintaining its economic relationship with China.

Tokyo and Seoul also differ in their stances on the Taiwan issue. Japan has been in support of Taiwan’s security, while South Korea has avoided direct commitments to establishing stability in the Taiwan Strait.

For its part, the US has been working toward increasing its military as well as political support for Taipei through elevated defense cooperation and regular official visits by politicians. 

The United States is keen on continuing to work deeply with Japan and South Korea to ensure peace and stability in the Indo-Pacific region. Recently, President Yoon visited the United States, where he and US President Joe Biden reached an agreement that would allow an increased level of deployment of US assets around the Korean Peninsula.

Furthermore, Biden has also invited Kishida and Yoon for a formal trilateral meeting to discuss issues and challenges in depth. 

North Korea’s nuclear ambitions 

North Korea’s media criticized plans of South Korea, Japan and the US to share real-time data on its missile launches, calling the move a way of strengthening military cooperation among these three countries.

The defense chiefs of the US and Japan emphasized the need for trilateral cooperation with South Korea after a North Korean rocket carrying a spy satellite failed, which led to an emergency alert for Japan’s Okinawa prefecture.

Pyongyang’s nuclear tests and missile launches threaten the stability in the region and also violate international law. 

North Korea’s nuclear arsenal has been building up, which also includes the development of missiles capable of delivering atomic bombs anywhere in the US. This has further concerned Japan regarding America’s nuclear umbrella. However, the US has reaffirmed its commitment to Japan time and again and also works toward extending deterrence through the US nuclear capabilities. 

Furthermore, trilateral defense cooperation has grown deeper in recent times after the rapprochement between South Korea and Japan. Their cooperation involves trilateral military drills for practicing the tracking of North Korea’s missile launches and information-sharing exercises.

Japan’s Defense Ministry has also warned that it will destroy North Korean missiles they it enter its territory. Moreover, the ministry has been taking concrete precautions that involve deploying Patriot missile defense batteries. 

Trilateral in the Indo-Pacific 

As far as the Indo-Pacific region is concerned, the US, South Korea and Japan have mutual interests in bolstering the “rules-based order.” These three nations must contribute to embracing economic connectivity in the region.

For instance, the US and South Korea should consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japan, the US and South Korea must enhance their security cooperation to tackle North Korea’s nuclear threats through intelligence sharing as well as military and security consultation. 

A free and open Indo-Pacific is vital for all three nations to maintain prosperity, democracy and security and to counter China’s rise and influence. It has become essential to create a structure for peace and stability for safeguarding democracies in Northeast Asia.

To ensure a coordinated response to challenges faced in light of North Korea’s nuclear ambitions, the US, South Korea and Japan need to work on improving their interoperability for conducting joint operations.

In South Korea’s recent National Security Strategy, emphasis is laid greatly on cooperation with Japan and the US and further pursuing value-based diplomacy that involves freedom, rule of law and democracy.

The strategy has also focused on the increased need for strengthened trilateral cooperation, and for this mechanism to flourish in coming years, there is a need to transform and improve Korea-Japan ties.

The three countries possess potent economic, military and political power but need to do more to counter threats from China and North Korea. 

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How Palestine drives Israel’s lucrative weapons industry

As with any Israeli operation in the West Bank, there are several ways to understand the recent events in Jenin.

Israel’s explanation for its assault on the refugee camp – which killed 12 Palestinians, injured 140, and forced thousands to flee – was to curb the rise of Palestinian resistance in the northern West Bank. A recent spike in Palestinian attacks on the Israeli military and civilians has dominated the news.

However, Israel’s explanation never acknowledges the constant aggression that comes with a full-blown military occupation. The maintenance and expansion of Israel’s occupation is a primary motivation for its recent actions in Jenin. 

It’s also vital to view the recent Jenin operation from the political standpoint of Israel’s hard-right government. The spike in violence between Israelis and Palestinians – the Israeli military has killed 114 Palestinians this year, and Palestinians have killed 16 Israelis – has given Israel’s extremist politicians a platform to incite hatred and encourage deepening the country’s footprint in Palestinian areas. 

National Security Minister Itamar Ben-Gvir, who has been convicted of incitement to racism, responded to one recent attack on Israeli settlers with calls for “a military operation to demolish buildings, eliminate terrorists, not one or two, but tens and hundreds, and if necessary even thousands.”

Other politicians have called for increased Israeli settlement creation in response to the wave of violence sweeping the territory. There are open discussions in Israel and Palestine that large-scale Palestinian expulsions from the West Bank could be in the cards in the not-too-distant future.

Palestinians see the Jenin operation as a serious attempt to destabilize Palestinian life. Institutions such as the Palestinian Authority have proved completely unable to stand up for Palestinian rights and dignity in the face of continuous Israeli assaults and land grabs. At this point, the two-state solution as envisaged in the Oslo Accords is a faint memory, let alone a viable plan for the future.  

While the spike in violence between the two sides is undeniable, it’s a symptom of a deeper issue. The occupation of Palestine is the most funded and resourced state project in Israel’s history.

On the surface, the occupation has been sold as a temporary defensive measure necessary for Israel’s survival. However, it satisfies many other needs.

Given the biblical connection to the West Bank, the occupation provides a religious veneer to the project of secular Zionism. Control over holy cities with deep meaning in Jewish religious history rallies Jews worldwide to support Israel and its government. 

Technology laboratory

More important, Israel’s military control over an entire population has facilitated the creation of a lucrative weapons industry.

In his new book The Palestine Laboratory: How Israel Exports the Technology of Occupation Around the World, Australian journalist Antony Loewenstein has documented the intricate connection between the occupation of Palestine and the development of the modern weapons industry.

Controlling millions of people requires more than a strong military. Israel has dominated virtually all aspects of Palestinian life with remarkable efficiency through a matrix of checkpoints, physical barriers, and advanced surveillance technologies. 

The systems Israel has designed, developed and tested have become lucrative goods for export to some of the world’s most repressive regimes.

While many have heard about Israel’s NSO group and its phone-hacking technology, fewer know how deep Israel’s history of exporting weapons technologies goes. From Augusto Pinochet’s Chile to apartheid South Africa, Israel has used the knowledge and systems it procures in its control over Palestinians to establish lucrative trade and political ties around the world. 

Israel’s drone program, which has brought billions of dollars into the country, is one of the best in the world. Loewenstein notes it has become so good because the Israeli military has a captured population in the West Bank and Gaza that it can fly drones over and test various technologies. Tested weapons and surveillance technology are generally considered the best, and Israel can test its wares 24 hours a day on a captive Palestinian population. 

If the occupation were to end tomorrow and a two-state solution took hold over the land between the Jordan River and the Mediterranean Sea, Israel would lose its technology laboratory. The Israeli weapons industry, just like apartheid South Africa’s weapons industry, would wither into a shadow of its former self.

Since many of Israel’s vaunted technology entrepreneurs started in elite military units, the country’s mainstream technology sector would also take a hit. Where would they test their crafts and new ideas?

From this perspective, Israel has a significant economic interest in entrenching its occupation of Palestine. Thus political posturing is a distraction drumbeat to keep the population invested in this resource-intense state project.  

The recent Jenin operation looks different when considering Palestine as a weapons laboratory.

While the cycle of violence might be spiking, the Israeli army decided to test out new tools and strategies in Jenin last week. What they learned from the operation will go into new surveillance and control technologies that will eventually find their way around the world.

If you want to find a reason for the assault on Jenin or the continuation of Israel’s occupation, follow the weapons technology.

This article was provided by Syndication Bureau, which holds copyright.

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