GOOD MORNING FROM LONDON
————————————–
#1 TRUMP REFUSES TAIWAN PRESIDENT PERMISSION TO LAND IN THE U.S.
THE FINANCIAL TIMES
#2 CHINA’S DOMESTIC CARE SUBSIDY – BIG CHANGE
SOUTH CHINA MORNING POST
#3 CHINA AND JACK PERRY – PART 6
————————————
#1 TRUMP MARGINALISING TAIWAN
THE FINANCIAL TIMES
“Donald Trump’s administration has denied permission for Taiwan’s President Lai Ching-te to stop in New York en route to Central America, after China raised objections with Washington about the visit. Lai planned to transit the US in August en route to Paraguay, Guatemala and Belize, which recognise Taiwan as a country.
The decision will deepen concerns among Taiwan’s supporters in Washington that Trump is taking a softer stance on China as he pushes to hold a summit with President Xi Jinping. The Financial Times reported on Monday that the US commerce department had been told to freeze planned export controls against China as the countries hold trade talks and discuss a summit.
GRAHAM PERRY COMMENTS;-
Taiwan is a measuring rod for China-U.S. relations. Remember the context. In February 1972 President Nixon travelled to China and signed the Shanghai Communique in which the U.S. stated that Taiwan was part of China. Whilst recognising that Taiwan belongs to China, the U.S. has supported efforts by Taiwan to establish an independent presence on the world stage.
China is inflexible on any issues relating to its frontier and will brook no intervention by any country that seeks to create Taiwan as a new country. It is, therefore, significant that Trump has refused to allow the Taiwanese President to stop in New York whilst en route to Central America
Bonnie Glaser, a China and Taiwan expert at the German Marshall Fund, said “Trump should be standing up to People’s Republic of China pressure, not caving into it,” Glaser said. “By signalling that aspects of the US relationship with Taiwan are negotiable, Trump will weaken deterrence and embolden Xi to press for additional concessions regarding Taiwan.”
Glaser gets it wrong. The Tariff issue – recently introduced by Trump – has injected a significant new factor into China-U.S relations. It is a case of Semiconductors v Rare Earths.
The U.S, – desperately – needs Rare Earths and only China can meet U.S. needs. It is the case, also, that China needs semiconductors but the U.S. is much more desperate for Rare Earths from China than China is for semiconductors from the U.S. And there is a direct link between the decision to refuse the Taiwanese President permission to land his plane in New York and the tense trade discussions taking place in Stockholm between U.S. Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng.
China has Rare Earths leverage over the U.S. They will handle the newly won power carefully and responsibly but on Taiwan China is inflexible and the U.S. has no alternative but to deny permission to the Taiwanese President to stopover in New York.
——————————————–
#2 CHINA ANNOUNCES NATIONAL CHILDCARE SUBSIDY
SOUTH CHINA MORNING POST
“China has announced its most significant central-level effort to reverse a deepening demographic crisis since allowing families to have three children, unveiling a long-awaited national childcare subsidy scheme that will provide up to 10,800 yuan (US$1,505) per child under the age of three.
The move came amid mounting urgency among policymakers to stem the population decline and blunt its long-term drag on economic growth and social stability, after years of piecemeal local incentives that failed to reverse the downward trend.
China will provide an annual childcare subsidy of 3,600 yuan for every child born on or after January 1, 2025, until they turn three – regardless of whether they are the first, second or third child, according to a government announcement on Monday.
Children born before that date but still under three will also be eligible for a prorated subsidy based on the remaining months.
More than 20 provinces across China have already experimented with childcare subsidies at various local levels. But this marks the first nationwide scheme introduced by the central government.
“The policy does mark a major milestone in terms of direct handouts to households and could lay the groundwork for more fiscal transfers in future,” said Huang Zichun, China economist at Capital Economics, in a report published on Monday. But he also pointed out that the sums involved were too small to have a near-term impact on the birth rate or household consumption.
GRAHAM PERRY COMMENTS;-
Birth rate decline does raise questions; what is the preferred population figure? Is China still over-populated? Can a declining population support the increased pension demand from an ageing population? Can the young and middle-aged Few provide the economic growth to fund the pension requirements of the ageing Many?
Advanced Intelligence and Robotics do challenge existing economic theory about the right balance for population growth and the Jury Is Still Out on what is the optimum annual population figure for now and for the future. There are many views but they are premature. More is needed to be known about the long-term effects on employment numbers of advanced technology before central government authorities finally settle on the desired optimum figure for population growth.
But population change is like the heavily laden cargo ship on the high seas – it takes time to effect a change in direction. China’s population fell for a third consecutive year in 2024, with the total dropping by 1.39 million to 1.4083 billion. Decades of strict one-child policy enforcement has not only curbed births but also deeply affected social attitudes and the confidence to have children.
It is correct that in 2024 births in China rose for the first time since 2017, reaching 9.54 million, an increase from the record low of 9.02 million newborns in 2023 – the lowest since record-keeping started in 1949. But experts warn the rebound will likely be limited and uneven, as sluggish economic momentum, rising uncertainty, sky-high parenting costs and entrenched gender inequality continue to weigh heavily on couples’ willingness to have children.
There is another aspect – the Government’s need to boost effective demand in the domestic economy. The Chinese Government wants its people to spend more and save less in order to avoid creating excess capacity and upsetting foreign populations as excess Chinese goods challenge the stability of foreign markets.
“The nationwide roll-out of the childcare subsidy system offers broader coverage, stronger support and greater policy sustainability – particularly crucial for low-income families,” according to a Xinhua article published Monday. Governments at all levels – and some of the country’s largest companies – have introduced a number of policies to incentivise families to have children or to motivate those with children to have more, including cash rewards, extended parental leave, tax breaks and housing subsidies. But experts have warned that China should brace itself for another decline in births this year, as the number of marriage registrations – a key indicator of future birth trends – fell sharply. In 2024, only 6.11 million couples registered to marry, a 20 per cent drop from 2023, reversing the brief rebound seen that year and signalling renewed demographic headwinds
————————————
#3 CHINA AND JACK PERRY – PART 6
The story so far. Jack, born in 1915 to a mother from Russia and a father from Poland, grows up in the Jewish East End in restricted economic circumstances. His upbringing is conventionally Jewish with the focus on synagogue, Jewish education, and observance of religious ritual. His upbringing is also quite non-political.
Everything changes in 1933 when Hitler comes to power in Germany and Oswald Mosely starts to march through the streets of the East End with his black-shirted supporters echoing Hitler’s stormtroopers. Jack is politicised – a process reaffirmed by Franco’s assumption of power in Spain.
His political journey brings him to the attention of the Communist Party which attracts support from East Enders in considerable numbers because of the leadership the Party provides in organising militant opposition to the British Union of Fascists. Matters reach a peak at Cable Street on Sunday 4th October 1936 when the Mosely foot soldiers suffer a severe beating – an event written into East End history.
Jack had registered for Royal Air Force service in March 1940 but his severe asthma condition rendered him unfit for active service and he was restricted to air raid notification duties with the Ministry of Defence. He was also drafted by the Board of Trade to become a part-time adviser to the Controller of Clothing, Sir Thomas Barlow.
As Part 5 covered, in the post war period Jack, because of his prominence in the Communist Party and his astute commercial skills, became active in the organisation of the Moscow International Economic Conference held in Moscow in April 1952. He was a member of the Organising Committee which met in 1951 to prepare for the Conference the following year. With the active support of three Cambridge University Professors – Joan Robinson, Richard Kahn, Joseph Needham – and Lord Boyd Orr, a leading world expert on Nutrition and winner of the Nobel Peace Prize in 1949, Jack became the Secretary of the British delegation.
The Conference attended by representatives from 49 countries, focused on three topics; the development of international trade; international economic co-operation for the solution of social problems; and problems of under-developed countries.
During the Conference in April 1952 meetings took place between the delegation from Great Britain headed by Lord Boyd Orr and the delegation from China headed by Mr Nan Hancheng who was President of the Bank of China when plans were discussed for the promotion of bilateral trade between Great Britain and China.
In his autobiography “From Brick Lane to The Forbidden City” Jack remarks;-
“Dr Ji Chaoting, a senior member of the Chinese delegation, suggested that the two of us (Dr Ji and Jack Perry) had a chat which probably became the most important and significant event of the Conference for me because he outlined a perspective that led to the transformation of my life’s purpose.
Dr Ji explained;-
‘The top Chinese leadership in Beijing regarded the Conference as a potential high watermark in their diplomatic initiatives. The Korean War had steered the Western capitalist countries into an anti-Chinese alliance. The embargo, blockade and isolating policy thereby produced needed to be fought against with every diplomatic and political weapon. The almost total cessation of trade relations between China and the Cold War warriors was harmful but not economically significant to China. At its present stage of development, just three years after decades of civil war and Japanese occupation, the task of feeding, clothing, housing and educating the people of China became the first priority. In the present circumstances the opening of substantial trade relations with capitalist countries had no strong economic imperatives. But the political case for campaigning against the attempt to isolate China politically and economically attracted the strongest priority.
Dr Ji continued “The boycott campaign by the West and the attempt to drive a political wedge between China and the Third World contained contradictions for the U.S. which would have difficulty in keeping its client states, including Western Europe, tied to its coat-tails. The opportunity should be seized to demonstrate concretely that opening up trade between East and West would make a contribution to economic development throughout the world.”
The Chinese delegation proposed to use the Conference to inaugurate flows of trade between China and Western nations. For this purpose the Chinese had identified the delegations from Britain, France, Itay and the Low Countries as providing fertile ground for specific trade negotiations. China proposed to start with the British trade delegation because it contained a number of persons – economists, businessmen, and parliamentarians – who would be sympathetic to the idea of constructing specific trade proposals which would attract international attention and would also encourage the other delegations in turn to take the same route.
Jack continued “Specifically, Ji Chaoting suggested that the Chinese and British delegations should make the running in negotiating a trade deal of significant proportions.”
Things were now beginning to happen. A completely new perspective was coming into focus – trade and business between China and the U.K. and Jack was at the heart of this new initiative.
The Chinese delegation consisted of 26 members – all of whom, Jack subsequently realised, were senior members of the Chinese trade and business community. Nan Hancheng was supported by Lei Yenmin, Lu Hsu Chang and Shi Chiang who was killed in the bomb plot in April 1955 when escorting Premier Zhou Enlai to the Bandung Conference of Afro-Asian states in Indonesia.
Jack makes clear that Dr Ji Chaoting was the “real powerhouse behind the Chinese delegation. He was a Chine national but held the post of Professor of Economic History at Chicago University. Jack describes him as the ideas man and organiser of the delegation
“ It was during the Conference that Jack was approached by Dr Ji who was Vice-President of the Bank of China and Mr Lu Hsuchang, the General Manager of the China National Import and Export Corporation (CNIEC) Import and Export Corporation. They knocked on his hotel room and made a proposal which had significant consequences for China-UK relations and also for Jack’s commercial career. They wanted him to set up an independent company in London to promote trade between China and the U.K.
Goodbye to dresses. Hello to soya beans.
GRAHAM PERRY
