GOOD MORNING FROM LONDON
12 DECEMBER 2025. CHINA POST 602
CHINA AND THE FOREIGN MEDIA
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#1 THE U.S. RETREATS FROM COLLISION WITH CHINA.
#2 SUCCESS AND FAILURE IN CHINA
#3 TAIWAN – TRUMP’S IRRITATION
#4 BRICS – IS IT UNDER-PERFORMING?
#5 TRUMP LOOSENS LINKS WITH WESTERN EUROPE
#6 CHINA AND JACK PERRY – PART 25
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EXTRACT #1
THE U.S. STEPS BACK FROM THE BRINK
FINANCIAL TIMES AND FOREIGN EXCHANGES
According to The Financial Times, the Trump administration “has halted plans” to sanction the Chinese Ministry of State Security and affiliated hacker organizations in connection with the “Salt Typhoon” campaign against US telecommunications firms. It is concerned that sanctions might upset the trade detente reached between Donald Trump and Xi Jinping back in October. The administration also appears to be shelving any new export controls or other provocative actions while it tries to reduce US dependence on Chinese supplies of critical minerals (which is likely a long-term process). Deputy White House Chief of Staff Stephen Miller has reportedly been tasked with blocking any measures that might threaten the trade status quo.
GRAHAM PERRY COMMENTS;-
This is a case of Rare Earths Speaking. This is where we can witness the clear impact of China’s leverage policy on the U.S. For many years the U.S. has been bossing China. The U.S. has been top dog but, as has become clear in recent weeks, the Xi-Trump Meeting in Seoul was a Moment In Time. China forced the U.S. onto the back foot and evidence is contained in the above extract from the FT and Foreign Exchanges. The U.S. is having to adjust to “the boot being on the other foot”. It will not find it easy. In life, generally, no nation likes to be pushed back. It creates inner tensions that can destroy the body politic. Look for signs of stress in the U.S. at the stranglehold that China is imposing. They are bubbling below the surface.
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EXTRACT #2
A COMMENT BY GRAHAM PERRY
‘SUCCESS AND FAILURE’
Good News And Bad News.
First, the Good – 800+ million people lifted out of extreme poverty. Second, 200 million Chinese predicted to travel overseas in 2030. Third, China boasts the largest number of STEM PhDs. – S for Science, T for Technology, E for Engineering and M for Mathematics.
And the Bad News – Youth unemployment is high, the real estate market remains a drag on economic growth and the population is ageing.
Critics of China focus on the Bad News. Fans of China focus on the Good News. Both are wrong because Good Things and Bad Things are essential and inevitable parts of the China narrative. They live side by side. Understandably, the China Government wants to stress the positives as justification for its continuing leadership role but the Party has never been smug or complacent about its successes – recent examples are DeepSeek, Huawei bounce back and the Photos of the far side of the Moon. It also acknowledges the areas in which China has fallen short and remains clear-headed and focused about the ongoing challenge of Corruption within the Party.
But China’s focus on its own negatives is not enough for the critics of China who want to talk up the Negatives and talk down the Positives. Why do they adopt such a position? It is not difficult to understand. China is led by a Communist Party and it must fail. It is as simple as that. Communism, says the West, is tyrannical, oppressive and rotten to the core. Its successes must be ridiculed and its failures must be magnified.
For the uncommitted observer of China some suggestions;- stay informed; keep abreast of the changes that are underway; maintain a balance and do not dismiss too readily the positives or embrace too quickly the negatives; and bear in mind that the critics of China do have an overwhelming urge to convince you that the Communist Party is a Big Negative – and China’s continued progress is causing them acute embarrassment. The USSR tried and failed. The PRC is trying and succeeding. There is a growing case for arguing that the Communist Experiment is confounding its critics.
GRAHAM PERRY
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EXTRACT #3
TRUMP AND TAIWAN – CHANGE UNDERWAY?
GIDEON RACHMAN – THE FT
“They stole our chip business . . .and they want protection.” That was Donald Trump, musing about Taiwan, last year on the Joe Rogan show. Remarks like that will prey on the minds of the Taiwanese, as Trump prepares to meet Xi Jinping this week. Trade will be the main item on the agenda. But Taiwan will also be discussed by the US and Chinese leaders. As president, Joe Biden said on four separate occasions that the US would fight to defend Taiwan. Trump has said no such thing. Instead, he has hit Taiwan with 20% tariffs and tried to force the country’s crucial semiconductor company TSMC to move its operations to the US”.
GRAHAM PERRY COMMENTS;-
Is something significant underway regarding Taiwan? Contrary to excited expectation Taiwan did not even feature in discussions between Xi Jinping and President Trump in Seoul, South Korea. Trump is known to be quite irritated by the semiconductor hold that Taiwan has over the U.S. The U.S. knows it is vulnerable because in 2024 General Motors had to close down some of its car manufacturing plants because of an interruption to the Taiwanese semiconductor supplies to US industry. Is something afoot? Trump knows – more than anything – that China wants a Taiwan return to the fold. There may be a price China would pay for such an outcome in terms of assurances that such a return would be eased with inducements from China that would accommodate Taiwanese desire for a measure of self-government – without affecting Chinese sovereignty. There is a formula that can work.
As China and the U.S. go head-to-head with tension, there always has to be a solution that could accommodate both countries priorities. Rare-Earths has really knocked back the U.S. It knows China is here to stay. Time for Trump to call Xi Jinping. There is a deal to be done.
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EXTRACT #4
IS BRICS UNDERPERFORMING
FOREIGN AFFAIRS
“This year, BRICS—a ten-country group whose first five members were Brazil, Russia, India, China, and South Africa—has gained a renewed sense of purpose thanks to one catalyst: the United States. With U.S. President Donald Trump’s return to the White House, the bloc looks, more than ever, like a necessary hedge against an increasingly erratic and fragmented global order. Many of Trump’s actions—including his chaotic tariff crusade against friends and foes, strikes on Iran and legally dubious military actions in Latin America, and withdrawal from the UN-supported Paris agreement on climate change—have sparked condemnation from the BRICS. Trump’s policies have put in stark relief BRICS’ raisons d’être: to help its members adapt to and build a less Western-centric world, gain greater leverage in their dealings with Washington, and find alternatives to Western-dominated institutions such as the World Bank and the International Monetary Fund.
But despite their shared interests, BRICS as a grouping is not ready to seize the moment. Its members—which now include Egypt, Ethiopia, Iran, Indonesia, and the United Arab Emirates—are too divided to turn the group into a real challenge to Washington. They vary significantly in their degree of antagonism toward the United States, and each wishes to maintain strategic autonomy. As a result, the bloc will struggle to mount joint action.”
GRAHAM PERRY COMMENTS;-
The Foreign Affairs article overlooks a recent quite significant BRICS development. The People’s Bank of China took financial markets by surprise when they announced that the digital RMB (Renminbi, Chinese Yuan) cross-border settlement system will be fully connected to the ten ASEAN countries and six Middle Eastern countries. This means that 38% of the world’s trade volume will bypass the SWIFT system dominated by the US dollar and directly enter the “digital RMB moment”. This financial game, which The Economist called the “Bretton Woods System 2.0 Outpost Battle”, is rewriting the underlying code of the global economy with blockchain technology.
While the SWIFT system is still struggling with the 3-5 day delay in cross-border payments, the digital currency bridge developed by China has compressed the clearing speed to 7 seconds.
In the first test between Hong Kong and Abu Dhabi, a company paid a Middle Eastern supplier through digital RMB. The funds no longer went through six intermediary banks, but were received in real time through a distributed ledger, and the handling fee dropped by 98%. This “lightning payment” capability makes the traditional clearing system dominated by the US dollar instantly look clumsy.
This technical advantage has enabled 23 central banks around the world to actively join the digital currency bridge test, among which Middle Eastern energy traders have reduced settlement costs by 75%. This wave of “de-dollarization” made the Bank for International Settlements exclaim: “China is defining the rules of the game in the era of digital currency.”
While the United States is still debating whether digital currency threatens the status of the US dollar, China has quietly built a digital payment network covering 200 countries. This silent financial revolution is not only about monetary sovereignty, but also determines who can control the lifeline of the future global economy. De-dollarisation is underway.
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EXTRACT #5
TRUMP PULLING BACK FROM WESTERN EUROPE
THE ECONOMIST
“Europeans have a right to speculate about the Trump administration’s true motives when it accuses them of undermining the civilisation of the West. The term has a narrow, sectarian edge to it, especially given Mr Trump’s recent pledges to expel American residents “non-compatible with Western Civilisation”. In recent years America’s allies in the West have felt themselves united by fundamental values, including liberal democracy, capitalism, the rule of law and the separation of powers. Given Mr Trump’s loathing of constraints on his presidential power, it is not reassuring when his officials talk of civilisation rather than values.
Allies may wonder, too, whether America wants an excuse to simply wash its hands of European security. For decades shared values and security needs were seen as mutually reinforcing. One neat line was that the West evolved “From Plato To NATO”. Today NATO offers America a lever for coercion. If Trump-defined civilisation is to be the test, then he, not values, becomes the arbiter of membership of the West. If conservative nationalism is what counts, why not include Russia? A battle for the Western soul looms. Unity is already a casualty.”
GRAHAM PERRY COMMENTS;-
The above extract is from the current issue of The Economist. But similar sentiments appear in The Sunday Times of page 18 of 7 December 2025 issue.
“On Friday the national security strategy sent shivers down the spines of European leaders. The 33 page document read like an angry continuation of Vance’s February speech accusing European governments of sleepwalking towards ‘civilisational erasure’ through immigration that would render the countries ‘unrecognisable’. Several NATO allies, the document said, were being turned into majority ‘non-European countries’. In parts it read like America serving divorce papers, lambasting allies for ‘censorship of free speech and suppression of political opposition, cratering birth rights and loss of national identities and self confidence’.
Is Trumpism for the long term or will normal business be restored if the Democrats are restored to power in 2028? China is watching closely in case Western Europe decides to embark on a fundamental change in the balance of power as a counterweight to the possible long termism of Trump separation from Western Europe. The focus will be on EU-China relations.
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CHINA AND JACK PERRY – PART 25
Part 24 concluded as follows;-
“Ji was looking beyond one or two contracts or three or four years. China was on a journey. It was another Long March and twenty-five years was the minimum. Ji was putting his faith in Jack but Jack did not know a Bill of Lading from a Letter of Credit; nor a UK £ from a US $, nor tea or wool tops or animal hairs or feeding stuffs. He was a novice; a greenhorn; an innocent unfamiliar with the ways of international trade. Ji had to assess whether Jack could make the change from dresses to commodities; from London to international trade; from dressers and cutters to traders and financiers. It was a tall order. Was Jack the man? Could Ji afford to make a mistake?”
Part 25
China had come of age when, on 1 October 1949, Mao Tsetung stood at the Gates of the Forbidden City and announced to the world the inauguration of the People’s Republic of China – the New China was a reality. In searching for new long term trade partners Dr Ji was willing to break the mould. The CV of the candidate to become China’s long term trade partner was a break with the past. Ji did not canvass the business schools of the capitalist West or turn to the Hong Kong traders who had dirtied their hands with the Opium Trade into China from the mid-nineteenth century. There was to be a break. China was starting afresh with a new approach and new priorities.
First, there had to be commercial competence and here Jack had proved himself – but in dresses not international trade. Ji was willing to take the risk of singling out Jack as a commercial man but he was aware that Jack lacked international trade experience. He was not an MBA. He did not have any University degree. He was not the product of established Western Business Schools. He had no CV in foreign trade. Ji knew this but was still willing to inform Premier Zhou Enlai that Jack was his chosen long term trade partner.
Ji assessed Jack – correctly – as a man of ability, confidence and courage. Ji had done his homework. He had made enquiries. He was aware of Jack’s close links with the Communist Party of Great Britain as an activist who had earned praise and respect for taking on Oswald Mosley and his Blackshirts in the East End of London in the 1930’s. Ji placed reliance on the recommendation of Prof Joan Robinson, a non-Communist with strong links to John Maynard Keynes of Cambridge University and, ultimately, Ji backed his own judgment of Jack. He had seen Jack at work on the Preparatory Committee in 1951 and at the Economic Conference in Moscow in 1952 and had established a personal rapport with the man he selected to lead for the UK in establishing long term business relationship with China. Jack, Dr Ji concluded, was capable of learning the mechanics of international trade, banking and currencies
It was a big moment for Jack and it was a big moment for Dr Ji. The relationship between the two men was the foundation of a personal and professional commitment that continued beyond Ji’s death in 1963 to Jack’s death in 1996.
Some questions arise;-
How important was Jack’s politics in Ji’s decision to recommend Jack to Premier Zhou and the key decision makers in Beijing?
How did the Chinese side view Jack’s lack of international trade experience?
How important was Jack’s links in the U.S. to the Chinese decision to go with Jack for the long term?
1. Jack’s Politics. This was very important. His commitment to the British Communist Party and his work in the Anti-Mosley struggles in Dalston and Hackney – before and after World War II – was evidence that Jack had been tested in battle. He had played an active role within the Communist Party in the famous Battle of Cable Street on 4 October 1936 when Mosley’s scheduled march through the East End in October 1936, was confronted by 250,000 anti-fascist demonstrators. Mosley’s BUF was forced to cancel the march.
Jack had secured the respect of Harry Pollitt, Johnny Gollan, Palme Dutt and other leaders of the Party including George Matthews, Editor of the Daily Worker who instructed Jack to inform the Chinese Communist Party during his first 1953 visit to Beijing of the British Party’s wish to establish fraternal relations with the Chinese Party. In later Parts of this narrative, I address the issue of Jack’s commitment to the Party and its Marxist politics on the one hand and his aspirations and ambition to build a successful trading company and to enjoy a good standard of living on the other hand. These are contradictions that need to be considered.
2. Jack’s lack of international trade experience. This was an issue for both Dr Ji and for Jack. Did he have the knowledge? Could he conduct trade, open a letter of credit, book foreign currency, handle the challenge and tensions that were at the heart of international trade. Here Jack shone. He made it his business to become informed and knowledgeable about the techniques and tactics of trade. He met with the Bank of China in London and also with UK merchant bank, Brown Shipley, who were eager to strengthen their role in the financing of the import and export trade. He spoke with their currency traders and soon picked up the rhythm of trade negotiations and the importance of carrying the banks with him at every stage of every transaction.
It was not simply a matter of convincing Dr Ji in China or the banks in London but of persuading his new counterparts in Beijing who at the other end of the chattering telex were bringing the Chinese party through the to and fro of daily business exchanges culminating in a binding contract. Attention to detail was everything with each line of a letter of credit scrutinised for possible error. He recruited traders, administrators and office staff who had to ensure that the London end of the business justified the confidence that Dr Ji had shown in making the key decision to invite Jack to set up a London trading company for the sole purpose of conducting trade between China and the UK.
3. The U.S. link. Part 26 of China and Jack Perry will focus on the importance in 1952 of Jack’s connection with the U.S.
GRAHAM PERRY.
