Editor’s note for Monday, August 3, 2020

My thoughts today:

Just over a week ago, I urged readers to prepare for the worst as U.S.-China relations continue to deteriorate by the day. Former Australian prime minister Kevin Rudd essentially says the same thing in a new piece for Foreign Affairs magazine:  

We are often enjoined to remember the lessons of history. The truth is history rarely repeats itself in precisely the same form. But for the nationalists in both Beijing and Washington who may not realize how serious the stakes have become, a good weekend read would be my compatriot Christopher Clark’s book on the failures of crisis management and diplomacy in 1914, evocatively titled The Sleepwalkers.

The core lesson in the events leading to World War I is that a relatively minor incident (the assassination of an Austrian archduke in Sarajevo in late June 1914) can escalate into a war between great powers in a matter of weeks. Clark’s graphic account is one of relentless escalation, inadequate diplomacy, and crude nationalism, along with a disbelief by populations and leaders alike that actual conflict was even possible — until the “guns of August” grimly proved otherwise.

Rudd suggests a number of scenarios that could lead to armed conflict. One of them is an escalation by the Trump administration “by, say, allowing a U.S. naval visit to a Taiwanese port…It is conceivable that China could retaliate by starting a ‘low-intensity’ conflict centered on Taiwan’s offshore islands, such as the Dongsha Islands or Taiping Island.”

Lo and behold, the Global Times today quotes “a military expert and TV commentator,” who notes: “Large-scale landing drills are becoming normalized for the PLA. The drills target islands, and as the Taiwan-controlled Dongsha, Taiping, Penghu, as well as Taiwan, are all islands, it is possible for the PLA to transform the drills into real combat operations anytime if the Taiwan authority crosses the bottom line.”  

On a completely different subject, here is a translation by Zichen Wang of an article by a senior official at China’s central bank on the 2019 takeover of Baoshang Bank, which “sent shock waves across China’s banking system” and sent borrowing costs rocketing overnight. Wang notes that Baoshang “was also part of the financial empire of the mysterious Tomorrow Group, whose founder was removed by Chinese police from his apartment at the luxury Four Seasons Hotel in Hong Kong in 2017. Xiao’s whereabouts are still unknown, although the New York Times says “people familiar with the situation said that he was under house arrest.”

Free online events you might be interested in:

• The next The China Project CEO webinar on Wednesday, August 5, is on venture capital in China with Gary Rieschel, founding managing partner of Qiming Venture Partners, which has over $5 billion in assets under management.
• The Africa-China Reporting Project at the University of Witwatersrand in South Africa is hosting a series of webinars on a variety of topics connected to media, China, and Africa.

Finally, some escapism: You may enjoy this parody cooking video with sound and visual effects based on over-the-top kung fu movies from the 1990s.

Our word of the day is ByteDance (字节跳动 zìjié tiàodòng).

—Jeremy Goldkorn, Editor-in-Chief