The National Interest offers an “end of the world as we know it” scenario for a potential Trump Administration/China clash: “$5 Trillion Meltdown: What If China Shuts Down the South China Sea?” (July 16, 2016) Rex Tillerson’s Senate confirmation remarks, reported in “Rex Tillerson’s South China Sea Remarks Foreshadow Possible Foreign Policy Crisis” (New York Times, January 12, 2017) called for the US to get tough with China’s bases on South China Sea islands.
Mr. Tillerson told members of the Senate Foreign Relations Committee on Wednesday that China’s multibillion-dollar island-building campaign in the oil-and-gas rich sea was illegal and “akin to Russia’s taking of Crimea.”
“We’re going to have to send China a clear signal that, first, the island-building stops,” Mr. Tillerson told the senators. “And second, your access to those islands also is not going to be allowed.”
But concern about oil and gas under the South China Sea is misguided. The key South China Sea issues are shipping and fishing. Future oil and gas should be considered a distant third.
Since 2014, billions of dollars have been lost by around the world in deep sea oil and gas projects (“15 [oil] companies lost $21.7 billion in 2014“). Exploration and drilling projects started before mid-2014 expected $75 to $100 a barrel oil and similarly high natural gas prices. Oil was $114 a barrel in June, 2014, but dropped below $50 and has stayed in the $40-$60 range since.
Surging oil from US shale drilling, increased oil from Saudi Arabia, Iraq, and Russia, as well as in returning Iran, all have production costs well below future undersea oil. Even without political risks, oil from under the South China Sea is less and less likely or relevant. Before the shale boom, the Chinese government believed oil shortages a key national defense issue. But that was ten years ago, when no one expected vast new oil and gas production from horizontal drilling through U.S. shale deposits.
Shale has another advantage over undersea drilling: fast and lower start-up costs. A proposed project to discover and drill oil or natural gas from under the South China Sea would cost billions and take perhaps a decade to bring oil to market. Advocates for such a project need the money now but won’t have revenue for ten years. New shale well proposals can raise funds and start drilling in a few months. Plus hundreds of already drilled wells are capped and just waiting for higher oil prices (see: “Hoping for a Price Surge, Oil Companies Keep Wells in Reserve” (New York Times, December 25, 2015).
Maybe some day oil and natural gas from the new “Saudi Arabia” under the South China Sea will be able to compete in world markets, but that day seems far, far in the future.
Shipping and South China Sea fisheries though, are still very important. China needs the sea lanes to stay open for its imports and exports. The National Interest story (above), suggests China could block the sea lanes, forcing expensive diversion for energy and other shipping headed for Taiwan, South Korea, and Japan:
…two-thirds of South Korea’s energy supplies, nearly 60 percent of Japan’s and Taiwan’s, and 80 percent of China’s crude oil imports flow through the South China Sea.
However, any Chinese action that threatens the South Korean, Taiwanese, or Japanese economy also threatens Chinese workers and companies. See, for example, “A bridge over troubled waters: Taiwan, Japan and South Korea employ huge numbers of mainland Chinese” (The Economist, November 8th 2014):
88,000 firms from Taiwan employ 15.6m Chinese workers. About 11m are employed at 23,000 Japanese firms or their suppliers. Throw in 2m more workers for South Korean enterprises, and companies from around the troubled East China Sea have approaching 30m Chinese on their payrolls.
Tens of millions more in China work for suppliers to firms based in South Korea, Taiwan, and Japan. Plus Chinese firms are investing heavily in South Korea. See, for example: “China shovels investment into South Korea — entertainment, real estate big takers” (Asia Times, April 20, 2016).
Strong economic ties between China, South Korea, Taiwan, Singapore, and Japan serve as a counterbalance to nationalistic urges and a history of conflicts. Chinese action to restrict shipping over the South China Sea would be economically and politically destabilizing, and I think as unlikely as major oil and gas production from under the South China Sea.
But under these shipping lanes are the vast fisheries, which have collapsed due to overfishing. The good news is that South China Seas fisheries can be restored drawing from successful fisheries restoration and management in New Zealand, Australia, and other world fisheries.
“Follow the Fish: Considering Options in the South China Sea,” (Marine Awareness Project, November 7, 2016), explains the role of regional fisheries agreements to complement the Exclusive Economic Zones (EEZs) of international law:
The second, and less-noticed, level is the regional one—that is, formulating and implementing regionally agreed-upon standards outside the established EEZ or territorial sea boundaries of littoral states. After all, fish are the only sovereign resources that stubbornly move between and among jurisdictions. To ensure that migrating species are not fished down to zero in regional high seas (so that there will be some fish left to swim into EEZs), UNCLOS encourages signatories to develop management measures in areas beyond an EEZ’s jurisdiction.
Wall Street Journal overview (July 19, 2016): “5 Things About Fishing in the South China Sea“:
• Fish stocks in the South China Sea have fallen 70% to 95% from 1950s levels,
• Fish caught in the South China Sea account for about 12% of the global annual catch.
• Chinese fishing fleets significantly outnumber those from other claimant countries in the South China Sea
• An average person in Southeast Asia and China consumes about 24.2 kilograms of fish a year… The average annual consumption of seafood in the U.S. was just 6.5 kilograms in 2012
• The ruling from the U.N. Permanent Court of Arbitration effectively demolished China’s claim to the vast majority of the South China Sea.
However, regional fisheries agreements based on top-down planning lack the institutional strength of quota-based systems like catch shares or TURFs.
Catch shares, mentioned above, offer an alternative path to restore and manage endangered fisheries. The Environmental Defense Fund’s Fisheries Solutions Center reports:
As of 2013, nearly 200 rights-based management programs exist worldwide, affecting more than 500 different species in 40 countries.
Debaters of the ocean policy topic should be familiar with EDF and the success of catch shares systems in restoring fisheries.
Shiyin assesses fisheries laws and policies and their implementations in Asian countries, particularly in China, and analyzes the possibility of using market-based approaches to achieve sustainability. She helps the Oceans Program launch fishing rights programs in China to reverse the decline of fish stocks and restore marine biodiversity.
For more on catch shares, see, “Catch Shares Around the World” (PERC), reporting on EDF report:
The Environmental Defense Fund has published a map of all catch share programs around the world. According to the infographic (click to enlarge), as of 2010 there were 275 catch share programs in effect worldwide, affecting 850 different species.
New Zealand and Australia lead the world in rights-based fisheries, with 117 and 111 species under catch share management respectively. Canada, Chile, and the United States are also among the top five in species protected. Perhaps surprisingly, rights-based fisheries exist in countries ranging from Namibia (8 species) to Papua New Guinea (13 species). See the accompanying searchable database of catch share systems around the world.
This Izzit.org video, Sustainable Oceans & Seas reviews the history and economic principles behind New Zealand’s recovery from collapsed fisheries 30 years ago. How to implement similar reforms to the contested South China Sea is a challenge.
Affirmative Case: Repeal Section 421 Tariffs on Chinese Imports
Fact 1: Section 421 Tariffs Discriminate Against Chinese Imports
Fact 2: Section 421 Tariffs Intended to be Temporary
Fact 3: Section 421 Tariffs Remain Authorized by Congress
Impact 1: Lower Evidentiary Standards Decrease Presidential Accountability
Impact 2: Lower Evidentiary Standards Enable Ineffective Tariffs
Plan: Repeal Section 421 Tariff Authorization
— See case pdf with evidence at link:
“Resolved: The United States federal government should substantially increase its economic and/or diplomatic engagement with the People’s Republic of China.”
There is no more important bilateral relationship than that between the United States and China. Yet the Congressional Research Service warns that ties have “become increasingly complex and often fraught with tension.” Relations appear likely to become even more fractious with the election of Donald Trump as president. Every four years the People’s Republic of China (PRC) becomes a presidential election issue, but Americans deserve a better explanation of the importance of U.S.-China political and economic relations than candidates’ sound-bytes.
The Complicated Relationship with China. China is an emerging great power and perhaps eventual superpower that is challenging Washington in several key areas. The economic benefits for the United States of its relationship with China seem obvious, but many Americans wonder if the difficulties outweigh the benefits.
The PRC possesses the world’s second largest economy and has become both commercial partner and competitor with the United States. Trade between the two nations is beneficial because of comparative advantage; that is, each country is relatively better at producing some items than the other. This economic concept is the foundation for trade throughout history.
However, international commerce today is about politics as well as economics. Trade and investment disputes have multiplied between the two governments while China remains the fount of extensive cyber-espionage targeting U.S. business secrets. Continuing the relationship depends on the ability of the two governments to work through these often contentious disputes.
– See more at: http://www.ncpa.org/pub/economics-of-the-2016-2017-debate-topic-us-relations-with-china-mixing-cooperation-with-competition#sthash.X9Qp2bar.dpuf
Public health concerns can restrict individual liberty. Typhoid Mary lost her liberty and freedom of association due to a microbe she carried, even though she was in good health. Similarly, Chinese companies raising seafood safe for U.S. consumers are creating a public health crisis: microbes resistant to antibiotics.
“How Antibiotic-Tainted Seafood From China Ends Up on Your Table,” (BloombergBusinessweek, December 15, 2016), describes the traditional “sustainable” Chinese use of animal waste to feed fish. Since the beginning of agriculture, animal waste has fertilized crops (it’s the organic way!). But the addition of antibiotics to boost animal size and disease resistance shifts the microbe ecosystem in animal waste. Some microbes gain resistance to antibiotics, and are then flushed into Chinese fish ponds, adding antibiotic resistance to microbes in fish later shipped (or transshipped) to the U.S..
The individual fish are okay to eat, but the antibiotic microbes migrate from Chinese pigs to fish to U.S. consumers, ecosystems, and hospitals.
In “China tackles antimicrobial resistance,” (Science, Aug. 31, 2016), the costs and source of the problem reported:
According to a May report from the Wellcome Trust in London, antimicrobial resistance in China could cause 1 million premature deaths annually by 2050 and cost the country $20 trillion. Antibiotics are currently widely available without prescriptions in China for both human and livestock use. The country accounts for half the world’s annual antimicrobial drug consumption. “Antimicrobial resistance is a problem created by human behavior—largely through the inappropriate use of antimicrobials in health care, as well as in animal husbandry,”
The Science article reports the Chinese government is taking the problem seriously and taking steps:
As part of a national action plan unveiled on 26 August, the Chinese central government said that it would mobilize the efforts of 14 ministries and departments including health, food and drugs, and agriculture. By 2020, the government aims to develop new antimicrobials, make sales of the drugs by prescription only, ramp up surveillance of human and veterinary usage, and increase training and education for both medical professionals and consumers on their proper use.
However, political pronouncements may or may not lead to actual reforms. Economists focus on incentives (economics is mostly about incentives, the rest is commentary). So what incentives will the announced Chinese “national action plan” create? It’s unclear. The size and scope of the problems are discussed in detail in “How Antibiotic-Tainted Seafood From China Ends Up on Your Table“:
…Livestock pens are scattered among the thousands of seafood farms that form the heart of the [China’s] aquaculture industry, the largest in the world.
Beside one of those fish farms near Zhaoqing…a farmhand … hoses down the cement floor of a piggery where white and roan hogs sniff and snort. The dirty water from the pens flows into a metal pipe, which empties directly into a pond shared by dozens of geese. As the yellowish-brown water splashes from the pipe, tilapia flap and jump, hungry for an afternoon feeding.
Chinese agriculture has thrived for thousands of years on this kind of recycling—the nutrients that fatten the pigs and geese also feed the fish. But the introduction of antibiotics into animal feed has transformed ecological efficiency into a threat to global public health.
Antibiotics banned for the U.S. food industry and essential for world health have been overused in China’s “sustainable” animal waste to fish fertilizing system:
At another farm, in Jiangmen, a farmer scatters a scoop of grain to rouse her slumbering swine, penned on the edge of a pond with 20,000 Mandarin fish. The feed contains three kinds of antibiotics, including colistin, which in humans is considered an antibiotic of last resort. Colistin is banned for swine use in the U.S., but until November, when the Chinese government finally clamped down, it was used extensively in animal feed in China. Vials and containers for nine other antibiotics lie around the 20-sow piggery… Seven of those drugs have been deemed critically important for human medicine by the World Health Organization.
The Bloomberg article also reports that tens of millions of tons of Chinese fish are likely transhipped through Malaysia and other countries, relying on loose or fraudulent paperwork on country of origin, and banned Chinese seafood still makes it to the U.S.:
But antibiotic-contaminated seafood keeps turning up at U.S. ports, as well as in restaurants and grocery stores. That’s because the distribution networks that move the seafood around the world are often as murky as the waters in which the fish are raised.
See also “U.S. seafood import restriction presents opportunity and risk,” (Science, December 16, 2016), however these new NOAA regulations are related to mammal protection and bycatch, rather than fish farming and antibiotic abuse.
“New DNA results answer consumers’ demand for trust in seafood,” (Phys.org, March 15, 2016) reports:
Two-thirds (67 percent) of U.S. seafood consumers say they want to know that their fish can be traced back to a known and trusted source, with 58 percent saying they look to ecolabels as a trusted source of information. Globally, 55 percent doubt that the seafood they consume is what it says on the package. These findings are from the Marine Stewardship Council’s (MSC) latest survey of more than 16,000 seafood consumers across 21 countries.
The article notes both that the U.S. is the world’s largest seafood importer, and that much of the imported seafood is mislabeled for consumers:
Oceana’s nationwide survey in 2013 found one-third (33 percent) of U.S. seafood samples genetically analyzed were mislabeled.
The Marine Stewardship Council documents seafood origin and sustainability for ocean-caught fish:
Brian Perkins, MSC Regional Director—Americas, said, “The MSC’s DNA results prove you can trust that seafood sold with the blue MSC ecolabel really is what the package says it is and can be traced from ocean to plate. Last month, the U.S. government announced proposed rules that would require tracking to combat illegal fishing and fraud. Many businesses are left wondering whether they’re selling seafood that was produced legally and sustainably. MSC certification means consumers and businesses can be confident that MSC ecolabeled fish has been caught legally and can be traced back to a sustainable source.”
The Marine Stewardship Council 2015 Annual Report has numerous references to China seafood certification:
The MSC’s program director in China, Dr An Yan, was named the most influential figure in the Chinese seafood industry, in a 2016 survey of hundreds of seafood executives in China. The number one spot went to Ivy Wang, chief China representative at the Atlantic Canada Business Network, for “putting Canadian lobster on so many Chinese plates” – 97% of Canadian lobster is MSC certified.
More focused on fish farming certification is the Aquaculture Stewardship Council: “ASC announces partnership for development in China” (September 14, 2016):
The agreement will accelerate the growth of the ASC programme in China. Tao Ran has been contracted to lead the strategy implementation and to expand the adoption of ASC farm standards. The firm’s aquaculture staff will also work seamlessly with the ASC team to promote the availability of ASC certified seafood for consumers within China, and in the many countries that buy aquaculture products from China.
This innovative partnership will allow ASC to seize the historical opportunity of the Chinese government’s policy for a “market-oriented mode” in economic development. The agreement includes a long-term strategy to support the development, improvement and adaptation of ASC standards and engage and assist ASC Chain of Custody (CoC) certified companies. The agency will play a key role in both building new partnerships and strengthening existing ties with the Chinese seafood industry, affiliated associations, NGOs and key government agencies…
Though the Food and Drug Administration (FDA) “has the primary federal responsibility for safety of seafood products in the U.S.” and other federal agencies are involved, private seafood certification systems are a popular alternative. For details, see presentation “U.S. Aquaculture Regulations: A
Comparison with Seafood Certification Schemes,” (November 13, 2013), and FAO Fisheries and Aquaculture Technical Paper No. 553: “Private standards and certification in fisheries and aquaculture” (FAO, 2011):
Private standards and related certification schemes are becoming significant features of international fish trade and marketing. They have emerged in areas where there is a perception that public regulatory frameworks are not achieving the desired outcomes, such as sustainability and responsible fisheries management. Their use is also becoming more common in efforts to ensure food safety, quality and environmental sustainability in the growing aquaculture industry.
Apart from U.S. regulatory or NGO certification advances, new research may address the global health problem of microbes gaining antibiotic resistance. In “Does this 25 year-old hold the key to winning the war against superbugs?,” (The Telegraph, September 25, 2016):
“We’ve discovered that [the polymers] actually target the bacteria and kill it in multiple ways,” says Lam, who leads a half-a-dozen-strong research team. “One method is by physically disrupting or breaking apart the cell wall of the bacteria. This creates a lot of stress on the bacteria and causes it to start killing itself.”
Her research, published this month in the prestigious journal, Nature Microbiology, has already been hailed by scientists as a breakthrough that could change the face of modern medicine.
Scope of public health danger is briefly (and breathlessly) outlined in a short video embedded in Telegraph article:
Superbugs, the drug-resistant infections, are set to kill over 10 million people across the world by 2050.
Debaters can address a major source of drug-resistant bacteria at their source in agriculture and aquaculture practices in China. New Chinese government regulations may or may not reform the industry. Restrictions on antibiotic use in Chinese fish farms exporting to the U.S. would have a more immediate economic impact. Improving US/China engagement on addressing overuse of antibiotics could save millions of lives over the coming decades.
In “The Legacy of China’s One-Child Policy,” (Time, Dec. 13, 2016), Hannah Beach reports on the sad reality of China’s misguided 1979 policy of limiting most families to one child.
Some costs of China’s family planning, which limited most urban families to a single child, are well known. Because of the abrupt lowering of the birth rate, China will grow old before it grows rich. The nation is already facing a labor shortage.
Fears of worldwide overpopulation and natural resource depletion influenced 1970s textbooks and classroom instruction around the world. Videos from ZPG (Zero Population Growth) shown to high school classes highlighted year-by-year population growth that accelerates rapidly with the Industrial Revolution in 1800s (similar YouTube world population video here). (Actually, the birth rate stayed much the same, but the death rate fell dramatically. Costs of food and clothes fell as farms and factories were able to produce far more at lower costs. Plus transportation costs fell some 80%, so food, raw materials, and people could travel less expensively around the world).
Here is abstract from ZPG report from 1985 critical of the Reagan Administration for ignoring the benefits of China’s one-child policy:
The Reagan administration refuses to recognize the achievements of China’s population program and the practical and humanitarian considerations which lead to China’s adoption of vigorous family planning policies. … The national census of 1982 revealed that China’s population doubled between 1949-1982 and in 1982 exceeded 1 billion. Severe famine and economic chaos were forecasted for the near future if population growth was not severely and immediately curbed.
But forecast by whom? Economist Julian Simon in his book The Ultimate Resource, emphasized that though every new child was at first a burden (as well as a joy) to parents, new mouths to feed soon became new hands able to produce and new minds to create and innovate. In open societies (unlike China under communism) people can produce far, far more in their lifetime than they consume.
Environmentalists and population-control advocates also feared the world was running out of resources, and demand for the oil, coal, natural gas, copper, zinc, aluminum, and other natural resources would soon exceed supplies that could be found. For more on 1970s overpopulation and natural resource fears see the 1977 Global 2000 Report to the President, and 1972 Limits to Growth study from The Club of Rome. (Students are encouraged to research both scholars who believed in natural resource depletion and other scholars (often economists) who believed markets and innovation would continue to innovate and discover new natural resources.)
Along with government population control, international ownership and planning of scarce world resources was advocated. For example, the 1975-1976 national high school debate topic:
Resolved: That the development and allocation of scarce world resources should be controlled by an international organization.
Hannah Beach in Time reports another legacy of China’s population policy:
But for the 13 million or so unregistered Chinese, most of whom were born in contravention of family-planning regulations, the one-child policy’s devastating effects still endure. …
Since their births were not officially recorded, many of these individuals live in the shadows of Chinese society. They could not go to school or get a passport. All too often, their parents were fined prohibitive amounts or forced out of their jobs. Although some have managed to fight the system, others spend their days mired in endless paperwork. Their goal: to get their very existence recognized by the Chinese state.
An alternate path for China’s unregistered is to exit the country that does not recognize their rights as Chinese citizens or human beings.
In “Start-up cities” for refugees: a long-term solution to the migration crisis?,” Pieter Cleppe argues new charter cities could help millions of refugees around the world. New charter cities could help millions wishing to escape China. And there is no better example than the charter city that gave economic freedom to millions of impoverished Chinese refugees:
What was Hong Kong other than a city governed by Western officials and populated largely by refugees from Maoist China? If it was possible for the British to provide a safe home for millions of people on the run in much more challenging times, why wouldn’t it be possible for the whole of the developed world – not just Western countries – to give any refugee the most precious thing the developed world can offer them: the protection of the rule of law, which has propelled the US, Canada, Europe, Japan, and parts of East and Southeast Asia to the levels of wealth they enjoy today.
Desperate for economic reforms so China could catch up to the West (and with Hong Kong, Taiwan, SK, and Japan), Chinese government officials since the 1960s have implemented disastrously destructive economic policies.
More on charter cities for refugees: “A Place for the Stateless: Can a Startup City Solve the Refugee Crisis?” And a longer history of charter cities “The Politically Incorrect Guide to Ending Poverty” (The Atlantic, July/August, 2010). Economist Paul Romer suggests “A Charter City in Cuba?” to address a US problem, and poverty for Cubans:
An existing treaty between the United States and Cuba currently gives the United States administrative control over a piece of sovereign Cuban territory straddling Guantanamo Bay that is twice the size of Manhattan.
Imagine that the United States and Cuba agree to disengage by closing the military base and transferring local administrative control to Canada. Canada works with Cuba to draft a charter for this special zone and promises to enforce its terms. Under this charter, a new city blossoms. It does for Cuba what Hong Kong, administered by the British, did for China; it connects Cuba to the global economy.
Some students debating the Mexico/Venezuela/Cuba debate topic from a few years ago researched Romer’s proposal for a new Hong Kong in Cuba.
See also “Could Refugee Camps Be Startup Cities?”
Back to China’s One-Child Policy
Nicholas Eberstadt in the Wall Street Journal (October 29, 2015), calls China’s population control policy: “The one-child mandate is the single greatest social-policy error in human history.”
The Chinese government’s draconian one-child policy followed soon after Mao Zedong’s death in 1976, and was a response to incredible poverty across China following decades of top-down economic planning.
The one-child policy created an utterly new social system for China, notes Eberstadt:
And China’s cities are now producing a new family type utterly unfamiliar to Chinese history: only children begotten by only children. They have no siblings, cousins, uncles or aunts, only ancestors (and perhaps, one day, descendants).
China’s population problems aren’t yet fixed. It’s current two-child mandate still has government officials trying to regulate families, limiting those without wealth or political connections to just two children.
On the positive side, there is this recent article: “Researchers may have ‘found’ many of China’s 30 million missing girls,” (Washington Post, November 30, 2016):
Academics often talk about between 30 and 60 million “missing girls” in China, apparently killed in the womb or just after birth, thanks to a combination of preference for sons and the country’s decades under a repressive one-child policy.
Now researchers in the United States and China think they might have found many — or even most — of them, and argue they might not have been killed after all. …
“If we go over a course of 25 years, it’s possible there are about 25 million women in the statistics that weren’t there at birth,” Kennedy said.
So, it is very good news that millions of Chinese girls long thought lost by academics may be found in rural areas and among the 200 million floating population (those who migrated illegally to work in Chinese factories).
However, many of these young people long fenced out of official Chinese society might well wish to depart regulated China and migrate toward opportunities in freer and more prosperous cities around the world.