Daily Archives: 10 August 2023

A Thought on Russia-PRC Relations

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The subheadline on a Wall Street Journal article that was centered on falling exports from the People’s Republic of China says it all regarding the growing relationship of the PRC with Russia.

Slide in outbound shipments reflects fraying trade ties with the Western world, even as exports to Russia boom

But at what cost to Russia are those exports? Russia hasn’t much with which to pay for them. The nation is short of hard currency, and its own goods are famous for their shoddiness. Russia, though, does have things of particular importance to the PRC: vast Siberian resources of oil, natural gas, coal, timber, and a variety of rare earths and ores whose extracted metals are critical for making batteries. To that end, Russia and the PRC concluded, a few short years ago, a trade treaty that has the PRC developing those fields and mines, extracting that output for PRC use alongside Russian use and in some cases for primary PRC use, and with PRC workers and their families moving into Siberia to do the work of development and extraction.

That last reveals one more item that Russia has to exchange for the PRC’s exports to it, an item of critical importance to the PRC: all that Siberian land.

And this, which subtext emphasizes the PRC’s dependency on Russia’s imports:

For China, weakening exports signal more trouble for its domestic economy….
…
July’s 14.5% drop in Chinese outbound goods shipments was sharper than the 12.4% year-over-year decline in June and outpaced the 12% decline expected by economists polled by The Wall Street Journal.
Chinese goods shipments to the US fell 23% in July compared with a year earlier. Shipments to the European Union and to the Association of Southeast Asian Nations, a group of 10 countries that includes Singapore and Indonesia, each dropped by about 21%.
Chinese shipments to Russia, a country under Western sanctions over its invasion of Ukraine, rose 52% in July from a year earlier, helped by sales of high-value goods including automobiles. For the first seven months of this year, Chinese exports to Russia soared 73% from a year earlier, even as China’s total exports have fallen 5%, data from Chinese customs show.

Thus, the dependency goes both ways, even as the PRC increasingly dominates the codependent relationship. As the West pulls back from buying goods and services from the PRC, the PRC becomes ever more dependent on Russian goods and services, especially those basic commodity goods of oil, natural gas, coal, timber, and Russian rare earths and battery-centric ores.

That growing PRC dependency makes the PRC’s land acquisitiveness even more dangerous for Russia.

A Step toward Downsizing the Federal Government

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Rightsizing is what the cool kids call it in their desperation to avoid notice, but what the House’s Republican Party’s Freedom Caucus is proposing represents a small, but needed, initial step toward downsizing our bloated Federal bureaucracy. Some of the State Department cuts being proposed include

  • State’s US Agency for Global Media would be reduced from $798 million to $734 million
  • State’s Democracy Fund and the United States Agency for International Development would be reduced from $355.7 million to $227.2 million
  • State’s US Global Health Programs would be reduced from $6.3 billion to $5.7 billion
  • State’s Global Environment Facility would be eliminated altogether, cutting $139.5 million

And so on.

In absolute terms, these are, individually, chump change cuts, for all that they represent significant reductions in each agency’s budget. They do, however, add up to $1.2 billion, including other State cuts not listed here, and so are an initial cut of 2% of the $58.5 billion 2022 State budget.

Over at the Energy Department, the Freedom Caucus is proposing elimination of the Aquatic Decarbonization and the Algae-Related Bioenergy Technologies, cutting $80 million from Energy’s 2023 $149 billion budget.

Freedom Caucus is proposing similar reductions for Agriculture.

I don’t often agree with the Freedom Caucus’ “my way or nothing” approach, but on matters regarding our nation’s morbidly obese Federal spending (and a deficit of $1.62 trillion just in the first 10 months of this fiscal year) and our resulting even more dangerously fat national debt, the Republican Party as a whole needs to stand tall on actual cuts.

Even if it means shutting down (some of) the Federal government next fall and winter. And spring. And summer. That, in itself, would result in badly needed spending cuts.