Investing in the PRC

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Some pundits are suggesting that the way in which the People’s Republic of China handles real estate company Evergrande’s default will say a lot about the utility of investing inside the PRC. The Wall Street Journal even is asking whether foreign investors are second class citizens “now.”

Last things first: foreign investors always have been second class citizens in the PRC. They’ve only recently been “allowed” to become equal partners or majority holders in established PRC companies being newly invested in or in enterprises being newly formed. It’s still the case, too, that as a condition of doing business inside the PRC, foreign companies must “share” intellectual and technology properties with their partners, and they must permit the PRC government to install back doors into those foreign partners’ primary software.

It’s also the relatively new case that, under the 2017 National Intelligence Law, companies must divulge any and all information that the PRC’s intelligence community requests.

Still, the Evergrande outcome will be informative.

Who is still standing when the dust clears will say a lot about the future of China as a place to invest more generally.

In particular, resolving this misconception will be informative:

Oaktree Capital has moved to seize a large chunk of Evergrande’s Hong Kong property, worth an estimated $1 billion, against a secured loan now in default—a property which could have potentially served an important role in Evergrande’s general offshore debt restructuring.

With the Xi Jinping government having, over the last couple of years, phagocyticly absorbed Hong Kong into the mainland body politic, that city no longer is offshore. Whether Oaktree will be permitted to seize that Hong Kong property is an open question, and a question subsequent to a permitted seizure will be the limits the PRC imposes on Oaktree’s disposition of that property.

I’m not sanguine.

ADL and Racism

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Luca Cacciatore has caught the before and after of the Anti-Defamation League’s attempted redefinition of racism. Here’s ADL’s original definition:

Here’s the ADL’s “revised” definition:

They’ve gone from a balanced definition that identifies the misbehavior in all races to one that makes it impossible for anyone other than a particular race to commit racism.

For a little bit of context, here’s the definition of racism according to The American Heritage dictionary:

1. The belief that race accounts for differences in human character or ability and that a particular race is superior to others.
2. Discrimination or prejudice based on race.

Far from fighting hate for good—that so Precious slogan at the bottom of their logo—the Anti-Defamation League’s personnel, with this Orwellian redefinition, shows how just good they are at hating and generating hate.

Germany “Helps”

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Germany has offered to ship to Ukraine 5,000 helmets and says it will “transfer” a field hospital (typically with 50-100 beds) to Ukraine in February. Ukraine had asked Germany, with its military establishment of more than 260,000,

to provide at least 100,000 helmets and protective gear….

5,000 helmets and a field hospital for an active duty establishment of more than 400,000 that’s backed up by a reserve establishment of 250,000. Kyiv Mayor Vitali Klitschko was generous to call the helmet offer a joke. What kind of support will Germany send next, pillows? he wondered.

German law also prevents Germany from shipping weapons into a war zone or a region that might become a war zone. German Chancellor Olaf Scholz further has excused his government’s behavior by claiming lethal aid would only fuel the situation, and he’d rather find a “diplomatic” solution.

Of course, Scholz knows better. What would—what is—fueling the situation is leaving Ukraine dangerously weak in front of the Red Army, encouraging Putin to invade and conquer. The only “diplomatic” solution resulting is Ukraine’s defeat and occupation.

If Germany were serious about helping Ukraine, it would alter its law to allow arms shipments—directly from Germany or (for instance) via transfer of German-originated arms from Estonia’s establishment—into the nation that’s about to be overrun by Russia. It would correct its “thinking” on the matter and recognize that a well-armed and strong Ukraine is what makes a diplomatic solution possible.

No, Klitschko understated the matter. The German “offer” is insulting, and Scholz’ excuse-making is illustrative just how deeply is Germany kowtowing to Russia.

A Misunderstanding

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The Wall Street Journal‘s Editorial Board had a piece about Justice Stephen Breyer’s impending retirement last Wednesday. One bit in it caught my eye.

Like many liberals of his generation, he [Supreme Court Justice Stephen Breyer] is an institutionalist who believes in the promise of the Constitution and incremental social improvement.

And herein lies the fundamental misunderstanding of liberal judges regarding their role as judges. A judge cannot both believe in the promise of the Constitution and act on the premise of incremental social improvement.

Acting on social improvement, incremental or otherwise, is a strictly political matter and is solely the province of the political actors—Congress and We the People who hire those actors.

If a judge believes in the promise, he must adhere solely to his duty to apply the statute(s) and Constitution that are before him in any case. If he acts on those views of social improvement—which views are inherently his personal views—he is violating both Article I, Section 1, of our Constitution and his oath as a judge to support and defend the Constitution of the United States.

A Party’s Legacy

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David Marcus had a piece in Thursday’s Fox News regarding the Progressive-Democratic Party’s (Marcus still calls Party by its legacy name, Democratic Party) move as far Left as it has gone.  He posited two reasons for Party’s behavior.

The first is that by focusing their energy on the nation’s big cities, progressive Democrats can gain cultural power. While radical agendas on welfare, gender, and education, to name a few, may play better in New York and Los Angeles than in the heartland, it is reasonable to believe that controlling politics in urban centers will influence television, movies and news in ways that will eventually spread, especially to younger voters.

And

[A] second reason may be that the far left sees more benefit than harm in a shellacking for their party in the midterms. After all, the Democrats who will be swept out of office are not the progressives, but the moderates. By losing this election, the former can gain institutional power in the party, possibly for a generation.

There’s a third explanation, too, that’s corroborated by the Progressive-Democrats’ behavior with Obamacare. This third reason also dovetails nicely with Marcus’ second reason. Since the last election, Progressive-Democrats have had control of both houses of Congress and the White House. With that, even with the slimness of their control, they’ve decided to go for it all and get their far Left (relative to the American political spectrum but center Left relative to Party) transformational, fundamentally socialist agenda enacted. They know that if they can get it rammed through, their policies won’t be repealed, even if they’re badly whipped in the next election. Just as with Obamacare.