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The UK's Misplaced China Policy

The state visit of China’s Communist Party general secretary, Xi Jinping, to the United Kingdom has had trappings that only Great Britain could deliver: a speech to the oldest parliament in the world, dinner with the queen at Buckingham Palace, and a visit to Chequers, Prime Minister David Cameron’s country retreat. More important, a Chinese state-owned company has gained entrée into the British nuclear power industry, a development that experts have warned presents a security risk.

The UK wants to become China’s “best partner in the West,” an objective set out by George Osborne, the chancellor of the Exchequer, who is taking the lead on China policy. Great Britain’s approach—engagement with a pronounced emphasis on trade, at the expense of human rights—resembles America’s policy of the 1990s, but with important differences.

First, the geopolitical situation is much changed. An economically and militarily powerful China is leading a challenge to the dominance of liberal democracy as a global norm. Second, the UK does not have the strategic responsibilities in Asia that the US does. 

What Just Happened in Syria?

Last week, after the White House announced its support for Syrian rebels was finished, the United States said it dropped 50 tons of ammunition from the air into Syria, ostensibly for unnamed Arab groups fighting ISIS. That, supposedly, was the last assistance those people were going to get.

A few days later, various anti-ISIS Syrian Arabs issued a collective, huh?

What happened to that ammo that supposedly fell out of the sky?

Nobody seemed to get any ammo.

All became clear the next day when Eli Lake and Josh Rogin reported in Bloomberg that, according to various officials, the aid was never intended for Syrian Arabs. That 50 tons of ammo actually went to the Kurds.

Turkey publicly summoned the US ambassador to complain.

“Turkey cannot accept any kind of cooperation with terror organizations that have declared war against Turkey,” Prime Minister Ahmet Davutoglu said.

That ammunition went to no kind of terrorist organization. It went to the Kurdish People’s Protection Units, or YPG, the only half-way sane militia in all of Syria that’s capable of taking on ISIS and winning.

The YPG is allegedly linked to the quasi-Marxist Kurdistan Worker’s Party, or PKK, over the border in Turkey which is listed by the United States government, among others, as a terrorist organization. But the PKK and the YPG are different organizations. They have different goals, different ideas, different leaders, and different enemies. They aren’t even in the same country. And the extent of their linkage is hotly disputed.

The Pentagon later said that, no, that ammunition did in fact go to Syrian Arab fighters and that, to the best of its knowledge, none of it was shared with anyone else.

The officials who told Lake and Rogin that it went to the Kurds are anonymous sources. They spoke unofficially and off the record. But this isn’t a case of one person said “this” and another said “that.” Lake and Rogin have American, Kurdish and Syrian Arab sources who back up that claim.

The Pentagon is almost certainly lying so it won’t infuriate Turkey.

Look. Running guns and ammo under the radar to legitimate proxies in a fight against a terrorist army is entirely reasonable behavior on the part of the United States government. We’ve been doing that sort of thing for decades. Pretty much everyone else in the Middle East does it, too, but they almost always run guns and ammo to terrorist organizations rather than to groups fighting terrorist organizations.

Regardless, it’s high time we come out and say exactly what we’re doing and why. Everyone already knows we’re backing the Kurds against ISIS, and everyone already knows the Turks would rather see an ISIS victory than a Kurdish victory. None of this is even remotely a secret. It’s all right out in the open. Official denials aren’t fooling anybody.

Besides, pretending we’re not doing what we clearly are doing just makes it look like the Turkish government’s complaint is legitimate.

It’s not.

Turkey says arming Syrian Kurds is unacceptable. Well. You know what’s unacceptable from everyone else’s point of view? Telling the rest of the world that we all have to suffer the plague of ISIS because an independent Syrian Kurdistan is inconvenient to Turkey.

How Effective Is Obama’s Cyber Deal with China?

On Monday, Dmitri Alperovitch of CrowdStrike revealed that his firm had detected a number of cyber attacks from China since the White House’s announcement of an agreement with Beijing on the hacking of companies. “The primary benefit of the intrusions,” wrote Alperovitch, “seems clearly aligned to facilitate theft of intellectual property and trade secrets, rather than to conduct traditional national-security related intelligence collection which the Cyber agreement does not prohibit.”

CrowdStrike’s co-founder and chief technology officer stated there was an attack on September 26th, the day after the White House announcement of the deal, and that there had since been attempted intrusions on 10 more days. Seven of his firm’s tech and pharmaceutical clients had been the targets.

A Cautionary Note: Reintegrating the Donbas

The fighting in the Donbas may be winding down, but Ukraine’s war with Russia will continue as long as Vladimir Putin believes that Ukraine must become his subject.

Now more than ever Ukraine’s survival as a democratic Western state depends on the continued strengthening of Ukraine’s military capability and the acceleration of reform.

An ostensibly peaceful Russia wedded to imperial expansion is no less of a military threat to Ukraine than an openly hostile Russia wedded to imperial expansion. The West is too preoccupied with its own problems and too indifferent to Putin’s destruction of the post-war international order to save Ukraine.

Only Ukraine can protect itself from further Russian predations by acquiring a first-class military able to deter all but the craziest of Russian leaders. Meanwhile, a first-class military is impossible without a strong economy, which in turn is impossible without serious, sustained reform.

The Trouble with Turkey: Erdogan, ISIS, and the Kurds

My latest essay for the print edition of World Affairs is now online. Here’s the first half.

Turkey, a key member of NATO, has so far chosen to sit out the war against ISIS. Instead, it is at war with Kurdish militias in Syria, the only ground forces so far that have managed to take on ISIS and win. 

Turkey fears and loathes Kurdish independence anywhere in the world more than it fears and loathes anything else. Kurdish independence in Syria, from Ankara’s point of view, could at a minimum escalate a three-decades-long conflict and at worst threaten Turkey’s territorial integrity. 

Kurds make up between 15 and 25 percent of Turkey’s population, but no one knows for sure because the government outlaws ethnic classification. Most live in the southeast near the Syrian and Iraqi borders. Many would like to secede and form an independent state of their own.

They could conceivably do it with enough help from the outside. They have a model in the Kurds in Iraq, who liberated themselves from Saddam Hussein after the first Persian Gulf War and have been independent in all but name ever since. The civil war in Syria has allowed the Kurds there to carve out a space of their own between ISIS and the Assad regime, which is what worries the Turks. 

Turkey is a powerful state, but so was Saddam Hussein’s government. So was Bashar al-Assad’s before the rebellion broke out a few years ago.

ISIS is still the JV squad as far as Turkey is concerned, to use President Obama’s unfortunate formulation, but Kurdish armed forces have been trying to rip apart the country for decades and therefore Ankara has called in the varsity to deal with them.

*

Turkish nationalists insist everyone in their country is a Turk whether they like it and admit it or not. The Kurds, according to them, are not a separate people. Rather, they are “mountain Turks who lost their language.” But Turkish nationalism, like Arab nationalism, scarcely existed until the waning days of the Ottoman Empire, which expired at the end of World War I. And the truth is that Turkey, as the rump state of that multi-ethnic empire, is a mélange of different identities. With its Kurdish, Arab, Zaza, and Alevi minorities, it’s no more homogeneous than the rump state of the Soviet empire with the Tatars, Ingush, Sakha, Chechens, and other large numbers of non-Russian peoples on its periphery. 

When Mustafa Kemal Ataturk founded the modern republic in the ashes of World War I, Turkish nationalists attempted to unite everybody under a single identity for the sake of national unity and to prevent any more territorial loss, but the Kurds refused to join up because the Western powers had promised them a state of their own. To this day, they remain the largest stateless people on earth. Many feel far more kinship with their fellow Kurds in Iran, Iraq, and Syria than with their nominal countrymen in Turkey.

The Ottoman Empire was loosely confederated, with a space for the Kurds, but modern Turkey was founded as a strong Western-style republic with a powerful center, and the Kurds were forcibly conquered, colonized, and integrated. 

The government’s response to Kurdish nationalism was tantamount to attempted cultural genocide. Ethnic Kurds were forcibly relocated from the eastern parts of the country, while European Turks were moved to the Kurdish region in the farthest reaches of Anatolia. Even speaking the Kurdish language was forbidden in schools, government offices, and in public places until 1991. Simply saying “I am a Kurd” in Kurdish was a crime, and it’s still considered scandalous in official settings. In 2009, a Kurdish politician created a huge controversy by speaking just a few words of Kurdish in the nation’s Parliament building.

Despite the fervor of this repression, Turkey’s problem with its Kurdish minority is more political than ethnic. As Erik Meyersson at the Stockholm School of Economics put it, “It is less an inherent dislike for Kurds that drives state repression of this minority than the state’s fear for the institutional consequences and loss of centralized power.”

Beginning in 1984, the Kurdistan Workers’ Party, or PKK—initially backed by the Soviet Union—has waged an on-again, off-again guerrilla and terrorist war against the Turkish state that has killed more than 45,000 people, according to government figures. That’s almost as many as Americans killed during the Vietnam War. 

Most of the dead are Kurdish. The Turkish military dished out unspeakable punishment in the east of the country. Nine years ago, I drove from Istanbul to northern Iraq and was shocked to discover that Iraqi Kurdistan is a vastly more prosperous and pleasant place than bombed-out and repressed Turkish Kurdistan. Turkey was once seen as a semi-plausible candidate for the European Union, yet the Kurdish parts of Iraq—one of the most dysfunctional and broken countries on earth—were and are doing much better than the Kurdish region of Turkey.

From mid-2013 to mid-2015, the Turkish state and the PKK enjoyed a period of relative calm under a cease-fire, but in late July the army bombed PKK positions in northern Iraq, and the PKK in Turkey declared the cease-fire void. A wave of attacks against police stations swept over the country in August. An enduring peace between the two sides now seems as elusive as ever. 

The Turkish establishment has been alarmed by the existence of an autonomous Kurdish region in Iraq since the day it was founded and has repeatedly threatened to invade if it declares independence from Baghdad. (That may be the only reason the Iraqi Kurds haven’t yet done it.) And it’s doubly alarmed now that the Kurds of Syria have cobbled together their own autonomous region, which they call Rojava, while the Arabs of Syria fight a devastating civil war with each other. And the Turkish establishment is triply alarmed because the Kurdish militias in Syria—the YPG, or People’s Protection Units—are aligned with the PKK. 

Turkey’s President Recep Tayyip Erdogan—like most of his ethnic Turkish countrymen—is terrified that an independent Syrian Kurdistan will help Turkish Kurdistan wage a revolutionary war against Ankara. Fairly or not, Erdogan sees Rojava much the way the Israelis see Hezbollah-occupied southern Lebanon. 

Ideally the Syrian Kurds wouldn’t side with the PKK. The PKK has committed crimes in Turkey and is a willing belligerent in a long and terrible war. The Turks are not imagining this or making it up, and there is no shortage of Kurds elsewhere in the region who share Erdogan’s dim view of the PKK and its allies.

“They are very fanatic in their nationalism,” Abdullah Mohtadi told me in Iraqi Kurdistan years ago. He’s the head of the Komala Party, a formerly Communist left-liberal Iranian Kurdish group living in exile in Iraq. “They are very undemocratic in nature. They have no principles, no friendship, no contracts, no values. In the name of the Kurdish movement, they eliminate everybody.”

The United States, though, is backing the Syrian Kurds. We have to. They’re the only ground force capable of fighting ISIS and winning. The only other options in Syria are the repulsive Assad regime, Hezbollah, Sunni Islamists that will inevitably turn on the United States, the al-Qaeda–linked Nusra Front, and a handful of relatively moderate but irrelevant Sunni groups that have already effectively lost. 

The Kurds are all that’s left. 

And the Kurds are the most pro-American people in the entire Middle East. They’re more pro-American than the Israelis. Ideologically, yes, the PKK-aligned groups are a bit iffy. They were once Soviet proxies and they’re at war with a member of NATO. But the Turks share at least half of the blame for that conflict. Nowhere in the region will Kurdish people accept cultural genocide lying down. Surely they would have accepted help from the United States had it been offered during the Cold War, but it wasn’t, so they took largesse and ideology from the Russians instead. 

For what it’s worth, though, the PKK is not what it used to be. The Soviet Union is dead, and a lot of the ideological Marxism its leaders once mouthed has been diluted over time to standard-issue leftism with a culturally conservative twist. The Kurds of Turkey and Syria are not struggling for the collectivization of agriculture. They are not interested in liquidating landlords or “the kulaks.” They certainly aren’t interested in imposing a police state in Ankara. First and foremost, they’re fighting against the fascists of ISIS, and second for Kurdish independence, a secular system of government, and equality between men and women. They detest the Islamic religion as much as far-right “Islamophobes” in America. Compared with just about everyone else in the region, they’re liberals. 

Not in any alternate universe would the United States oppose these people right now. The Kurds of Iran and Iraq are more politically palatable, but you fight a proxy war with the proxies you have, and Americans will never find a better proxy in Syria against ISIS than the Kurdish People’s Protection Units.

 Read the whole thing.

Remembering a Winter on Fire

Before the winter of 2013-2014, Ukraine had spent its 22 years of independence peacefully. Where Russia had seen wars with separatist regions (Chechnya, 1994-1996 and 2000-2005), witnessed its president turn tank barrels on the parliament (October 1993), and had seen opposition-leaning Russians jailed and beaten by riot police for peaceful demonstrations (Winter 2012-2013), Ukraine had remained quiet. Certainly, the country had its share of political assassinations in the 1990s, but even 2004’s Orange Revolution was concluded peacefully and without violence against the protestors in the street or the politicians involved.

So the decision by then-President Viktor Yanukovych to use force on the thousands of Ukrainian citizens peacefully protesting his choice to forego signing an association agreement with the European Union came as a great shock to the body politic. Netflix’s newest documentary, Winter on Fire, tells the story of what happened next, as Ukrainians were killed, kidnapped and beaten by their government for daring to believe in the possibility of a new, uncorrupt, and European Ukraine.

Is a US-China Showdown in South China Sea Imminent?

“We will never allow any country to violate China’s territorial waters and airspace in the Spratly Islands, in the name of protecting freedom of navigation and overflight,” said Chinese Foreign Ministry spokeswoman Hua Chunying at Friday’s regular news briefing. “We urge the related parties not to take any provocative actions, and genuinely take a responsible stance on regional peace and stability.”

Hua was evidently reacting to a Navy Times report that the US Navy was planning to send a surface combatant within 12 nautical miles of a Chinese island in the South China Sea in a bid to preserve freedom of navigation for itself and others.

Obama Dumps Syria's Rebels

The White House has officially scrapped its policy of training Syrian rebels now that Vladimir Putin is killing them.

Normally we might call this a surrender, but at this point, abandoning the rebel training would be the right call even if Vladimir Putin decided to help us instead of obstruct us.

Three years ago I wrote in this magazine that it was in America’s interests to see Bashar al-Assad overthrown.

The Arab Socialist Baath Party regime, beginning with its founder Hafez al-Assad and continuing through the rule of his son Bashar, is the deadliest state sponsor of terrorism in the Arab Middle East. It assisted the bloodthirsty insurgency in Iraq that killed American soldiers by the thousands and murdered Iraqi civilians by the tens of thousands. It has used both terrorism and conventional military power to place Lebanon under its boot since the mid-1970s. It made Syria into the logistics hub for Hezbollah, the best-equipped and most lethal non-state armed force in the world. It has waged a terrorist war against Israel and the peace process for decades, not only from Lebanon, but also from the West Bank and Gaza. And it is Iran’s sole Arab ally and its bridge to the Mediterranean.

That was in the early days of this conflict. Before ISIS took over a huge swath of the country. When the Free Syrian Army could have been molded into at least a semi-moderate force.

Arming and training a rebel army to fight the Assad regime and Hezbollah would have been extremely risky, obviously. It could have gone wrong in any number of ways.

But ISIS, the Al Qaeda-linked Nusra Front, and other Islamist totalitarians are so thick on the ground now that arming and training a rebel army is not even risky. It’s guaranteed to fail or blow back in our faces. Our brief opportunity to maybe stave off a local apocalypse is long past.

The battlefield in Syria has already been shaped, and there is no longer any room for even a semi-moderate force outside the Kurdish region.

Nearly all the political moderates in Syria have fled the country or are hiding under their beds. The US can have no leverage in the Arab parts of the country. All we can do at this point is back the Kurds.

In case there was any doubt left, Putin made it absolutely clear yesterday that Russia is intervening strictly in order to bolster Assad’s regime, which puts him clearly on side with the Iranian-Hezbollah axis.

Maybe he’ll get rid of ISIS while he’s at it, but so far that isn’t his plan. ISIS and Assad for the most part haven’t been fighting each other anyway—they’re both too busy fighting everyone else. Which all but guarantees that everyone else, with the possible exception of the Kurds, is going to lose.

Estonia’s Defense Contractor Startups

Like any trade fair, London’s annual DSEI show allows participants so inclined to salivate over their industry’s latest innovations. But DSEI—the acronym stands for Defense and Security Equipment International—showcases the latest in military equipment. This year participants could, for example, admire BAE Systems Hägglunds’s 360 Battleview, a tank with technology that allows its commander and crew to “see” through the heavy metal. No need for a soldier to stick his head up, risking his life to survey enemy activity.

China Stock Crash Imperils Proposed Nicaragua Canal

The net worth of Chinese entrepreneur Wang Jing, the driving force behind a proposed canal across Nicaragua, has fallen $9.1 billion since mid-June, when China’s stock market collapsed. No other individual in the Bloomberg Billionaires Index during this period has lost a greater proportion of assets, 84 percent in his case.

Chinese ambition in recent years has been stunning, and no person outside officialdom has been more optimistic than Wang, 42, who owns 35 percent of publicly listed Beijing Xinwei Telecom Technology Group Co.

In 2013, Wang announced he would build the waterway, three times longer than the Panama Canal. His plans also contemplated two deep-water ports, an airport, an artificial lake, a tourist area, a free-trade zone, roads, and factories to make cement and steel. Wang’s closely held vehicle, the Hong Kong Nicaragua Canal Development Investment Group Co., has an initial 50-year concession awarded by Daniel Ortega’s government.

Donald Trump Can’t Get the Middle East Right

Over the span of just over a week, Republican presidential candidate Donald Trump has changed his position on Syria twice and even reversed himself once, but he still can’t find the right answer.

On Meet the Press over the weekend, he said he thinks the Middle East would be better off if Saddam Hussein and Moammar Qaddafi were still in charge of Iraq and Libya, and that Syria will be better off if Bashar al-Assad remains in power for the same reason.

“You can make the case, if you look at Libya, look at what we did there — it's a mess — if you look at Saddam Hussein with Iraq, look what we did there — it's a mess — it's [Syria] going to be same thing.”

He acknowledges, though, that Assad is “probably a bad guy.”

He uses the word “probably” because he doesn’t actually know. He’s just guessing. Winging it. 

The Assad family has been the chief villain of the Eastern Mediterranean for decades, but Trump isn’t sure because he’s spent most of that time working in real estate. Which is fine—my parents spent their careers in real estate, too—but it doesn’t exactly prepare a person for dealing with the likes of Assad and ISIS.

At least he guessed right. Syria has used terrorist armies to attack every single one of its neighbors, including Turkey and Jordan, but especially Israel, Lebanon, and Iraq. Assad is Iran’s staunchest ally in the world, a co-sponsor of Hezbollah, supporter of Palestinian terrorist organizations, and one of the original backers of ISIS when it was slaughtering Americans in Iraq under its previous name.

Assad’s government is the most destructive and pernicious in the Arab world.

Yeah, he’s “probably” a bad guy.

Chaos may follow the removal of the likes of Saddam Hussein, Moammar Qaddafi and Bashar al-Assad, but they are not forces for stability in the Middle East and never have been. You want a force for stability? Try the king of Morocco. He’s a force for stability. So is the sultan of Oman. Oman is so stable that most people don’t even know where it is. (It’s on the Arabian Peninsula next to Yemen.) King Abdullah of Jordan is also a force for stability.

None of these guys were elected, but we’d be out of our minds to want them removed.

But Bashar al-Assad, like Saddam Hussein and Moammar Qaddafi, is a state sponsor of terrorism. All three brutally subjugated their citizens and poisoned the minds of the survivors with a vicious anti-Western ideology.

The day we decide that hostile state sponsors of terrorism are reliable firewalls against terrorists is the day we give up.

A week earlier, Trump seemed to have a clearer idea that Assad was a bad guy, but he thought it might be a good idea if we let ISIS take him out.

“We go in to fight ISIS,” he said. “Why aren't we letting ISIS go and fight Assad and then we pick up the remnants? Why are we doing this?”

He sounds like a random guy in a bar who’s thinking out loud after reading a couple of newspaper articles that are fuzzy on the details. We all run into people like that once a while, people who don’t really know anything about the Middle East but think they’ve got it all figured out anyway.  

He realizes it’s hard, though, and figures, hey, let the Russians deal with it instead.

“Russia wants to get rid of ISIS,” he said. “We want to get rid of ISIS. Maybe let Russia do it. Let 'em get rid of ISIS. What the hell do we care?”

Here’s why we should care: The most powerful hostile bloc in the Middle East is the Syrian-Iranian-Hezbollah axis. That faction has been murdering Americans for decades, long before Al Qaeda and ISIS even existed. Now that Vladimir Putin is aggressively on side with Assad, we’re dealing with the Russian-Syrian-Iranian-Hezbollah axis. It’s like the Cold War all over again in the Middle East, except that it’s hot.

Russia isn’t interested in defeating ISIS anyway. Neither is Assad. Moscow and Damascus are fighting the other anti-Assad factions—the Nusra Front, what’s left of the Free Syrian Army, and the largely useless factions backed by the United States.

It is a quagmire, though, so it’s not hard to see why Trump would rather see Russians get sucked into it than Americans. Phrased that way, it’s a no-brainer. But the Middle East is a lot more complicated than figuring out which foreign power should get bruised and bloodied trying to deal with it. 

When looking at ISIS and Assad, a lot of us echo Henry Kissinger on the Iran-Iraq war—it’s too bad they can’t both lose. But the operative word in that sentence is can’t.

ISIS and Assad are not both going to lose. They are not going to cancel each other out. Wars don’t turn out that way. They end with a victor or in a stalemate. ISIS and Assad aren’t really fighting each other anyway. They’re both fighting the other armed factions and consolidating their respective territories.

We can argue all day about which side we’d rather see lose, but we’re heading toward the worst-case scenario, where Assad and ISIS both win. The nation once known as Syria is already de-facto divided in half. Iran and Hezbollah may keep their rump state on the Mediterranean now that Russia is backing Assad, while ISIS remains secure out in the desert.

Someone should ask Trump—and President Barack Obama, too, while we’re at it—what the US should do about that. 

At the UN, Poroshenko 1, Putin 0

Not that speeches delivered at the United Nations General Assembly matter, but, if they did, Vladimir Putin’s would have garnered him a failing grade, while Petro Poroshenko’s would have been in the A range.

Putin said his usual bromides about the importance of the UN and international institutions, conveniently forgetting his violation of the 1994 Budapest Memorandum and the 1978 Helsinki Accords. He praised state sovereignty, while ignoring his invasions of Georgia and Ukraine and occupation of eastern Moldova. He condemned terrorism, while promoting it in Ukraine. It takes real chutzpah to make the following claims:

Russia stands ready to work together with its partners on the basis of full consensus, but we consider the attempts to undermine the legitimacy of the United Nations as extremely dangerous. They could lead to a collapse of the entire architecture of international organizations, and then indeed there would be no other rules left but the rule of force.

The Baltic Defense Bubble

Last week, General Philip Breedlove—the supreme commander of Allied Forces in Europe, and thus NATO’s top military officer—warned that Russia is building up a defensive bubble in the Mediterranean. Breedlove’s statement got plenty of attention, but what’s more worrisome is news that has received close to no attention: Russia is building a defensive bubble in the Baltic Sea as well.

A defensive bubble—A2/AD in military speak, which stands for anti-access/area denial—is a combination of long-range missiles and sensors that makes it hard or even impossible for enemy airplanes and ships to approach their target. With the sensors and missiles having a range of up to 2,500 kilometers from the coast where they’re based, the equipment is very long-range indeed.

As the Swedish Defense Research Agency, FOI, points out in a new report, China is actively improving its A2/AD capabilities, which—considering the equipment’s long range—poses serious challenges for the United States in Southeast Asia, in addition to raising concerns about Chinese sales of bubble components to rogue nations. Even rudimentary bubbles would make a quick air war like the Gulf War much harder.

China Imposes New Capital Controls

The State Administration of Foreign Exchange, China’s foreign exchange regulator, has imposed annual limitations on cash withdrawals outside China on China UnionPay bank cards, the Wall Street Journal learned on Tuesday. The limitations are reportedly contained in a circular SAFE, as the regulator is known, sent to banks.

Cardholders, under the new rules, may withdraw a maximum 50,000 yuan ($7,854) in the last three months of this year and a maximum 100,000 yuan next year.

Because UnionPay processes virtually all card transactions in China, the new limits apply to all Chinese credit and bank cards. Beijing already imposes a 10,000-yuan daily limit on withdrawals.

And why should the rest of the world care about how much money a holder of a Chinese credit card can get from an ATM in, say, New York? The new rules could be the first in a series of measures leading to draconian prohibitions of transfers of money from China.

Draconian prohibitions, in turn, could spark a global panic.

China Intercepts US Aircraft Over Yellow Sea in Dangerous Maneuver

On September 15th, a Chinese military jet intercepted a US Air Force RC-135 reconnaissance aircraft over the Yellow Sea, about 80 miles east of China’s northern Shandong Peninsula. The Chinese jet crossed the nose of the American plane, passing within 500 feet, a dangerous maneuver.

The US regularly conducts surveillance flights over international water along China’s coast, airspace that Beijing wrongly claims to be its own. As a result, there has been a series of Chinese intercepts of these flights.

“One of the maneuvers conducted by the Chinese aircraft during this intercept was perceived as unsafe by the RC-135 air crew and at this point, right now, there’s no indication this was a near collision, but the report that came back was that the plane operated in an unsafe fashion,” said Pentagon spokesman Peter Cook last week.

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