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Amazon Fires, the Chinese “Long March” and Danish Pipelines…and the Week in Review

Blog / Weekly Review

Amazon Fires, the Chinese “Long March” and Danish Pipelines…and the Week in Review

We’ve had a number of new sign-ups in the last week, so if this is your first time reading, a warm and hearty welcome! If you’re a returning reader, welcome back to our latest Week in Review. Remember to check out the Perch Pod by clicking HERE – our latest episode comes out Monday with Dario Fabbri, one of Italy’s best geopolitical analysts – and we have 7 other great episodes to peruse if you have not had a chance to listen already. Also, please feel free to share this newsletter with anyone you think would enjoy it and share the podcast far and wide. Thanks for your support as always and Happy Friday!

Protecting the Amazon. 38 companies and 4 institutions submitted a letter to the Brazilian government demanding that Brazil do more to stop deforestation in the Amazon region and offering to help on a range of possible measures to make the Brazilian economy more environmentally friendly. Brazilian Vice President Hamilton Mourão said the Brazilian government was instituted a 120-day moratorium on burning the Amazon rainforest and Pantanal wetland biomes and said the moratorium could be extended. He also said the Brazilian government would take more action against illegal fires in the Amazon in the coming weeks.

What it means: The news that Brazilian President Jair Bolsonaro has contracted COVID-19 may have drowned out all other headlines in Brazil this week, but Bolsonaro’s winning disposition cannot obscure the importance of this development. After all, it was Bolsonaro himself who campaigned for his presidency on a pledge to utilize the Amazon for Brazil’s interest – and to resist foreign criticism on how Brazil chose to do so.

The move comes after a groundswell of international pressure against the Brazilian government. In June, 29 financial institutions, managing more than $3.7 trillion in assets, submitted a letter of their own to the Brazilian government demanding Brazil do more to stop deforestation – or else. French President Emmanuel Macron has threatened to hold up the Mercosur-European Union free trade agreement unless Brazil cleans up its act – and he went so far as declaring that he had “canceled” further negotiations last week. (We wrote about that here as well.)

The new letter, signed by representatives of companies like Bayer, Rabobank, Shell, Microsoft, and Vale, takes the pressure up a notch and seems to have forced Brazil’s hand – a little, that is. Brazil instituted a shorter moratorium on burning in the Amazon last year and did not enforce it particularly well – and data from Brazil’s Instituto Nacional de Pesquisas Espaciais suggests August could see worse fires than last year when the world started paying real attention to the Amazon for once.

As climate change becomes a focal point for competition between nations, it is also becoming a badge of corporate responsibility as well. When these powerful forces are combined, change, it seems, can be achieved. Then again, Brazil is susceptible to this pressure because it needs foreign investment and its economy has not been doing great for a while. Who will speak up for the mostly desolate and unpopulated areas of Siberia, where wildfires are raging at statistically unprecedented levels now? Who will force mighty global powers like the US and China to do their share?

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“Point the blade inward.” China’s Central Political and Legal Affairs Commission declared a pilot “political and legal education rectification program” which Chen Yixin, secretary-general of the commission, described in stark terms, most notably as a “fresh-water style Yan’an rectification.”

What it means: Unless you recently read Jonathan Spence’s “The Search for Modern China,” or else subscribe to Bill Bishop’s excellent Sinocism newsletter, the phrase “Yan’an rectification” probably does not mean very much to you. Unfortunately, it should. The language used by Chen harkens back to the first real purge Mao Zedong undertook to cement his control of the Chinese Communist Party (CPC) and to claim the mantle of “Chairman.”

The original Yan’an “Rectification Campaign” refers to the period 1942-1944. The campaign followed the “Long March” – the CPC’s epic retreat into the Chinese interior to evade the forces of the rival Kuomintang (KMT). It was in Yan’an that Mao became Mao and the CPC became the CPC, so in a certain sense, it is where the People’s Republic of China was truly born.

The Yan’an Rectification Campaign combined CPC efforts to stamp out corruption and punish abusive landlords with Mao’s desire to consummate his ideological control over the CPC. Allies and rivals, intellectuals and peasants, were forced to confess their crimes in public and to endure manual labor or even torture and other forms of physical maltreatment. What happened in Yan’an laid the groundwork for the CPC’s eventual victory over the KMT in the Chinese Civil War and was used by Mao not just to buttress his own leadership of the CPC to protect it from ideological dominance by the Soviet Union.

It is possible to interpret Xi’s new campaign as a sign of his weakness – and we cannot disprove that mode of analysis. What we can do is offer what we think is a compelling alternative. Consider that this generation’s “Long March” is the combination of the U.S.-China trade war, the African Swine Fever epidemic, and COVID-19. Xi, the clear leader, now wants to make sure his rule is undisputed, because when the current struggle is over, there is a greater struggle to be fought.

For Mao, of course, that greater struggle was against the Japanese and then the KMT. What does Xi think it is? To what ends will he direct his Belt and Road Initiative, his great rejuvenation of the Chinese nation, and now his own personal Rectification campaign? The answers to those questions will define China’s future.

Pipeline politics. The Danish Energy Agency gave the go-ahead for construction of the Nord Stream 2 pipeline to continue.

What it means: Nord Stream 2 is one step closer to completion but there are still bigger hurdles to overcome. There are about 120 kilometers of pipeline that still need to be laid and most of it is in Danish waters. The United States is worried that Nord Stream 2 will increase European energy dependence on Russian gas exports and weaken Ukraine’s leverage in its relations with Russia (roughly 40 percent of Russian gas bound for Europe currently transits Ukraine. The United States has a difficult choice to make: impose new sanctions on Russia and on companies involved with Nord Stream 2’s construction (even if they are companies associated with U.S. allies like Germany and France) or let the pipeline go forward.

Nord Stream 2 also has ramifications for the internal cohesion of the European Union, not just for future EU-U.S. relations. Eastern European countries, especially Poland, do not want to see Nord Stream 2 come to fruition. Central and Western European countries like Germany and France do not have the same concerns as countries like Poland. For them, access to cheap and reliable natural gas outweighs the potential impact of Russian revanchism. France in particular has taken a lead in recent weeks in reaching out to Russia because Moscow and Paris seem to be on the same side of the ongoing civil war in Libya – and united in a shared distrust and suspicion of Turkey.

We have made the point repeatedly in recent weeks that external geopolitical forces are pushing EU member-states close together. A fundamental disagreement about future relations with Russia is the opposite – a geopolitical force that threatens to tear the EU apart. For better and for worse, Russia is a European power. Sanctions and threats to EU unity will not prevent Nord Stream 2; they are, instead, a gift to Russia, which will not only get its cherished pipeline, but will also get to see its potential rivals behave like little more than a gaggle of squabbling and disunited allies.

Honorable Mention

If you’ve had a rough week in quarantine, might we recommend watching this or this to get your spirits up. Or the inimitable Egyptian military orchestra – they are always an inspiring bunch.

India and China finally took tangible steps towards de-escalation in their border spat, but Chinese troops are still present around Pangong Lake and new Indian protectionist measures against Chinese-origin goods and components are imminent.

Mexican President Andres Manuel Lopez Obrador (AMLO) flew coach – and connected via Atlanta – to travel to Washington to mark the official start of the “New NAFTA,” or as it is officially known, the United States-Mexico-Canada Agreement.

Canada did not attend the aforementioned meeting, likely because the US continues to threaten Canada with tariffs because it claims Canada is threatening its national security.

The Scottish cabinet secretary for constitutional affairs told the FT that Scotland would challenge UK legislation that allowed the British government to unilaterally set food and environmental standards in Scotland as part of Brexit in court.

Australia said it would offer a path to citizenship for Hong Kong citizens and New Zealand said it was reconsidering its future relations with Hong Kong; these are bold, brave steps but will likely result in Chinese economic retaliation.

Unidentified fighter jets reportedly attacked Turkish military targets near al-Watiya airbase in Libya, where Turkey has said it plans to construct a permanent military base in the future.

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