China’s Manufacturing Sector Continued To Contract In January

China’s manufacturing contracted for a sixth consecutive month in January as shrinking global demand hit the country’s export-driven economy. The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 42.2 from 41.2 in December. Since any reading below 50 indicates contraction, even though the rate of contraction dropped (and has been dropping since November, see chart below) China’s manufacturing sector (and hence China’s economy) is still contracting. What we don’t know at this point is how quickly China GDP is contracting, we won’t know that till someone with the time and ingenuity devises a way to calculate a rough and ready quarter on quarter (seasonally adjusted) output indicator. Come on, be famous for a day, go out and do it (since the Chinese statistics office apparently have no interest in the matter), I would, but I simply don’t have the time, since Europe, not China, is my focus. However, on a rough and ready, back of the envelope, basis my guess is that this months Chinese reading may be equivalent to something like a quarter on quarter contraction rate of around 0.5%, which means that what we have at this point is a 2% annual contraction rate, but we really need to see some actual data to calibrate all this a bit better I think.

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We Have Steampunk Police Surveillance Movies

Our reader Chris Williams has an article out in Surveillance and Society about the early history of police surveillance on film in Britain. It’s a Europe-wide issue, but one which a lot of people both imagine is restricted to Britain and recent. But back in 1935, the police in Chesterfield were training 16mm cine cameras into the main market place…all in an attempt to catch illegal gamblers. Here is some of the footage.

Zombie Meme Watch: Transatlantic Politics and Afghanistan

Hey, it’s the Americans are from Mars, Europeans are from Venus meme again. This is what programmers call an anti-pattern – a classical, typical example of how to do something wrong. You might have thought that, with the Bush years finally behind us, this would have been retired at long last; but no. Now, the UK is being accused of becoming “Europeanised”, supposedly because it doesn’t want to put more troops in Afghanistan.

First, the UK cannot do this because, having spent the last 8 years chasing various US-inspired missions, it doesn’t have the troops, and more to the point, it doesn’t have the air transport fleet to support them in the interior of Asia. Simple. But more importantly, there are two huge unexamined assumptions here. The first is that the Europeans have to come when the US calls them. What is in it for us? After all, NATO declared that the alliance had been invoked back in September 2001, and was told that its assistance was not required, at the same time as hordes of rightwing publicists accused it of not helping. Then, later, the US accepted the need for an international peacekeeping force, which was led by European NATO members for most of its existence.

And then, the US withdrew much of its own forces in Afghanistan for use in Iraq. Specifically, the special forces whose mission in counter-insurgency and as military advisors was crucial in the vast majority of Afghanistan away from Kabul were drawn on, as were the satellite and other reconnaissance assets. This was a loss in awareness of what was happening out there that ISAF never really recovered; it is no coincidence that, as Antonio Giustozzi writes in Koran, Kalashnikov and Laptop, the Taliban resurgence began in 2003.

Now, after several EU states have been prevailed on for troops and have sent many more, things seem to be worse. If, as they do, the Americans whine about having had to contribute to IFOR/SFOR in Bosnia (which consisted of two European divisions and a partly-US one), why should EU member states happily fork out for a much more dangerous, violent, expensive and uncertain commitment which is not much more remote from their real interests than Bosnia was to the US? If they don’t want NATO to be seen as a club for the furtherance of US interests out-of-area, this is not the right way to go about it.

Secondly, there is the question of whether more troops – anyone’s troops – will do any good. Even US Secretary of Defence Robert Gates is doubtful of that. After all, even with many more troops, they will still be spread very thinly, but they will create more of the perception of a blundering occupation with fortified bases and car-bashing road convoys and edgy privateer guards. More and more money will be spent in expanding the sector of the economy devoted to supplying “the internationals”. The strained and politically dodgy supply route through Pakistan will get even more strained and dodgy.

Further, the planned US “surge” is a surge; a temporary increase in forces. Surely, what is required is a sustainable solution – one that might serve our supposed goals after the captains and the kings depart as the US military’s arms-plot requires. And that is only going to be achieved through political and economic means. If EU states should contribute more of anything, it should be more advisors, more reconstruction aid, more doctors and engineers – not more wedding-party strikes-in-error, and the kind of combination of well-meaning NGOs, PRTs and other TLAs with chaos and sinister spookery Robert Young Pelton brilliantly evokes here.

Friends don’t let friends drink and drive; neither do they help friends get into open-ended two-front wars. Europeans are entirely right to behave as if Iraq and Afghanistan had erased US credibility, and to expect it to be earned back rather than freely given. They are also right to look to their wooden walls, or their reconnaissance satellites.

The Ruble Fall Continues As Unemployment Soars

Russia’s current woes can be readily summed up in just one single variable – the value of the ruble – and this value, as we all know, is falling. Almost uncontrollably so.

The bank’s target will be “very quickly” breached without more intervention, said Gaelle Blanchard of Societe Generale SA in London. “Right now the market is convinced it wants to see the ruble lower,” Blanchard said. “As long as the central bank gives these targets, then speculators are going to have something to aim for.”

“The market is testing whether the authorities see this band as something permanent or something that will move,” said Lars Rassmussen, an emerging markets analyst at Danske Bank A/S. “Our view is that they’ll move it because it’s not worth wasting the reserves for a band that is obviously not wide enough.”

First Deputy Prime Minister Igor Shuvalov expressed regret that the general population failed to fully understand the Central Bank’s policy on the ruble’s exchange rate against the dollar/euro basket. The government did let the ruble depreciate, but it did so gradually, providing plenty of time for people to decide which currency to keep their savings in.

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