Tenure of the day

2038

That’s when Lisa Cook was due to end her term on the Fed’s board, until President Trump moved to fire her over mortgage fraud allegations. Cook denies the claims and says the president has no authority to sack her, suggesting we’re now headed to court. If Professor Cook is fired, Trump appointees would be set to secure a Fed board majority.

Let there be light islands

We humans can create just about anything these days: self-heating mugs, lab-grown meat, KFC-flavoured toothpaste. So no harm in a few artificial islands, right? Wrong.

China’s foreign ministry just rebuked Vietnam for doing just that in the South China Sea (SCS), declaring Beijing “firmly opposes relevant countries’ construction activities on islands and reefs they have illegally occupied”. 

What’s the problem?

If you look carefully at that wording, it’s not so much about the activity as the location: “on islands and reefs they have illegally occupied”. And that’s an important distinction, because (as we’ll see below) China is no stranger to a bit of artificial island building.

So why Beijing’s sudden sass?

A top US thinktank just dropped its latest report on Vietnam’s own island-building in the South China Sea, where players already claim varying degrees of ownership: China, Vietnam, Philippines, Malaysia, Taiwan, Brunei, and Indonesia (in descending order).

We say “varying” because the claims range from China’s ‘nine-dash line’ encompassing 90% of the sea (the size of Mexico), down to Indonesia and Brunei each claiming ~1%.

But Vietnam’s building spree isn’t just anywhere: it’s specifically in the Spratly Islands, which are perched smack bang in the middle of the South China Sea overlooking busy shipping lanes, rich fishing grounds, and presumed gas and oil reserves. 

And whoever controls the Spratlys controls the South China Sea. 

Enter outposts. 

Vietnam (like the Philippines, Malaysia, and Taiwan) has been building local outposts for decades, but this always involved zhushing up the islands and rocks already there, until…

Enter China.

Beijing got its first Spratlys toehold after a clash with Vietnam in 1988. It then built new “fishermen shelters” deep in Philippine waters from the 90s, nudging a shocked Manila to deliberately ground an old ship which it’s used as a makeshift outpost ever since.

But China really hit the gas once Xi Jinping took power from 2012, willing 13 sq km (5 sq mi) of new land into existence via both expansion and creation: those early “fisherman shelters” gave way to China’s seven Spratly bases, all despite pledging the opposite to President Obama, and getting its ‘nine-dash line’ rejected by a top tribunal. So…

Re-enter Vietnam.

According to satellite pics analysed by the US thinktank above, Vietnam has now reclaimed land at all its 21 Spratly features (up from 11 four years ago). And it’s levelled up from a few humble pillboxes back then, to munition depots and a full runway. When you add all Vietnam’s reclaimed acreage in the area, it’s now about 70% of China’s total, and gaining.

Intrigue’s Take

So does any of this really matter? It’s a question occasionally posed in Western capitals querying how it’s their problem if distant nations fight over poop-covered rocks.

But there are a few answers.

First, the world already agreed on a set of rules to resolve maritime border disputes: it’s called the UN Convention on the Law of the Sea, and it has little time for artificial islands beyond the need for tiny ‘safety zones’ around them.

Second, with faith in international law waning, we’re seeing rivals race to shape the maritime reality in their own favour instead, or at least stop others from doing so. And that process just undermines international law even further, meaning…

Third, as everyone rushes to build and fortify random rocks, the crowding of such an already packed strategic space just raises the risk of an accident or miscalculation. And with so many guns drawn, history reminds us this is all it takes to ignite a war.

Meanwhile, elsewhere…

Extra Intrigue

Here’s what people around the world are googling

• Folks in Germany looked up “Robert Habeck”, the former economy minister who has decided to quit politics for an academic career instead.

• Venezuelans googled “Huawei” after dictator Nicolás Maduro used a speech to brandish a new cell phone which he claimed was a gift from China’s Xi Jinping.

• And netizens in Hong Kong searched “HSBC” after the international bank announced it was offering lower interest rates for mortgages on the island.

Words of the day

Remember the good ol’ Cambridge dictionary? It’s one of the few books professors might allow students to schlepp into exams, though it’s unclear what good a dictionary is when that essay on macroeconomics rolls around.

But still, take comfort that if you end up needing to double-check what “skibidi”, “delulu”, or “tradwife” mean when crunching out that graph on marginal propensity to save, the dictionary’s newest version has got you covered, plus an additional 6,000 other new words.

Today’s poll

Yesterday’s poll: Do you think robots are the answer for shrinking-ageing economies?

🤖 Yes, here's why… (49%)
❌ No, here's why… (47%)
✍️ Other (write in!) (4%)

Your two cents:

• 🤖 V.K.F: “Increases in productivity are how prosperity is won, and robots are just the latest version of that.”

• ❌ A: “Even though it would serve as a temporary bandaid for a shrinking workforce, it won't address two key issues that will spiral the problem even further, A) a shrinking consumer population that will make our robot workers obsolete, and B) the lack of meaning that comes with employment.”

• ✍️ E.K.M: “The issue isn’t labor, it’s power. AI takes a lot of energy to use, and current technology isn’t scalable without severely damaging the climate and local communities.”

• ❌ S.H: “It will take longer than most people think to fill all the various positions needed with a robot.”