China is now widely seen as the coming superpower. But few even among the west’s China-watchers understand quite how fast this geopolitical freight train is approaching. Moreover, most western observers assume that China’s ambitions are being opposed by its East Asian rival, Japan. In the words of the Economist, Japan is “standing in the way” of China’s superpower ambitions. As the Japanese economy is still one of the world’s largest, Japan’s supposed hostility has tended to tranquilize western concerns about the dragon’s rise.

All conventional wisdom to the contrary, however, Japan and China are not enemies. The two East Asian great powers quietly buried the hatchet more than 35 years ago and, at least as far as top policymakers are concerned, their relations have long been remarkably close and even warm. It was in December 1979 that the Japanese prime minister, Masayoshi Ohira, paid a historic visit to Beijing to set the seal on wide-ranging plans for Sino-Japanese co-operation. What started out as a simple economic partnership has now blossomed into a full-scale alliance, with an increasingly obvious anti-western – and particularly anti-U.S. agenda.

The cynicism with which Japan habitually treats the United States is apparent not only in its hard-as-nails economic behavior (which contrasts dramatically with Japan’s much more beneficent economic relations with China) but in various diplomatic gambits. One such gambit was Japan’s decision to participate in the “coalition of the willing” that invaded Iraq in 2003. What was so cynical about this? The fact is that no one in Tokyo thought that the invasion had a prayer. They knew in particular that the invasion would not play out anything like the American occupation of Japan in the late 1940s. This occupation was held up by the pro-war party in Washington as a blueprint for how things would pan out in post-defeat Iraq. I should know because I was in Tokyo in 2003 and my own prediction of America’s Iraq debacle, based on my knowledge of the fatuousness of the post-defeat Japan analogy, appeared in an editorial page commentary in the International Herald Tribune in March 2003. Tokyo moreover insisted that its participation be entirely ceremonial, and that Japanese troops at all times be kept far from the action. This tokenist nature of Japan’s participation was kept quiet ahead of time, thus allowing the neoconservatives to crow about the fact that Japan was for the first time breaking with its Peace Constitution of 1947. In all probability this propaganda coup helped Tony Blair win Cabinet approval for the U.K. ’s participation (although Japan’s participation was announced late in the day, it had been telegraphed to London and, of course, to Washington many months previously).

So why did Japan participate? Its only interest evidently in a quid pro quo on trade. By offering the merest of token gestures on Iraq, Tokyo bought off all American pressure to open Japan’s closed markets for the duration of the George W. Bush presidency.

As for the Sino-Japanese alliance, Japanese policymakers entered this because they recognized earlier than their western counterparts how radically the map of world power was likely to be redrawn in the 21st century. They realized that, thanks to reforms initiated in the 1970s, the Chinese economy was launched on a path of sustainable growth. It required little prescience to see that a rise in China’s military power would follow. As China’s growth has continued to meet and even surpass Japanese expectations, the Japanese have become convinced that the U.S. will come off second best in rivalry with China for global leadership.

Faced with this realization, Japanese leaders had a choice. They could obstruct China, sabotaging any hope of reconciliation with their neighbor, or they could mend fences. All the evidence is that they chose the latter, and that since 1979 they have been accommodating, and indeed encouraging, China’s superpower ambitions.

Of course, all this must remain strictly sub rosa. Japanese leaders understand that any acknowledgment of how close Sino-Japanese relations have become would risk a backlash from America. After all, Japan has long presented itself as one of America’s most loyal and devoted allies – and has enjoyed uniquely generous economic privileges as a result.

Yet the fact that Tokyo and Beijing enjoy a special understanding is becoming ever harder to conceal. A marked pro-China bias has long been apparent in key areas of Japanese policy, including trade, technology transfer, foreign aid, and diplomatic co-operation.

On the Chinese side too, there is plenty of evidence that relations have undergone a sea change. Reciprocating Japan’s preferential trade policy, China now buys more than twice as much from Japan as from the US. The number of Chinese students studying in Japan in 2002 was nearly 60,000, a fourfold increase on the late 1980s. And manifestations of Japanese popular culture – from manga comics to karaoke – are now all the rage among young Chinese.

The origins of the Sino-Japanese rapprochement date to the early 1970s. In the wake of President Richard Nixon’s historic visit to Beijing in 1972, Japanese officials rushed to build closer trade ties with China. Then in 1978, in a move almost unnoticed in the west, Japan and China signed a treaty of friendship. This opened the door to extensive economic negotiations that culminated in Ohira’s Beijing visit in 1979.

The most obvious change in Japan’s China policy was in official aid. Up to 1978, Japan’s aid to China had been negligible. Then the numbers suddenly soared. China was the top destination for Japanese aid throughout the 1980s and in every year but one of the 1990s. The sums involved were not insignificant. Indeed Japan’s worldwide aid budget has exceeded America’s in most of the period since 1989. In 2000, for instance, it totalled $13.1 billion, nearly 36 per cent more than that of the US.

Seen from the Chinese side, Japan has long dwarfed all other donor nations. In the 20 years to 1999, Japanese aid to China totaled nearly $25 billion, about two thirds of all China’s bilateral aid in the period. By contrast, for all the Clinton era talk of a US-China “strategic partnership,” the U.S. has provided no significant aid to China in more than 50 years.

Perhaps even more important than the scale of Japanese aid is how it has been applied. In a pattern that will surprise many in the west who have perceived Japan’s China aid policy as a humanitarian gesture to atone for past wrongs, little money is intended for humanitarian purposes. Japan has never done much to alleviate immediate poverty in China. Instead, it has mostly worked with the Beijing government to fund “muscle-building” projects that are clearly intended to speed China’s emergence as an economic superpower.

In particular, as much as 60 per cent of Japan’s total aid has at times been devoted to improving China’s transport infrastructure. Despite talk of China as an economic threat, Japan is clearly intent on providing China’s export industries with the modern roads, railways, and ports needed to serve world markets. Not only that, in a reversal of its traditionally protectionist trade policy, Japan has been providing a major market for China’s exports; so much so that China, almost alone among manufacturing nations, enjoys large and growing surpluses on its trade with Japan.

Few aspirants to the American presidency have ever deployed a more effective slogan than Donald Trump’s “Make America Great Again.” Although Hillary Clinton professed to believe that America has never stopped being great, in the end countless voters sided with Trump – and in many cases did so passionately, oblivious to all the Trumpian scandals and gaffes that marred his campaign.

I happen to be one of the few commentators who were early to spot his electoral potential. At Forbes.com, I began a series entitled “Why Trump Is Winning” in December, and explicitly called the general election for him as far back as February. I need no persuasion therefore that the issue of American decline is real and powerful. The irony is, however, that I am skeptical about how much even he, with his nationalistic fervor, tough-guy tactics, and vaunted negotiating skills, can do to improve the prospects for his beleaguered core constituency in the American Rust Belt. The problems are just too large and the rot has gone too far.

The most obvious evidence is in infrastructure. Much American infrastructure has become embarrassingly outdated. The problem, in a nation that has long run huge fiscal deficits, is finding the money for the necessary massive upgrades. (More about financing in a moment.)

The expressways are crumbling; the railways slow and antiquated. The United States even lags in internet speeds. Then there is water purity and the quality of mains electricity (this latter is a key consideration for companies locating advanced manufacturing operations).

Meanwhile as Trump has repeatedly pointed out, many American airports are so dysfunctional and badly served by ground transport that they would not be out of place in the Third World. According to the latest annual survey by the Skytrax company of the world’s best airports, Denver placed highest among American airports – but ranked a mediocre 28 in the world. By comparison five East Asian airports, including two in Japan alone, made it into the top 10.

Infrastructure apart, far bigger problems lurk just below the surface. They are summed up in one statistic, albeit a statistic that a perennially out-to-lunch American press rarely mentions: the trade deficit. Measured on a current account basis (which is the widest and most meaningful measure), the trade deficit last year was $463 billion. This represented a stunning 4.7 percent of gross domestic product (GDP). By comparison the worst figure in the 1970s – a decade when the United States was already seen, both at home and abroad, as losing out badly in global competition – was a mere 0.5 percent. The truth is that the United States has not run a trade surplus consistently since the 1960s, and in the last two decades the deficits have rarely fallen below 3 percent of GDP.

Why does trade matter matter? For many reasons, not least because deficits have to be financed. In practice most of the financing has come from major sovereign investors, particularly the governments of China and Japan and to a lesser extent other East Asian nations. Typically it comes in the form of massive purchases of U.S. Treasury bonds. So far, the money has kept flowing but there is evidently an implicit understanding: in return for doing their bit to keep both the U.S. dollar and U.S. financial markets on an even keel, the East Asians will brook no lectures from Washington on opening their markets to foreign trade. Hence a conspicuous silence in Washington in recent years on East Asian trade barriers. Washington has entered a Faustian bargain and it is hard to see how even Trump, with all his undoubted energy and determination, can break out of it.

He has talked about reopening shuttered factories. That is easier said than done. Once a nation loses its position in any advanced manufacturing specialty, it finds it almost impossible to get back in.

Take electronics. Trump seems to believe that by the simple expedient of imposing stiff tariffs on Chinese imports he can encourage Apple to make iPhones in America. In reality, this badly misdiagnoses the problem. Where the manufacture of sophisticated electronic consumer products is concerned, China is a much less significant player than meets the eye. The product may bear a “Made in China” label but this refers merely to the place of final assembly. Admittedly China does possess the knowhow to make some components but generally only the simpler ones such as the plastic housing for a smartphone. The serious components are made typically in high-wage nations like Japan and to a lesser extent Korea, Taiwan, and Germany. Meanwhile Japan reigns supreme as the source of many of the most important materials and production machinery used in the industry. Little noticed outside East Asia, such materials and machinery are the ultimate driver of the electronic revolution.

All this means that, as a practical matter, China’s contribution to a smartphone’s total added-value may amount to little more than a few percentage points. Thus tariffs on China alone will, with the best will in the world, create remarkably few American jobs. Moreover such jobs would be labor-intensive and therefore fundamentally unsuitable for a high-wage economy. In any case it is highly debatable whether such jobs would be created in the first instance: the point is that even if Trump succeeded in imposing massive tariffs on Chinese goods, Apple would presumably retain the right to move the work to other cheap-labor nations such as Vietnam, India, Mexico, and Brazil.

The real challenge for the United States is to create jobs in advanced manufacturing. In the electronics industry that means focusing on components, materials, production machinery, and other so-called producers’ goods. Such goods typically entail production systems that are both highly capital-intensive and knowhow-intensive. The knowhow, moreover, is of a special, quite rarefied kind in that it resides not in the minds of ordinary production workers but rather consists typically of machine settings known only to a few top engineers. Getting high-tech production machinery to achieve high yields of saleable products is a bit like tuning a piano, only much more daunting. Knowhow is acquired through years if not decades of trial-and-error and learning-by-doing, and is closely held by any company that has acquired it.

Precisely for these reasons, the entry barriers in the sort of industries that Trump might want the United States to stage a comeback in are supremely high. By the same token incumbent companies are well shielded from new competition. Deploying capital-intensive production techniques, they can well afford to pay high wages and still dominate world markets.

Japan provides many impressive examples. Take, for instance, such an important material as semiconductor-grade silicon. Each new generation of microchip requires a quantum leap in the purity of silicon wafers. Otherwise, given the degree to which circuitry has to be miniaturized, even just one atom out of place can short-circuit a chip. In the old days Monsanto provided the United States with an ample supply of home-grown silicon. But Monsanto could not keep up and dropped out as far back as the 1980s. The only other non-Japanese supplier, Wacker Chemie of Germany, soon followed. The result is that today just two Japanese companies, Shinetsu and Sumco, enjoy a quiet but crucial global duopoly in this most important of all high-tech materials.

It is not hard to think of reasons why Hillary Clinton should not be President. Yesterday Wikileaks founder Julian Assange cited one of the best: Libya.

In an interview with John Pilger, a noted Australian-born documentary maker and veteran critic of American military adventurism, he commented: “Libya more that anyone else’s war was Hillary Clinton’s war. Barack Obama initially opposed it. Who was the person who was championing it? Hillary Clinton. That’s documented throughout her emails. There’s more than 1,700 emails out of the 33,000 of Hillary Clinton’s emails we published just about Libya.

“She perceived the removal of Gaddafi and the overthrow of the Libyan state as something that she would use to run in the general election for president. So late 2011, there’s an internal document called the ‘Libya Tick Tock’ that is produced for Hillary Clinton, and… it’s a chronological description of how Hillary Clinton was the central figure in the destruction of the Libyan state.”

Things did not quite follow the script, however. For a start, U.S. ambassador Christopher Stevens and several other U.S. citizens were massacred when U.S. facilities in Benghazi were ransacked. The attacks were facilitated by security lapses for which Clinton was forced to take responsibility.

Observing that Libya remains to this day ravaged by civil war, Assange added: “As a result, there [have been] around 40,000 deaths within Libya. Jihadists moved in, ISIS moved in. That led to the European refugee and migrant crisis, because not only did you have people fleeing Libya, people then fleeing Syria, destabilization of other African countries as a result of arms flows.”

The interview, which was made in association with London-based Dartmouth Films and broadcast by RT, ranged widely over Clinton’s vulnerabilities. It can be viewed here.

According to the London Sunday Express, Prime Minister Theresa May’s delegation to the G20 summit in Hangzhou was offered some ripe sartorial advice. Said one British participant: “We have been told that if you feel uncomfortable about people seeing you naked, you should change under your bedclothes.”

Surveillance is everywhere in the sort of top hotels favored by foreign dignitaries in China. Indeed Chinese spooks now deploy some of the world’s most microscopically miniaturized cameras and bugs. They are also, as the British delegation has been warned, particularly aggressive and effective in the use of such traditional spy-craft techniques as honey traps. Significantly several British reports recently have described the unhappy experience of a British official who accompanied Prime Minister Gordon Brown to China in 2008. He was waylaid by a particularly beautiful young woman and slipped a Mickey Finn. Eventually waking with a world-class hangover, he discovered he was missing his Blackberry and much of the contents of his briefcase.

The Sunday Express account – headlined “The spies in Theresa May’s bedroom: Prime Minister warned over Chinese snoopers at G20” – can be read here. For another good account , click here.

For those of us who know East Asia (I covered the region from a base in Tokyo for 27 years), the interesting thing is not so much that, in their blackmail efforts, Chinese spooks now deploy no-holds-barred stratagems. Rather it is that Western intelligence agencies haven’t long ago raise the alarm.

After all, blackmail has always been a routine lever of power throughout the region. Sexual blackmail generally works on Westerners.

Other forms of blackmail are also possible. As I have recounted in several books, the standard form used by East Asian governments on their own people is a technique best described as selective enforcement. Regulations are written strictly but — in most cases — are enforced laxly. Officials, however, reserve the right to tighten up enforcement on anyone who displeases them. The classic manifestation of selective enforcement is in tax policy. For a rising businessman, it is understood that certain forms of tax evasion are fair game and are rarely if ever challenged. Indeed if a businessman wants to keep up with the competition, it is imperative to take full advantage of evasion opportunities. But if, having grown wealthy, he decided to use his money to promote a cause considered undesirable by top officials — say, the promotion of genuine Western-style democracy — retribution would be fast and effective. All the authorities need do is take a closer look at his tax books. A stiff jail term would soon follow.

There is no way of knowing the full extent to which Western influence in East Asia has been frustrated by blackmail and similar dirty tricks. What we do know is that both Western corporations and Western governmental institutions have a long and ostensibly mysterious history of spinelessness in the region.

Perhaps the most interesting aspect of this story is its London provenance. Why haven’t we had similarly frank warnings from Washington? At a guess, several factors are involved, but one surely is American-style political correctness. British officials have far fewer inhibitions about criticizing the less salubrious aspects of Chinese political culture.

From reading between the lines, it would appear that the decision to plant this story may have come from Theresa May herself. If so, it is another indication that she is demonstrating a new streak of pluck in facing down East Asian pressures. What we do know is that she has already slammed the brakes on a proposed nuclear power deal with China that seemed likely to compromise British national security.

All in all, May seems to be a considerable improvement on her too-clever-by-half predecessor David Cameron. In fact it may not be overstating it to suggest that she may be a new Iron Lady in the making – and, in contrast with the late-phase Margaret Thatcher, an Iron Lady whose feet seem likely to remain planted firmly on the ground.

Is Donald Trump really as stupid as the press seems to think? And if not, how do we explain the press’s version of countless Trumpian controversies lately?

Take, for instance, the Kovaleski affair. According to a recent Bloomberg survey, no controversy has proven more costly to Trump.

The episode began when, in substantiating his erstwhile widely ridiculed allegation that Arabs in New Jersey had publicly celebrated the Twin Towers attacks, Trump unearthed a 2001 newspaper account in which law enforcement authorities were stated to have detained “a number of people who were allegedly seen celebrating the attacks and holding tailgate-style parties on rooftops while they watched the devastation on the other side of the river.” This seemed to settle the matter. But the report’s author, Serge Kovaleski, demurred. Trump’s talk of “thousands” of Arabs, he alleged, was an exaggeration.

Trump fired back. Flailing his arms wildly in an impersonation of an embarrassed, backtracking reporter, he implied that Kovaleski had bowed to political correctness.

So far, so normal for this election cycle. But it turned out that Kovaleski is no ordinary Trump-dissing media liberal. He suffers from arthrogryposis, a malady in which the joints are malformed.

For Trump’s critics, this was manna from heaven. Instead of merely accusing the New York real estate magnate of exaggerating a minor, if disturbing, sideshow in U.S.-Arab relations, they could now arraign him on the vastly more damaging charge of mocking a disabled person.

Trump pleaded that he hadn’t known Kovaleski was handicapped. This was undermined, however, when it emerged that in the 1980s the two had not only met but Kovaleski had even interviewed Trump in Trump Tower. Trump was reduced to pleading a fading memory, something that those of us of a certain age can sympathize with, but, of course, it didn’t wash with Trump’s accusers.

In responding directly to the charge of mocking a disabled person, Trump commented: “I would never do that. Number one, I have a good heart; number two, I’m a smart person.” Setting aside point one (although to the press’s chagrin, many of Trump’s acquaintances have testified that a streak of considerable private generosity underlies his tough-guy public image), it is hard to see how anyone can question point two. Even if he really is the sort of unspeakable buffoon who might mock someone’s disability, he surely has enough political smarts to know that there is no profit in doing so in a public forum.

There has to be something else here, and, as we will see, there is. Key details have been swept under the rug. We will get to them in a moment but first let’s review the wider context. Candidate Trump’s weaknesses are well-known. He is unusually thin-skinned and can readily be lured into tilting at windmills. His reality-television persona is sometimes remarkably abrasive. His penchant for speaking off-the-cuff has resulted in a series of exaggerations and outright gaffes.

All that said, if he ends up losing in November, it will probably be less because of his own shortcomings than the amazing lengths to which the press has gone in misrepresenting him – painting him by turns weird, erratic, and downright sinister.

What is not in doubt is that if the election were to revolve around fundamental policy proposals (what an innovation!), it would be Trump’s to lose. As Patrick Buchanan has observed, “on the mega-issue, America’s desire for change, and on specific issues, Trump holds something close to a full house.”

On out-of-control immigration and gratuitously counterproductive foreign military adventures, he has seriously wrong-footed Hillary Clinton. He has moreover made remarkable progress in focusing attention on America’s trade disaster. Thanks in large measure to his plain talk, the Clintons have finally been forced into ignominious retreat on their previous commitment to blue-sky globalism. For more on Hillary Clinton’s trade woes, click here.

Trump’s hawkish stance not only packs wide popular appeal but, as I know from more than two decades covering the global economy from a vantage point in Tokyo, it addresses disastrous American policy-making misconceptions going back generations.

The standard Adam Smith/David Ricardo case for free trade, long considered holy writ in Washington, has in the last half century become ludicrously anachronistic.

Smith based his intellectual edifice on the rather pedestrian observation that rainy England was good at raising sheep, while sunny Portugal excelled in growing grapes. What could be more reasonable than for England to trade its wool for Portugal’s wine? But, while Smith’s case is a charming insight into eighteenth century simplicities, the fact is that climate-based agricultural endowments have long since ceased to play a decisive role in First World trade. Today the key factor is advanced manufacturing. By comparison, not only is agriculture a negligible force but, as I documented in a book some years ago, even such advanced service industries as computer software are disappointing exporters.

For nations intent on improving their manufacturing prowess (and, by extension, their standing in the world incomes league table), a key gambit is to manipulate the global trading system. Japan and Germany were the early leaders in intelligent mercantilism but in recent years the most consequential exemplar has been China.

In theory China should be a great market for, for instance, the U.S. auto industry – and it is, sort of. The Detroit companies have been told that while their American-made products are not welcome, they can still make money in China provided only they manufacture there AND bring their most advanced production know-how.

While such an arrangement may promise good short-term profits (nicely fattening up those notorious executive stock options), the trade-deficit-plagued American economy is immediately deprived of badly needed exports. Meanwhile the long-term implications are devastating. In industry after industry, leading American corporations have been induced not only to move jobs to China but to transfer their most advanced production technology. In many cases moreover, almost as soon as a U.S. company has transferred its production secrets to a Chinese subsidiary, these “migrate” to rising Chinese competitors. Precisely the sort of competitively crucial technology that in an earlier era ensured that American workers were not only by far the world’s most productive but the world’s best paid have been served up on a silver salver to America’s most formidable power rival.

Corporate America’s Chinese subsidiaries moreover are expected almost from the get-go to export. In the early days they sell mainly to Africa and Southern Asia but then, as they approach state-of-the-art quality control, they come under increasing pressure to export even to the United States – with all that that implies for the job security of the very American workers and engineers who developed the advanced production know-how in the first place.

Almost alone in corporate America, the Detroit companies have hitherto baulked at shipping their Chinese-made products back to the United States but their resolve is weakening. Already General Motors has announced that later this year it will begin selling Chinese-made Buicks in the American, European, and Canadian markets. It is the thin end of what may prove to be a very large wedge.