So, yuan to fight about it?
Joel P. Trachtman, Vox EU, April 30, 2010
Does the US have a legal case against China's exchange-rate regime?
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Friday, April 30, 2010
Is an undervalued renmimbi the source of global imbalances?
Is an undervalued renmimbi the source of global imbalances?
Charles Wyplosz, Vox EU, April 30, 2010
The current debate in the US over Chinese exchange-rate policy can be viewed as a rerun of the 1970s and '80s, with China taking Japan's role.
http://www.voxeu.org/index.php?q=node/4866
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=580&gopid=1106033&#entry1106033
Charles Wyplosz, Vox EU, April 30, 2010
The current debate in the US over Chinese exchange-rate policy can be viewed as a rerun of the 1970s and '80s, with China taking Japan's role.
http://www.voxeu.org/index.php?q=node/4866
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=580&gopid=1106033&#entry1106033
China breaks the Himalayan barrier
China breaks the Himalayan barrier
from Asia Times Online :: Asian news hub providing the latest news and ...
China has ascended to become South Asia's leading interlocutor on regional cooperation, as events at a summit in Bhutan this week show, and may make India look an ineffectual power in its own backyard. The countdown has begun for a point when China leapfrogs India in terms of substantive cooperation, a jump Beijing has already made on Japan and the United States in Southeast Asia. - M K Bhadrakumar (Apr 30, '10)
from Asia Times Online :: Asian news hub providing the latest news and ...
China has ascended to become South Asia's leading interlocutor on regional cooperation, as events at a summit in Bhutan this week show, and may make India look an ineffectual power in its own backyard. The countdown has begun for a point when China leapfrogs India in terms of substantive cooperation, a jump Beijing has already made on Japan and the United States in Southeast Asia. - M K Bhadrakumar (Apr 30, '10)
U.S. Goes Low-Tech On China Exports
http://blogs.cfr.org/geographics/2010/04/22/china-exports/
U.S. Goes Low-Tech On China Exports
posted on Thursday, April 22, 2010
by the Center for Geoeconomic Studies
Over the past decade, trade between the United States and China has grown dramatically while also becoming significantly more imbalanced. The United States ran a bilateral trade deficit with China of over $225 billion in 2009, compared with a $69 billion deficit in 1999. One factor contributing to this imbalance is U.S. export controls on certain high-tech products deemed important for national security. As illustrated in the chart above, the United States now exports to China relatively less machinery and relatively more crude materials, such as scrap metal, than it did a decade ago. China's president Hu Jintao has urged the United States to relax technology export controls for years. The Obama administration is starting to push to do just that, in line with its goal of doubling exports in five years. U.S. Secretary of Defense Robert Gates has bluntly observed that "America's decades-old, bureaucratically labyrinthine [export control] system does not serve our 21st-century security needs or our economic interest."
Department of Commerce: 2010 Report On Foreign Policy-Based Export Controls
Milken Institute: Jobs For America-Modernizing Export Controls
Dreazen, Pasztor: Plan Would Revamp Export Controls
Reuters: Hu Says China Will Stick To Its Own Yuan Path
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=580&gopid=1105812&#entry1105812
U.S. Goes Low-Tech On China Exports
posted on Thursday, April 22, 2010
by the Center for Geoeconomic Studies
Over the past decade, trade between the United States and China has grown dramatically while also becoming significantly more imbalanced. The United States ran a bilateral trade deficit with China of over $225 billion in 2009, compared with a $69 billion deficit in 1999. One factor contributing to this imbalance is U.S. export controls on certain high-tech products deemed important for national security. As illustrated in the chart above, the United States now exports to China relatively less machinery and relatively more crude materials, such as scrap metal, than it did a decade ago. China's president Hu Jintao has urged the United States to relax technology export controls for years. The Obama administration is starting to push to do just that, in line with its goal of doubling exports in five years. U.S. Secretary of Defense Robert Gates has bluntly observed that "America's decades-old, bureaucratically labyrinthine [export control] system does not serve our 21st-century security needs or our economic interest."
Department of Commerce: 2010 Report On Foreign Policy-Based Export Controls
Milken Institute: Jobs For America-Modernizing Export Controls
Dreazen, Pasztor: Plan Would Revamp Export Controls
Reuters: Hu Says China Will Stick To Its Own Yuan Path
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=580&gopid=1105812&#entry1105812
Thursday, April 29, 2010
China's grand strategy from Shadow Government by Daniel Blumenthal
China's grand strategy
from Shadow Government by Daniel Blumenthal
Robert Kaplan has written an excellent, thought-provoking piece in Foreign Affairs. He argues that China's insatiable demand for energy and natural resources is driving its strategic policy, as it expands its military reach and influence both on continental as well as in maritime Asia. It is not that China has a master plan for world domination, rather, like all rising powers, (nineteenth-century America included) the logic of its growth requires it to play a greater international role.
To its west China is strengthening its grip on Xinjiang and Tibet. Soon it will complete two major pipelines extending from Central Asia to Xinjiang. In Tibet it is building roads and railroads to extract resources, pacify the restive population, and keep it out of Indian hands. China is marching southward as well, as it increases control over Burma, which may provide Beijing with a port and maritime access to the Bay of Bengal. And it is trying, as Kaplan says, to "divide and conquer" other ASEAN states, who, in response to American inattention, are beginning to team up in opposition to China's influence. According to Kaplan, Beijing's main objective on the Korean peninsula is to help North Korea develop into a more "modern authoritarian" state, so that it remains a buffer against U.S.-allied South Korea. Even so, Kaplan writes, China would not necessarily be opposed to a unified Korea that, for economic reasons, would be a part of "Greater China's" sphere, and eventually lead to the removal of American troops from South Korea.
[[BREAK]]
According to Kaplan, as China looks to the seas along its eastern seaboard, it feels contained. South Korea, Japan, Taiwan, the Philippines, Indonesia, and Australia are all, to varying degrees, U.S. allies unwilling to acquiesce in a Chinese breakout into the Pacific Ocean. China is trying to get out of this box by building up its submarine fleet and conventional cruise and ballistic missile force. In the end, according to Kaplan, Taiwan is the key to China's naval breakout. Control of Taiwan would allow China to project power beyond the "first island" chain.
To its south, China strives for control of the South China Sea, both because it is a gateway to the Indian Ocean and because it is rich in natural resources. To that end, China has built a major naval base on Hainan Island in the South China Sea. Hainan Island could allow the Chinese navy unimpeded access to the seas' major chokepoints.
While Kaplan's assessment of China's geostrategy sounds about right to me, it has also done its job in provoking some thoughts. I will offer three thoughts:
First, I do not agree that China can accomplish its continental consolidation through demographic efforts -- populating Tibet, Xinjiang, the Russian Far East -- or commercial relations alone. To do what Kaplan argues Beijing is trying -- consolidate its land borders, extend its reach in Central Asia and Burma and Korea -- China will also need to develop expeditionary land forces. Why? To respond to terrorist attacks, to prepare for a possible border war with India, and to advance its goals on the Korean peninsula in case of collapse and chaos in the North.
Second, Kaplan seems to endorse the "Garret plan" that is making its way around the Pentagon, a plan which, in the context of America's regional political objectives, seems wrongheaded. The basic idea is to "do away with master bases" in Japan and South Korea and instead strengthen the U.S. presence in Oceania -- on Guam and the Caroline, Northern Mariana, Solomon, and Marshal islands -- while at the same time vastly expanding America's naval presence in the Indian Ocean. This strategy would require Washington to upgrade defense relations with India-to use some of its outer islands-well as with Brunei, Malaysia, and Singapore. The U.S. navy would still cooperate with the Japanese maritime self-defense force as well. This plan, according to Kaplan, would be less provocative to China while at the same time still allow the United States to play something more than the role of offshore balancer.
There are a number of problems with this plan. It is not clear that some of the countries that we would need for the plan to work would cooperate, especially after we pulled out of Japan and South Korea. A withdrawal from the "master bases" would be seen as a waning U.S. commitment to its allies. And, while it is true that the "first island chain" is becoming less defensible, it is not too late to take prudent steps to reverse this dangerous trend. We have not yet hardened air bases in Japan, stepped up efforts at missile defense, or sought better options for countering China's missile force (How about the deployment by Japan of cruise and ballistic missiles along the Ryukus to target Chinese launchers?).
Third, Kaplan's emphasis on the importance of Taiwan for geostrategy, rather than for geopolitics, is debatable. Taiwan would provide China with modern ports and China could extend its maritime surveillance capabilities. But unless we develop adequate defenses, China's missiles forces will render U.S. military activity in the first island chain too costly whether China possesses Taiwan or not.
While Mahanians in and out of China would argue that acquiring more territory would extend China's maritime reach, analysts focused on China's missile forces would disagree. With better precision guided capability and longer ranges, China missile force may, over time, give the People's Liberation Army air superiority over the first island chain, as well as allow it to target any surface ship approaching China from the Western Pacific. We still could take steps (hardening bases, seeking new bases, deploying better missile defenses, investing in more submarines and stealthy long range fighter-aircraft and bombers) that would make operations in the first island chain less risky, but if current trends continue, China will not need Taiwan to project power into the Pacific.
From a geostrategic perspective, Taiwan would only be important if we decided to use it to counter China's missile or submarine force. But we are not doing that now nor are we likely to in the future. Since we are decidedly not using Taiwan as our "unsinkable aircraft carrier," China does not need to consider it a barrier to its current military planning. Taiwan's geographic importance to China may be overstated.
That brings me back to broad U.S. objectives. Taiwan's importance is the same as the importance of our Japanese, South Korean, and Philippine allies -- more geopolitical than geostrategic. These countries have embraced the international system that the United States created and defended after World War II. They are democratic states with free market economies that all want to be part of what used to be called the "West," the worldwide club of modern, advanced industrial democracies. Washington's interests are better served when economically vibrant democracies are free from the control of other great powers - this better ensures that the international system remains hospitable to us.
In my opinion, for geopolitical as well as geostrategic reasons, the United States military should maintain a (more defendable) presence on the territory of as many U.S. Asian allies as welcome it, at least until all can be assured that China will be a responsible and democratic great power, uninterested in creating its own exclusive economic or military spheres. That means we need to work harder to help our allies build capabilities that help frustrate China's military plans rather than pulling back and relying mostly on offshore bases.
from Shadow Government by Daniel Blumenthal
Robert Kaplan has written an excellent, thought-provoking piece in Foreign Affairs. He argues that China's insatiable demand for energy and natural resources is driving its strategic policy, as it expands its military reach and influence both on continental as well as in maritime Asia. It is not that China has a master plan for world domination, rather, like all rising powers, (nineteenth-century America included) the logic of its growth requires it to play a greater international role.
To its west China is strengthening its grip on Xinjiang and Tibet. Soon it will complete two major pipelines extending from Central Asia to Xinjiang. In Tibet it is building roads and railroads to extract resources, pacify the restive population, and keep it out of Indian hands. China is marching southward as well, as it increases control over Burma, which may provide Beijing with a port and maritime access to the Bay of Bengal. And it is trying, as Kaplan says, to "divide and conquer" other ASEAN states, who, in response to American inattention, are beginning to team up in opposition to China's influence. According to Kaplan, Beijing's main objective on the Korean peninsula is to help North Korea develop into a more "modern authoritarian" state, so that it remains a buffer against U.S.-allied South Korea. Even so, Kaplan writes, China would not necessarily be opposed to a unified Korea that, for economic reasons, would be a part of "Greater China's" sphere, and eventually lead to the removal of American troops from South Korea.
[[BREAK]]
According to Kaplan, as China looks to the seas along its eastern seaboard, it feels contained. South Korea, Japan, Taiwan, the Philippines, Indonesia, and Australia are all, to varying degrees, U.S. allies unwilling to acquiesce in a Chinese breakout into the Pacific Ocean. China is trying to get out of this box by building up its submarine fleet and conventional cruise and ballistic missile force. In the end, according to Kaplan, Taiwan is the key to China's naval breakout. Control of Taiwan would allow China to project power beyond the "first island" chain.
To its south, China strives for control of the South China Sea, both because it is a gateway to the Indian Ocean and because it is rich in natural resources. To that end, China has built a major naval base on Hainan Island in the South China Sea. Hainan Island could allow the Chinese navy unimpeded access to the seas' major chokepoints.
While Kaplan's assessment of China's geostrategy sounds about right to me, it has also done its job in provoking some thoughts. I will offer three thoughts:
First, I do not agree that China can accomplish its continental consolidation through demographic efforts -- populating Tibet, Xinjiang, the Russian Far East -- or commercial relations alone. To do what Kaplan argues Beijing is trying -- consolidate its land borders, extend its reach in Central Asia and Burma and Korea -- China will also need to develop expeditionary land forces. Why? To respond to terrorist attacks, to prepare for a possible border war with India, and to advance its goals on the Korean peninsula in case of collapse and chaos in the North.
Second, Kaplan seems to endorse the "Garret plan" that is making its way around the Pentagon, a plan which, in the context of America's regional political objectives, seems wrongheaded. The basic idea is to "do away with master bases" in Japan and South Korea and instead strengthen the U.S. presence in Oceania -- on Guam and the Caroline, Northern Mariana, Solomon, and Marshal islands -- while at the same time vastly expanding America's naval presence in the Indian Ocean. This strategy would require Washington to upgrade defense relations with India-to use some of its outer islands-well as with Brunei, Malaysia, and Singapore. The U.S. navy would still cooperate with the Japanese maritime self-defense force as well. This plan, according to Kaplan, would be less provocative to China while at the same time still allow the United States to play something more than the role of offshore balancer.
There are a number of problems with this plan. It is not clear that some of the countries that we would need for the plan to work would cooperate, especially after we pulled out of Japan and South Korea. A withdrawal from the "master bases" would be seen as a waning U.S. commitment to its allies. And, while it is true that the "first island chain" is becoming less defensible, it is not too late to take prudent steps to reverse this dangerous trend. We have not yet hardened air bases in Japan, stepped up efforts at missile defense, or sought better options for countering China's missile force (How about the deployment by Japan of cruise and ballistic missiles along the Ryukus to target Chinese launchers?).
Third, Kaplan's emphasis on the importance of Taiwan for geostrategy, rather than for geopolitics, is debatable. Taiwan would provide China with modern ports and China could extend its maritime surveillance capabilities. But unless we develop adequate defenses, China's missiles forces will render U.S. military activity in the first island chain too costly whether China possesses Taiwan or not.
While Mahanians in and out of China would argue that acquiring more territory would extend China's maritime reach, analysts focused on China's missile forces would disagree. With better precision guided capability and longer ranges, China missile force may, over time, give the People's Liberation Army air superiority over the first island chain, as well as allow it to target any surface ship approaching China from the Western Pacific. We still could take steps (hardening bases, seeking new bases, deploying better missile defenses, investing in more submarines and stealthy long range fighter-aircraft and bombers) that would make operations in the first island chain less risky, but if current trends continue, China will not need Taiwan to project power into the Pacific.
From a geostrategic perspective, Taiwan would only be important if we decided to use it to counter China's missile or submarine force. But we are not doing that now nor are we likely to in the future. Since we are decidedly not using Taiwan as our "unsinkable aircraft carrier," China does not need to consider it a barrier to its current military planning. Taiwan's geographic importance to China may be overstated.
That brings me back to broad U.S. objectives. Taiwan's importance is the same as the importance of our Japanese, South Korean, and Philippine allies -- more geopolitical than geostrategic. These countries have embraced the international system that the United States created and defended after World War II. They are democratic states with free market economies that all want to be part of what used to be called the "West," the worldwide club of modern, advanced industrial democracies. Washington's interests are better served when economically vibrant democracies are free from the control of other great powers - this better ensures that the international system remains hospitable to us.
In my opinion, for geopolitical as well as geostrategic reasons, the United States military should maintain a (more defendable) presence on the territory of as many U.S. Asian allies as welcome it, at least until all can be assured that China will be a responsible and democratic great power, uninterested in creating its own exclusive economic or military spheres. That means we need to work harder to help our allies build capabilities that help frustrate China's military plans rather than pulling back and relying mostly on offshore bases.
The RMB and the magic of accounting identities by Michael Pettis, China Financial
The RMB and the magic of accounting identities by Michael Pettis, China Financial Markets, April 29, 2010In the end, large trade deficits are not politically compatible with high unemployment, and in my opinion things only will get worse on both fronts.
http://mpettis.com/2010/04/the-rmb-and-the...ing-identities/
http://mpettis.com/2010/04/the-rmb-and-the...ing-identities/
Wednesday, April 28, 2010
China's African Land Grab Doug Saunders, Globe and Mail
China's African Land Grab
Doug Saunders, Globe and Mail
In the fertile lands south of the Sahara, the huge green apparitions have become an increasingly familiar sight. After crossing the long stretches of the dun-coloured wasteland and the tiny, emaciated peasant plots that make up much of Africa’s countryside, you’re suddenly confronted with a huge expanse of green, robust crops doused in modern irrigation, worked with tractors and scattered with scores of field workers.
Doug Saunders, Globe and Mail
In the fertile lands south of the Sahara, the huge green apparitions have become an increasingly familiar sight. After crossing the long stretches of the dun-coloured wasteland and the tiny, emaciated peasant plots that make up much of Africa’s countryside, you’re suddenly confronted with a huge expanse of green, robust crops doused in modern irrigation, worked with tractors and scattered with scores of field workers.
China Returns to the Persian Gulf Ben Simpfendorfer, Foreign Policy
China Returns to the Persian Gulf
Ben Simpfendorfer, Foreign Policy
Two Chinese naval warships visited the UAE last week. The warships were refueling and taking on supplies after six months at sea protecting sea lanes from Somali pirates. The visit attracted little attention. But it was the first by the Chinese navy to the Gulf in modern history and, as such, set an important precedent for China's military engagement with the region -- and raises intriguiging questions about the future of the Persian Gulf as an American lake.
Historians will be tempted to draw comparisons with Admiral Zheng He and his visit to the Gulf in the 1400s at the head of a flotilla of treasures ships. Yet, there are important differences. Then, a wealthy and powerful Chinese state was attempting to shock and awe its neighbors. Today's China has far greater...
Read Full Article
Ben Simpfendorfer, Foreign Policy
Two Chinese naval warships visited the UAE last week. The warships were refueling and taking on supplies after six months at sea protecting sea lanes from Somali pirates. The visit attracted little attention. But it was the first by the Chinese navy to the Gulf in modern history and, as such, set an important precedent for China's military engagement with the region -- and raises intriguiging questions about the future of the Persian Gulf as an American lake.
Historians will be tempted to draw comparisons with Admiral Zheng He and his visit to the Gulf in the 1400s at the head of a flotilla of treasures ships. Yet, there are important differences. Then, a wealthy and powerful Chinese state was attempting to shock and awe its neighbors. Today's China has far greater...
Read Full Article
Monday, April 26, 2010
Chinese Oil Companies Expanding Collaboration on Major Projects from SeekingAlpha.com by Research Recap
Chinese Oil Companies Expanding Collaboration on Major Projects
from SeekingAlpha.com by Research Recap
Research Recap submits:
The last ten months have seen decisive moves by China’s National Oil Companies to join with International Oil Companies (IOCs) in major projects and to engage in wider collaboration both overseas and within China. Oxford Analytica examines China’s major change of tack in this guest post.
When China became a net importer of oil in 1993, its national oil companies (NOCs) embarked on a massive program of investment in overseas oil resources. As the country now imports gas as well, these companies also invest in international gas projects. By early 2010, after 18 years of investment, Chinese NOCs have a stake in more than 200 projects in about 50 countries. The total value of these projects is estimated to exceed 50 billion dollars.
Complete Story »
from SeekingAlpha.com by Research Recap
Research Recap submits:
The last ten months have seen decisive moves by China’s National Oil Companies to join with International Oil Companies (IOCs) in major projects and to engage in wider collaboration both overseas and within China. Oxford Analytica examines China’s major change of tack in this guest post.
When China became a net importer of oil in 1993, its national oil companies (NOCs) embarked on a massive program of investment in overseas oil resources. As the country now imports gas as well, these companies also invest in international gas projects. By early 2010, after 18 years of investment, Chinese NOCs have a stake in more than 200 projects in about 50 countries. The total value of these projects is estimated to exceed 50 billion dollars.
Complete Story »
China Biotech Week in Review: Focus on Innovation
China Biotech Week in Review: Focus on Innovation
from SeekingAlpha.com: Home Page by ChinaBio Today
chinabiotodaynewlogo ChinaBio Today submits:
On Friday, the SEED Life Sciences Business Plan Competition chose Dr. Yuqiang Wang from Guangzhou Jinan University College of Pharmacy as its first winner (see story). Dr. Josen Ma, from Pharminova Bio-tech Co. Ltd. and Dr. Bai Xu from Suzhou Natong Bionanotechnology Co. Ltd. were named as the runners-up. The SEED competition was organized by Roche, OrbiMed, and McKinsey. The event was hosted by the ChinaBio Accelerator in Zhangjiang Hi-Tech Park, Shanghai.
Sanofi-Aventis (NYSE: SNY) has established a regional R&D center in Shanghai (see story) to develop and manage partnerships with China biopharmas. Unlike many of its big pharma competitors, Sanofi-Aventis is not building a lab and hiring scores of scientists to work exclusively on S-A projects. The company says the plan will allow Sanofi-Aventis to take advantage of China’s innovative biopharma culture.
from SeekingAlpha.com: Home Page by ChinaBio Today
chinabiotodaynewlogo ChinaBio Today submits:
On Friday, the SEED Life Sciences Business Plan Competition chose Dr. Yuqiang Wang from Guangzhou Jinan University College of Pharmacy as its first winner (see story). Dr. Josen Ma, from Pharminova Bio-tech Co. Ltd. and Dr. Bai Xu from Suzhou Natong Bionanotechnology Co. Ltd. were named as the runners-up. The SEED competition was organized by Roche, OrbiMed, and McKinsey. The event was hosted by the ChinaBio Accelerator in Zhangjiang Hi-Tech Park, Shanghai.
Sanofi-Aventis (NYSE: SNY) has established a regional R&D center in Shanghai (see story) to develop and manage partnerships with China biopharmas. Unlike many of its big pharma competitors, Sanofi-Aventis is not building a lab and hiring scores of scientists to work exclusively on S-A projects. The company says the plan will allow Sanofi-Aventis to take advantage of China’s innovative biopharma culture.
China's new strategy from Stephen M. Walt
http://walt.foreignpolicy.com/posts/2010/04/25/chinas_new_strategy
China's new strategy
from Stephen M. Walt
For the past fifteen years or so, there's been a continuing debate on the likelihood of a serious rivalry between the United States and China. On one side are realists who believe that if China continues to increase its economic power, then significant security competition between the two countries is virtually inevitable. On the other side are those (mostly liberal) theorists who believe that the potential for trouble will be muted by economic interdependence and the socializing effects of China's growing participation in various international institutions. (This was Bill Clinton's rationale for getting China into the World Trade Organization, for example). And if China were to make a gradual transition to democracy, so the argument runs, then democratic peace theory will kick in and there's nothing to worry about.
On Saturday, the New York Times published an important story supporting the realist view. It described the rapid expansion of China's naval capabilities (a classic manifestation of great power status), as well as the more ambitious new strategy that this growing capacity is designed to serve. Briefly, as China's economic power and dependence on overseas raw materials (e.g., oil) has grown, it is seeking to acquire the ability to protect its access. In practice, China's new strategy of "far sea defense" means acquiring the ability to project naval power into key ocean areas (including the Indian Ocean and Persian Gulf), while denying other naval powers the ability to operate with impunity in areas close to China.
Needless to say, this is precisely what realism would predict, and some prominent realists (e.g., my co-author John Mearsheimer) have already explained the logic behind this prediction very clearly. And the one country that shouldn't be at all surprised is the United States, because China appears to be doing something akin to what we did during the latter part of the 19th century. To be specific: Beijing is seeking to build its economy, then expand its military capacity, achieve a position of regional dominance, and then exclude other major powers from its immediate neighborhood.
In the U.S. case, we expanded across North America ("Manifest Destiny") and other great powers to stay out of the Western hemisphere (the Monroe Doctrine). It took a long time before the United States was strong enough to enforce the latter idea, but eventually we could and we did. This position has been a huge strategic advantage ever since: not only is the United States the only great power that didn't have to worry about foreign invasion (because it had no great power rivals nearby), this position also allowed us to intervene all over the globe without having to devote much blood or treasure to defending our own shores.
If you were a Chinese strategist, wouldn't you like to be in similar position? Ideally, you'd like to be the strongest power in East Asia and you wouldn't want any other great powers (like the United States) to have a major strategic role there. Achieving that goal is not easy, however, because China has some strong neighbors (Japan, India, Vietnam, etc.) and many Asian states already have close security ties with the United States.
So here's what I'd expect to see over the next few decades. I'd expect China to speak softly (for the most part) while it builds a bigger stick. If they are smart, they won't throw their weight around too much lest they provoke more vigorous balancing behavior by their neighbors (and the United States). I would also expect them to continuing developing military capabilities designed to make it more dangerous for the United States to operate near China, and eventually build power projection capabilities that will complicate our operations in other areas that matter (like the Persian Gulf). At the same time, look for them to forge relations in some areas that have been traditional U.S. "spheres of interest," so that the United States has to devote more time and attention to these regions too. I'd expect them to play "divide-and-conquer" closer to home as well, and try to persuade some of their neighbors to distance themselves from Washington. Lastly, Beijing would dearly love to keep the United States bogged down in places like Afghanistan, distracted by disputes over Iran's nuclear program, and stymied by the interminable Israeli-Palestinian conflict, while they exploit the anti-American sentiments that these problems exacerbate and stay focused on the bigger picture. So don't expect a lot of help from them on those fronts.
There are at least three caveats worth noting in this otherwise gloomy picture. First, as the Times article makes clear, China remains much weaker than the United States today, and it has a long way to go before it becomes a true "peer competitor." So there's no need for panic, just a timely and prudent response. The good news (such as it is) is that China's rise should make it relatively easy for the United States to stay on good terms with its current Asian allies.
Second, Chinese economic growth is likely to slow in the years ahead, especially as its population ages and as its emerging middle class demands additional social benefits. This situation will force Beijing to make some hard choices about domestic and international priorities and may limit the speed with which economic might is translated into military power and overseas presence.
Third, and most important, nothing I've said above implies that open war between the United States and China is inevitable. Nuclear deterrence is likely to keep the competition within bounds, and prudent and sensible diplomacy may be able to defuse or limit potential clashes of interest. Nonetheless, if China continues on the course laid out here, you should expect significant security competition between Washington and Beijing in the decades ahead. To expect anything else is . . . well . . . unrealistic.
China's new strategy
from Stephen M. Walt
For the past fifteen years or so, there's been a continuing debate on the likelihood of a serious rivalry between the United States and China. On one side are realists who believe that if China continues to increase its economic power, then significant security competition between the two countries is virtually inevitable. On the other side are those (mostly liberal) theorists who believe that the potential for trouble will be muted by economic interdependence and the socializing effects of China's growing participation in various international institutions. (This was Bill Clinton's rationale for getting China into the World Trade Organization, for example). And if China were to make a gradual transition to democracy, so the argument runs, then democratic peace theory will kick in and there's nothing to worry about.
On Saturday, the New York Times published an important story supporting the realist view. It described the rapid expansion of China's naval capabilities (a classic manifestation of great power status), as well as the more ambitious new strategy that this growing capacity is designed to serve. Briefly, as China's economic power and dependence on overseas raw materials (e.g., oil) has grown, it is seeking to acquire the ability to protect its access. In practice, China's new strategy of "far sea defense" means acquiring the ability to project naval power into key ocean areas (including the Indian Ocean and Persian Gulf), while denying other naval powers the ability to operate with impunity in areas close to China.
Needless to say, this is precisely what realism would predict, and some prominent realists (e.g., my co-author John Mearsheimer) have already explained the logic behind this prediction very clearly. And the one country that shouldn't be at all surprised is the United States, because China appears to be doing something akin to what we did during the latter part of the 19th century. To be specific: Beijing is seeking to build its economy, then expand its military capacity, achieve a position of regional dominance, and then exclude other major powers from its immediate neighborhood.
In the U.S. case, we expanded across North America ("Manifest Destiny") and other great powers to stay out of the Western hemisphere (the Monroe Doctrine). It took a long time before the United States was strong enough to enforce the latter idea, but eventually we could and we did. This position has been a huge strategic advantage ever since: not only is the United States the only great power that didn't have to worry about foreign invasion (because it had no great power rivals nearby), this position also allowed us to intervene all over the globe without having to devote much blood or treasure to defending our own shores.
If you were a Chinese strategist, wouldn't you like to be in similar position? Ideally, you'd like to be the strongest power in East Asia and you wouldn't want any other great powers (like the United States) to have a major strategic role there. Achieving that goal is not easy, however, because China has some strong neighbors (Japan, India, Vietnam, etc.) and many Asian states already have close security ties with the United States.
So here's what I'd expect to see over the next few decades. I'd expect China to speak softly (for the most part) while it builds a bigger stick. If they are smart, they won't throw their weight around too much lest they provoke more vigorous balancing behavior by their neighbors (and the United States). I would also expect them to continuing developing military capabilities designed to make it more dangerous for the United States to operate near China, and eventually build power projection capabilities that will complicate our operations in other areas that matter (like the Persian Gulf). At the same time, look for them to forge relations in some areas that have been traditional U.S. "spheres of interest," so that the United States has to devote more time and attention to these regions too. I'd expect them to play "divide-and-conquer" closer to home as well, and try to persuade some of their neighbors to distance themselves from Washington. Lastly, Beijing would dearly love to keep the United States bogged down in places like Afghanistan, distracted by disputes over Iran's nuclear program, and stymied by the interminable Israeli-Palestinian conflict, while they exploit the anti-American sentiments that these problems exacerbate and stay focused on the bigger picture. So don't expect a lot of help from them on those fronts.
There are at least three caveats worth noting in this otherwise gloomy picture. First, as the Times article makes clear, China remains much weaker than the United States today, and it has a long way to go before it becomes a true "peer competitor." So there's no need for panic, just a timely and prudent response. The good news (such as it is) is that China's rise should make it relatively easy for the United States to stay on good terms with its current Asian allies.
Second, Chinese economic growth is likely to slow in the years ahead, especially as its population ages and as its emerging middle class demands additional social benefits. This situation will force Beijing to make some hard choices about domestic and international priorities and may limit the speed with which economic might is translated into military power and overseas presence.
Third, and most important, nothing I've said above implies that open war between the United States and China is inevitable. Nuclear deterrence is likely to keep the competition within bounds, and prudent and sensible diplomacy may be able to defuse or limit potential clashes of interest. Nonetheless, if China continues on the course laid out here, you should expect significant security competition between Washington and Beijing in the decades ahead. To expect anything else is . . . well . . . unrealistic.
CHINA WATCH Oil Rush
In which Art Pine encounters one of many straw dragons roaming Capitol Hill and slays it. (From today's CongressDaily.)
CHINA WATCH
Oil Rush
Monday, April 26, 2010
Conjure up an image of China these days, and chances are that it's one of a fast-growing,
energy-starved behemoth desperately trying to lock in supplies of oil and other key commodities
for decades to come.
Hardly a week goes by without news that Beijing has cut another deal with an oil-producing
country guaranteeing China access to that nation's oil fields or raw materials. Usually China has
agreed to provide loans, foreign aid, drilling rights or even military assistance -- often involving
weapons sales or training.adversaries -- Sudan, Myanmar and Iran. Last week, Venezuelan President Hugo Chavez said
China had promised to lend his oil-rich country $20 billion, helping to bolster his regime.
China's quest to lock in oil supplies -- as well as access to gas, iron ore, copper and other
commodities -- has caused a good bit of uneasiness in Washington. In 2005, when the China
National Offshore Oil Corp. tried to buy Unocal Corp., Congress protested so loudly that CNOOC
quietly bowed out.
Recently, however, Beijing has become less wary about annoying the United States in its quest
for oil. Last year, it pledged billions for investments in Iran's oil and gas infrastructure. (It's now
that country's second-largest oil customer.) And Chinese oil companies have been seizing new
opportunities no matter where they find them.
Strictly from an economic viewpoint, Beijing's resource-grabbing isn't much of a worry. Although
critics fret that China might eventually bottle up enough oil to starve the United States, "the
statistics don't bear that out," says Bo Kong, director of the Global Energy and Environment
Initiative at Johns Hopkins University in Washington.
China's total oil acquisitions around the globe account for less than 1 percent of worldwide
production, Kong says. Its overseas production totals about 1.1 million barrels a day -- less than
that of Exxon Mobil. And China's overseas producers ship only 60 percent of their production
back home. The rest goes on sale in international markets.
"So far, the scale of what China has been doing isn't anything to worry about," says Adam
Sieminski, who tracks oil markets for Deutsche Bank AG in New York.
China's appetite for oil and other resources is expected to grow sharply over the coming decades.
The International Energy Agency says China now imports 4 million barrels of oil a day, about 53
percent of its total oil consumption. By 2030 that will rise to 13 million barrels a day, or about 75
percent of its projected consumption.
But even that may not be the threat that some see, says Frank Verrastro, director of the energy
and national security program at the Center for Strategic and International Studies in Washington.
If China develops the oil fields that it has staked out in the Middle East and Africa, total global
supplies should increase, he says, "and that's not a bad outcome."
And Beijing is rapidly developing other energy sources, from shale oil extraction and nuclear
power to clean coal and liquefied natural gas. It's actually ahead of the United States in many of
these efforts, Verrastro argues. "Their energy needs are so enormous that they're looking at a
wide variety of solutions," he says.
The foreign policy implications of China's oil search are another story. It's true the money Beijing
is willing to lend to countries such as Iran, Sudan and Venezuela is likely to help prop up their
regimes -- to the detriment of U.S. interests -- but experts say that's not necessarily China's goal.
Greg Fager, chief Asia specialist at the Institute of International Finance in Washington,
speculates that much of the reason Beijing courts such unsavory oil centers is that they're easy
pickings. Western countries long ago locked in supplies from Saudi Arabia and other big
suppliers. China didn't begin importing oil until early 1993.
"Actually, in many ways the Chinese are acting pretty rationally in picking out these suppliers,"
Fager says. He predicts Beijing might change its strategy after it discovers that places such as
Sudan "may not prove to be the best investment." After they get burned, they might rely more on
the world oil market, he says. "They're still new players."
As for China's sweetening its bids for oil contracts with loans, military aid and economic subsidies
to oil-rich countries, the United States has regularly employed such practices to help lock up
Middle East petroleum supplies, and so have other Western countries. "They basically copied the
[West's] book," Kong says.
What to do about China's increasingly aggressive push to lock up future oil supplies is a more
difficult challenge. Kong argues that congressional opposition to CNOOC's proposed Unocal
purchase was pivotal in pushing China to seek supply guarantees in countries that Washington
doesn't like.
"It's clear that this was an incentive for CNOOC to expand elsewhere," Kong says.
Meanwhile, Verrastro points out that the United States can meet some of its increasing need for
petroleum by exploring more of its own oil fields. "It doesn't mean we have to go whole hog," he
says, "but it does look a little silly when we have the resources and we're not using them."
CHINA WATCH
Oil Rush
Monday, April 26, 2010
Conjure up an image of China these days, and chances are that it's one of a fast-growing,
energy-starved behemoth desperately trying to lock in supplies of oil and other key commodities
for decades to come.
Hardly a week goes by without news that Beijing has cut another deal with an oil-producing
country guaranteeing China access to that nation's oil fields or raw materials. Usually China has
agreed to provide loans, foreign aid, drilling rights or even military assistance -- often involving
weapons sales or training.adversaries -- Sudan, Myanmar and Iran. Last week, Venezuelan President Hugo Chavez said
China had promised to lend his oil-rich country $20 billion, helping to bolster his regime.
China's quest to lock in oil supplies -- as well as access to gas, iron ore, copper and other
commodities -- has caused a good bit of uneasiness in Washington. In 2005, when the China
National Offshore Oil Corp. tried to buy Unocal Corp., Congress protested so loudly that CNOOC
quietly bowed out.
Recently, however, Beijing has become less wary about annoying the United States in its quest
for oil. Last year, it pledged billions for investments in Iran's oil and gas infrastructure. (It's now
that country's second-largest oil customer.) And Chinese oil companies have been seizing new
opportunities no matter where they find them.
Strictly from an economic viewpoint, Beijing's resource-grabbing isn't much of a worry. Although
critics fret that China might eventually bottle up enough oil to starve the United States, "the
statistics don't bear that out," says Bo Kong, director of the Global Energy and Environment
Initiative at Johns Hopkins University in Washington.
China's total oil acquisitions around the globe account for less than 1 percent of worldwide
production, Kong says. Its overseas production totals about 1.1 million barrels a day -- less than
that of Exxon Mobil. And China's overseas producers ship only 60 percent of their production
back home. The rest goes on sale in international markets.
"So far, the scale of what China has been doing isn't anything to worry about," says Adam
Sieminski, who tracks oil markets for Deutsche Bank AG in New York.
China's appetite for oil and other resources is expected to grow sharply over the coming decades.
The International Energy Agency says China now imports 4 million barrels of oil a day, about 53
percent of its total oil consumption. By 2030 that will rise to 13 million barrels a day, or about 75
percent of its projected consumption.
But even that may not be the threat that some see, says Frank Verrastro, director of the energy
and national security program at the Center for Strategic and International Studies in Washington.
If China develops the oil fields that it has staked out in the Middle East and Africa, total global
supplies should increase, he says, "and that's not a bad outcome."
And Beijing is rapidly developing other energy sources, from shale oil extraction and nuclear
power to clean coal and liquefied natural gas. It's actually ahead of the United States in many of
these efforts, Verrastro argues. "Their energy needs are so enormous that they're looking at a
wide variety of solutions," he says.
The foreign policy implications of China's oil search are another story. It's true the money Beijing
is willing to lend to countries such as Iran, Sudan and Venezuela is likely to help prop up their
regimes -- to the detriment of U.S. interests -- but experts say that's not necessarily China's goal.
Greg Fager, chief Asia specialist at the Institute of International Finance in Washington,
speculates that much of the reason Beijing courts such unsavory oil centers is that they're easy
pickings. Western countries long ago locked in supplies from Saudi Arabia and other big
suppliers. China didn't begin importing oil until early 1993.
"Actually, in many ways the Chinese are acting pretty rationally in picking out these suppliers,"
Fager says. He predicts Beijing might change its strategy after it discovers that places such as
Sudan "may not prove to be the best investment." After they get burned, they might rely more on
the world oil market, he says. "They're still new players."
As for China's sweetening its bids for oil contracts with loans, military aid and economic subsidies
to oil-rich countries, the United States has regularly employed such practices to help lock up
Middle East petroleum supplies, and so have other Western countries. "They basically copied the
[West's] book," Kong says.
What to do about China's increasingly aggressive push to lock up future oil supplies is a more
difficult challenge. Kong argues that congressional opposition to CNOOC's proposed Unocal
purchase was pivotal in pushing China to seek supply guarantees in countries that Washington
doesn't like.
"It's clear that this was an incentive for CNOOC to expand elsewhere," Kong says.
Meanwhile, Verrastro points out that the United States can meet some of its increasing need for
petroleum by exploring more of its own oil fields. "It doesn't mean we have to go whole hog," he
says, "but it does look a little silly when we have the resources and we're not using them."
Thursday, April 22, 2010
China in Africa: The Next Empire - Howard French, The Atlantic
China in Africa: The Next Empire - Howard French, The Atlantic
http://www.theatlantic.com/magazine/archiv...ext-empire/8018
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1102060&#entry1102060
http://www.theatlantic.com/magazine/archiv...ext-empire/8018
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1102060&#entry1102060
Wednesday, April 21, 2010
China lifts lid on local spending
China lifts lid on local spending
Local governments in China are starting to make public their budgets and reveal how they spend their cash. The move towards more openness may pick up pace this autumn after revisions to the budget law, but entertaining officials is expected to remain the top spending item. - Kit Gillet
Local governments in China are starting to make public their budgets and reveal how they spend their cash. The move towards more openness may pick up pace this autumn after revisions to the budget law, but entertaining officials is expected to remain the top spending item. - Kit Gillet
Russia open for Asian nuclear sales
Russia open for
Asian nuclear sales
Russia is attracting more customers interested in buying its nuclear power technology. While some, such as India, have clear requirements, the needs of others, such as Vietnam, are less obvious. - Stephen Blank
http://www.atimes.com/atimes/Central_Asia/LD22Ag01.html
http://www.commongroundcommonsense.org/for...p;#entry1101475
Asian nuclear sales
Russia is attracting more customers interested in buying its nuclear power technology. While some, such as India, have clear requirements, the needs of others, such as Vietnam, are less obvious. - Stephen Blank
http://www.atimes.com/atimes/Central_Asia/LD22Ag01.html
http://www.commongroundcommonsense.org/for...p;#entry1101475
China's navy cruises into Pacific ascendancy
China's navy cruises into Pacific ascendancy
Aggressive Chinese war gaming near Okinawa has led to Japanese complaints, particularly after the Suzunami destroyer was buzzed by a Chinese navy helicopter operating from a fleet of warships and submarines. The Chinese exercise, which may have used five surveillance satellites, seems a clear statement of Beijing's intent in securing Taiwan and important lines of trade and communication. - Peter J Brown (Apr 21, '10)
http://www.atimes.com/atimes/China/LD22Ad01.html
http://www.commongroundcommonsense.org/for...p;#entry1101473
Aggressive Chinese war gaming near Okinawa has led to Japanese complaints, particularly after the Suzunami destroyer was buzzed by a Chinese navy helicopter operating from a fleet of warships and submarines. The Chinese exercise, which may have used five surveillance satellites, seems a clear statement of Beijing's intent in securing Taiwan and important lines of trade and communication. - Peter J Brown (Apr 21, '10)
http://www.atimes.com/atimes/China/LD22Ad01.html
http://www.commongroundcommonsense.org/for...p;#entry1101473
China is the key to unwinding global imbalancesArvind Subramanian, Financial Times,
China is the key to unwinding global imbalancesArvind Subramanian, Financial Times, April 20, 2010A new, more worrying set of global imbalances is now emerging and there is an urgent need for co-ordination among emerging economies on managing capital flows and exchange rates, writes Arvind Subramanian.
http://www.ft.com/cms/s/0/f4696136-4caa-11...html?ftcamp=rss
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1101431&#entry1101431
http://www.ft.com/cms/s/0/f4696136-4caa-11...html?ftcamp=rss
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1101431&#entry1101431
Tuesday, April 20, 2010
Chinese savings and the wealth effect
Chinese savings and the wealth effect
Michael Pettis, China Financial Markets, April 20, 2010
The positive relationship between the interest rate and savings rate makes it a little surprising...that in China and in certain other countries, especially those typically included as examples of the Asian development model, rising interest rates are often associated with higher, not lower, consumption.
http://mpettis.com/2010/04/chinese-savings-and-the-wealth-effect/
Michael Pettis, China Financial Markets, April 20, 2010
The positive relationship between the interest rate and savings rate makes it a little surprising...that in China and in certain other countries, especially those typically included as examples of the Asian development model, rising interest rates are often associated with higher, not lower, consumption.
http://mpettis.com/2010/04/chinese-savings-and-the-wealth-effect/
Monday, April 19, 2010
China plays it cool on Kyrgyzstan
China plays it cool on Kyrgyzstan
Kyrgyzstan is a key component of Beijing's "go out" strategy towards Central Asia. Two border crossings connect the Xinjiang Uyghur Autonomous Region with Kyrgyzstan, which has replaced Kazakhstan as the number one export market for Xinjiang. Unlike the United States and Russia, though, China has adopted a stance of non-interference. - M K Bhadrakumar (Apr 19, '10)
http://www.atimes.com/atimes/Central_Asia/LD20Ag01.html
Kyrgyzstan is a key component of Beijing's "go out" strategy towards Central Asia. Two border crossings connect the Xinjiang Uyghur Autonomous Region with Kyrgyzstan, which has replaced Kazakhstan as the number one export market for Xinjiang. Unlike the United States and Russia, though, China has adopted a stance of non-interference. - M K Bhadrakumar (Apr 19, '10)
http://www.atimes.com/atimes/Central_Asia/LD20Ag01.html
Friday, April 16, 2010
First concrete for second Taishan reactor from World Nuclear News by Jeremy Gordon
First concrete for second Taishan reactor
from World Nuclear News by Jeremy Gordon
Taishan 2 April 2010 (CGNPC)The first concrete has been poured at the Taishan nuclear power plant in Guangdong province, China, marking the official start of construction for the site's second EPR unit.
http://www.world-nuclear-news.org/NN-First...tor-1604105.htm
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1099640&#entry1099640
from World Nuclear News by Jeremy Gordon
Taishan 2 April 2010 (CGNPC)The first concrete has been poured at the Taishan nuclear power plant in Guangdong province, China, marking the official start of construction for the site's second EPR unit.
http://www.world-nuclear-news.org/NN-First...tor-1604105.htm
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1099640&#entry1099640
Thursday, April 15, 2010
Why China Will Not Help In Levying Sanctions Against Iran And Other Countries from War News Updates by Bookyards
Why China Will Not Help In Levying Sanctions Against Iran And Other Countries
from War News Updates by BookyardsChinese President Hu Jintao (L) meets with U.S. President Barack Obama in Washington April 12, 2010. President Hu Jintao arrived in Washington on Monday to attend the Nuclear Security Summit slated for April 12-13. (Xinhua/Li Xueren)
Chinese Firms Boost Nuclear Threats: Proliferation Aids Terrorists -- Washington Times
Unchecked proliferation by Chinese firms has undermined a global effort to keep nuclear and missile technology out of the hands of terrorists.
The transfer of such technology to countries such as Pakistan and Iran, which are considered vulnerable to an attack by terrorists or rogue insiders, is the cause of much anxiety in the international community. Kicking off the Nuclear Security Summit in Washington this week, President Obama described nuclear terrorism as the "single biggest threat to U.S. security."
Read more ....
My Comment: Bottom line .... it is all about the money and international alliances. But what makes this entire episode in international relations frustrating, is that much of the technology that China has acquired over the years has come from us, and it is this tech that is now being transferred to countries like Iran, Pakistan, and others.
I know that President Obama feels confident that China will help in imposing and enforcing sanctions against Iran .... but as the Washington Times article clearly points out, China's business relationship with Iran operates on numerous and divergent levels, and the monies involved are huge.
How huge is China's investment in Iran, the following EIN News Report summarizes it perfectly .....
If China were to fall in line and sanction Iran, it would mean a loss of 10 to 12% of its oil imports, the aborting of some $80 billion in development projects and the sacrifice of hundreds of billions of dollars worth of oil, which the Chinese have locked in futures contracts, DawnNews reports.
China has already made a decision on how to work with Iran, and they are putting their money on the line in developing future projects and trade. As to what the sanction sponsoring countries want .... the Chinese are only giving vague commitments and promises.
It is not hard to see where this is all going.
http://www.commongroundcommonsense.org/for...9384&st=560
http://warnewsupdates.blogspot.com/2010/04/why-china-will-not-help-in-levying.html
from War News Updates by BookyardsChinese President Hu Jintao (L) meets with U.S. President Barack Obama in Washington April 12, 2010. President Hu Jintao arrived in Washington on Monday to attend the Nuclear Security Summit slated for April 12-13. (Xinhua/Li Xueren)
Chinese Firms Boost Nuclear Threats: Proliferation Aids Terrorists -- Washington Times
Unchecked proliferation by Chinese firms has undermined a global effort to keep nuclear and missile technology out of the hands of terrorists.
The transfer of such technology to countries such as Pakistan and Iran, which are considered vulnerable to an attack by terrorists or rogue insiders, is the cause of much anxiety in the international community. Kicking off the Nuclear Security Summit in Washington this week, President Obama described nuclear terrorism as the "single biggest threat to U.S. security."
Read more ....
My Comment: Bottom line .... it is all about the money and international alliances. But what makes this entire episode in international relations frustrating, is that much of the technology that China has acquired over the years has come from us, and it is this tech that is now being transferred to countries like Iran, Pakistan, and others.
I know that President Obama feels confident that China will help in imposing and enforcing sanctions against Iran .... but as the Washington Times article clearly points out, China's business relationship with Iran operates on numerous and divergent levels, and the monies involved are huge.
How huge is China's investment in Iran, the following EIN News Report summarizes it perfectly .....
If China were to fall in line and sanction Iran, it would mean a loss of 10 to 12% of its oil imports, the aborting of some $80 billion in development projects and the sacrifice of hundreds of billions of dollars worth of oil, which the Chinese have locked in futures contracts, DawnNews reports.
China has already made a decision on how to work with Iran, and they are putting their money on the line in developing future projects and trade. As to what the sanction sponsoring countries want .... the Chinese are only giving vague commitments and promises.
It is not hard to see where this is all going.
http://www.commongroundcommonsense.org/for...9384&st=560
http://warnewsupdates.blogspot.com/2010/04/why-china-will-not-help-in-levying.html
China toughens measures to cool off housing market from LEAP/Europe 2020 by Market Watch
China toughens measures to cool off housing market from LEAP/Europe 2020 by Market Watch
China raised down-payment requirements and lifted the lending rates on some types of mortgages Thursday, a day after official data showed property prices in its major cities increasing at the fastest pace in nearly five years.
The required down payment on purchases of second homes will rise to 50% from 40%, the state-run Xinhua news agency reported, citing a statement issued late Thursday by the State Council following the conclusion of an executive meeting chaired by Premier Wen Jiabao...
Read
http://www.marketwatch.com/story/china-unv...?dist=afterbell
China raised down-payment requirements and lifted the lending rates on some types of mortgages Thursday, a day after official data showed property prices in its major cities increasing at the fastest pace in nearly five years.
The required down payment on purchases of second homes will rise to 50% from 40%, the state-run Xinhua news agency reported, citing a statement issued late Thursday by the State Council following the conclusion of an executive meeting chaired by Premier Wen Jiabao...
Read
http://www.marketwatch.com/story/china-unv...?dist=afterbell
China's property bubble Takatoshi Ito, Vox EU, April 15, 2010
China's property bubble Takatoshi Ito, Vox EU, April 15, 2010
This column blames policymakers for not dealing with Japan's property bubble early enough. China should learn from these mistakes with its own property bubble and let the renminbi appreciate.
http://www.voxeu.org/index.php?q=node/4885
http://www.commongroundcommonsense.org/for...p;#entry1099147
This column blames policymakers for not dealing with Japan's property bubble early enough. China should learn from these mistakes with its own property bubble and let the renminbi appreciate.
http://www.voxeu.org/index.php?q=node/4885
http://www.commongroundcommonsense.org/for...p;#entry1099147
Is China's Economy Overheating? Michael Schuman, The Curious Capitalist, April 15, 2010
Is China's Economy Overheating?
Michael Schuman, The Curious Capitalist, April 15, 2010
Qu Hongbin, an economist with HSBC, figures that China's GDP is expanding at an annualized rate of nearly 11%. That's darn fast. Perhaps too fast.
http://curiouscapitalist.blogs.time.com/20...s+Capitalist%29
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1099146&#entry1099146
Michael Schuman, The Curious Capitalist, April 15, 2010
Qu Hongbin, an economist with HSBC, figures that China's GDP is expanding at an annualized rate of nearly 11%. That's darn fast. Perhaps too fast.
http://curiouscapitalist.blogs.time.com/20...s+Capitalist%29
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1099146&#entry1099146
China -- it's money Daniel Griswold, Los Angeles Times, April 15, 2010
China -- it's money Daniel Griswold, Los Angeles Times, April 15, 2010
Critics take note: It has been the hottest major export market for U.S. companies for the last decade.
http://www.latimes.com/news/opinion/la-oe-...es+-+Opinion%29
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1099144&#entry1099144
Critics take note: It has been the hottest major export market for U.S. companies for the last decade.
http://www.latimes.com/news/opinion/la-oe-...es+-+Opinion%29
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1099144&#entry1099144
Wednesday, April 14, 2010
China's footloose climb to the top
China's footloose climb to the top
China's fast climb up the world's economic league table is not the only valid measure on which to base the country's ascendency in world affairs, and while its influence is undoubtedly growing, an uncertain Beijing cannot yet claim superpower status. Washington, for all the talk of America's decline, will continue to dominate international affairs. - Jian Junbo (Apr 13, '10)
http://www.atimes.com/atimes/China/LD14Ad02.html
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1098654&#entry1098654
China's fast climb up the world's economic league table is not the only valid measure on which to base the country's ascendency in world affairs, and while its influence is undoubtedly growing, an uncertain Beijing cannot yet claim superpower status. Washington, for all the talk of America's decline, will continue to dominate international affairs. - Jian Junbo (Apr 13, '10)
http://www.atimes.com/atimes/China/LD14Ad02.html
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1098654&#entry1098654
China's economy feels the heat
China's economy
feels the heat
Surging Chinese property prices are adding pressure on Beijing to cool an economy that may have expanded almost 12% in the first quarter, while a rare trade deficit has failed to silence demands that the government let the Chinese currency appreciate. Domestic concern may for once harmonize with those overseas voices. - Robert M Cutler
http://www.atimes.com/atimes/China_Business/LD15Cb01.html
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1098649&#entry1098649
feels the heat
Surging Chinese property prices are adding pressure on Beijing to cool an economy that may have expanded almost 12% in the first quarter, while a rare trade deficit has failed to silence demands that the government let the Chinese currency appreciate. Domestic concern may for once harmonize with those overseas voices. - Robert M Cutler
http://www.atimes.com/atimes/China_Business/LD15Cb01.html
http://www.commongroundcommonsense.org/forums/index.php?showtopic=105277&st=560&gopid=1098649&#entry1098649
China says military ties with US still suspended Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/04/13/international/i022957D95.DTL#ixzz0l5L1iHvr
China says military ties with US still suspended
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/04/13/international/i022957D95.DTL#ixzz0l5L1iHvr
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/04/13/international/i022957D95.DTL#ixzz0l5L1iHvr
China says sanction cannot resolve Iran nuclear issue:
China says sanction cannot resolve Iran nuclear issue: China said here Tuesday sanctions and pressure cannot fundamentally resolve the Iran nuclear issue while reiterating its adherence to a dual-track strategy.
http://news.xinhuanet.com/english2010/chin.../c_13249560.htm
http://www.commongroundcommonsense.org/for...p;#entry1098610
http://news.xinhuanet.com/english2010/chin.../c_13249560.htm
http://www.commongroundcommonsense.org/for...p;#entry1098610
Friday, April 9, 2010
Great Power Rivalry. China's Role as America's Creditor "From Export Juggernaut to a Credit Addict" by Mike Whitney
Wednesday, April 7, 2010
Google wins and loses with exit
Google wins and
loses with exit
Baidu, the Chinese Internet search company, appears the undisputed winner from rival Google's censorship clash with the Chinese government, yet both warring parties can claim laurels as the dust from the spat settles. The losers' list is less clear, although the US Internet search company's name is also being etched there. - Sherman So
loses with exit
Baidu, the Chinese Internet search company, appears the undisputed winner from rival Google's censorship clash with the Chinese government, yet both warring parties can claim laurels as the dust from the spat settles. The losers' list is less clear, although the US Internet search company's name is also being etched there. - Sherman So
China changes its economic paradigm
China changes its
economic paradigm
Google's withdrawal of its core business from China, far from being an isolated incident, is another indicator that Beijing has established a new economic paradigm, and it is not a good one. The Chinese market is reserved for Chinese competitors. - Gordon G Chang
economic paradigm
Google's withdrawal of its core business from China, far from being an isolated incident, is another indicator that Beijing has established a new economic paradigm, and it is not a good one. The Chinese market is reserved for Chinese competitors. - Gordon G Chang
SINOGRAPH Journey of a thousand miles ...
SINOGRAPH
Journey of a thousand miles ...
With the grand plan on climate change a non-starter after the chaos of the Copenhagen summit in December, the way forward may lie in the power of forging small agreements on technology transfers for cutting carbon emissions to create momentum for tackling thornier issues. It would take China and the United States to set the ball in motion. - Francesco Sisci (Apr 7, '10)
Journey of a thousand miles ...
With the grand plan on climate change a non-starter after the chaos of the Copenhagen summit in December, the way forward may lie in the power of forging small agreements on technology transfers for cutting carbon emissions to create momentum for tackling thornier issues. It would take China and the United States to set the ball in motion. - Francesco Sisci (Apr 7, '10)
Mistrust lingers over dams
Mistrust lingers over dams
Accusations that China's dams are causing the Mekong River's unusually low levels in northeast Thailand, Laos and Vietnam have dominated a regional summit on the river's health. Hoping to safeguard its burgeoning ties with Southeast Asia, Beijing went out of its way to try and prove that low rainfall, not dams, is the main culprit. But not all were convinced. - Johanna Son (Apr 7, '10)
Accusations that China's dams are causing the Mekong River's unusually low levels in northeast Thailand, Laos and Vietnam have dominated a regional summit on the river's health. Hoping to safeguard its burgeoning ties with Southeast Asia, Beijing went out of its way to try and prove that low rainfall, not dams, is the main culprit. But not all were convinced. - Johanna Son (Apr 7, '10)
China faces its biggest foe
China faces its biggest foe
The worst drought in a century continues to grip China's southwest, with reports of abandoned villages and an exodus of people. With the rural poor angry at the government's lack of planning and its dam projects, the crisis threatens to become a far bigger challenge to Beijing than it faces from political reformers and human-rights activists. - Kent Ewing
The worst drought in a century continues to grip China's southwest, with reports of abandoned villages and an exodus of people. With the rural poor angry at the government's lack of planning and its dam projects, the crisis threatens to become a far bigger challenge to Beijing than it faces from political reformers and human-rights activists. - Kent Ewing
Asian allies welcome new US nuclear stance
Asian allies welcome new US nuclear stance
By ERIC TALMADGE (AP) – 6 hours ago
TOKYO — U.S. allies in Asia on Wednesday welcomed President Barack Obama's new policy aimed at reducing the likelihood of nuclear conflict, while powerhouse China was silent over his call for Beijing to better explain its nuclear intentions.
In a much-awaited announcement, Obama vowed Tuesday to reduce America's nuclear arsenal, refrain from nuclear tests and not use nuclear weapons against countries that do not have them. North Korea and Iran were not included in that pledge because they do not cooperate with other countries on nonproliferation standards.
Some U.S. allies, which benefit from being under the U.S. nuclear defense umbrella, were concerned they would be left vulnerable by a change in Washington's policy. But Obama's statement appeared to defuse many such concerns.
"This is a first step toward a nuclear-free world," said Japanese Prime Minister Yukio Hatoyama. "Deterrence is important, but so is reducing nuclear arsenals. We highly regard his stance."
Katsuya Okada, Japan's foreign minister, noted that Japan, which is located near North Korea, China and Russia but has decided not to develop nuclear weapons of its own, was concerned about how the policy will affect its security.
"The United States had assured its allies that this position will not endanger them," he said. "This is important."
In South Korea, the foreign and defense ministries issued a joint statement saying the new U.S. stance would strengthen Washington's commitment to its allies and pressure North Korea to give up its nuclear weapons development.
"The government welcomes and supports" Obama's announcement, they said. There was no immediate reaction to Obama's plan from North Korean state media.
New Zealand Prime Minister John Key also welcomed the announcement.
"President Obama made good on his pledge a year ago to reduce the role of nuclear weapons in U.S. security policies and set the world on a path to a nuclear-weapons-free world," he said in a statement. "The review clearly states the long-term objective of U.S. policy is the complete elimination of nuclear weapons, and implements the first of the actions that will be needed to get there."
Chinese Vice Foreign Minister Cui Tiankai refused to comment on the new U.S. nuclear defense policy, which also calls on China to explain its nuclear intentions more clearly.
"China's nuclear policy and China's strategic intentions are clear. Since the 1960s we have repeated our position on many occasions and our position has never been changed," Cui said, without elaborating. "I believe people with fair and just minds will not question China's position."
Beijing, which is said to have 100 nuclear warheads, has said it would not be the first to attack with nuclear weapons.
Chinese President Hu Jintao is to travel to Washington to take part in an April 12-13 nuclear summit that will focus on securing nuclear material to prevent it from falling into the wrong hands. The meeting is expected to bring together about 46 leaders.
One Chinese expert strongly criticized Obama's call for more transparency from Beijing on its nuclear capabilities.
"I think Obama's comments are way out of line," said Shi Yinhong, a professor of international relations and director of the Center for American Studies at Renmin University. "China has always been guided by the principle that China will not be the first to use nuclear weapons."
Shi noted that while China has only about 100 nuclear warheads, the U.S. has 10,000.
"China is doing a lot better than the U.S.," he said. "The U.S. is not in the position to teach China any lessons, although it has a lot to teach China in other fields. The U.S. should be more cautious."
Associated Press writer Anita Chang and researcher Zhao Liang in Beijing contributed to this report.
By ERIC TALMADGE (AP) – 6 hours ago
TOKYO — U.S. allies in Asia on Wednesday welcomed President Barack Obama's new policy aimed at reducing the likelihood of nuclear conflict, while powerhouse China was silent over his call for Beijing to better explain its nuclear intentions.
In a much-awaited announcement, Obama vowed Tuesday to reduce America's nuclear arsenal, refrain from nuclear tests and not use nuclear weapons against countries that do not have them. North Korea and Iran were not included in that pledge because they do not cooperate with other countries on nonproliferation standards.
Some U.S. allies, which benefit from being under the U.S. nuclear defense umbrella, were concerned they would be left vulnerable by a change in Washington's policy. But Obama's statement appeared to defuse many such concerns.
"This is a first step toward a nuclear-free world," said Japanese Prime Minister Yukio Hatoyama. "Deterrence is important, but so is reducing nuclear arsenals. We highly regard his stance."
Katsuya Okada, Japan's foreign minister, noted that Japan, which is located near North Korea, China and Russia but has decided not to develop nuclear weapons of its own, was concerned about how the policy will affect its security.
"The United States had assured its allies that this position will not endanger them," he said. "This is important."
In South Korea, the foreign and defense ministries issued a joint statement saying the new U.S. stance would strengthen Washington's commitment to its allies and pressure North Korea to give up its nuclear weapons development.
"The government welcomes and supports" Obama's announcement, they said. There was no immediate reaction to Obama's plan from North Korean state media.
New Zealand Prime Minister John Key also welcomed the announcement.
"President Obama made good on his pledge a year ago to reduce the role of nuclear weapons in U.S. security policies and set the world on a path to a nuclear-weapons-free world," he said in a statement. "The review clearly states the long-term objective of U.S. policy is the complete elimination of nuclear weapons, and implements the first of the actions that will be needed to get there."
Chinese Vice Foreign Minister Cui Tiankai refused to comment on the new U.S. nuclear defense policy, which also calls on China to explain its nuclear intentions more clearly.
"China's nuclear policy and China's strategic intentions are clear. Since the 1960s we have repeated our position on many occasions and our position has never been changed," Cui said, without elaborating. "I believe people with fair and just minds will not question China's position."
Beijing, which is said to have 100 nuclear warheads, has said it would not be the first to attack with nuclear weapons.
Chinese President Hu Jintao is to travel to Washington to take part in an April 12-13 nuclear summit that will focus on securing nuclear material to prevent it from falling into the wrong hands. The meeting is expected to bring together about 46 leaders.
One Chinese expert strongly criticized Obama's call for more transparency from Beijing on its nuclear capabilities.
"I think Obama's comments are way out of line," said Shi Yinhong, a professor of international relations and director of the Center for American Studies at Renmin University. "China has always been guided by the principle that China will not be the first to use nuclear weapons."
Shi noted that while China has only about 100 nuclear warheads, the U.S. has 10,000.
"China is doing a lot better than the U.S.," he said. "The U.S. is not in the position to teach China any lessons, although it has a lot to teach China in other fields. The U.S. should be more cautious."
Associated Press writer Anita Chang and researcher Zhao Liang in Beijing contributed to this report.
U.S. says China nuclear programs lack transparency
U.S. says China nuclear programs lack transparency
WASHINGTON
Tue Apr 6, 2010 1:57pm EDT
Surface-to-surface missiles are displayed in a parade to celebrate the 60th anniversary of the founding of the People's Republic of China, in Beijing October 1, 2009. REUTERS/Jason Lee
WASHINGTON (Reuters) - Lack of transparency surrounding China's nuclear programs raises questions about its strategic intentions, the United States said on Tuesday.
WASHINGTON
Tue Apr 6, 2010 1:57pm EDT
Surface-to-surface missiles are displayed in a parade to celebrate the 60th anniversary of the founding of the People's Republic of China, in Beijing October 1, 2009. REUTERS/Jason Lee
WASHINGTON (Reuters) - Lack of transparency surrounding China's nuclear programs raises questions about its strategic intentions, the United States said on Tuesday.
Evaluating the renminbi manipulation
Tuesday, April 6, 2010
China sees US as hedge for Taiwan, Tibet
China sees US as hedge for Taiwan, Tibet
China's agreement to discuss Iran sanctions and send President Hu Jintao to President Barack Obama's nuclear non-proliferation summit has helped ease United States-China tensions. In return, Beijing has secured a vital US commitment to the one-China policy at a time when potentially dangerous transitions of power loom in Taiwan and among the Tibetan diaspora. - Peter Lee (Apr 6, '10)
China's agreement to discuss Iran sanctions and send President Hu Jintao to President Barack Obama's nuclear non-proliferation summit has helped ease United States-China tensions. In return, Beijing has secured a vital US commitment to the one-China policy at a time when potentially dangerous transitions of power loom in Taiwan and among the Tibetan diaspora. - Peter Lee (Apr 6, '10)
Taiwan eyes October 2011 startup for 4th nuclear plant
Taiwan eyes October 2011 startup for 4th nuclear plant
Taiwan Power, or Taipower, plans to start operations at its fourth nuclear energy facility by October 2011. Taipower's chief engineer, Tu Yueh-yuan, said she is "cautiously optimistic" that the company could meet the goal, and it will make sure that work on the plant follows the highest safety standards. The China Post/Central News Agency (Taiwan)
Taiwan Power, or Taipower, plans to start operations at its fourth nuclear energy facility by October 2011. Taipower's chief engineer, Tu Yueh-yuan, said she is "cautiously optimistic" that the company could meet the goal, and it will make sure that work on the plant follows the highest safety standards. The China Post/Central News Agency (Taiwan)
Monday, April 5, 2010
Why China Snubs Russian Arms
Why China Snubs Russian Arms
Richard Weitz, The Diplomat
Last week, Russia delivered 15 additional batteries of S-300 surface-to-air missiles to China, making good on an about 2 billion dollar deal signed in the mid-2000s. Yet despite the publicity surrounding the sale, the Russian-Chinese arms transfer relationship is in trouble.
Recent years have seen a precipitous fall in Chinese purchases of Russian military equipment and technologies. Whereas until a few years ago Beijing was buying large quantities of Moscow’s surplus Soviet-era military products, during the past few years the Chinese have declined to purchase any major weapons systems from Russia
Richard Weitz, The Diplomat
Last week, Russia delivered 15 additional batteries of S-300 surface-to-air missiles to China, making good on an about 2 billion dollar deal signed in the mid-2000s. Yet despite the publicity surrounding the sale, the Russian-Chinese arms transfer relationship is in trouble.
Recent years have seen a precipitous fall in Chinese purchases of Russian military equipment and technologies. Whereas until a few years ago Beijing was buying large quantities of Moscow’s surplus Soviet-era military products, during the past few years the Chinese have declined to purchase any major weapons systems from Russia
CHART OF THE DAY: If China Keeps Growing, High Oil Prices Will Crush Us from Clusterstock by Joe Weisenthal and Kamelia Angelova
CHART OF THE DAY: If China Keeps Growing, High Oil Prices Will Crush Us
from Clusterstock by Joe Weisenthal and Kamelia Angelova
It'd be great to inhabit a world where all economic growth were positive sum. They grow, we grow, everyone's happy.
But where there's a shortage of key resources, not everything is so rosy.
This chart, put together by HedgEye, shows a nice correlation between Chinese oil imports (measured in tons) and the price of oil, though obviously the price of oil swings more wildly.
If China keeps growing -- and really, how will it not? -- oil seemed destined only to go in one direction.
from Clusterstock by Joe Weisenthal and Kamelia Angelova
It'd be great to inhabit a world where all economic growth were positive sum. They grow, we grow, everyone's happy.
But where there's a shortage of key resources, not everything is so rosy.
This chart, put together by HedgEye, shows a nice correlation between Chinese oil imports (measured in tons) and the price of oil, though obviously the price of oil swings more wildly.
If China keeps growing -- and really, how will it not? -- oil seemed destined only to go in one direction.
One Effect of U.S. Trade With China: 2.4 Million Jobs Lost
One Effect of U.S. Trade With China: 2.4 Million Jobs Lost from SeekingAlpha.com: by David Hunkar
The U.S. unemployment rate held steady at 9.7% in March. The number of unemployed persons remained little unchanged at 15.0 million.
Last month employers added 162,000 jobs but 48,000 of them were temporary workers hired for the 2010 census. In the manufacturing sector, 2.1 million jobs have been lost since December 2007. 17,000 jobs were created in this sector in March. Many of the manufacturing jobs lost over the past couple of decades may never return to the U.S. The free trade agreements signed by the U.S. over the years such as NAFTA and WTO policies have not only eliminated millions of jobs in the U.S. but also have helped drive down the wages for workers. In order to understand the loss of manufacturing jobs, we have to look at the impact of U.S. trade with China since China is the largest exporter of goods to this country.
Complete Story »
The U.S. unemployment rate held steady at 9.7% in March. The number of unemployed persons remained little unchanged at 15.0 million.
Last month employers added 162,000 jobs but 48,000 of them were temporary workers hired for the 2010 census. In the manufacturing sector, 2.1 million jobs have been lost since December 2007. 17,000 jobs were created in this sector in March. Many of the manufacturing jobs lost over the past couple of decades may never return to the U.S. The free trade agreements signed by the U.S. over the years such as NAFTA and WTO policies have not only eliminated millions of jobs in the U.S. but also have helped drive down the wages for workers. In order to understand the loss of manufacturing jobs, we have to look at the impact of U.S. trade with China since China is the largest exporter of goods to this country.
Complete Story »
The Right and Wrong Price for Holding on the China Currency Report from The Washington Note by Steve Clemons
The Right and Wrong Price for Holding on the China Currency Report
from The Washington Note by Steve Clemons
China-US Flags.jpgThe White House has announced that it will delay a Treasury Department report reviewing whether China is manipulating its currency.
This delay is likely tied to three goals of the US.
First, the US wants to stop the slide in US-China relations. After Obama's meeting with the Dalai Lama, Hillary Clinton's swats at China over internet freedom and lack of cooperation on Iran, and some tough wrestling on where "global economic rebalancing" should start, the temperature between both global powers has been getting icier. Obama and team want to turn this around, particularly in light of Hu Jintao's trip to Washington in a week and a half.
Second, the US may hope that the growing tension between the nations combined with the "potential willingness" of the Department of Treasury to enable a spate of China-directed economic penalties may finally move China to float the value of its currency up at a faster pace.
Third, some are suggesting that the US has traded backing off on its currency findings if China demonstrates more support in the UN Security Council for tougher Iran sanctions. We'll see.
Back room deal making with great powers to achieve significant international objectives makes sense -- and Iran is one of those big problems today. I worry though that State Department and White House strategists may not see the difference between tying China into an effective comprehensive plan to change Iran's nuclear track on one hand and roping China into an ineffective sanctions strategy on the other.
So, if the US did trade away its economic interests by holding back on the currency report, or burying it, the price needs to be higher than Chinese support of Iran sanctions.
-- Steve Clemons
from The Washington Note by Steve Clemons
China-US Flags.jpgThe White House has announced that it will delay a Treasury Department report reviewing whether China is manipulating its currency.
This delay is likely tied to three goals of the US.
First, the US wants to stop the slide in US-China relations. After Obama's meeting with the Dalai Lama, Hillary Clinton's swats at China over internet freedom and lack of cooperation on Iran, and some tough wrestling on where "global economic rebalancing" should start, the temperature between both global powers has been getting icier. Obama and team want to turn this around, particularly in light of Hu Jintao's trip to Washington in a week and a half.
Second, the US may hope that the growing tension between the nations combined with the "potential willingness" of the Department of Treasury to enable a spate of China-directed economic penalties may finally move China to float the value of its currency up at a faster pace.
Third, some are suggesting that the US has traded backing off on its currency findings if China demonstrates more support in the UN Security Council for tougher Iran sanctions. We'll see.
Back room deal making with great powers to achieve significant international objectives makes sense -- and Iran is one of those big problems today. I worry though that State Department and White House strategists may not see the difference between tying China into an effective comprehensive plan to change Iran's nuclear track on one hand and roping China into an ineffective sanctions strategy on the other.
So, if the US did trade away its economic interests by holding back on the currency report, or burying it, the price needs to be higher than Chinese support of Iran sanctions.
-- Steve Clemons
China Eyes Hong Kong Democracy
China Eyes Hong Kong Democracy
Robert Keatley, Asia Sentinel
The early months of 2010 saw Hong Kong moving slowly but surely toward a fractious political showdown that will influence its governing structure for years. The main question concerns how to adopt electoral reforms that could move it closer to a Beijing-promised "ultimate"goal of universal suffrage—or whether the reform process will stop, perhaps permanently. The economy, meanwhile, showed further recovery from a 2009 reversal caused by the global financial crisis. However, there are continued worries on at least two fronts: the gap between rich and poor continues...
Robert Keatley, Asia Sentinel
The early months of 2010 saw Hong Kong moving slowly but surely toward a fractious political showdown that will influence its governing structure for years. The main question concerns how to adopt electoral reforms that could move it closer to a Beijing-promised "ultimate"goal of universal suffrage—or whether the reform process will stop, perhaps permanently. The economy, meanwhile, showed further recovery from a 2009 reversal caused by the global financial crisis. However, there are continued worries on at least two fronts: the gap between rich and poor continues...
Why Repegging the Yuan and Other Non-Free-Market Solutions to Trade Imbalances With China Will Fail
Why Repegging the Yuan and Other Non-Free-Market Solutions to Trade Imbalances With China Will Fail
from Mish's Global Economic Trend Analysis by noreply@blogger.com (Michael Shedlock)
from Mish's Global Economic Trend Analysis by noreply@blogger.com (Michael Shedlock)
US must not gamble on the renminbi
Friday, April 2, 2010
DANIEL DREZNER China and America, sitting in a tree?
China and America, sitting in a tree?
http://drezner.foreignpolicy.com/posts/201...tting_in_a_tree
http://drezner.foreignpolicy.com/posts/201...tting_in_a_tree
China Expands Science Globalization Trends
China Expands Science Globalization Trends
Laboratory Equipment
15 March 2010
China's scientific knowledge grows through global ties
Scientific research is now a worldwide endeavor, with researchers from multiple countries collaborating on projects. In recent years, Chinese authorities and academics have begun to take advantage of these possibilities, resulting in a growing network of global scientific research. A Sino-French joint research institute in Shanghai has been in existence for six years and has produced breakthroughs in stem cell research and other fields. A separate Sino-Brazilian partnership has launched several satellites, providing information on deforestation in Brazil and earthquakes in China. As a result, scientific globalization not only offers new research, but also the fostering of local scientific talent that might otherwise have been overlooked.
Despite Strains, China Leader to Attend Nuclear Meeting in U.S. -- New York Times
Despite Strains, China Leader to Attend Nuclear Meeting in U.S. -- New York Times
BEIJING — President Hu Jintao of China will attend a nuclear security summit meeting in Washington this month, an indication that strained relations between the United States and China may be easing.
Until the announcement on Thursday by the Chinese Foreign Ministry, American officials feared that Mr. Hu would boycott the talks to express China’s displeasure over a series of recent diplomatic clashes, including a White House decision to sell arms to Taiwan and President Obama’s meeting with the Dalai Lama, the exiled Tibetan leader.
Read more ....
BEIJING — President Hu Jintao of China will attend a nuclear security summit meeting in Washington this month, an indication that strained relations between the United States and China may be easing.
Until the announcement on Thursday by the Chinese Foreign Ministry, American officials feared that Mr. Hu would boycott the talks to express China’s displeasure over a series of recent diplomatic clashes, including a White House decision to sell arms to Taiwan and President Obama’s meeting with the Dalai Lama, the exiled Tibetan leader.
Read more ....
Thursday, April 1, 2010
Will China re-define great power politics?
Will China re-define great power politics? –
inthesenewtimes: "The past two decades of China’s re-emergence have been a breathtaking diplomatic balancing exercise. It has been remarkable how the juggernaut managed to neutralize distrust and nurtured the idea that its own development is going to benefit the development of the entire world. In the last few years China’s foreign policy has become much more professional and sophisticated. Political relations are now embedded in a sound economic and public diplomacy. Chinese officials also seem to be increasingly sensitive to the perceptions and expectations in partner countries. They are eager to learn, to anticipate challenges and to adapt their discourses to a heterogeneous audience. These are all reassuring trends. Yet, progress in China’s foreign policy is frail and reversible."
inthesenewtimes: "The past two decades of China’s re-emergence have been a breathtaking diplomatic balancing exercise. It has been remarkable how the juggernaut managed to neutralize distrust and nurtured the idea that its own development is going to benefit the development of the entire world. In the last few years China’s foreign policy has become much more professional and sophisticated. Political relations are now embedded in a sound economic and public diplomacy. Chinese officials also seem to be increasingly sensitive to the perceptions and expectations in partner countries. They are eager to learn, to anticipate challenges and to adapt their discourses to a heterogeneous audience. These are all reassuring trends. Yet, progress in China’s foreign policy is frail and reversible."
U.S. Can Suspend Reprocessing if 'National Security' Is Threatened Siddharth Varadarajan, The Hindu
U.S. Can Suspend Reprocessing if 'National Security' Is Threatened
Siddharth Varadarajan, The Hindu
Editor's Note: This article states that "the [reprocessing arrangement and procedures] envisage payment of compensation" to India in the case of a suspension beyond a period of six months. In fact, it calls for both parties to "enter into consultations" on compensation only. There is no commitment to compensate or to negotiate compensation.
Full Article
Siddharth Varadarajan, The Hindu
Editor's Note: This article states that "the [reprocessing arrangement and procedures] envisage payment of compensation" to India in the case of a suspension beyond a period of six months. In fact, it calls for both parties to "enter into consultations" on compensation only. There is no commitment to compensate or to negotiate compensation.
Full Article
Pakistan in ‘civil nuclear deal’ with China
Pakistan in ‘civil nuclear deal’ with China
* Two plants with a capacity of 640 megawatts to be set up in Chashma
* China to provide 82% of total $1.912bn financing
By Sajid Chaudhry
ISLAMABAD: Pakistan has entered a civil nuclear deal with China for the establishment of two nuclear power projects of 640 megawatts in Chashma, Daily Times has learnt.
The breakthrough deal – under which Pakistan would be provided a loan, technology and installation facilities – was finalised ahead of the latest round of the Pak-US strategic dialogue, as the federal cabinet granted financial approval at a meeting on March 24.
Sources privy to the deal said the federal cabinet had approved an inter-government framework agreement on the financing of ‘Chashma Nuclear Power Project 3’ and ‘Chashma Nuclear Power Project 4’ with China.
The sources said under the agreement, China would provide 82 percent of the total $1.912 billion financing to Pakistan as a 20-year soft loan, with an eight-year grace period.
In a bid to guarantee financing for the two plants, the inter-government framework agreement requires both countries to enter three loan agreements. Under the first loan agreement, Pakistan would be provided $104 million with an annual interest rate of 1 percent, management fee of 0.2 percent and a commitment fee of 0.2 percent. Under the second preferential buyer credit agreement, Pakistan would get $1 billion with an annual interest rate of 2 percent, a management fee of 0.2 percent and a commitment fee of 0.2 percent – while the third buyers credit agreement would provide Pakistan $474 million with an annual interest rate of 6 percent, a management fee of 0.75 percent, a commitment fee of 0.5 percent and an insurance rate of 7 percent.
However, according to the inter-government framework agreement, the annual composite interest rate would not exceed three percent in any case.
The sources said that frequent visits by President Asif Ali Zardar and Prime Minister Yousaf Raza Gilani helped secure the deal. They said the Executive Committee of the National Economic Council (ECNEC) had already approved the two projects.
The Pakistan Atomic Energy Commission would be the executing agency for the establishment of the two plants – which would be completed in eight years.
The sources said each 320-megawatt unit would contain a nuclear steam supply system, a turbine-generator set and the associated auxiliary equipment and installations.
* Two plants with a capacity of 640 megawatts to be set up in Chashma
* China to provide 82% of total $1.912bn financing
By Sajid Chaudhry
ISLAMABAD: Pakistan has entered a civil nuclear deal with China for the establishment of two nuclear power projects of 640 megawatts in Chashma, Daily Times has learnt.
The breakthrough deal – under which Pakistan would be provided a loan, technology and installation facilities – was finalised ahead of the latest round of the Pak-US strategic dialogue, as the federal cabinet granted financial approval at a meeting on March 24.
Sources privy to the deal said the federal cabinet had approved an inter-government framework agreement on the financing of ‘Chashma Nuclear Power Project 3’ and ‘Chashma Nuclear Power Project 4’ with China.
The sources said under the agreement, China would provide 82 percent of the total $1.912 billion financing to Pakistan as a 20-year soft loan, with an eight-year grace period.
In a bid to guarantee financing for the two plants, the inter-government framework agreement requires both countries to enter three loan agreements. Under the first loan agreement, Pakistan would be provided $104 million with an annual interest rate of 1 percent, management fee of 0.2 percent and a commitment fee of 0.2 percent. Under the second preferential buyer credit agreement, Pakistan would get $1 billion with an annual interest rate of 2 percent, a management fee of 0.2 percent and a commitment fee of 0.2 percent – while the third buyers credit agreement would provide Pakistan $474 million with an annual interest rate of 6 percent, a management fee of 0.75 percent, a commitment fee of 0.5 percent and an insurance rate of 7 percent.
However, according to the inter-government framework agreement, the annual composite interest rate would not exceed three percent in any case.
The sources said that frequent visits by President Asif Ali Zardar and Prime Minister Yousaf Raza Gilani helped secure the deal. They said the Executive Committee of the National Economic Council (ECNEC) had already approved the two projects.
The Pakistan Atomic Energy Commission would be the executing agency for the establishment of the two plants – which would be completed in eight years.
The sources said each 320-megawatt unit would contain a nuclear steam supply system, a turbine-generator set and the associated auxiliary equipment and installations.
Protests greet new round of Taiwan-China trade talks
Protests greet new round of Taiwan-China trade talks
Taoyuan, Taiwan (AFP) March 31, 2010
Taiwan and China held a new round of talks on a contentious trade pact Wednesday as protesters wary of the island's closer ties with the mainland scuffled with police and rival demonstrators. A group of about 100 anti-China demonstrators gathered as representatives of the two sides met in a hotel in Taoyuan near the island's capital, but were kept back by a cordon of uniformed police. "We should protect Taiwan's sovereignty and Taiwan's own future," said Chang Jaw-liang, one of the protest organ ... read more
http://www.sinodaily.com/reports/Protests_greet_new_round_of_Taiwan-China_trade_talks_999.html
Taoyuan, Taiwan (AFP) March 31, 2010
Taiwan and China held a new round of talks on a contentious trade pact Wednesday as protesters wary of the island's closer ties with the mainland scuffled with police and rival demonstrators. A group of about 100 anti-China demonstrators gathered as representatives of the two sides met in a hotel in Taoyuan near the island's capital, but were kept back by a cordon of uniformed police. "We should protect Taiwan's sovereignty and Taiwan's own future," said Chang Jaw-liang, one of the protest organ ... read more
http://www.sinodaily.com/reports/Protests_greet_new_round_of_Taiwan-China_trade_talks_999.html
Binoy Kampmark Tinted with Blood: Rio Tinto Dumps Stern Hu
Chinese Manufacturing Growth Accelerates Even Further
Chinese Manufacturing Growth Accelerates Even Further
Vincent Fernando, CFA | Apr. 1, 2010, 12:31 AM | 433 | And it's not just government data that says so.
Read more: http://www.businessinsider.com/clusterstoc...0#ixzz0jrkCa0CA
Vincent Fernando, CFA | Apr. 1, 2010, 12:31 AM | 433 | And it's not just government data that says so.
Read more: http://www.businessinsider.com/clusterstoc...0#ixzz0jrkCa0CA
Doctor Doom China's Not-So-Fair Trade Nouriel Roubini, 04.01.10, 12:01 AM EDT The risks of rising economic tensions between U.S. and China.
Doctor Doom
China's Not-So-Fair Trade
Nouriel Roubini, 04.01.10, 12:01 AM EDT
The risks of rising economic tensions between U.S. and China.
http://www.forbes.com/2010/03/30/china-united-states-trade-global-opinions-columnists-nouriel-roubini.html?boxes=Homepagelighttop
China's Not-So-Fair Trade
Nouriel Roubini, 04.01.10, 12:01 AM EDT
The risks of rising economic tensions between U.S. and China.
http://www.forbes.com/2010/03/30/china-united-states-trade-global-opinions-columnists-nouriel-roubini.html?boxes=Homepagelighttop
Tough talk on China ignores economic reality By Jim O’Neill The Financial Times
http://www.ft.com/cms/s/0/dc113472-3cfd-11df-bbcf-00144feabdc0.html
Tough talk on China ignores economic reality
By Jim O’Neill
The Financial Times
In the past few weeks, Washington has upped the rhetoric concerning China and its currency. Coming at a time when there are a number of other sensitive issues facing the US-China relationship, it is not obvious to some of us why Congress is so excitable about this issue. With the biannual decision of the US Treasury on whether to name China as a currency “manipulator” due on April 15, it is far from clear that all this noise is helpful to anyone.
Indeed, from a macro-economic perspective, the timing could not seem more inappropriate. About four weeks ago, President Barack Obama announced a plan to double exports over the next five years. This is ambitious, but given the past weakness of the dollar and the strength of domestic demand in many big emerging countries, China included, the US has a chance of reaching its goal. So why go down a path of tit-for-tat retaliation that would take things in the opposite direction?
There are three fundamental issues that US policymakers should focus on: domestic demand in China, China’s trade with the rest of the world, and exchange rates.
With respect to domestic demand in China, there is rather clear evidence that, if anything, it is currently too strong, and certainly not at a level to justify accusations that China is not doing its “bit” for the world economy. For about 13 years we have used our own proprietary gross domestic product indicator for China, the so-called Goldman Sachs China Activity index. At the moment, this is growing at an annual rate of more than 14 per cent. Indeed, and somewhat ironically, it is likely that if Washington and others could keep quiet, Chinese policymakers would probably be more eager to do things to ease the inflationary pressures arising from this growth, including introducing more flexibility to the exchange rate.
Looking at a number of indicators, whether they be anecdotal from domestic or global companies that do business in China, published data on consumption and investment, or, importantly, the trade data, all of this is clear. Speak to anyone involved at any level of the consumer business, whether it be Tesco, Walmart or Louis Vuitton, and their evidence backs up the data. Chinese consumption is probably growing at about 15 per cent, similar to a 2-3 per cent rate for the US consumer.
As far as China’s involvement with the rest of the world goes, the real story since the worst of the crisis is not China’s recovering exports but China’s strong imports. The forthcoming trade release – interestingly due a few days before the Treasury report – is likely to demonstrate enormous import growth again, absolutely and relative to exports. This is seen not just in Chinese data, but in those from many other important trading nations. Indeed, quite remarkably, Germany’s trade with China is showing such strong growth that by spring next year, on current trends, it might exceed that with France. China last year reported a current account surplus of 5.8 per cent of GDP, significantly lower than apparently assumed as the current level by many people in Washington. In 2010, it could be closer to 3 per cent – incidentally below the 4 per cent level deemed as “equilibrium” by the Peterson Institute for International Economics.
Which brings me to the exchange rate. I have spent a lot of my career working on exchange rate models and am familiar with all the pitfalls. We have developed ours over the years at Goldman Sachs, including for the renminbi. At the moment, rather oddly, our model suggests that the renminbi is very close to the price that it should be. This has not always been the case. The model used to suggest the currency was undervalued by about 20 per cent, but it has moved by that degree in the past five years. We are, of course, less sure about the accuracy of this model than is usual with currency models, given the huge changes going on with China’s growth dynamics and the world as a whole.
This brings us back to the irony of the question. Why are US policymakers pushing the protectionist buttons at the very time when there is growing evidence that events would otherwise play out in their favour? Moreover, it should and probably does seem obvious to those who matter in Beijing that keeping the renminbi rigidly pegged to the dollar has lost its post-crisis usefulness, something that the governor of the People’s Bank of China has himself recently noticed.
The writer is chief economist at Goldman Sachs
Tough talk on China ignores economic reality
By Jim O’Neill
The Financial Times
In the past few weeks, Washington has upped the rhetoric concerning China and its currency. Coming at a time when there are a number of other sensitive issues facing the US-China relationship, it is not obvious to some of us why Congress is so excitable about this issue. With the biannual decision of the US Treasury on whether to name China as a currency “manipulator” due on April 15, it is far from clear that all this noise is helpful to anyone.
Indeed, from a macro-economic perspective, the timing could not seem more inappropriate. About four weeks ago, President Barack Obama announced a plan to double exports over the next five years. This is ambitious, but given the past weakness of the dollar and the strength of domestic demand in many big emerging countries, China included, the US has a chance of reaching its goal. So why go down a path of tit-for-tat retaliation that would take things in the opposite direction?
There are three fundamental issues that US policymakers should focus on: domestic demand in China, China’s trade with the rest of the world, and exchange rates.
With respect to domestic demand in China, there is rather clear evidence that, if anything, it is currently too strong, and certainly not at a level to justify accusations that China is not doing its “bit” for the world economy. For about 13 years we have used our own proprietary gross domestic product indicator for China, the so-called Goldman Sachs China Activity index. At the moment, this is growing at an annual rate of more than 14 per cent. Indeed, and somewhat ironically, it is likely that if Washington and others could keep quiet, Chinese policymakers would probably be more eager to do things to ease the inflationary pressures arising from this growth, including introducing more flexibility to the exchange rate.
Looking at a number of indicators, whether they be anecdotal from domestic or global companies that do business in China, published data on consumption and investment, or, importantly, the trade data, all of this is clear. Speak to anyone involved at any level of the consumer business, whether it be Tesco, Walmart or Louis Vuitton, and their evidence backs up the data. Chinese consumption is probably growing at about 15 per cent, similar to a 2-3 per cent rate for the US consumer.
As far as China’s involvement with the rest of the world goes, the real story since the worst of the crisis is not China’s recovering exports but China’s strong imports. The forthcoming trade release – interestingly due a few days before the Treasury report – is likely to demonstrate enormous import growth again, absolutely and relative to exports. This is seen not just in Chinese data, but in those from many other important trading nations. Indeed, quite remarkably, Germany’s trade with China is showing such strong growth that by spring next year, on current trends, it might exceed that with France. China last year reported a current account surplus of 5.8 per cent of GDP, significantly lower than apparently assumed as the current level by many people in Washington. In 2010, it could be closer to 3 per cent – incidentally below the 4 per cent level deemed as “equilibrium” by the Peterson Institute for International Economics.
Which brings me to the exchange rate. I have spent a lot of my career working on exchange rate models and am familiar with all the pitfalls. We have developed ours over the years at Goldman Sachs, including for the renminbi. At the moment, rather oddly, our model suggests that the renminbi is very close to the price that it should be. This has not always been the case. The model used to suggest the currency was undervalued by about 20 per cent, but it has moved by that degree in the past five years. We are, of course, less sure about the accuracy of this model than is usual with currency models, given the huge changes going on with China’s growth dynamics and the world as a whole.
This brings us back to the irony of the question. Why are US policymakers pushing the protectionist buttons at the very time when there is growing evidence that events would otherwise play out in their favour? Moreover, it should and probably does seem obvious to those who matter in Beijing that keeping the renminbi rigidly pegged to the dollar has lost its post-crisis usefulness, something that the governor of the People’s Bank of China has himself recently noticed.
The writer is chief economist at Goldman Sachs
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