Category: East Asia & Pacific

  • China’s Defense Budget Draws Concern

    China’s Defense Budget Draws Concern

    BEIJING—Japan expressed concern over China’s planned double-digit rise in defense spending this year, highlighting trepidation in the region about China’s escalating military and economic might after a week of fresh Chinese territorial confrontations with Japan, South Korea and the Philippines.

    Chinese army

    Japan Foreign Minister Seiji Maehara urged the Chinese government to be more transparent about how it planned to use its newfound military firepower, saying, “Whether it should be regarded as offensive or defensive would require a close look.”

    The comments came after China announced plans early Friday to increase its defense budget by 13% this year and as the week’s clashes built on concerns that China will increasingly use its escalating military power to assert its territorial claims in the region

    Such fears have prompted many of its neighbors to to shore up defense ties with the U.S. and beef up their own militaries, threatening to push Asia into a new arms race.

    China expects to spend 601.1 billion yuan ($91.4 billion) on defense in 2011, up from 533.4 billion yuan last year, Li Zhaoxing, spokesman for the National People’s Congress, told a news conference ahead of the start of the legislature’s annual session on Saturday.

    The projected rise is faster than last year’s 7.5% increase—the slowest clip in decades—but is significantly slower than the roughly 19% annual growth in years before 2010.

    The headline figure does not, however, include key items such as arms imports and the program to develop a stealth fighter and an aircraft carrier, according to foreign military experts who estimate that China’s real defense spending is far higher.

    Mr. Li said the military budget would be used for purposes including “appropriate armament development,” training and human resources, while stressing that it remained relatively low as a proportion of China’s GDP and overall budget, and dismissing concerns that it threatened neighboring countries.

    “China’s defense spending is relatively low in the world,” he said. “Every bit of China’s limited military strength will be used for safeguarding national independence, sovereignty and territorial integrity. He reiterated China’s oft-repeated refrain that its efforts “will not pose a threat to any country.”

    On Wednesday, Japan scrambled fighter jets to chase off two Chinese military planes which it said flew within 34 miles of disputed islands in the East China Sea, which are known as Senkaku in Japan and as Diaoyu in China.

    Japanese government spokesman Yukio Edano said Japan would not protest formally as the Chinese planes did not leave international airspace, but he also voiced concern over China’s growing military power and said Japan would monitor the situation. China’s Foreign Ministry didn’t immediately respond to a request for comment.

    Relations between Asia’s two biggest economies plunged to their lowest point in years in September following collisions near the islands between two Japanese coast guard patrol boats and a Chinese fishing vessel.

    In December, Japan, which in 2010 was surpassed by China as the world’s No. 2 economy, revised its national defense guidelines, which were drawn up during the Cold War, to shift focus away from Russia and toward the emerging threat from China.

    China’s more forceful stance on territorial issues has also alarmed other countries in the region.

    On Wednesday, the Philippines deployed two war planes to protect oil explorers who complained that they were being harassed by two Chinese patrol boats in a disputed area of the South China Sea.

    The Philippine government demanded an explanation Friday for the incident at Reed Bank near the Spratly Islands, which are claimed by China, Brunei, Malaysia, Taiwan, Vietnam and the Philippines.

    Chinese Embassy spokesman Ethan Sun reiterated his country’s claim to the Spratly Islands and adjacent waters, but said Beijing was committed to maintaining peace and stability in the area and resolving disputes through peaceful negotiations, according to the Associated Press.

    South Korea’s Coast Guard said Friday it seized two Chinese fishing boats and their crews on Thursday after they were found fishing illegally in South Korea’s Exclusive Economic Zone, 64 miles southwest of Keokrulbiyeol island in the west sea.

    During the process, one South Korean policeman was hurt by a weapon wielded by Chinese fishermen, and one Chinese fisherman was shot in his leg, the coast guard said.

    China’s Foreign Ministry didn’t immediately respond to a request for comment on that incident.

    Chinese officials and academics have toned down their rhetoric this year in an apparent bid to address concerns that China is becoming increasingly assertive on territorial claims, and that it plans to challenge U.S. military supremacy in the Asia-Pacific region.

    In January, China jolted the region with a test flight of a new stealth jet fighter, indicating that China is further along in using the advanced technology than previous Pentagon statements had suggested.

    China is also developing an antiship ballistic missile that could threaten U.S. naval vessels in the Asia-Pacific region, where the U.S. has long been dominant.

    However, Mr. Li pointed out that China’s military spending accounted for only about 6% of China’s national budget, which he said was lower than in recent years—and well below the level of the U.S.

    The defense budget “will see some increase, but the ratio of spending to GDP is quite low—lower than in many countries,” he added.

    The Wall Street Journal

     

  • Bank of India becomes first to offer trade settlement in yuan

    Bank of India becomes first to offer trade settlement in yuan

    Saibal Dasgupta

    yuan+dollarBEIJING: Bank of India has become the first Indian bank to offer trade settlement facility between the rupee and the Chinese RMB from Hong Kong. This follows intense persuasion by the China Banking Regulatory Commission, which is trying to gain acceptance of the RMB as an international currency.

    “We are the first Indian bank to offer real-time settlement facility in RMB to Indian exporters and importers. It will be save a lot of time because settlement in US dollars usually takes three working days,” Arun Kumar Arora, BoI’s chief executive in Hong Kong, said during a recent visit to meeting regulators in Beijing.

    Indian buyers are at present making payments in US dollars, and they often have to convert rupee into the US currency for the purpose. The US dollars will no more be the intermediary currency as the BOI is offering direct settlement between the rupee and the Chinese money.

    Chinese exporters want their money in the local currency, which is regarded as more stable compared to the US dollar. They are also in a position to have their way because Indian buyers do not have an alternative source of low-cost goods, sources said.

    The process has been facilitated by a recent memorandum of understanding signed between the Reserve Bank of India and the CBRC to enhance banking relationship between the two giant neighbors.

    BoI has opened a RMB with the Bank of China, which will provide real time settlement with buyers and sellers across all provinces of China. The move is part of a campaign by the Hong Kong Monetary Authority, which has persuaded 100 foreign banks to enter into arrangements with Chinese banks for trade settlement in RMB.

    We will sell RMB against the US dollar, and companies can buy as much as they want provided they have the right papers. For individuals, the limit of 20,000 RMB a day,” Arora said. He expects settlements for an amount ranging between 200 million and 300 million in the first year.

    Hong Kong is the only offshore market for the Chinese currency. The past year saw $400 billion of Chinese yuan being traded in Hong Kong against other currencies.

    BoI is also awaiting permission from Chinese regulators to establish a branch in Beijing, where it has been running a representative office for the past four years. It has recently signed an MoU with the CBRC on converting the representative office into a branch. The bank has been running a branch in the boom city of Shenzhen for the past four years. The Shenzhen branch will also be involved in providing additional support for the trade settlement business.

    timesofindia.indiatimes.com, Feb 24, 2011,

  • Standoff at Tahrir Sq.

    Standoff at Tahrir Sq.

    by Kutluk Ozguven

    29 January 2011

    The rules of the game have been simple: Police trumps protesters. Masses trump police. Army trumps masses. If the army stands back, you have a revolution (Iran 1979, Romania 1989, Tunisia 2011), if not, then bloodshed (Hungary 1956, China 1989, Algeria 1992). I don’t recall any popular uprising successful over a fully functioning armed force determined to go all the way. That is why armed forces are always considered as backbones of corrupt dictatorships.

    This weekend we shall see if the Egyptian armed forces, which the latest Wikileaks leak as US believes it to be unhappy, at least in the mid-ranking officers, but probably higher, will open fire to stop the masses or the masses will blink, or it will give way to the people. Egyptian army is a conscript army and there is no part of the Egyptian society that may be counted on apart from the westernised elites, whose children do not operate tanks during military service. The news is that the Egyptian army are already mobilised into urban areas and taken control of strategic points.

    Egyptians I came to know during a series of visits for international projects were a very kind people, members of a polite and civilised nation, well known among the other Arabs with their humour and taking things lightly. This nation of gentle farmers has been easy to manage by foreign soldiers (the Hyksos, Ptolemeans, the Mamluke, Ali Pasha troops) or domestic warlords, perhaps exact opposite of Chechens or Afghans. They are patient, soft-spoken, happy in the face of any event, and cultured. In short, any megalomaniac tyrant’s dream population.

    They have gone through a westernisation process predating Turkey, and a secularisation process of 50 years under socialist dictatorship. Save occasional and sensational terror incidents, there is no history of popular uprising or even any active political formation, except for the elitist Muslim Brotherhood, structured in 30s as a Muslim answer to Freemasonry, who wouldn’t even entertain the idea of going on the streets with sweaty youngsters. Americans and Israelis are all over the country, to the degree that five star Cairo hotels put on Hebrew-language TV channels for their guests from their northeastern neighbours. It has highest number of Internet access in the region with 20 million users and more advanced in some software technologies than, say, Turkey.

    Therefore, one wouldn’t expect a popular uprising overthrowing one of the most entrenched dictators of the world. Most well-informed experts, political commentators or social analysts certainly did not expect that the events would have gone out of control to this degree where it is becoming more and more unlikely that Mubarak will survive. When he unplugged the Internet less than a day ago, I recalled another ridiculous caricature, Alan Rickman’s Sheriff of Nottingham cancelling Christmas. He could have blocked social networks and slowed down the e-mail, but that would be too sophisticated to epitomise this wily little people who see it their birth right to enslave tens of millions of human beings. Which explains the situation better than any verbose expertise: it is the tyranny of stupid, primitive, incompetent minds over masses much more sophisticated and much deeper than them.

    When one sees all these Middle Eastern or Central Asian rulers and their small social segments whom they depend upon to man their security forces or financial institutions, one cannot help but be only deaf to any economic analysis. Despotism is always a disaster for economy because meritocracy is not allowed and accountability does not exist. The small clique of rulers milks the real productive people and eventually kills their productivity long before they would expire naturally. This leaves society weak and inefficient. If we add to the two factors the global financial system, which get the lion’s share of the bounty and only leaving crumbs to the visible rulers, it is obvious that the dictatorship is not a long term stable solution. Either the nation is annihilated from within or without, or it throws its rider. The last military period in Turkey, 1997-2002, is a good accelerated example to despotic cronyism, when the rampant economy of 1997 was brought to bankruptcy in four winters. Imagine that being practiced 30 years or 50 years.

    It is true that the 2011 Domino events stem from people wanting to get rid of the despotic cronyism, with them seeing that it is no more to mind one’s own business anymore as there is no business being left. And this is why analysts keep calling them secular uprisings, emphasizing the difference between Iran, Algeria, Hama or others. But this distinction comes out of their own mental compartmentalisation rather than the field. There is no separation between three elements that are in force here: people’s dignity, economic development and return to Islam. In the middle-east, or any once-have-been Islamic nation, the three are inseparable.

    Economic development is impossible without a level playing field and risk taking, bold, free, entrepreneurial players and accountable refereeing. That is impossible without popular social consent and social contract without privileged classes, aristocracies and caste systems. Perhaps in Hindu society, or in Confucian society. But not where Islam had been the source of social order with its egalitarian principles, holistic justice concept and personal freedoms. Once the verses of the Quran are practiced at some point by any society, it can never have another long-term working social system. That is why in any free election in the Middle East at any given time, Muslim-leaning parties have always won without exceptions. Therefore however secular the protests might have been, if there will be political freedom, reversal of de-Islamisation will be part of it.

    This is why many in the Middle East look towards the Turkish experiment. Without oil and natural sources, and to confess, with little ingenuity, by simply doing things as they should be done, Turkey turned from the military-dominated status to a richer, functional democracy managed by Muslims.

    The Tunisians, Jordanians, Algerians, Yemenis and Egyptians want this, no more. The talk of Turkey without oil is doing well with a free society, with secularised and religious people coexisting under a religious president, with none of the pretentious extravaganza is the greatest fairy tale to Arab ears. A fantastic dream which had been once ruled out as absurd. They just want the same. But when they get it, as they will, another fairy tale that was once ruled as absurd, will inevitably roll on: the cooperation and eventual unity of these independent states.

    If the troops on the Tahrir Square open fire, the process will only be delayed. But not stopped.

  • Chinese president concludes state visit to US

    Chinese president concludes state visit to US

    Obama and Hu

    Chinese President Hu Jintao left Chicago for home on Friday after concluding a four-day state visit to the United States, during which Hu and his US counterpart Barack Obama agreed to build a China-US cooperative partnership based on mutual respect and mutual benefit.

    “It is also conducive to world peace and development,” Hu said.

    In his speech, Hu elaborated on the domestic and foreign policies of the Chinese government and on how to advance China-US relations in the new era.

    “Working together hand in hand, we will build and develop a China-US cooperative partnership based on mutual respect and mutual benefit and deliver greater benefits to the people of our two countries and the world over,” he said.

    The Chinese president flew to Chicago on Thursday afternoon to continue his visit to the United States.

    On Friday, Hu, accompanied by local officials, visited Walter Payton College Preparatory High School in downtown Chicago.

    The high school houses the Confucius Institute in Chicago (CIC), which primarily focuses on the Chinese language and cultural education programs and is the only such institute targeting primary and middle school students in the United States.

    Later in the day, Hu visited an exhibition of companies operating in the US Midwest. Most companies at the exhibition in Chicago’s suburban city of Woodridge are Chinese-funded ones.

    During his tour of the exhibition, Hu encouraged Chinese companies operating in the US to play a bigger role in promoting economic and trade cooperation between the two countries.

    The success of Chinese companies in the United States is a specific example of the China-US mutually beneficial cooperation, he said.

    The operation of these companies not only yields profits for themselves, but adds momentum to economic development in the US Midwest, he added.

    At least 40 Chinese businesses now have operations in the Chicago area, and the number is growing. For example, Wanxiang America Corp., which makes solar panels, has opened plants and a headquarters around Chicago in the last two years.

    Before leaving the US for home, Hu sent a message of thanks to US President Obama, expressing his belief that through the efforts of the two sides, China-US relations would be further developed to better benefit the peoples of the two countries and make a greater contribution to world peace, stability and prosperity.

    The Chinese president began his state visit on Tuesday in Washington. The visit, Hu’s second as head of state, is aimed at enhancing the positive, cooperative and comprehensive relationship between the two countries.

    Hu last visited the United States in April 2006.

    President Hu, who began his visit on Tuesday, had extensive and in-depth discussions with Obama at the White House on Wednesday on major bilateral, regional and world issues.

    The Global Times

  • How to Stay Friends With China

    How to Stay Friends With China

    Between Two Ages Brzezinski 1970By ZBIGNIEW BRZEZINSKI

    Washington
    THE visit by President Hu Jintao of China to Washington this month will be the most important top-level United States-Chinese encounter since Deng Xiaoping’s historic trip more than 30 years ago. It should therefore yield more than the usual boilerplate professions of mutual esteem. It should aim for a definition of the relationship between the two countries that does justice to the global promise of constructive cooperation between them.
    I remember Deng’s visit well, as I was national security adviser at the time. It took place in an era of Soviet expansionism, and crystallized United States-Chinese efforts to oppose it. It also marked the beginning of China’s three-decades-long economic transformation — one facilitated by its new diplomatic ties to the United States.
    President Hu’s visit takes place in a different climate. There are growing uncertainties regarding the state of the bilateral relationship, as well as concerns in Asia over China’s longer-range geopolitical aspirations. These uncertainties are casting a shadow over the upcoming meeting.
    In recent months there has been a steady increase in polemics in the United States and China, with each side accusing the other of pursuing economic policies that run contrary to accepted international rules. Each has described the other as selfish. Longstanding differences between the American and the Chinese notions of human rights were accentuated by the awarding of the 2010 Nobel Peace Prize to a Chinese dissident.
    Moreover, each side has unintentionally intensified the suspicions of the other. Washington’s decisions to help India with nuclear energy have stimulated China’s unease, prompting increased Chinese support for Pakistan’s desire to expand its own nuclear energy potential. China’s seeming lack of concern over North Korea’s violent skirmishes with South Korea has given rise to apprehension about China’s policy on the Korean peninsula. And just as America’s unilateralism has in recent years needlessly antagonized some of its friends, so China should note that some of its recent stands have worried its neighbors.
    The worst outcome for Asia’s long-term stability as well as for the American-Chinese relationship would be a drift into escalating reciprocal demonization. What’s more, the temptations to follow such a course are likely to grow as both countries face difficulties at home.
    The pressures are real. The United States’ need for comprehensive domestic renewal, for instance, is in many respects the price of having shouldered the burdens of waging the 40-year cold war, and it is in part the price of having neglected for the last 20 years mounting evidence of its own domestic obsolescence. Our weakening infrastructure is merely a symptom of the country’s slide backward into the 20th century.
    China, meanwhile, is struggling to manage an overheated economy within an inflexible political system. Some pronouncements by Chinese commentators smack of premature triumphalism regarding both China’s domestic transformation and its global role. (Those Chinese leaders who still take Marxist classics seriously might do well to re-read Stalin’s message of 1930 to the party cadres titled “Dizzy With Success,” which warned against “a spirit of vanity and conceit.”)
    Thirty years after their collaborative relationship started, the United States and China should not flinch from a forthright discussion of their differences — but they should undertake it with the knowledge that each needs the other. A failure to consolidate and widen their cooperation would damage not just both nations but the world as a whole. Neither side should delude itself that it can avoid the harm caused by an increased mutual antagonism; both should understand that a crisis in one country can hurt the other.
    For the visit to be more than symbolic, Presidents Obama and Hu should make a serious effort to codify in a joint declaration the historic potential of productive American-Chinese cooperation. They should outline the principles that should guide it. They should declare their commitment to the concept that the American-Chinese partnership should have a wider mission than national self-interest. That partnership should be guided by the moral imperatives of the 21st century’s unprecedented global interdependence.
    The declaration should set in motion a process for defining common political, economic and social goals. It should acknowledge frankly the reality of some disagreements as well as register a shared determination to seek ways of narrowing the ranges of such disagreements. It should also take note of potential threats to security in areas of mutual concern, and commit both sides to enhanced consultations and collaboration in coping with them.
    Such a joint charter should, in effect, provide the framework not only for avoiding what under some circumstances could become a hostile rivalry but also for expanding a realistic collaboration between the United States and China. This would do justice to a vital relationship between two great nations of strikingly different histories, identities and cultures — yet both endowed with a historically important global role.
    Zbigniew Brzezinski was the national security adviser in the Carter administration.

    January 2, 2011

  • Turkish souvenirs made in New Zealand

    Turkish souvenirs made in New Zealand

    By Charlotte Shipman

    turkish rug 600The painstaking craft of hand knotting Turkish rugs is thousands of years old and based thousands of kilometres from these shores.

    But the modern versions of the ancient art have a distinctly kiwi connection.

    Throughout the world, Turkish rugs are a highly sought after souvenir. On the streets and in the markets of Istanbul there is a carpet on every corner.

    But what most buyers do not know is how much Kiwi’s weave.

    “It’s 50 percent New Zealand wool and 50 percent local wool,” says Mustafa Gozne, a wool importer.

    Gozne has been getting his wool from New Zealand Wool Services since 1992.

    Last year he imported 60 percent of New Zealand wool exports to Turkey – that is nearly two thousand tonnes of wool, worth $7 million.

    It is mainly used in machine made carpets, blended with Turkish wool

    But 10 percent is used for traditional hand knotted carpets, an art which cheap labour in Pakistan, China and India is threatening to destroy.

    “They give the designs, the colours, patterns and they produce Turkish carpet but not in Turkey,” says Gozne.

    Hand knotting carpet is extremely labour intensive. Each square metre has 360 knots and takes more than a month to complete.

    Our wool is valued for being readily available and having a consistent texture.

    “When you use this wool you will not have any headache. I mean the quality during the dying and the knotting,” says Gozne.

    There is only one problem – customers do not realise the secret of the rugs and do not give New Zealand credit.

    “They wouldn’t really have great understanding that it’s always coming from New Zealand which is something we are looking to change throughout the world,” says Paul Steel from NZ wool services.

    But awareness is growing.

    Twenty years a go, hand knotted carpet manufacturers did not know anything about New Zealand wool. Now it is synonymous with quality

    Of the millions of tourists who visit Turkey every year, some are leaving with a small piece of New Zealand.

    3 News

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