US-China heralded a new 'great power relationship'

China seeks ‘great power relationship’ with U.S. but warns against meddling in Tibet, Taiwan

Jewel Samad/AFP/Getty Images

China's Vice President Xi Jinping: “China welcomes the United States playing a constructive role in promoting the peace, stability and prosperity of the Asia-Pacific region, and at the same time we hope the U.S. side will truly respect the interests and concerns of countries in the region, including China.”hare

By Chris Buckley and Doug Palmer

WASHINGTON – China’s Vice President Xi Jinping on Wednesday offered deeper co-operation with the United States on trade and hot spots like North Korea and Iran, but warned Washington to heed Beijing’s demands on Tibet, Taiwan and other contentious issues.

“Sino-U.S. relations stand at a new historic starting point,” China’s expected next leader told U.S. business groups after meetings on Tuesday with President Barack Obama and other top U.S. officials.

China and the United States should strive to create “a new type of great power relationship for the 21st century,” Xi said.

But he said the two powers also had to “strive to avoid misunderstandings and avert misjudgments” and should “truly respect each other’s core interests and major concerns.”

Xi’s visit to United States this week presents a chance for him to boost his international standing before his expected promotion to head of China’s communist party later this year and president of the world’s most populous nation in 2013.

Even as Xi continued his U.S. visit, Obama, at a campaign-style stop in Milwaukee, took aim at China’s trade practices, saying he will not stand idly by when American’s competitors “don’t play by the rules.” “I directed my administration to create a Trade Enforcement Unit with one job: investigating unfair trade practices in countries like China,” Obama told factory workers.

Xi met with House of Representatives Speaker John Boehner and Senate Majority Harry Reid on Wednesday morning and after his speech was headed to Iowa for the next leg of his trip, which finishes later this week in Los Angeles.

Xi addressed a number of sore spots in the U.S.-China relationship, including Beijing’s currency policy.

Many U.S. lawmakers complain the yuan is significantly undervalued, giving Chinese companies an unfair price advantage that helped lift the U.S. trade deficit with China to a record US$295.5-billion in 2011.

Xi said currency reforms already taken by Beijing helped boost U.S. exports to China to more than US$100-billion in 2011 and has significantly reduced China’s overall trade surplus.

“China has become the United States’ fastest growing export market,” Xi said. “The trade surplus as a proportion of GDP has been falling from over 7% to 2%, at a level internationally recognized as reasonable.”

U.S. Treasury Secretary Geithner acknowledged on Wednesday that Beijing is gradually letting its currency rise, but not fast enough to please the United States.

“We think they have some ways to go, we would like them to move more quickly,” he told a congressional panel.



SHARED CHALLENGES

Xi is poised to become China’s next leader following a decade in which it has risen to become the world’s second largest economy while the United States has fought two wars and endured the deepest and longest recession since the Great Depression that sapped its resources.

“The world is currently undergoing profound changes, and China and the United States face shared challenges and shared responsibilities in international affairs,” Xi said.

“We should further use bilateral and multilateral mechanisms to enhance coordination between China and the United States on hotspots, including developments on the Korean peninsula and the Iran nuclear issue,” he said.

At the same time, he urged Washington not to support movements in Taiwan and Tibet for independence.

China deems the self-ruled island of Taiwan to be an illegitimate breakaway from mainland rule since 1949, and has warned that the island must accept eventual reunification.

In recent years, tensions between the two sides of the Taiwan Strait have eased as economic flows have grown. But Beijing remains wary of U.S. involvement in the issue, which it calls an internal affair.

In early 2010, the Obama administrations decision to move forward with proposed arms sales to Taiwan triggered vehement criticism from Beijing, including warnings of sanctions against U.S. companies involved in the sales. Those warnings petered out, but Xi made clear that Taiwan remains an acute concern for Beijing’s dealings with Washington.

Tensions over Chinese control of Tibet have flared in past months when a succession of protests and self-immolations have exposed volatile discontent. Chinese officials have repeatedly blamed those tensions on separatists or supporters of the Dalai Lama, the exiled Buddhist leader of the region.

Xi also acknowledged the Obama administration’s recent “pivot” toward Asia, but warned it not to push too far.

“China welcomes the United States playing a constructive role in promoting the peace, stability and prosperity of the Asia-Pacific region, and at the same time we hope the U.S. side will truly respect the interests and concerns of countries in the region, including China.”

© Thomson Reuters 2012

Xi sees new 'starting point' for US-China ties

By Andrew Beatty (AFP) 

WASHINGTON — Chinese heir apparent Xi Jinping heralded "a new historical starting point" for ties with the United States, wooing US business leaders with a glimpse of a more cooperative future.

Speaking during a lavish ballroom luncheon with the upper crust of corporate America, Vice President Xi described deeper Sino-American ties as an "unstoppable river that keeps surging ahead."

Glossing over the tumultuous twists and turns in 30 years of Cold War-dominated relations, Xi said interests had become ever-more intertwined. "It is a course that cannot be stopped or reversed," he said.

Xi welcomed Washington's interest in the Asia Pacific region, and said cooperation was needed on a range of challenges from North Korea to Iran, so long as China's interests are also respected.

Xi is on his maiden visit to the United States as a top official, a trip many hope will help close a chapter in relations characterized by mistrust and mudslinging, particularly in the commercial sphere.

As the tectonic plates of global trade have shifted in recent decades, China and the United States -- the world's two largest economies -- have frequently collided, jutted and bumped against each other, sometimes to damaging effect for both.

With Xi widely tipped to lead China from 2013 and Obama in a November re-election battle, the visit is being seen as a dress rehearsal for the next generation of US-China relations.

During the trip, Xi has worked US constituencies key to the bilateral ties: official Washington, corporate leaders and, in Iowa, a return to small-town America which he visited more than two decades ago.

His stops in Washington have included the White House, the Pentagon, the State Department, Congress and the US-China Business Council.

Throughout his trip Xi has received the trappings of a state visit -- even if he is only head of state in waiting.

In a broad-ranging speech that was short on specifics Wednesday, Xi told business leaders that increased understanding, mutual respect for core interests, trade and cooperation in international affairs should form the basis for relations.

"Over the past 33 years since the establishment of diplomatic ties, the friendship between our two peoples has deepened, mutually beneficial cooperation has expanded and our interests have become increasingly interconnected," he said.

At the luncheon Xi was introduced by former US secretary of state Henry Kissinger whose secret trip to China in 1971 paved the way for the normalization of relations between Washington and Beijing.

The pair were flanked by a cadre of Chinese Communist Party officials, as well as executives from Coca Cola, Chevron, ConocoPhillips, Dow Chemical, DuPont, Procter & Gamble and Estee Lauder.

Coca Cola CEO Muhtar Kent expressed the cautious optimism felt in the US business community about future ties with China.

He described Xi's visit as "another important milestone toward building an enduring and constructive relationship between our two nations."

The Chinese vice president largely steered clear of specific policy pronouncements, but stressed the mutual benefits of trade, pointing out that 47 of 50 US states had seen their exports with China grow in the last decade.

Despite deepening ties, many Americans and their lawmakers angrily accuse Beijing of not playing by the rules.

They accuse China of keeping the value of its currency unfairly low to fuel inexpensive exports, which have catalyzed China's headlong dash toward becoming an economic superpower.

From June 2010, Beijing has allowed the yuan to rise 8.5 percent against the dollar, in part because of domestic inflation pressures -- making the yuan an increasingly dubious scapegoat for lopsided trade.

In the last decade, trade between the two countries has increased over 275 percent and is now worth half a trillion dollars a year.

But Chinese exports still make up 80 percent of bilateral trade, despite China joining the World Trade Organization a decade ago, leading to accusations of protectionism from US industry.

Xi, repeating a long standing gripe, said the US would need to reform its own trade restrictions on exports to China in order to right that imbalance.

"It is very important for addressing the China-US trade imbalance that the United States adjusts its economic policies and structure, including removing various restrictions on exports to China, in particular easing control on civilian high-tech exports to China as soon as possible," he said.

China has often blamed the US deficit on Washington's own rules on exporting sensitive equipment that could be adapted for military or intelligence use.

Copyright © 2012 AFP. All rights reserved

China and the US: the princeling and the professor

Barack Obama should strive to create conditions in which Xi Jinping, the presumed next leader of China, can play reformer 

Editorial guardian.co.uk, 

If Russia is a country with an unpredictable past, spare a thought for Jia Juchuan, the historian entrusted with the official biography of the father of the next presumed leader of China, Xi Jinping. The story of Xi's father – a member of the first generation of Chinese revolutionary leaders – is a bear trap for the fifth. The elder Xi was both a pioneer of the People's Republic who rose to the rank of vice-premier and a victim of Mao's cultural revolution.

This was not without consequence for the son who may shortly inherit the leadership. Xi junior exchanged his gilded cage in Beijing for a cave home in the impoverished northwestern province of Shaanxi. The first volume of Xi the elder's life was published without problems, but the second volume, covering the purge, has been shelved for three years, ever since the son's destiny became clear. 
Everybody wants a hand in writing it, the historian complained to the Washington Post. If only China's collective leadership could have followed Churchill's advice to Stalin and Roosevelt.



Xi's own biography is a major political asset as the Chinese leader-in-waiting tours America this week on what everyone is taking to be a pre-coronation visit. It gives him the ability to be all things to all men. He is both the princeling confident and authoritative enough to speak his mind, and a man with first-hand experience of rural China. Xi is the modern entrepreneur, not only at ease with China's coastal wealth but the creator of much of it, especially in Shenzhen. And he can also present himself as the man of the people – frugal, down to earth, pragmatic, eating dressed-down in government canteens, a modern politician at home with big business but uncorrupted by it. Supporters of Tibet have scoured Xi Jinping's past for any signs of a shift away from Beijing's growing clampdown. Xi's father was an interlocutor for the Dalai Lama's special envoy Lodi Gyari. But these are straws in the wind. Read what Xi said in a speech celebrating the 60th anniversary of Tibet's "peaceful liberation" last year – that China should fight against separatist activities of the Dalai group and "completely destroy any attempt to undermine stability in Tibet and the national unity of the motherland". As the US ambassador candidly observed, Xi seems personable, but US officials "don't really know much about him".

Perhaps that is why Xi was given the red carpet treatment on Tuesday in Washington. His day included a stop at the Oval Office, lunch with the vice-president and the secretary of state, and a highly unusual visit to the Pentagon – all after a dinner with Henry Kissinger and Brent Scowcroft. Xi remains number two, and his succession – although heavily scripted, with all members of the standing committee of the politburo except Xi and Li Keqiang set to leave – is not yet complete. The choreography of Tuesday's events left little room for doubt. These were the two most important world leaders getting a sense of each other for the first time.

For an America that has consciously turned its diplomatic firepower away from Europe and the Middle East – the former in economic decline, the latter convulsed by revolution to which Washington is a bystander – the Asia Pacific region represents a more fruitful arena. Not only as the economic powerhouse of the world, but an area where US power projection is positively sought – by its traditional allies Japan, Australia and the Philippines, but also by lesser nations emerging from China's shadow. If China and America can deliver mutually assured economic destruction – as the holder of $2tn of US treasury and mortgage-backed debt, China would suffer disastrous capital losses if it spooked the markets – in military terms China and America are regional powers. What more important task than they understand each other's red lines?

Obama should not read too much into Xi's arrival. He should strive to create the conditions in which Xi could play the reformer. If not, the US might find that Xi is equally at home with a more traditional role.

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Western war on Iran soon?

Rising risk of Western war on Iran

GLOBAL TRENDS BY MARTIN KHOR

The new year is witnessing an escalation of a Western economic blockade against Iran while it has been claimed that Israel is preparing for a military strike. Can a war against Iran be avoided? 



THE risk of the world being engulfed in a new and dangerous war is increasing. In recent weeks, Iran has come under greater pressure over its nuclear programme, and the chances of this leading to military conflict have escalated.

A recent article in New York Times magazine revealed that senior Israeli leaders were preparing for a strike on Iranian nuclear facilities in 2012.

The United States has intensified its initiative on trade and financial sanctions on Iran.

Republican candidates for the Presidency have been using high anti-Iran rhetoric.

And there is the possibility in a Presidential election year that the incumbent President may start a war to gain popularity.



In his State of the Union speech last week, President Barack Obama said he would take no option off the table to prevent Iran from getting a nuclear weapon.

Europe recently announced an embargo on Iranian oil. The European Union foreign ministers decided there would be no further oil contracts between its member states and Iran, and that existing oil delivery deals would be allowed to run only until July.

These actions are purportedly aimed at preventing Iran from developing nuclear weapons. But Iran has insisted its research programme is for developing nuclear power, not weapons.

And there is no evidence that it is in fact developing, or intending to develop, weapons.



There is a danger of dramatic escalation of the present conflict through one of various scenarios, such as an Israeli attack on Iran (with or without United States assistance or approval) or an incident in the Persian Gulf involving Western and Iranian ships.

The US has doubled the number of aircraft carriers near the Persian Gulf, while French and British warships recently accompanied the aircraft carrier USS Abraham Lincoln into the Gulf.

These developments are creating the conditions for a slide into a catastrophic war.

On Jan 25, the New York Times carried an article – “Will Israel attack Iran?”– by Israeli journalist Ronen Bergman, an analyst who interviewed Israel’s Defence Minister Ehud Barak, vice-premier Moshe Ya’alon and others.

“After speaking with many senior Israeli leaders and chiefs of the military and the intelligence, I have come to believe that Israel will indeed strike Iran in 2012,” wrote Bergman.

This determination to strike comes despite many difficulties, listed by Bergman.

Iran has dispersed its nuclear installations throughout its vast territory, and Israel has limited air power and no aircraft carrier.

Even if an attack were successful, Iran would be able to rebuild the damaged or wrecked sites. And Iran had declared that it would strike back if attacked.

There is of course irony and double standards in this situation.

While Israel and the West decry the consequences if Iran obtains nuclear weapons capability, it is well known that Israel itself owns many nuclear weapons.

And while Iran is often accused by the same countries of sponsoring terrorism, Iran itself has been the victim of terrorist attacks and economic and technological sabotage.

Bergman’s article provides many details of many of the covert actions taken by Israel against Iran.

The Israeli secret service Mossad was given “virtually unlimited funds and powers” to stop the Iranian bomb through a five-front strategy that involved “political pressure, covert measures, counter-proliferation, sanctions and re­­gime change”.



The moves against Iran include boycotting of financial institutions, the use of computer viruses to disrupt the operations of the nuclear project, tampering with components and the supply of faulty parts and raw materials, explosions at various facilities, and the assassination of several Iranian nuclear scientists.

The article implies that Israel has been involved in, or approves of, these actions, although it does not explicitly admit to them.

Meanwhile, Iran insists it is not intending to develop nuclear weapons, and there has been no evidence that it is doing so.

Iran’s enemies are fearful it will develop a technical capability for developing weapons as it pursues its nuclear energy programme.

Nuclear physicist Yousaf Butt, a former Fellow in the Committee on International Security and Arms Control at the US National Academy of Sciences, and scientific consultant for the Federation of American Scientists, has said Iran was not doing anything that violated its legal right to develop nuclear technology.

Under the Non-Proliferation Treaty, it is not illegal for a member state to have a nuclear weapons capability or option.



If a nation has a fully developed civilian nuclear sector, it, by default, already has a fairly solid nuclear weapons capability, and several countries that do not have weapons, do have this capability.

Meanwhile, Jim Lobe of Inter Press Service reported that several influential foreign policy figures in the US (who used to be Iraq war hawks) were speaking up against military action on Iran.

“We’re doing this terrible thing all over again,” wrote Leslie Gelb, the president emeritus of the Council on Foreign Relations and previously a Iraq-war hawk.

Kenneth Pollack, whose 2002 book on Iraq was cited frequently by hawks before the Iraq invasion, argued not only against any further escalation, but also suggested that the US-EU sanctions were proving counterproductive.

Princeton University professor Anne-Marie Slaughter argued that the West and Iran were playing a “dangerous game of chicken” and that the West’s current course “leaves Iran’s government no alternative between publicly backing down, which it will not do, and escalating its provocations”.

“The more publicly the West threatens Iran, the more easily Iranian leaders can portray America as the Great Satan,” wrote Slaughter, formerly director of policy planning under Secretary of State Hillary Clinton.

It remains to be seen if cooler heads will indeed prevail so that a new war against Iran is avoided.

Obama and Bernanke: Cooking Up Another Market Bubble?

BY James Marshall Crotty, Forbes Contributor

 

"Ben, look. You have to keep interest rates low or I am toast, dude."

The two most important leaders on planet earth each delivered major public speeches in the last 24 hours. Last night U.S. President Barack Obama, in what might be the last State of the Union address of his political career, suggested that the economy is improving, unemployment is heading down, the world is safer, and America’s standing in the world vastly improved all because of his administration’s policies. In a press conference this afternoon, Federal Reserve Chairman Ben Bernanke (by far, the most powerful non-elected person on the planet) delivered a more cautious assessment, suggesting that improved economic conditions, including decreased unemployment and steadily low inflation, will be affected by what happens in Europe and in the broader non-U.S. global economy (hint: China). Today’s upward rise in the U.S. stock market suggests that investors believe both men might be right. That is, there will be economic headwinds, but the U.S. will manage those headwinds well.



Just to make sure, Bernanke signaled that the Fed would keep interest rates low at least through 2014. This is unhappy news to America’s savers and the rabidly anti-Fed Ron Paul (who believes Fed money printing is the root cause of our economic malaise), but music to the ears of investors, new homebuyers, and for what Obama terms those “responsible homeowers” seeking home refinancing (who will now pay a 30-year mortgage rate of just 3.88%). Who knows, maybe housing principal forgiveness is on the way too (ah, heck, throw in a toaster while’s you’re at it).

But, with such initiatives, are Obama and Bernanke just cooking up another housing and market bubble to go along with the current student loan bubble?

What are your thoughts on Obama’s State of the Union and the Fed Chairman’s news conference today? Are things slowly getting better? Will we be able to manage the turmoil in Europe and a slower growth China? Will their remedies make the U.S. economy stronger long-term?

Or are these two men missing some elephant in the living room?

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New US defense policy challenges trust; China in US gunsights!

 

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WASHINGTON / BEIJING - US President Barack Obama's revamped national defense strategy may challenge mutual trust with China, experts said.

While promising to make the US armed forces smaller and leaner, Obama pledged to shift the country's military focus to the Asia-Pacific region.



The nation's military review says that US economic and security interests are "inextricably" connected with the area and the US military accordingly will "of necessity rebalance toward the Asia-Pacific region", including strengthening Asian allies and investing in the strategic partnership with India.

Though Washington recognizes that the United States and China share common interests and stakes in the region, it fears China's rise will affect its economy and security in many ways and it worries about the strategic intention of China's military buildup, according to the review.

The assertive moves by the US may cause potential military tensions between China and the US, said Yuan Peng, an expert of American studies at the China Institutes of Contemporary International Relations.

"China has repeatedly explained its defensive policy, but the US keeps pressuring China. This may irritate China and lead to negative reactions if the US continues to do so," Yuan said.


 

"However, we need to be clear that the draft of the plan, as a whole, is not China-centered, though it is somehow offending that the document puts China in a similar position with Iran," Yuan said.

In the 10 primary missions of the US armed forces listed in the draft of the plan, published on the US Department of Defense website, China was mentioned with Iran - a country labeled as a member of "the axis of evil" by former US president George W. Bush.

"Why does the US want to shift its focus to Asia-Pacific as the region has been the most peaceful area compared with other areas which saw conflicts and wars in the last three decades?" asked Xu Hui, professor with Beijing-based National Defense University.

The US military faces $450 billion in budget cuts through 2021, including about $261 billion through 2017, part of the administration's effort to put the US fiscal house in order.

But "budget reductions will not come at the expense of this critical region", Obama said at the news conference.

After the war in Iraq came to an end last month and as the US is winding down its presence in Afghanistan, Obama said the nation can now meet the new challenges, especially from the Asia-Pacific region.

"Our military will be leaner, but the world must know: The United States is going to maintain our military superiority with armed forces that are agile, flexible and ready for the full range of contingencies and threats," Obama said.

In the document, the US listed China as one of the countries that will continue to pursue asymmetric means to counter America's power projection capabilities.

Although the Chinese government did not comment on the US review on Friday, the country had said earlier that it welcomes the US playing a positive role in the region, but it opposes Washington's involvement in disputes in the South China Sea.

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China in US gunsights

By Damian Grammaticas Beijing correspondent, BBC

 

The US review has prompted some to ask whether a clash between the US and China is inevitable >>

 

Is China's rise going to lead to conflict with America? Is Beijing destined to go to war with today's undisputed global superpower?

The question is not posed directly in the new US defence strategic review. But, unspoken, it is there, running through the document that seeks to shape America's new military thinking for the 21st Century.

Read the review and it is clear that the challenge posed by a rising China is at the very heart of America's new defence strategy.

The document is careful to say China is not destined to be an adversary. But it makes clear America is, nevertheless, about to retool its military to deter China, and, if necessary, to confront it.

Released by President Barack Obama at the Pentagon, the aim of the new strategy is there in black and white: to reshape the US military in a way that "preserves American global leadership, maintains our military superiority".

The Pentagon and the White House are certainly not ready to accept the notion that America is inevitably facing long-term decline while China is on an equally inevitable rise. America wants to remain number one, and this new defence policy is designed to achieve that.

Lack of trust

In the very first sentence of his preamble, President Obama says "our nation is at a moment of transition," and the review states: "We face an inflection point." It identifies two basic forces shaping the transition, one inside America, one outside.

At home growing budget pressures mean there have to be cuts in military spending. At the same time there is the awareness that, abroad, China's growing economic strength is changing the dynamic of power in Asia.

US President Barack Obama insists his country welcomes the "peaceful" rise of China >>

 

The new defence posture, says the US, encourages "the peaceful rise of new powers". That is code for welcoming China's ascent, and has been said many times before.

As to what China's rise means, the new strategy is open-minded. "Over the long term," it says, noncommittally, "China's emergence as a regional power will have the potential to affect the US economy and our security in a variety of ways."

Note the way that China is described as an emerging "regional power". The Pentagon is not ready to accord China the status of a global power or superpower, or even an emerging superpower, a reflection of the fact that China's military reach is still far from global.

However China's economic influence does now span the world. America and China are bound by mutual self-interest. But the review is clear there is a real lack of trust.

"Our two countries have a strong stake in peace and stability in East Asia and an interest in building a co-operative bilateral relationship. However, the growth of China's military power must be accompanied by a greater clarity of its strategic intentions in order to avoid causing friction in the region."

Arms race

So the US is still hedging its bets. Already last year, the Obama administration unveiled its "pivot", turning America's gaze towards the Pacific. That shift is clear in this new doctrine. "We will of necessity rebalance toward the Asia-Pacific region", it says several times.

Now America is stating that it will work on several fronts to counter China's emerging power.

There is a clear concern about China's efforts to develop weapons that would make it hard for US forces to operate in parts of East Asia. China is investing in "anti-access" and "area denial" weapons like so-called "carrier killer" missiles that could sink US aircraft carriers at sea. It has also invested heavily in submarines and is building stealth fighter jets.

The US and China may send up in a tug-of-war over the Pacific region - and perhaps globally >>

 

All of those could push US aircraft carrier fleets further from China's shores, limiting their ability to influence vital trade routes in the South China Sea, or to defend Taiwan if it is attacked by China.

The review says "states such as China and Iran will continue to pursue asymmetric means to counter our power projection capabilities." But it promises "the United States must maintain its ability to project power in areas in which our access and freedom to operate are challenged".

"The maintenance of peace, stability, the free flow of commerce, and of US influence in this dynamic region will depend in part on an underlying balance of military capability and presence," it says.

So the US wants to keep its military superiority over China intact. What that leads to is an escalating arms race as America moves to counter China's own advances.

In a way the Pentagon may be copying China's own strategy, investing in similar types of weapons. There will be a focus on developing increasing air and naval power, and on advanced weapons such as even more sophisticated stealth jets, missiles and drones, along with cyberwarfare and space capabilities too.

Making friends

Strengthening a network of alliances around China is the other pillar of the strategy. "We will emphasise our existing alliances, which provide a vital foundation for Asia-Pacific security. We will also expand our networks of co-operation with emerging partners throughout the Asia-Pacific region."

“Start Quote

China must make the US realise that its rise can't be stopped”

Global Times State-run Chinese newspaper

 

Already the US has close defence relationships with South Korea, Japan, Taiwan, the Philippines and Australia. It is working to build ties with Vietnam, Indonesia and is "investing in a long-term strategic partnership with India".

What all this amounts to is a very robust message of deterrence to China. The US will contest any challenge to its dominance. It will cement core alliances with China's neighbours and protect its interest in East Asia.

To return to the question we began with. Will there be conflict between the US and China one day?

The answer may well depend on how China responds to this new policy. Will it seek to assert its own power in East Asia? Will that cause growing friction?

One early response to the new US policy has come from the state-controlled Global Times newspaper, often nationalist in its opinions.

It says "China needs to enhance its long-distance military attack ability and develop more ways to threaten US territory in order to gradually push outward the front line of its 'game' with America".

"China," the paper says, "must make the US realise that its rise can't be stopped and that it is best for the US to show friendliness towards China."

By  Li Lianxing, Ma Liyao and Tan Yingzi  (China Daily)

Related post;

China warns US on Asia military strategy

China warns US on Asia military strategy

President Obama: "The tide of war is receding"

China's state media have warned the US against "flexing its muscles" after Washington unveiled a defence review switching focus to the Asia-Pacific.

In an editorial, official news agency Xinhua said President Barack Obama's move to increase US presence in the region could come as a welcome boost to stability and prosperity.

But it said any US militarism could create ill will and "endanger peace".

Mr Obama also plans $450bn (£290bn) in cuts to create a "leaner" military.

Thousands of troops are expected to be axed over the next decade under the far-reaching defence review.

The defence budget could also lose another $500bn at the end of this year after Congress failed to agree on deficit reduction following a debt-ceiling deal in August 2011.

Mr Obama said the "tide of war was receding" in Afghanistan and that the US must renew its economic power.



Regional disputes
 
However, he told reporters at the Pentagon: "We'll be strengthening our presence in the Asia-Pacific, and budget reductions will not come at the expense of this critical region."

Xinhua said the US role could be good for China in helping to secure the "peaceful environment" it needed to continue its economic development.

US Defence Secretary Leon Panetta on the new challenges for the US military >>

But it added: "While boosting its military presence in the Asia-Pacific, the United States should abstain from flexing its muscles, as this won't help solve regional disputes.

"If the United States indiscreetly applies militarism in the region, it will be like a bull in a china shop, and endanger peace instead of enhancing regional stability."

BBC Asia analyst Charles Scanlon said the US decision to focus on Asia would have come as no surprise to China's leaders. However, to some in Beijing, it would look like a containment strategy designed to curtail China's growing power.

Beijing officials have yet to comment.

However, the Communist Party's Global Times newspaper said Washington could not stop the rise of China and called on Beijing to develop more long-range strike weapons to deter the US navy.

'Flexible and ready'
 
The US strategy shifts the Pentagon away from its long-standing doctrine of being able to wage two wars simultaneously.

However, Defence Secretary Leon Panetta emphasised the military would retain its ability to confront more than one threat at a time, and would be more flexible and adaptable than in the past.

Mr Obama said: "The world must know - the United States is going to maintain our military superiority with armed forces that are agile, flexible and ready for the full range of contingencies and threats."

No specific cuts to troop numbers or weapons programmes were announced on Thursday - those are to be presented as part of the federal budget next month.

But a 10-15% reduction to the US Army and the Marine Corps is being considered over the next decade - amounting to tens of thousands of troops, Obama administration officials have told US media.

Initial Republican reaction to the review was negative. Chairman of the House Armed Services Committee, California Representative Howard McKeon, said the new policy was a "retreat from the world in the guise of a new strategy".

"This is a lead-from-behind strategy for a left-behind America," he said in a statement.

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Who leads Asia? Can Asia step up to 21st century leadership?

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Can Asia step up to 21st century leadership?

ANALYSIS by Amitay Acharya

IF one had any doubts about the world being in the midst of a huge power shift, recent events should have dispelled those.

From Europeans appealing to China to save the euro to President Barack Obama arriving in Bali to lobby for Asian support, the transformation is evident. Less clear is who will lead the world in the 21st century and how.

There is plenty of talk about the 21st century being an Asian century, featuring China, Japan and India.

These countries certainly seek an enhanced role in world affairs, including a greater share of decision-making authority in the governance of global bodies. But are they doing enough to deserve it?

The intervention in Libya, led by Britain and France, and carried out by Nato, says it all. There is no Nato in Asia, and there’s unlikely to be one.

China and Japan are the world’s second and third largest economies. India is sixth in purchasing-power parity terms. China’s defence spending has experienced double-digit annual growth during the past two decades. India was the world’s largest buyer of conventional weapons in 2010.

A study by the US Congressional Research Service lists Saudi Arabia, India and China as the three biggest arms buyers from 2003 to 2010. India bought nearly US$17bil (RM54.17bil) worth of conventional arms, compared with US$13.2bil (RM42.06bil) for China and some US$29bil (RM92.4bil) for Saudi Arabia.

Chinese, Indian and Japanese foreign policy ideas have evolved. India has abandoned non-alignment. China has moved well past Maoist socialist internationalism. Japan pursues the idea of a “normal state” that can say yes to using force in multilateral operations.

Unfortunately, these shifts have not led to greater leadership in global governance. National power ambitions and regional rivalries have restricted their contributions to global governance.



President Hu Jintao has defined the objective of China’s foreign policy as to “jointly construct a harmonious world”. Chinese leaders and academics invoke the cultural idea of “all under heaven”, or Tianxia. The concept stresses harmony – as opposed to “sameness” – thus signalling that China can be politically non-democratic, but still pursue friendship with other nations.

China has increased its participation in multilateralism and global governance, but not offered leadership. This is sometimes explained as a lingering legacy of Deng Xiaoping’s caution about Chinese leadership on behalf of the developing world. More telling is China’s desire not to sacrifice its sovereignty and independence for the sake of multilateralism and global governance.

Japan’s policy conception of a “normal state”, initially presented as a way of reclaiming Japan’s right to use force, but only in support of UN-sanctioned operations, may sound conducive to greater global leadership.

But it also reflects strategic motivations: to hedge against any drawdown of US forces in the region, to counter the rise of China and the growing threat from North Korea, and to increase Japan’s participation in collective military operations in the Indian Ocean and Persian Gulf regions.

Beset by chronic uncertainty in domestic leadership and a declining economy, Japan has not been a proactive global leader when it comes to crisis management.

Its response to the 2008 global financial crisis was a far cry from that to the 1997 crisis, when it took centre-stage and proposed the creation of a regional monetary fund, a limited version of which materialised eventually within the Chiang Mai Initiative.

In 2005, Indian Prime Minister Manmohan Singh asserted that “the 21st century will be an Indian century”.

Manmohan expressed hope that “the world will once again look at us with regard and respect, not just for the economic progress we make but for the democratic values we cherish and uphold and the principles of pluralism and inclusiveness we have come to represent which is India’s heritage as a centuries old culture and civilisation”.

Yet, the Indian foreign-policy worldview has shifted in the direction of greater realpolitik. Some Indian analysts such as C. Raja Mohan have pointed out that India might be reverting from Gandhi and Nehru to George Curzon, the British governor-general of India in the early 20th century.

Indian power projection in both western and eastern Indian Ocean waters is growing, thereby pursuing a Mahanian approach for dominance of the maritime sphere – named after US Admiral Alfred Thayer Mahan – rather than a Nehruvian approach. It is partly driven by a desire, encouraged by the US and South-East Asian countries, to assume the role of a regional balancer vis-à-vis China.

Asia’s role in global governance cannot be delinked from the question: Who leads Asia?

After World War II, India was seen as an Asian leader by many of its neighbours and was more than willing to lead, but unable to do so due to a lack of resources.

Japan’s case was exactly the opposite; it had the resources from the mid-1960s onwards, but not the legitimacy – thanks to memories of imperialism for which it was deemed insufficiently apologetic by its neighbours.

China has had neither the resources nor the legitimacy, since the communist takeover, nor the political will, at the onset of the reform era to be Asia’s leader.

In Asia today, although Japan, China and India now have the resources, they still suffer from a deficit of regional legitimacy. This might be partly a legacy of the past – Japanese wartime role, Chinese subversion and Indian diplomatic high-handedness. But their mutual rivalry also prevents the Asian powers from assuming regional leadership singly or collectively.

Hence, regional leadership rests with a group of the region’s weaker states: Asean. While Asean is a useful and influential voice in regional affairs, its ability to manage Asia is by no means assured.

Greater engagement with regional forums is useful for the Asian powers to prepare for a more robust role in global governance. So many of the global problems – climate change, energy, pandemics, illegal migration and more – have Asian roots.

By jointly managing them at the regional level, Asian powers can limit their rivalries, secure neighbours’ support, and gain expertise that could facilitate a substantive contribution to global governance from a position of leadership and strength. — The Daily Star/Asia News Network

> The author is the UNESCO chair in Transnational Challenges and Governance at American University and a senior fellow of the Asia Pacific Foundation of Canada. This is based on his article, “Can Asia Lead: Power Ambitions and Global Governance in the 21st Century”, International Affairs, vol. 87, no. 4, 2011.

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The role that the US plays in Asia: Containment of China!

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The role that the US plays in Asia

Comment by XUE LITAI

SINO-US ties were in focus at the recent Asia-Pacific Economic Cooperation (Apec) summit in Honolulu and the just concluded East Asia Summit (EAS) in Bali, especially because of the European economic and political crises.

It was not a good time for US President Barack Obama to attend the EAS, given the unstable state of the American economy, and the Congressional super committee’s failure on the federal budget.

The frictions between the United States and China – from the yuan’s exchange rate to the South China Sea disputes – are nothing new. But the problem now is that the two countries seem unable to narrow their perception gap.

Obama met with Premier Wen Jiabao twice during the EAS to say that China should allow the yuan to revalue more rapidly.

At the Apec summit in Hononulu, Obama had complained to President Hu Jintao that the yuan was undervalued and said it “disadvantages American business; it disadvantages American workers. And we have said to them that this is something that has to change”.

The Chinese leaders responded that the yuan’s exchange rate was not responsible for the US’ high trade deficit with China, instead structural problems in the American economy were to blame for that.

In fact, China has been emphasising the need for a new mechanism for global economic governance to increase “the voice of emerging markets and developing economies”.

Before the summits, US officials had said countries concerned should exercise self-restraint and refrain from taking any action that could escalate or complicate the territorial disputes in the South China Sea. The US remark was directed at China, too.

But before that, Obama had issued an indirect message to China saying: “We want you to play by the rules.”

He warned that “where we see rules being broken, we’ll speak out and, in some cases, we will take action.”

Chinese leaders and people, however, think that the US dragged the South China Sea disputes, an irrelevant issue, to the EAS to fulfil its own agenda.



To them, the US’ intention is clear: It is using the South China Sea disputes to drive a wedge between China and some of its South-East Asian neighbours, which have enjoyed “20 years of steady friendship”.

It is clear that the US is desperate to engage full-time and establish its diversified presence in Asia as part of its global repositioning strategy. Washington is in the process of one of the most important transitions, that is, repositioning and rebalancing its foreign policy priorities.

To that end, it has begun shifting its resources and capabilities from the Middle East and South Asia to East Asia. Recognising that the “American future is in Asia”, the US is hell-bent on establishing a strong presence in Asia.

In the 21st century, as US Secretary of State Hillary Clinton has said, the world’s strategic and economic centre of gravity “will be Asia Pacific”. Clinton said that with the withdrawal of American forces from Iraq and Afghanistan, the US had reached a “pivot point” that should allow it to “lock in a substantially increased investment – diplomatic, economic, strategic and otherwise – in this region”.

Obama soon underscored the shift by stressing: “There is no region in the world that we consider more vital than the Asia-Pacific region; we are going to prioritise this region.”

Such a strategic calculus makes US-China ties the most important and complex relationship Washington has ever established. Thus, the US has to have constructive engagement with China.

But simultaneously, some senior US officials also consider it necessary to continue their China-containment policy. As a result, the US is using the South China Sea disputes to prevent China’s influence from advancing southward
.
Actually, Obama’s decision to attend the EAS is symbolic of Washington’s policy shift towards Asia. In other words, the US’ purpose was to use the EAS to reduce China’s influence in the region.

The Obama administration has demonstrated the US’ established policy on containment of China over the past two years.

Once, Obama even declared: “We’ve brought more enforcement actions against China over the last couple of years than had taken place in many of the preceding years.”

Probably, his declaration was aimed partly at the strategic calculations mentioned above and partly to blunt criticism of his administration by trade unions and Republican rivals, who could accuse him of not taking tougher action against China in the run-up to next year’s presidential election.

The US’ focus on Trans-Pacific Partnership could be interpreted as part of its economic strategy to compete with China’s increasing influence in the region.

In response, China has announced that it would offer its South-East Asian neighbours US$10bil (RM31.8bil) in infrastructure loans and establish a three billion yuan (RM1.5bil) fund to accelerate maritime cooperation with Asean member states.

Among the areas covered by the fund are marine research, navigation safety and combating transnational crimes. Asean member states now look to China for economic revitalisation and seek security guarantee from the US.

But such is the triangular US-China-Asean ties that only after the US and China reach greater agreement over Asia-Pacific affairs can Asean member states overcome the dilemma of choice. — China Daily/Asia News Network

> The author is a research associate at the Center for International Security and Cooperation at Stanford University in California, US.

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Is China still a developing nation?

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Global Trends By MARTIN KHOR

Last week, US President Barack Obama said China has ‘grown up’ and must take on the responsibilities of a developed country. But is China already grown up – or is it still a developing country?

 China’s fight to retain its developing country status is of interest to other developing countries, for they will be next if China loses that fight

IS CHINA still a developing country, or has it joined the ranks of the advanced developed countries? This has become a topical question, especially after US Presi-dent Barack Obama reportedly told Chinese President Hu Jintao last week that China had to act more responsibly now that it has “grown up”.

This interesting conversation took place at the Asia-Pacific Economic Cooperation (Apec) Summit in Hawaii. And when Obama met Chinese premier Wen Jiabao at the East Asia Summit hosted by Asean in Bali last week, he must have said something similar, in between chiding him for not allowing the Chinese currency to shoot up.

By telling China that it has become a grown-up, Obama meant that China should now be treated just like the US or Europe in terms of international obligations – like taking on binding commitments to reduce greenhouse house gas emissions, cutting its tariffs to near zero and giving up its subsidies under the World Trade Organisation, giving aid to poor countries and letting its currency float.

This is what the US has been pressurising China to do in the recent negotiations in climate change, in the WTO’s Doha talks, at various meetings of the United Nations and at the Apec summit.

In fact, most of the important multilateral negotiations are stalled because the US (with Europe and Japan standing behind it) insists that China gives up its developing country status and takes on the obligations of a developed country.

It is not only China, of course. They also want India and Brazil to do likewise. And often also mentioned are South Africa and the wealthier or bigger Asean countries.

The main focus, however, is China. There has been growing respect for – or, rather, fear of – China, that it is growing so fast and has become so big and powerful it might swallow up the Western world in a decade or two.



So, the question is pertinent. Is China a developed country?

The answer depends on what criteria are used. In absolute terms, China is indeed a big economy. Its GNP is second only to that of the United States. It has become the biggest emitter of greenhouse gases, having overtaken the United States.

But this is mainly because China is a big country in terms of population. With 1.3 billion people, it is the world’s most populous country.

However, despite the mighty image it has been given by the world media, China looks like a very ordinary developing country once we look at per capita indicators.

Whether one is a developed or developing country is defined by the UN and by the IMF and World Bank, and the most important criterion is income per capita.

By that yardstick, China is very much a developing country.

The International Monetary Fund, in its latest World Economic Outlook, classifies China as a developing country, with a per capita Gross Domes­­-tic Product last year of US$4,382 (RM13,852), ranked a lowly 91 of 184 countries in the world.

Six African countries (Equatorial Guinea, Gabon, Botswana, Mauritius, South Africa, Namibia) had GDP per capita levels higher than China.

China’s GDP per capita was less than a tenth that of the United States, which had US$46,860 (RM148,129). Luxembourg had the highest ranking, US$108,952 (RM344,408). Ma­­laysia was No. 65 at US$8,423 (RM26,626) and Singapore No. 15 at US$43,117 (RM136,297).

Economists also use the measure of GNP per capita “in gross purchasing power” (GPP). This is to take into account the different costs of living in different countries. People living in countries with a lower cost of living could enjoy a higher li- ving standard than their country’s GNP implies.

Last year, in GDP (at GPP) per capita terms, China was lower still at No. 95 with US$7,544 (RM23,847), just below Ecuador and just above Albania, El Salvador and Guyana.

By contrast, Malaysia was at No. 58 with GPP per capita of US$14,744 (RM46,607) while Singapore was No. 3 with US$56,694 (RM179,295).

The UN Development Programme has a human development index (HDI) that measures quality of life in terms of income, schooling, life expectancy and so on.

The Human Development Report 2011 shows China at No. 101 of 187 countries with a HDI of 0.687 and in a category of “medium human development”.

What about climate change? China, again mainly because of its huge population, is the top greenhouse gas emitting country, with a total of 7,232 megatonnes of CO2 equivalent in 2005. The US is second with 6,914 Mtonnes. India was fifth with 1,859 Mtonnes.

But in per capita terms, China’s emissions level was 5.5 CO2-equivalent per person, ranked 84 in the world. By contrast, the US’ per capita emission was 23.4 CO2 equivalent, Australia’s 27.3, Russia’s 13.7, Ger­many’s 11.9, Japan’s 10.5, Singa­pore’s 11.4, Malaysia’s 9.2, South Africa’s 9.0, Brazil’s 5.4, Indonesia’s 2.7, India’s 1.7 and Rwanda’s 0.4.

Thus, as No. 91 country in the world in GDP per capita, No. 101 in human development index and No. 84 in per capita emissions, China is looking like, and is, a middle-level or even lower-middle level developing country, with not only all the developed countries ahead of it, but also many developing countries, too.

China also shares the same characteristics of many developing countries. More than 700 million of its 1.3 billion people live in the rural areas, and in 2008 there was a large imbalance, with the urban disposable household income 3.3 times bigger on average than in rural areas.

According to China’s own standard, 43 million Chinese are low-income (below US$160 (RM506) a year). By the higher UN standard, 150 million people are poor, living on less than US$1 (RM3.16) a day.

Each year, 12 million people are newly added to the job market, outnumbering the population of Greece, and it is quite a task to find them jobs.

This does not deny the fact that there are high points in China’s development: its big GNP in absolute terms, its high rate of economic growth, the foreign reserves of above US$3 trillion (RM9.5 trillion).

But the fact remains that while China has become a big economic power in absolute terms, it is still a middle-level developing country, with the socio-economic problems that most developing countries have.

And if China is pressurised to take on the duties of a developed country and to forgo its status and benefits of a developing country, then many other developing countries that are ahead of China (at least in per capita terms) may soon be also asked to do the same.

Thus China’s fight to retain its developing country status is of interest to other developing countries, for they will be next if China loses that fight.

China cautions 'outside forces' on sea issue

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Wen Jiabao sounds warning against interference in dispute with neighbours over potentially oil-rich South China Sea.  Wen wants any dispute over the South China Sea to be resolved by the countries that are affected [EPA] Wen Jiabao, the Chinese premier, has said "outside forces" had no excuse to get involved in a complex dispute over the South China Sea. Wen, who spoke on Friday at the Association of Southeast Asian Nations (ASEAN) summit on the Indonesian resort island of Bali, gave a veiled warning to the US and others not to interfere in the sensitive issue. But he also struck a softer line during the ASEAN summit by offering loans and saying China only wanted to be friends. China already claim a large swathe of the South China Sea, which straddles key shipping lanes and is potentially rich in energy resources. Vietnam, the Philippines, Taiwan, Malaysia and Brunei are the other claimants to parts of the sea, and along with the US and Japan, are pressuring China to try and seek some way forward on the knotty issue of sovereignty, which has flared up again this year with often tense maritime confrontations. The Chinese news agency reported Wen as saying "the dispute which exists among relevant countries in this region over the South China Sea is an issue which has built up for several years". "It ought to be resolved through friendly consultations and discussions by countries directly involved. Outside forces should not, under any pretext, get involved," he said. Concerns expressed Japan has also expressed concern over the dispute, and India has become involved via an oil-exploration deal with Vietnam in the South China Sea. Marty Natalegawa, the Indonesian foreign minister, said that China had sent positive signals about further discussing  the code of conduct for the waters. "I think this is an important development," Natalegawa said. China has offered loans of id=mce_marker0bn on top of a pledge of  id=mce_marker5bn in loans made two years ago [AFP] In July, China and Southeast Asian countries agreed on a preliminary set of guidelines in the South China Sea, a rare sign of co-operation in a row that has plagued relations in the region for years. The White House has said President Barack Obama, who is also in Bali, will bring up the issue at the summit. China has said it does not want it discussed, preferring to deal with the problem bilaterally amongst the states directly involved. Beijing accuses the US of trying to consolidate its own position in Southeast Asia. Obama has agreed to to deploy up to 2,500 troops and boost air force co-operation with Australia. China sees US action as a deliberate ploy to counterbalance the rise of China as an economic and military in the region. Despite the disagreements over the South China Sea, China has been keen to deepen trade and economic ties with Southeast Asia, and has a free trade agreement with the bloc. "The China-ASEAN relationship is solidly based and has great potential and a promising future," Wen said in his speech. To this end, Wen said China would offer $10bn in loans, on top of a pledge $15bn of loans made  two years ago. China will also set up a $473 million fund to expand practical maritime co-operation by promoting cooperation in environmental protection, navigational safety and combating transnational crimes. Source: Agencies   Newscribe : get free news in real time