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Showing posts with label Japan. Show all posts
Showing posts with label Japan. Show all posts

Wednesday 29 September 2021

Beyond the submarine feud, contains China's rise

https://youtu.be/-RqjM2ij5dc 

Indo-Pacific: AUKUS alliance causes anger in France and EU | DW News

https://youtu.be/8WpwHJV6TG4

China and France criticise UK-US-Australia submarine pact

A Royal Australian Navy submarine is seen during a drill with the Indian Navy in Darwin on September 5. Australia is buying a fleet of nuclear submarines as part of a new defence pact. Photo: TNS

The new US security pact with Australia and Britain shows Biden’s approach in building overlapping alliances and partnerships in dealing with its China challenge

THE empire strikes back. So it seemed as United States President Joe Biden announced recently at a press conference attended virtually by Australian Prime Minister Scott Morrison and his British counterpart Boris Johnson, the conclusion of a new military and security agreement between their three nations.

The agreement smacks of the old “Anglo” arrangements made a century ago between what used to be called the “Mother Country” and two of her major English-speaking siblings. And President Biden’s jovial reference during the latest press conference to the Australian Premier as “that fellow Down Under” only heightened the “retro” feel of the entire enterprise.

But appearances can be deceiving, and what may look and sound like a blast from the past could well turn out to be a major pointer of the world of tomorrow. For there is little doubt that the new Aukus arrangement – as this pact is rather ungainly called – is already being rated as a fundamental step change in Asian and, perhaps, even global security structures.

Professor Rory Metcalf of the Australian National University and one of his country’s most prominent strategic experts, is not a man known to exaggerate. But on this occasion, no exaggeration seemed too much: Australia, he wrote after the Aukus deal was announced, “has crossed a strategic Rubicon, bitten the bullet, nailed its colours to the mast”. In short, no expression, however grand or over-used, is out of place in expressing the significance of the new deal.

French fury over subs deal

Following the announcement, most of the attention concentrated on the impact of the Aukus agreement on Australia’s existing contract with France for the delivery of a new generation of conventional, diesel electric powered submarines. That deal has been cancelled and will be replaced with the supply of nuclear-powered submarines based on Us-developed technology.

The French were predictably apoplectic at the loss of a contract for the construction of 12 Barracuda submarines, a mega deal worth at least Us$88bil in today’s prices, and a critical part of France’s struggle to maintain an indigenous naval industry.

Officials in Paris were particularly indignant about being kept in the dark by the Australians about their negotiations for a nuclear submarine replacement deal. French Foreign Minister Jean-yves Le Drian called the entire episode a “stab in the back”; junior politicians in Paris have used even more colourful language, and French officials have been steeling themselves for a prolonged legal battle with Australia over what they claim is a broken contract.

As is often the case with military deals which contain many confidential clauses, the conclusion may well be that both sides to the dispute are right.

The French may be correct to point out that Australia could have gone for the purchase of nuclear submarines back in 2016, when the initial deal was signed. It was Canberra that insisted on the diesel variety partly because the anti-nuclear mood was strong among Australians then, and one of the chief attractions of picking France’s Barracuda submarines at that time was precisely the fact that the submarines could be switched from diesel to nuclear power. So, it looks odd that the Australians are now ditching a French contract by arguing that it does not offer them the technology which they could have had from the start, but rejected.

However, the Australians may also be right in claiming that the French submarine project is both behind schedule and more than double the initial budget, and that the promises initially made by Paris to transfer 90% of the work to shipyards in Adelaide were subsequently whittled down to not more than half of the construction capacity, thereby failing to create the national Australian submarine manufacturing capability which Canberra craved.

But all these arguments, although weighty, are marginal. For what persuaded the Australian government to go for the deal was the unique access it offers to the technology which no other nation has, apart from the US and the United Kingdom.

Only six nations in the world have nuclear-powered submarines: Britain, China, France, India, Russia and the US. The Americans have never shared their technology with any other country apart from Britain, and even that technology-sharing deal was concluded back in the late 1950s.

There is no question, therefore, about the significance of the latest agreement for Australia. A senior American official who briefed the media about the Aukus deal on condition of anonymity underlined the “very rare” nature of the arrangement and the “extremely sensitive” technology that will be shared.

“This is, frankly, an exception to our policy in many respects. I do not anticipate that this will be undertaken in any other circumstances going forward; we view this as a one-off,” he told journalists.

The French were wondering why they were not offered a part in one shape or another in this Australia-britain-us triumvirate. The answer is quite simple and, of course, fully known in Paris.

The French have spent decades trying to develop technologies which are independent from the US and offered as alternatives to American platforms. President Emmanuel Macron uses every opportunity to urge the rest of Europe to develop “strategic autonomy” from the US. It should come as no surprise, therefore, that the Americans are taking France at its word and propose to respect French “autonomy” by excluding it from sensitive military projects.

The Five Eyes 

 In reality, the Aukus deal builds on almost 80 years of intelligence cooperation within the so-called Five Eyes arrangement in which the Australians, Brits and Americans are also joined by New Zealanders and Canadians. The unique flow of classified information between them served as not only the foundation for the current deal, but also the basis for common threat assessment.

Australia has decided that it needs nuclear-powered submarines because they are stealthier and can endure far longer periods submerged, but also because the submarine deal is a curtain-raiser to something far bigger: the development and transfer of technology with the Americans and British involving a variety of other fields, including cyber, artificial intelligence and quantum technology.

Furthermore, senior US officials are now talking about setting up “a new architecture of meetings and engagements” between relevant defence and technology teams from the three countries which will not only identify joint areas of research and development, but also promote “deeper interoperability” across the entire spectrum of a future battlefield. This is, to all intents and purposes, a new alliance.

And the longer-term political ramifications are just as substantial.

In a 30-minute phone call on Wednesday, the French and US presidents agreed to try to find a way forward and will meet in Europe at the end of next month.

But there is no doubt that the conclusion of the Aukus deal marginalises Europe. The Europeans have spent the past 18 months proclaiming their desire to elaborate a new policy towards the Indopacific region, and particularly towards China, one which will supposedly entail both a “critical engagement with China” and a friendly engagement with the US.

Yet when the chips were down, the only European partner the US was interested in enlisting was Britain. The fact that the announcement of the Aukus deal came literally hours before the European Union unveiled its own Asia policy paper only added to the continent’s sense of marginalisation.

The deal with Australia is also a huge boon for British PM Johnson. He was castigated for pulling Britain out of the EU, something which supposedly made his country irrelevant. But the Aukus pact seems to confirm Johnson’s claims that out of the EU, the Brits have plenty of global engagement alternatives. The deal with Australia also demolishes the argument that the Johnson government is not taken seriously in Washington.

The Aukus deal also ensures that Britain’s existing intelligence and technology cooperation links with the US are now being recast as part of a global effort to keep up with the perceived Chinese threat, a useful advantage for the British, who often fretted that, with the old confrontation against Russia now less important, the US would lose interest in cooperation with them.

America’s China strategy

But the most significant aspect is what the Aukus deal tells us about America’s long-term strategy on China.

For years, the discussion in many world capitals was about the feasibility of creating a broad, global Us-led coalition to contain China, one which includes most Asian countries, and mimics the Nato alliance in Europe during the Cold War. But that was never feasible in Asia, and probably was never even considered in Washington.

Instead, what President Biden is seeking to promote is several more restricted alliance and partnership arrangements, some overlapping and some complementing each other. The Quad is one such arrangement, the Aukus another, and there will be others in the offing.

The approach has the advantage of enhancing the existing hub-andspokes arrangements whereby the US is crucial to every single regional arrangement but is not presiding over a uniform region-wide alliance.

The overlapping nature of these arrangements is intended to increase the cost which China may have to pay in any future confrontation, but at the same time does not isolate the Chinese or condemn the region to a Cold War-style confrontation. Still, the Aukus military pact is not without its own potential difficulties.

The fact that it is seen as a public rebuff of France and of the EU is decidedly unhelpful. The US needs EU cooperation in Asia, and particularly French cooperation. Next to the British, the French have the most capable European military force, and the only one apart from the British with true long-range expeditionary capabilities. France is also a Pacific power: It has two million citizens in the region.

So, urgent steps must be taken to include France in any future regional projects.

Because of its privileged and exclusive nature, the Aukus deal can also create tensions with other US allies such as Japan and South Korea, which may wish to get similar technology-sharing deals.

So, it’s better if, after the initial publicity splash, the Aukus copies the example of America’s nuclear submarines and dives into the depth of secrecy, never to be talked of again. Most of its added value is by working behind the scenes.

There will also be political difficulties. Critics in Australia will claim that their country is losing its independence by getting too close to the US. And critics in Britain – including former prime minister Theresa May – are already warning that the Aukus deal makes the British too dependent on US policy towards China, with potentially grave consequences.

Still, none of this detracts from the conclusion that, in seeking to counter China, the US has lost none of its ability to innovate and surprise. And decision-makers in Beijing would be well advised to reflect on how their own actions of condemning Australia, boycotting Australian goods and, more recently, presenting a set of humiliating conditions to the Australians as a precondition for the restoration of normal relations have contributed to the creation of the Aukus alliance.

Far from achieving what Beijing would regard as Canberra’s “good behaviour”, the pressures have resulted in an Australia which will be better armed and more closely aligned with the US, precisely the outcome China sought to avoid.

Jonathan Eyal is the Europe correspondent at The Straits Times, a member of the Asia News Network (ANN), which is an alliance of 24 news media entities. The Asian Editors Circle is a series of commentaries by editors and contributors of ANN.

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Australian Aukus subs: are China’s fears of a nuclear arms race in.

 https://www.thestar.com.my/aseanplus/aseanplus-news/2021/09/27/australian-aukus-subs-are-chinas-fears-of-a-nuclear-arms-race-in-the-indo-pacific-founded

 

  Why AUKUS, Quad and Five Eyes anger China

The declared aim of a new defense agreement comprising the U.S., U.K. and Australia, christened AUKUS, is to maintain a “free and open IndoPacific,” with nuclearpowered submarines potentially on patrol. But you can add it to the list of arrangements among democracies attempting to counter China’s growing power. The so-called Quad partnership, created after the devastating 2004 Indian Ocean tsunami, and even the World War II-era “Five Eyes” spy alliance now seem overwhelmingly focused on Beijing. The growing web has provoked fury from Beijing and worries in some Asian states that the new groupings could fuel a dangerous arms race in the region.

Q: Q:What is AUKUS?

A: A:A new security partnership that will see Australia acquire nuclearpowered submarine technology – but not nuclear weapons – from the U.S. and U.K. While it could take more than a decade for Australia to build its first sub, the agreement shows the U.S. seeking to form a more cohesive defense arrangement in Asia to offset China’s rapidly modernizing military. Australia has long tried to balance security ties with the U.S. and its close economic ties with China, insisting it didn’t need to pick sides. But Beijing’s barrage of punitive trade reprisals following Prime Minister Scott Morrison’s push for an investigation into the origins of the Covid-19 pandemic appears to have drastically changed the strategic calculus in Canberra.

Q: Q:Why are the submarines important?

A: A:Nuclear-powered vessels are vastly superior to their diesel-electric counterparts: They’re faster, can stay submerged almost indefinitely, and are bigger – allowing them to carry more weapons, equipment and supplies. Given Australia’s remote location and the fact its subs may operate in waters stretching from the Indian Ocean up to Japan, these are big pluses. Until now, only six nations – the U.S., U.K., France, China, Russia and India – have had the technology to deploy and operate nuclear-powered subs. France was enraged by the Aukus deal, which came as a surprise, because Australia simultaneously canceled a $66 billion agreement it had had with Paris for conventional subs.

Q: Q:What’s the Quad?

A: A:It brings the U.S., Japan, India and Australia together in an informal alliance of democracies with shared economic and security interests that span the Pacific and Indian Oceans. Formed to coordinate tsunami relief efforts, it lay dormant for years afterward until 2017, when it was revived under then-U.S. President Donald Trump as his administration sought to challenge China from every angle. Trump’s successor, Joe Biden, organized the first-ever gathering of the Quad leaders in March, at which they pledged to accelerate production of Covid-19 vaccines and distribute them across Asia. Although their statement doesn’t mention China, the talks came amid a flurry of U.S. diplomacy designed to build a common approach to dealing with Beijing.

Q: Q:What’s Five Eyes?

A: A:It’s a decades-old intelligence-sharing arrangement among the U.S., the U.K., Canada, Australia and New Zealand. It’s so good at keeping secrets that its existence wasn’t publicly revealed until the mid-2000s. It isn’t clear how much intelligence is shared, but most of whistle-blower Edward Snowden’s vast 2013 dump of classified U.S. National Security Agency data, for instance, was marked FVEY, meaning it was available to other Five Eyes members. Advocates say the collaboration was used to positive effect in the Afghanistan war as well as in counter-terrorism operations in the Philippines and East Africa. Snowden attacked it as unanswerable to democratic oversight by national governments. Cracks emerged this year over China, when New Zealand distanced itself from moves to broaden the group’s remit and take positions on issues such as Beijing’s human rights record.

Q: Q:Why so much focus on China?

A: A:Its rise has steadily become one of the biggest foreign policy challenges not just for the U.S., but for almost every Chinese neighbor and democracies around the world. China’s rapid military development is a particularly acute threat to neighboring countries such as India and the Philippines, which have active maritime or border disputes. But it also threatens the U.S. military presence that has underpinned Asia’s security architecture for decades. Researchers at the University of Sydney, for example, warned last year that China’s growing missile arsenal could wipe out America’s bases in Asia during the “opening hours” of any conflict. China’s global economic reach has also greatly expanded as state-owned companies buy up strategic assets such as ports around the world that could be harnessed in times of war. Its statecraft – spearheaded by “wolf warrior” diplomats – has also grown more aggressive, particularly throughout the Covid pandemic.

Q: Q:What’s China’s reaction?

A: A:It has consistently lashed out at what it calls a “Cold War mentality,” denouncing such partnerships as anti-China cliques. Chinese officials argued that Aukus will stoke an arms race in the Asia-Pacific region. In their view, its members are trying not just to compete, but to contain China’s rise – to throw a military net around it in vital waterways like the South China Sea and undermine the country’s economic development. Relations have been getting tenser on all sides. Biden, like Trump, has trained his energies on preventing the world’s second-largest economy from pulling ahead. Beijing also has sparred with the U.K. over Hong Kong and Canada over detained citizens, while Europe has called China a “systemic rival.”

US-Australia nuclear arms deal


On September 15, the heads of government of Australia, the United Kingdom and the United States announced the formation of AUKUS, "a new enhanced trilateral security partnership" among these three countries. Australian Prime Minister Scott Morrison and British Prime Minister Boris Johnson joined US President Joe Biden to "preserve security and stability in the Indo-Pacific," as Johnson put it.

While China was not explicitly mentioned by these leaders at the AUKUS announcement, it is generally assumed that countering China is the unstated motivation for the new partnership. "The future of the Indo-Pacific," said Morrison at the press conference, "will impact all our futures." That was as far as they would go to address the elephant in the room.

Zhao Lijian of the Chinese Foreign Ministry associated the creation of AUKUS with "the outdated Cold War zerosum mentality and narrow-minded geopolitical perception." Beijing has made it clear that all talk of security in the IndoPacific region by the US and its NATO allies is part of an attempt to build up military pressure against China. The BBC story on the pact made this clear in its headline: "Aukus: UK, US and Australia launch pact to counter China."

What was the need for a new partnership when there are already several such security platforms in place? Morrison acknowledged this in his remarks at the press conference, mentioning the "growing network of partnerships" that include the Quad security pact (Australia, India, Japan and the United States) and the Five Eyes intelligence-sharing group (Australia, Canada, New Zealand, the UK and the United States).

A closer look at AUKUS suggests that this deal has less to do with military security and more to do with arms deals.

Morrison announced that the "first major initiative of AUKUS will be to deliver a nuclear-powered submarine fleet for Australia." Two red flags were immediately raised: first, what will happen to Australia's pre-existing order of diesel-powered submarines from France, and second, will this sale of nuclear-powered submarines violate the nuclear Non-Proliferation Treaty (NPT)?

In 2016, the Australian government made a deal with France's Naval Group (formerly known as Direction des Constructions Navales, or DCNS) to supply the country with 12 diesel-electric submarines.

A press release from then-prime minister Malcolm Turnbull and his minister of defense (who is the current minister of foreign affairs), Marise Payne, said at the time that the future submarine project "is the largest and most complex defense acquisition Australia has ever undertaken. It will be a vital part of our defense capability well into the middle of this century."

Australia's six Collins-class submarines are expected to be decommissioned in the 2030s, and the submarines that were supposed to be supplied by France were meant to replace them. The arms deal was slated to cost (in Australian dollars) "about $90 billion to build and $145 billion to maintain over their life cycle," according to The Sydney Morning Herald.

Australia has now canceled its deal with the French to obtain the nuclear-powered submarines. These new submarines will likely be built either in the US by Electric Boat, a subdivision of General Dynamics, and Newport News Shipbuilding, a subdivision of Huntington Ingalls Industries, or in the UK by BAE Systems; BAE Systems has already benefited from several major submarine deals.

The AUKUS deal to provide submarines to Australia will be far more expensive, given that these are nuclear submarines, and it will draw Australia to rely more deeply upon the UK and US arms manufacturers.

France was furious about the submarine deal, with Foreign Minister Jean-Yves Le Drian calling it a "regrettable decision" that should advance the cause of "European strategic autonomy" from the United States.


US rules out adding India or Japan to AUKUS pact

Washington, Sept. 23: The United States has ruled out adding India or Japan to the new trilateral security partnership with Australia and Britain to meet the challenges of the 21st century in the strategic Indo-Pacific region. On September 15, US President Joe Biden, Australian PM Scott Morrison and British PM Boris Johnson jointly announced the formation of the trilateral security alliance AUKUS under which Australia would get a fleet of nuclear-powered submarines for the first time.

“The announcement of AUKUS last week was not meant to be an indication, and I think this is the message the President also sent to (French President Emmanuel) Macron, that there is no one else who will be involved in security in the Indo-Pacific,” White House press secretary Jen Psaki told reporters at her daily briefing on Wednesday.

Ms Psaki was responding to a question if countries like India and Japan whose leaders would be in Washington this week for the first in-person Quad summit would be made part of the new security alliance.

“On Friday you’ll have the Australians there (for the Quad summit). But then you also have India and Japan. Would you envision for them a similar kind of military role that you’ve now defined for the Australians?” a journalist asked.

“AUKUS? What would it become? JAUKUS? JAIAUKUS?” Ms Psaki then quipped, before giving an answer to the question. The trilateral security alliance AUKUS, seen as an effort to counter China in the IndoPacific, will allow the US and the UK to provide Australia with the technology to develop nuclear-powered submarines for the first time. China has sharply criticised the trilateral alliance, saying such an exclusive grouping has no future and will gravely undermine regional stability and aggravate the arms race and hurt international non-proliferation efforts.

The move also angered France, an European ally of the US, which said it had been “stabbed in the back” and publicly voiced its outrage at the AUKUS alliance. It recalled its ambassadors to the US and Australia after the AUKUS security deal was announced.

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Saturday 21 August 2021

The economics of politics: Malaysia's leaders should put the people's interests before their own !

 


THE Sengoku period (also known as the “Warring States period”) of Japan from 1467 to 1615 is a period of great turbulence and unrest due to endless civil war and social upheaval.

` It came about as a result of a political vacuum when the Ashikaga Shogunate collapsed. Advancement of technology during this period also contributed to new warfare. Europeans arriving at the shores of Japan in 1543 introduced the “arquebus”, a type of long gun of its time. It was the same weaponry used by the Portuguese when they invaded the Sultanate of Malacca in 1511.

` I find this period of Japanese history especially fascinating, as this is where samurai warlords such as Oda Nobunaga, Toyotomi Hideyoshi and Tokugawa Ieyasu rose to prominence. Nobunaga was the leading figure and is recognised as one of the “Three Great Unifiers” of Japan. Coming from a relatively small, Oda clan, he became the most powerful Daimyo (feudal lord) of his time. Due to his adoption of “arquebus” and prowess in war, he was a potent force fighting towards a unification of all of Japan.

` He was succeeded by Hideyoshi, after being forced to commit seppuku in Kyoto when a retainer samurai general, Akechi Mitsushide, launched a coup. Hideyoshi was Nobunaga’s loyal general who rose through the ranks from a foot soldier. He completed Nobunaga’s unification agenda from the existing foundation laid and became the de facto leader of his time.

` Sadly, blinded by his political ambition to expand territories beyond Japan, he launched an ill-fated Korean invasion which damaged Japan’s own domestic economy due to prolonged military stalemate.

` After his death, his five-year-old son, Toyotami Hideyori, succeeded him under the guidance of a Council of Five Regents. It wasn’t until 17 years later before the conflict between Toyotami loyalist supporting Hideyori as a rightful ruler of Japan and Ieyasu, the regent and most influential Daimyo then, imploded leading to the Battle of Sekigahara. Ieyasu won and it ushered 250 years of peace and economic growth known as the Edo Period (Tokugawa Era).

` As our country is in the midst of a second major political impasse after only 18 months and looking to have its third government in three years, this raises the issue of the cost of politics towards our country’s economy and its overall wellbeing.

` Looking back, the Sengoku period was a time of political turmoil where espionage, betrayals and revenge were ordinary course of daily business. It is no different from modern politics today minus the bloodshed. The whole cloak-and-dagger operations beneath the glamorous guise of democracy today hinges on personal interests over the greater good of the people. Hence, almost always the people end up paying the greatest price in the economics of politics.

` The current geopolitical issue in Afghanistan is a clear testament of the cost of politics and poor foreign policy of the United States. After spending US$1 trillion (RM4.2 trillion) of taxpayers’ money, sacrificing 2,448 Americans lives with 20,722 more wounded over 20 years, the longest spanning foreign war in the US’ history is officially drawing to a close. However, at what cost?

` The withdrawal of troops has a left a vacuum in Afghanistan where the “elected” government was overran by armed Taliban. Even president Ashraf Ghani fled the country with cars and choppers filled with cash. The innocent citizens of Afghanistan are left to fend for themselves, while those deemed pro-American are fearing for their lives. Innocent people of both countries paid the ultimate price for US disastrous foreign policy which benefited nobody except weapons manufacturers, arms dealers, pro-war politicians and lobbyist. This is the real cost of politics on full display.

` Of course, there are economics positives that comes out from politics too. After all, politicians plays the role of lawmakers of a country and policies crafted will have direct consequences on the economics of a nation (refer to China’s GDP Growth chart below).

` Deng Xiaoping, the de facto paramount leader of China inherited a country when it was suffering from poverty and ill effects of policies such as the “Great Leap Forward” and “Cultural Revolution” implemented during Mao-era. He instituted a series of reforms including the most crucial “Opening Up of China” (Gai Ge Kai Fang) which pivoted China from a planned economy to a socialist market economy (also known as socialist capitalism).

` I remembered asking my economics professor in LSE years ago, “who is your favourite economist of all time?” Without hesitation, he said “Deng Xiaoping. This man may be small in size but he is enormous in stature. He is great because he had the vision to institute economic reforms steering from old ways for the world’s most populous nation. By doing so, he saved countless of lives.”

` Relating to the current political predicament in our country, I realised how Deng Xiaoping was not your ordinary politician. Unknown to many, he did not actually hold official leadership position in Government or the Chinese Communist Party when he was instituting reforms. Yet, his policies from 1978 onwards laid the foundation for what would make China the second largest economy and superpower of the world today. He is a statesman without honorifics, position and title.

` China’s GDP Growth Chart in above

` Economics and politics always go hand in hand. Both cannot be looked at in isolation. While there are many negative economic indicators for our country at present such as Fitch Solution’s latest 2021 GDP growth forecast downgrade to zero or other rankings which point towards our country’s rapid decline in comparison to regional peers, one should not despair and be overly pessimistic.

` Our country was a beacon of democracy in South East Asia when there was a peaceful transfer of power in 2018 from a regime that ruled for 61 years since Merdeka. Of course, today’s political quandary exposes the flaws within the system but fail safes can be implemented if the leaders are willing to put the people’s interests before their own.

` Japan did not get to where they are today overnight. It was a civilization that went through the bloody Sengoku period. It also showed us that before an era of peace and prosperity comes along, there will be times of turbulence.

` Rest assure, history has shown as society progresses through education and learning from the mistakes of the past, it will mature. That is my hope for the country.

` Ng Zhu Hann, is the author of Once Upon A Time In Bursa. He is a lawyer & former Chief Strategist of a Fortune 500 Corporation. The views expressed here are his own.

Hann Ng - Managing Partner - Hann Partnership | LinkedIn

NG ZHU HANN

 

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Tuesday 24 November 2020

RCEP shows Asia can act independently of US

Malaysia and other partner nations are looking forward to better days ahead after signing the world’s largest trade deal.

THE Regional Comprehensive Economic Partnership (RCEP), eagerly awaited by 15 member nations and their 2.2 billion people, was finally signed last Sunday after eight years of negotiations and delays.

This regional free trade agreement has injected hope into the economies of member nations as they struggle to contain the second wave of Covid-19 pandemic.

The biggest trade deal in the world signed on Nov 15 during a virtual summit in Vietnam will, among others, allow participating countries to enjoy major tariff cuts.

Covering 30% of the global economy and global population, the RCEP will broaden and deepen economic linkages across the Asia Pacific region, ease trade in goods and services and facilitate the flow of investments.

The Geneva-based United Nations Conference on Trade and Development (Unctad) believes that the RCEP could give “a significant boost” to foreign direct investment (FDI) in the region.

“The provisions related to market access and disciplines in trade, services and e-commerce are highly relevant for regional value chains and market-seeking investment,” said the UN body in its special issue on investment trends last Sunday.

With China being a participating nation, others within the bloc will be able to gain easier access to China’s vast market of 1.4 billion people, including its 400-million strong middle-class income group.

And China, being the largest economy in Asia, will find it easier to export its capital to Asean and other RCEP nations after having faced political barriers in its investments in the West in recent years.

The RCEP comprises 10 Asean members (Indonesia, Malaysia, Singapore, Brunei, Vietnam, Laos, Cambodia, Myanmar, the Philippines and Thailand) and five others in the region – Australia, China, Japan, South Korea and New Zealand.

Indeed, Singaporean Prime Minister Lee Hsien Loong’s remark after the signing could best summarise the importance and impact of the trade agreement.

He described the signing of the RCEP as a “major step forward for the world at a time when multilateralism is losing ground and global growth is slowing”, according to The Straits Times.

“It signals our collective commitment to maintaining open and connected supply chains, and to promoting freer trade and closer interdependence, especially in the face of Covid-19 when countries are turning inwards and are under protectionist pressures,” he added at the virtual conference hosted by Vietnam.

Premier Li Keqiang of China, which has been suffering from the US-led trade war, said the RCEP “is a victory of multilateralism and free trade” and “it let people choose unity and cooperation in the face of challenges, rather than conflict and confrontation.” In its analysis, Global Times said: “The conclusion of the RCEP indicates that most Asian countries endorse free trade framework and see it as a landmark step toward achieving closer economic integration in East Asia and South-East Asia.

“The RCEP sends out the message that Asian countries are not willing to blindly follow the US and exclude China from the region’s integration process. A sound and healthy economic community in Asia cannot be achieved without China’s participation.”

For China, the RCEP is the first multilateral free trade agreement it has ever participated in. China already has bilateral trade deals with many RCEP members, and it has been trying to seal an obstacle-filled trilateral pact with Japan and South Korea.

For Malaysia, the cheer is that the RCEP will provide greater access to regional markets and more opportunities for local small and medium-sized enterprises (SMEs) to expand into foreign markets, said Senior Minister Datuk Seri Azmin Ali.

The lowering of barriers and streamlining of rules in trade facilitation will boost Malaysia’s trade with RCEP countries and attract foreign firms keen on entering into a more integrated Asean, said the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM).

“This will enhance transparency in trade and investment, as well as facilitate the greater inclusion of Asean’s SMEs in global and regional supply chains,” said ACCCIM president Tan Sri Ter Leong Yap in a statement.

Wanita MCA national chairperson Datuk Heng Seai Kie said the RCEP provides “new hope for Malaysian entrepreneurs and national economic recovery to counter the current pandemic”.

“The RCEP trade deal will help stimulate the economy by integrating the various participating nations in the Asia-Pacific while introducing lowered tariffs, standardised customs rules and procedures and widened market access, especially among countries that don’t have trade deals,” she said in a statement.

Describing the free trade agreement as “an incredibly important agreement in terms of the timing”, Australian Trade Minister Simon Birmingham said: “This agreement signifies that our region is still committed to openness and to trade and that we will use that as a platform and a springboard for recovery in the post-Covid era… Better access for our farmers and businesses means more jobs for Australians overall.”

Birmingham noted that Australian businesses in education, healthcare, accountancy, engineering and legal service industries would benefit most from the deal, which will allow them to open offices in RCEP countries.

Most importantly, the trade pact may facilitate Australia’s exports to China – its largest trading partner – if Australia tones down its two-year long hostility towards Beijing. Canberra’s ongoing spat with Beijing has hurt Australia’s economy deeply.

For Japanese exporters, the agreement means that China and South Korea will gradually eliminate tariffs on sake and shochu, according to Japan Times. The reduction from China’s current 40% tariff on both will fall to zero after 21 years, and South Korea’s 15% tariff on both goods now will be eliminated after 15 years.

The RCEP may help reduce the adverse impact of trade wars waged on any member country in the deal, according to prominent YouTuber Yang Fong.

“Once the RCEP comes into force in two years, the US cannot simply wage trade wars on China and other members. The deal will also bring major changes to supply-chains in China and the region,” said the economic analyst.

While all member nations are excited about RCEP, India left the negotiation table last year.

In November 2019, Prime Minister Narendra Modi said the pact would not benefit India’s core interest. Indian dairy farmers, as well as SMEs, are worried of losing out to China in the trade of manufactured goods, and to Australia and New Zealand on dairy products.

But despite this, the RCEP welcomes the return of India once it is ready to join.

To the Western world, the concern is that the world’s largest trade deal has left out the United States.

“Notably, the agreement excludes the US and can potentially allow China to cement its position as a key trade partner for South-East Asia and other countries,” CNBC said in its report.

The US Chamber of Commerce in Washington has expressed concern that the US is being left behind in the world’s largest free-trade bloc, reported Reuters.

However, the absence of US in the RECP could be easily explained. The world’s biggest economy was never a part of the trade pact from the very beginning.

The RCEP’s formation in 2012 is seen as an Asean response to the Trans-Pacific Partnership (TPP), a US-led free trade agreement that excluded China – the world’s second largest economy and largest trading partner for most Asian countries.

At the beginning, TPP membership included the United States, Malaysia and several Asean countries, Japan, South Korea, Canada, Mexico and Australia.

While setting up the RCEP, Asean invited China, India, Japan, South Korea, Australia and New Zealand to be partners in this free trade agreement.

For countries like Malaysia that believe in multi-lateralism, they can gain tremendously from having membership in both US-led TPP and Asean-led RCEP.

However, when Donald Trump became president, he rejected multilateralism and the Trump administration withdrew from the TPP in 2016.

Trump’s “America First” policy and the trade wars he has waged against China and others have also raised doubts about the US’ willingness to trade with Asian countries on mutually beneficial basis.

Without US participation, the West is worried that China will dominate RCEP and expand its influence in the region.

China’s state-linked Global Times is prompt to supply answers and address the concern.

Noting that major US allies (such as Australia, New Zealand and Japan) are part of the RCEP, Global Times said: “China cannot dominate the attitude of these countries or Asean as many major US allies are in the deal.”

In fact, Japan and Australia – which have enjoyed very close ties with the US – are likely to keep a close eye on China in the RCEP, while championing their own interests in the deal.

Global Times added: “If China is the so-called winner this time, then it is a win-win situation for all other RCEP members because these countries have strived for their own benefits during the past eight years of negotiations. All countries can only be winners since they have signed this agreement.”

Analysis by HO WAH FOON wahfoonho@thestar.com.my 

 

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Azmin showing the RCEP agreement document during the signing ceremony witnessed by Muhyiddin on Nov 15. – fotoBERNA..

 

Tuesday 17 November 2020

Asia-pacific 15 economies signed world's biggest free trade agreement , RCEP without US

 

 


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China and 14 other economies signed the world's largest trade deal, the Regional Comprehensive Economic Partnership (RCEP), on Sunday to form a free trade zone in the Asia-Pacific region that will encompass a third of the global economy, in what Chinese officials and experts call a historic win for multilateralism that would help the regional and global economies cope with the COVID-19 pandemic and rising protectionism.

Chinese Premier Li Keqiang said that signing of the RCEP is not only an achievement of landmark significance in East Asian regional cooperation, but is also a victory of multilateralism and free trade.

"Signed after eight years of negotiation, the RCEP lets people see brightness and hope in shadows, proving that multilateralism and free trade remain the main and correct course as well as the right direction for the global economy and mankind," Li said.

Signed at a critical turning point in the global political climate – when the next US administration is set to come into office and the world is grasping for solutions to tackle challenges arising from the coronavirus pandemic, the new regional deal would also help the Asia Pacific region take the global lead in recovering from the COVID-19 pandemic and reduce US hegemony in the region, experts said.

The deal, which encompasses Japan, China, South Korea, Australia and the 10 members of the Association of Southeast Asian Nationals, will create what is believed to be the world's largest free trade zone, covering about one-third of the world's total population and GDP. It will be also Japan's first free trade framework with its vital trading partners China and South Korea.

Notably, two major economies – the US and India – were left out of the trade pact. The US, under President Donald Trump, has been pushing for bilateral deals rather than multilateral ones. India was part of the negotiations, but did not join the final agreement.

The RCEP, which contains 20 chapters covering a wide range of areas from merchandise trade to investment to e-commerce, is “modern, comprehensive and high-level win-win agreement,” China’s Finance Ministry said on Sunday, adding that under the deal, members will aim to reduce tariffs to zero in the coming decade.

Bao Jianyun, professor of the School of International Studies and director of the Center for International Political Economy Studies at Renmin University of China, said that signing of the RCEP showed China, which played a very active role in pushing for the deal, has led the way in liberalizing trade and promoting a global market order of free competition.

"At the same time, China provides the world with a Chinese model and a Chinese solution on the open platform, where it serves the world," Bao told the Global Times, explaining that China as an emerging power has been a major promoter of trade and investment integration of RCEP.

Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, also stressed that the successful and long-awaited signing of the megapact has rekindled the world's 'hope and confidence" about a model of cooperation.

"Global cooperation has been defeated in recent years because of rising protectionism and China-US trade friction. But the RCEP's signing is a signal that cooperation does work today, which I think is even more important withthe lift it gives to specific countries' GDP growth," Chen told the Global Times.

Liu Kuikui, a Beijing-based consultant of international transport and trade, told the Global Times that the RCEP will establish a common framework of rules of origin for Asia-Pacific countries, reduce investment barriers, and expand trade and investment. The participation of Japan, South Korea, Australia and New Zealand, allies of the US, demonstrates that the four countries are opposed to the trade protectionism and the economic bullying launched by the US.

Signing of RCEP a victory of multilateralism and free trade: Chinese Premier Li Keqiang RCEP will end US hegemony in West Pacific Not joining RCEP a strategic blunder that will lead to India’s isolation in globalization 

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