Friendly Ties: China and Russia

By China Watcher

Can you tell me which photos project a much more sincere and friendlier atmosphere?













I am pleased to note that Sino-Russian strategic relationship has proceeded so well and the partnership has expanded cooperation in all areas. A month ago, the signing of a long awaited agreement to allow the construction of a major pipeline linking Russia to China was testimony of the strength of the political and economic relationship between the two countries.

Perhaps the West should realize that in any relationship there is bound to be “mutual respect” of each other cultural values, a strong and genuine people-to-people ties, the sincere and “complete” recognition of a country’s sovereignty interest and most crucial, the ability to view the relationship from a global future perspective.

A strong naval presence is necessary for respect as a global power

By China Watcher

I witnessed the impressive display of the Chinese armada of ships at the port city of Qingdao for the 60th anniversary of the People's Liberation Army on television yesterday.

For once, I was proud to note the progress made by the Chinese navy from the heydays of coastal ships and frigates in the 1950s to what it is today. The show-stopper was obviously the 2 nuclear submarines which led the flotilla of ships at sea. The Chinese fleet comprises 56 vessels, including submarines, an array of destroyers and frigates, and missile boats.

I do agree that in terms of firepower and technology the Chinese navy is still two or maybe three notches lower than the US but the gap is slowly closing in given the committed will of the Chinese people to accelerate the development of its navy by making better submarines, destroyers and long-range missiles. A senior Chinese naval officer has already indicated the need to construct at least one aircraft carrier to be ready by 2013. I am of the opinion that the presence of a large carrier is more for power projection and image rather than for improving latent fighting power.

The heavy movement of the carrier is actually a liability rather than an advantage in a war situation. The carriers without air and sea protection are easy target for submarines. Bigger modern ships are now better equipped with accurate missiles and together with its advanced anti-submarine features coupled with the ability to move faster, in numbers, would definitely add firepower. Single-purpose and a few wide-platform ships for aircraft movement instead of one large single carrier that would reduce the single-point vulnerability risk, is one important point the Chinese navy should consider when developing “big” ships.

A western media, Reuters, of which I could sense its envious attitude made a passing comment that the US and Vietnamese relationship have progressively improved with the single visit of several Vietnamese military officers on the US aircraft carrier off the coast of Hanoi two days ago. And it added that the Vietnamese are wary of Beijing’s fleet modernization because of the country’s outstanding territorial issues with China. Western media are always good at making inferences, which are merely assumptions, to suit its very own agenda – to constantly highlight Chinese threat and to preserve US superiority in the Asia-Pacific region.

Personally, I think there are only two Asian countries of which its leaders and its people are concerned over China’s military growth (including its naval improvements) and perhaps, to a certain extent China’s economic growth namely India and Japan.

India has always harbored an inert “jealously” tendency over China ever since it lost the Sino-Indian border war with China in 1962. The “could-not-accept” attitude grows over the years and it deteriorated, when it realized that its economic size is only one-quarter of China. Further, India is gradually losing control even in its own sphere of influence in countries like Pakistan, Bangladesh, Sri Lanka, Myammar and most recently, in Maoist controlled Nepal. This is a fact but the Western media selectively choose not to highlight negative development affecting its “democratic” allies. China have made attempts to improve Sino-Indian ties through stronger people to people relations but all these had been shunned by the past and present Indian government due to the deep mistrust. The “comparison only china syndrome” is an indication of the deep estrangement that had not gone away. Two can actually play the game. China should cast a watchful eye on the rapid development of Indian military especially on its missile development, which I think is not only targeting the country's main rival Pakistan but China.

Japan is the other country who had yet to recover from its “prideful” defeat during the Second World War and the Liberal Party controlled government – past and present – had not genuinely shown any remorse to the countless sufferings the imperialist army had inflicted on the Chinese and Koreans. Even after nearly 60 years, the subject of the Japanese army is still very sensitive to the people in China and Korea. A recent survey in Japan stated that 70% of the Japanese do not like the Chinese and in China, an equally big percentage of Chinese (75%) also dislike the Japanese people. You see there are always two sides to a coin. But the Western media selectively choose to publish only one side of the story. Historically, the Japanese have been taught to consider themselves as more superior than the other races, besides the Germans and the Jews. In the eyes of the Japanese, the Chinese were at the lowest rungs of the race category and were called “the sick man of Asia” nearly seven decades ago. Even though the Japanese people have not outwardly displayed their true resentful character it had not been able to accept the reality that ultimately it had to play “second fiddle” to China in Asia. Until and unless these perceived superiority thoughts are discarded, the estrangement would remain and any military advancement by China would be taken as a threat.

The flexing of the Chinese naval muscle is also to show to the US that China presently has the ability to deny the US navy access to certain waters in the region, most likely the water surrounding Taiwan.

If there is tension in the Taiwan Straits, the US would now think twice before sending two aircraft carriers like what it did in 1996 to the contested area. The writing on the wall is very clear. Whether the US or its allies like it or not, it had to contend with a strong China – both militarily and economically.

Australia’s thinking is still racist and anti-Chinese

By China Watcher

A few years ago, I visited the Gold Coast, a tourist belt on the eastern coast of Australia in the state of Queensland of which I had my first encounter with Australian pent up racism. A couple of Caucasian youths in their cars sped by us and shouted inflammatory words like “you chinks, go back to your country” and “you should not pollute our civilized environment”. A little further ahead in a motel-typed restaurant, there were anti-Asian sentiments being expressed like “why are there so many yellow-skinned people in our country - to takeover the country someday?” Being a tourist who had no interest in the country, I decided to ignore those outrageous remarks and went back to my hotel room to rest.

These are only samples of racial and hateful tantrums coming from the majority white based societies in Australia. Anti-racist supporters may defend that these are sporadic events and it does not reflect the majority feelings of the Australian residents but the indoctrination of the youths by the parents with anti-racist thinking is certainly not the way to go, given that Australia had quite a large Asian immigrant population especially in Melbourne, Sydney and Perth.

Recently the Mandarin speaking Australian Prime Minister had been lambasted by the opposition leader for being too pro-China when he made a call to support China’s greater role in the International Monetary Fund. First, China’s as the third largest economy (very soon, to be the second largest) does not require any initiative from any Western (white based) leader to elevate China’s role in the international financial body. Second, international organization or grouping that fail to take into consideration China’s influence and importance in resolving global issues will be rendered ineffective as what is happening to the G-8 meeting in the past few years. The G-20 with China’s participation is believed to be a more effective grouping. Finally, what does speaking out in support of China by Mr. Kevin Rudd has anything to do with Australia’s national interest as mentioned by the Australia opposition leader? I hope this is only a fiery brand of Australian politics.

The emergence of the anti-Chinese sentiment in the Australian public was elevated to a level not seen since the “white-Australia policy” of the early 1900s when these Australian dailies highlighted the purchases of billions of Australian assets by Chinese state-owned companies this year. If the purchases were to be made by a Western country, I do not think such outwardly racial rhetoric would be heard? Let us be realistic, if the Australian residents are not racially reserved or not racially inclined, the trumpeting of the threat of the “yellow peril” would not have caused so much grievances and concerns.

Moving forward and looking at the present economic trends, Australia’s future is very much connected to Asia rather than with Europe. China’s resounding economic growth provides vast opportunities of a ready market for resource-rich Australia. Australian experts are fully aware of it. Shelving all suspicious thoughts and the threat of the “yellow peril” would be a welcome effort on the part of the Australian society for the peaceful co-existence and economic prosperity of the Asia-Pacific region.

US hypocritical stance on the demonstration in Thailand

By China Watcher

Not surprising, the two-faced US government finally revealed its stance after being silent for the past 3 weeks on the just diffused street protest in Thailand. The US government condemned the violence by anti-government protestors and urged its citizens to exercise caution while in the country.

Western media reported that the US government has joined the chorus of nations (yes, nosy Western nations again) in reacting to the violence in Thailand. The US State Department in a media conference urged an end to the violence by the “red shirted” demonstrators.

The first thing that comes to my mind was how could the US, a country which had traveled to all corners of the world to defend Western brand of democracy could condemn the very act of protest, which is one of the tenets of democracy and a mode for freedom of expression as promoted in democratic societies. The red-shirted protesters resorted to the use of violence to seek their demand for general elections after its peaceful protests have been largely ignored by the present Thai administration. The protesters were merely trying to garner world attention to its plight for a fair and proper representative government chosen by the majority of the people of Thailand. If I am not mistaken, the current Thai government came to power through the courts which invalidated the previous populist government. Does Western democracy stands for an elected government by the majority of its population?

Actually, I do support protest but only if it is peaceful in nature regardless of the system of governance.

In a brief revisit to Tibet, a China’s province, the protests that turned violent and deadly in March last year, the US and the Western media were the very first to support the protest as a human right to assemble and to express oneself and that the Chinese security police was putting down the unrest aggressively. The media were quick to highlight that there was a military clampdown on the Tibetan population. There is just no consistency in the US stance on the two incidents.

We all know very well that when it comes to China, there is always an exception whenever there was a hidden agenda behind it and the hawkish support from the US elected representatives. Perhaps, the US is gradually losing its touch on current events and it may be a sign of its dwindling influence throughout the world.

South Korea strategies to counter China’s growing influence is futile

By China Watcher

A recent report by the Ministry of Strategy and Finance from South Korea suggested that the country needs to counter China’s growing influence in the world but did not provide any strategic measures, leaving it to the economic experts in the small but “fiercely patriotic” country of about 50 million people to decide on the next course of action.

The so-called strategic “thinkers” said that China’s growing economic might and influence will turn the world’s crisis into an opportunity for themselves thus depriving small export oriented nations like South Korea of similar lucrative markets to sell its manufactured goods. The report pointed out that China has been beefing up the "Beijing Consensus" through signing currency swap deals with Asian and Latin American nations, expanding assistance to developing countries in Africa and Southeast Asia, and increasing investment in natural resources in Latin America. Currency swap deals worth about US$91 billion have been concluded to date. The initiative is one of the efforts of the Chinese government to reduce the reliance on the US dollar as the main global trading and investment currency.

Though China is a direct competitor for markets for manufactured goods throughout the world, it it is also presently South Korea’s largest export market. According to the South Korea’s statistical data, trade volume with China stood at USD168 billion in 2008 and constituted about a fifth of its total trade volume.

China with its huge foreign reserves of US$1.9 trillion and its large appetite for natural resources would provide them with stronger leverages to negotiate with resourced rich countries. As a influential permanent UN Security Council member like the US, it can also use its diplomatic links to support its many international deals especially with developing nations.

Personally, I think there are only two feasible options. The first is to work with the European Union (EU), the US and maybe, to a certain extent with Japan as an informal conglomerate to COUNTER China’s economic growth and influence throughout the world using agreed quotas and other non-free trade protective mechanisms like tariff and trade barriers. The protective shield is already being used actively by EU in its trade with China. The second would be to work with China jointly like the ASEAN trade initiative to increase intra-trade among them, and to complement the production of goods in countries where there are noticeable comparative advantage. As to the sharing of limited resources, China could use its strong purchasing power and large warehouses to distribute it among the signatories of the Asian grouping including South Korea to secure the lowest possible cost.

The second option which is non-confrontational and a win-win scenario would be the best bet, and I am sure the Koreans would know which one to pick for the prosperity of its people in the next 10 to 20 years.

Why did the President of China meet up with Prince Charles?

By China Watcher

As we all know, the Prince of United Kingdom has been an ardent fan and a ferocious supporter of the deposed religious leader of Tibet, the Dalai Lama. He has taken every opportunity to meet and provide “sympathetic support” to the spiritual leader. The wily religious figure currently employs a worldwide strategy (not world as reported but to only certain Western countries leaders and celebrities) to garner attention and sympathies for his hordes of exiled monastery monks and their plight for independence of a land they lost 50 years ago.

Being polite, the President of China told the monarch-to-be that the Prince placed importance on Sino-UK ties and actively promoted “practical” cooperation between the two countries. Do you think so? I am of the opinion that he has done more damage to the relationship than in promoting it. I remembered very clearly at the 1997 handover of Hong Kong to China when he was observed to be feeling very uncomfortable sitting next to the then Chinese President, Jiang Ximin. Being very undiplomatic and rude to the host, he openly condemned the Chinese administration as comprising leaders that are "known waxworks” which are inflexible when dealing with foreigners and its own people.

The UK’s rights record has not been perfect. It has been fighting the Irish Republican Army (IRA) in Northern Ireland for the past 40 years or so, and is responsible for the many deaths that followed the independence-seeking initiatives of this faction. I have not heard anything from the British heir-to-be King commenting on the many outrageous British human rights infringements in Northern Ireland. But yet he can comment so much on China and Tibet. Isn’t this a case of being hypocritical?

The Chinese should not place so much importance on the royal private meeting but since the British are still a “king or queen based monarchy political system” the meeting can be viewed as a respect to the British political system and also to the British people and nothing more than that.

Western media incites comparison between China and India

By China Watcher

Financial Times UK at an interview session asked the Indian Prime Minister the divisive question on the rate of economic development between China and India? Being drawn into a corner and obviously, losing face, due to wide gap in economic progress between the two countries he stated that the Indian economy is more durable on in other words, lasting.

In the past, I always hold to the opinion that the Indian economy will grow in its own right to be a large economy within the Top 5 in due course, perhaps, in 15 years. The Chinese economy is more broad-based and is largely export driven. Infrastructural development is impressive if we observe the number of bridges, roads, highways, railways and dams just over the last 15 years. The Chinese are also slowly catching up on its technological prowess in IT (lately more into software) and biotechnology. In terms of enhancement of management expertise, it had joint leadership forums with certain US educational institute and also, with sincere and slightly better developed Asian countries like Singapore and Malaysia. Further, it can also tap into the labor strength of its SAR, Hong Kong.

Presently, the Chinese economy is clearly more diversified than before and I do not understand what the Indian PM had in mind when he told the media Indian economy is more durable. The economic bubble created by the hypnotic frenzy on its Shanghai Stock Exchange has also come down to a more reasonable level and the prices of its properties are now within reasonable range. I just cannot comprehend the statement.

Anyway, the educated elite in India have been passionately comparing the success on India and China in every field/aspect as I pointed out in my earlier article. Why compared with China alone and not benchmarked against UK, Germany, Japan or the US? Where is the Asian solidarity which had been the driving force behind the non-aligned movement? Maybe it is the intense rivalry which goes back to the 1960s in which both the countries economic development are on par but China has surged beyond the level for the Indians to catch up – 4 times of GDP?

If I am the Indian PM, I would have answered the British media in a more thoughtful way, “well, both the economies are doing well and I am sure in the future we will both have our niche areas and one thing which is certain, both our economies will be among the top in the world nudging out all the European economies”.

That would be a good reply to the nosy British press.

Do you think the French has learn the lessons?

By China Watcher

Nicolas Sarkozy, the current French President who said he has "principled values" and one of the few leaders of which the Chinese residents dislike was literally "forced" to shake hands with the President of China at a sideline meeting of the G20 Economic forum in London. He is not laughing and his feeling is not sincere. I always believe that a picture can reveal what cannot be expressed adequately even in one thousand words. After the brickbats of protests against his administration in France, he is compelled to demonstrate to the French people that he can accomplish more in the foreign scene. Just 6 months ago, he was very cheerful when he met the Dalai Lama.

Let us hope the French has learned the painful lessons that historical ties and trusts are more important when dealing with the Chinese. Don't mince your words and do not let the wily Dalai Lama and his exiles hijack an important and beneficial relationship. Is it really worth it? Most Asian countries have realistically picked their choices but not the West and their hypocritical principled stance.

China uses its economic muscles to gradually make the US Dollar less relevant

By China Watcher

First the Chinese called to the world’s financial communities to seriously consider replacing the US Dollar as the standard international trading and investment currency with a new reserve currency. Now they are living up to its promises of unilaterally finalizing currency swaps with a couple of nations on its trading list to build a global economic order less dominated by the West and the wealthy nations. Stripping the West of its economic influence will also help to make their prejudicial Western media less prominent and less imposing on others.

On April 1 2009, China and Argentina had agreed to swap US$14.5 billion (RM53 billion) of their currencies to boost trading volume between the two nations. Argentina is the second largest economy in Latin America and is deemed within the “backyard” of the US. Actually, the whole purpose of the currency swap is to avoid using the US dollars in trade between the two sovereign countries and to allow Argentineans to purchase Chinese goods directly in Yuan.

This is the first time a currency swap has been concluded successfully with a Latin America’s nation. The move aims to help Argentina by cutting trading costs, giving it access to hard currency and strengthening its financial position as it is battered by the global financial crisis. Argentina imported mainly electronics, computers and chemicals from China, and it exported chiefly commodities such as wheat and soy beans.

Besides this, China had also completed similar deals with Belarus, South Korea, Indonesia, and Malaysia. I have a strong feeling that there are more of the same deals with other trading countries which would be announced in the near future.

The Argentina’s central bank governor in support of the swap told the media that his country backed China’s suggestion to replace the US dollar with a broader based alternative like a reserve currency issued by the International Monetary Fund. Chinese central bank governor commented that the special drawing rights of the IMF shall comprise a basket of the yen, euro and pound sterling and not only the US dollar. Additional support for change is provided by Venezuela, a strong ally of the Chinese government. On the same vein, Russia also recommended that the IMF considers issuing the world’s currency, and emphasized the need to update "the obsolescent uni-polar world economic order."

Asian countries (excluding Japan which tend to be a US’s self-appointed speaker) progressive support for the new proposal also indicated that Asia might be adopting the Yuan as the main Asian currency unit in the future as China gains intra-trade prominence as the second largest economy, overtaking the Japanese economy, in about 5-6 years from today.

It is understandable that the Chinese, being a large holder of US government bonds, are increasingly worried of the value of its US dollars assets of which it has no control. News that the US may finance its huge stimulus package by printing more money will trigger a fall in the value of the US dollar, thus negating the value of its US dollar held assets.

The US being the largest economy at USD13 trillion (as compared to China’s USD3.4 trillion based on 2008’s rankings), holds 17% voting power in the Western dominated IMF and as such, is still directly influential in the restructuring of the governance of the world international financial systems. And China’s proposal to replace the US currency may be rejected. China called for a greater voice for the developing countries may be tabled instead at the G20 forum.

China as the third largest economy presently is lumped together with Switzerland and Austria with the same voting rights. Where are the Western media and the NGOs voices in support of fairness and proper democratic rights based on economic influence and the size of its populace as reflected in the world’s financial body? As usual, the West’s self-righteousness becomes muffled suddenly or it fell conveniently into a “volunteered silent hole”. Never mind, the West thinking has been clouded by matters such as Tibetan rights and independence which are more important.

In reality, the establishment of a world reserve currency with a stable valuation may take some time as agreed by the Chinese bank’s governor but efforts must begin from somewhere, however, small that effort may be. China’s currency swaps are laudable as it is a step in the right direction to make international trade and investment less reliant on the US dollar and also, to a certain extent making the US less dominant in the world’s new financial structure.