Tuesday, June 8, 2010



Prime Minister Wen Jiabo of China visited Myanmar on June 2 and 3,2010, to participate in celebrations to mark the 60th anniversary of the establishment of diplomatic relations between the two countries. During the visit, which was confined Naypyitaw, the new capital, with a transit halt in Yangon, he met Senior General Than Shwe, Chairman of the State Peace and Development Council of Myanmar, and Prime Minister U Thein Sein. Myanmar was the last leg of a four-nation Asian tour which had taken him to South Korea, Japan and Mongolia before he arrived in Myanmar. China’s then Prime Minister Li Peng had visited Myanmar in 1994 and the then President Jiang Zemin in 2001. Chinese Vice President Xi Jinping had visited Myanmar on December 19 and 20, 2009, during the course of a four-nation tour covering Japan, South Korea, Myanmar and Cambodia.

2. The visit of Mr.Wen was mainly to provide a high profile to the 60th anniversary celebrations and to underline the continued importance attached by China to its relations with Myanmar, which has acquired an importance in China’s search for energy security and reduced dependence on the Malacca Strait for the movement of its energy supplies from West Asia and Africa. Speculation in some circles of the Myanmar political exile community seeing an additional significance in the fact that the visit came a few months before the controversial elections from which the ruling junta had manipulated the exclusion of Aung San Suu Kyi and her party appeared to be wishful-thinking. Political stability in Myanmar has become important for China’s energy security and the Chinese are unlikely to do or say anything which could destabilize the junta, which has been favourable to Chinese energy requirements.

3. Renewed speculation on the eve of Mr.Wen’s visit about the alleged attempts of Myanmar to acquire a nuclear capability with North Korean help did not come in the way of the visit. In fact, Chinese sources dismissed the speculation as unworthy of being taken seriously since it emanated from an army defector with an axe to grind against the junta.

4. There were three high-profile events during the visit. The first was a formal function to mark the 60th anniversary at which U Thein Sein and Mr.Wen delivered formal speeches tracing the evolution of the relations between the two countries during the last 60 years. Mr. Wen highlighted the fact that the bilateral trade has increased five-fold from 620 million dollars in 2000 to 2960 million dollars in 2009.

5. The second was the formal launching by the two Prime Ministers of the construction of the Myanmar-China oil and natural gas pipeline project. Even though the two pipelines will not pass through the capital, the launching function was held in the capital. Mr.Wen did not go to the Arakan area for this purpose. There is local opposition to the pipelines in the Arakan area and the two Governments apparently did not want to take the risk of having the function there. In fact, apart from a visit to a school in the capital area, Mr.Wen did not have any interactions with the people or the political leaders of Myanmar. His interactions were confined to the military officers, the civilian bureaucrats and their families who attended the formal functions.

6. The China National Petroleum Corporation (CNPC), the country's largest oil and gas producer and supplier, gave the following details in its web site on June 4: Work has started on the construction of two oil and gas pipelines between China and Myanmar.The Southeast Asia Pipeline Company, one of its affiliates, has been put in charge of the design, construction, operation and maintenance of the pipelines. As a controlling shareholder, the Southeast Asia Pipeline Company signed an agreement with the Myanmar National Oil and Gas Company on June 3 at Naypyitaw. Each with an overall length of about 1,100 kilometers, the gas and oil pipelines are both expected to run from the Kyaukpyu port on Myanmar's west coast and enter China at Ruili, Yunnan Province. The oil pipeline will have a designed transport capacity of 22 million tonnes per year, while the natural gas pipeline a designed transport capacity of 12 billion cubic meters annually.

7. The “ People’s Daily” of China reported as follows on June 7:”There are 793 kilometers of gas pipeline in Myanmar, and also a 771-kilometer-long crude oil pipeline. The China National Petroleum Corporation (CNPC) said it has begun building an oil port in Kyaukpyu as a facility for the planned China-Myanmar oil pipeline project. According to the agreement signed by both countries, the Union of Myanmar is to grant a crude oil pipeline to the Southeast Asia Oil Pipeline Co., Ltd. for the China-Myanmar oil pipeline franchise and is responsible for pipeline construction and operation and so on. The company also enjoys tax breaks, oil transit, import and export customs clearance and related rights such as right-of-way operations. Relevant chiefs from CNPC said that the project could explore new oil product import channels and further ensure the country's oil supply security. Meanwhile, the project also could improve the infrastructure construction in China's southwest area, which is beneficial to implementing the general strategy of the West Development Program.”

8. In a commentary by Mr.Eric Watkins, its oil diplomacy editor, the “Oil & Gas Journal” of the US reported inter alia as follows on June 4: “Kyaukpyu is on Ramree Island about 400 km northwest of Yangon, and is due to become the import terminus for Middle East and African tankers supplying oil to China. The new port will be able to receive vessels of up to 300,000 dwt and will have storage capacity of 600,000 cu m. Analysts said the oil line will diversify China's import routes from the Middle East and Africa, enabling it to bypass the sea route through the piracy-prone Strait of Malacca. The gas line will help meet rapidly expanding demand in southern China. Oil for the line will come from China’s Middle Eastern and African suppliers, while the gas line will be fed by fields in Myanmar, which has the most extensive gas reserves in Southeast Asia at 21.2 tcf. Recent reports claim that Myanmar produces around 1.2 bcf/year of gas but wants to increase this to almost 2.2 bcf/year by 2015. In November 2009, CNPC said it had started construction of a large-scale oil port in Kyaukpyu as a facility for the planned China-Myanmar oil line project.”

9. The third event was the formal handing over by Mr.Wen to his Myanmar counterpart of the Myanmar International Convention Centre-MICC built by Chinese engineers. According to the details given on the occasion, the MICC building was designed by the Beijing Institute of Architectural Design (BIAD) and built by the Anhui Foreign Economic Construction (Group) Co Ltd. The construction of the building started on 15 February 2008 and it was completed on 15 March 2010. It was located on 16 acres of land with 312,000 square feet. The MICC has a Plenary Hall that can accommodate 1900 persons.

10. Officials of the two countries reported that during the visit of Mr.Wen, 15 agreements and Memoranda of Understanding were signed covering bilateral cooperation in economic and technology sectors, rail transportation, trade, hydropower, energy and mining. No details have been disclosed.

11. In an editorial on the visit, the Government-controlled “New Light of Myanmar” said on June 5: “ The two nations maintain good neighborly relations based on equality, understanding and mutual support for each other. Bilateral cooperation in various sectors has made significant progress and the bilateral relations have grown to strategic relations. The two peoples have been dealing with each other through fraternal sentiment.”

12. China is now Myanmar’s third largest trading partner and investor after Thailand and Singapore. Up to January 2010, China had invested $1.848 billion in Myanmar, or 11.5 percent of Myanmar’s total foreign direct investment.

13. A Chinese military delegation from the Jinan Military Region headed by General Fan Changlong of the Chinese People’s Liberation Army, has separately come to Myanmar to participate in the 60th anniversary functions. (9-6-10)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com )


ambi said...

Listen u all, war monger, radical, fanatic, blood thirsty, hegemonic Indians, this is a gem from Pakistan:

just eat this: Most Pakistanis are pacifist, says survey carried out by Pak Institute of Peace Studies (Pips).

Hmm. I think its time for Indians to learn how to live peacefully with others & how to become a true pacifist from Pakistan. When P Chidambaram, will visit them, he can learn it first, & when he ll return he can pass on this knowledge to us.

I wish M K Gandhi ld have been alive. Even he ld have learn some lessons.

ambi said...

Something interesting to read:
………“In a speech at the National Defence Academy this March, Hatoyama reassured new graduates that Japan’s alliance with the US remained a cornerstone of its foreign policy (2). But Japan wants a more balanced relationship. The cost of maintaining the US garrisons is high – around $3bn a year – at a time when Japan’s budget deficit is rocketing.
Another symbol of the past is the legal immunity of US military personnel. “When there’s a road accident,” said a citizen of Naha, Okinawa, “first you get a white car, with the Japanese police, then a black-and-white one belonging to the US military police – only they are allowed to deal with an incident involving a soldier.” Locals are eager to talk about serious offences that have never been brought to court, including rapes, road accidents and robberies……….Continued.

ambi said...

…………………Japan’s new administration is keen to avoid the establishment of a one-to-one relationship between Washington and Beijing, from which it would be excluded. Hence the rapprochement with China and a determination to earn political credibility in the region. It is true that the concept of the East Asian Community does not belong exclusively to Japan (it first emerged after the Asian financial crisis of the 1990s, when it was opposed by the US and China), but Hatoyama revived the long term idea of a common (Asian) currency, to mark Asia’s new role in world affairs. His resignation is unlikely to change Japan’s desire to free itself from the International Monetary Fund and the burden of the dollar. An embryonic Asian monetary fund, in which South Korea is participating, is already in place. Even so, the Asian leadership contest has yet to be decided.
China seized the diplomatic initiative by signing a free trade agreement with the 10 Asean countries (8), which came into force on 1 January 2010. While trying to catch up, Japan has turned to India, Australia and New Zealand to form an “arc of freedom and prosperity”, in opposition to China’s authoritarianism. The Japanese government is keen to woo India, which it sees as the perfect counterweight to China. Japan and India signed a strategic partnership agreement in October 2008 and are planning joint military manoeuvres. This privileged relationship is promising but as yet marginal: India accounts for less than 1% of Japan’s trade………….
The complete link to the paper: http://mondediplo.com/2010/06/04japan

ambi said...

Something more interesting to read.
Europe Looks to Break US Ratings Monopoly
Few doubt that US ratings agencies contributed greatly to the global financial crisis. Europe is now worried that the euro could also fall victim to credit downgrades -- and is exploring the possibility of creating its own ratings agency.

…….In the midst of the euro crisis, the highly indebted countries are embroiled in a grotesque dilemma. The rating agencies will punish them if they don't get their gigantic mountains of debt under control. But the same agencies will also downgrade them if the governments impose austerity programs to reduce their debts……….

…..But even if the ratings agencies have taken a beating since the financial crisis, an alternative rating system is not yet in sight. Credit ratings are still an important decision-making factor in the global web of financial transactions. Be it banks, insurance companies or investment funds, all of them manage a large portion of their investments with a view toward three letters: AAA, the highest rating. Should a country's credit rating falls below a certain threshold, many investors in those bonds, pension funds, for instance, have bylaws requiring them to sell. If the securities are on banks' balance sheets, regulators require more equity capital as a safety cushion……………..

ambi said...

Continued. From earlier comment' System of Interests'
Of course, the notion of competition isn't the only motivation behind the French campaign for a European rating agency. Many a politician and professor sees Moody's and the other two agencies as a US instrument of power. Rudolf Hickel, an economics professor in the northern German city of Bremen, believes that the ratings agencies are incorporated into the "system of interests" of the American financial sector.
Do the agencies act as a beachhead for Wall Street? And by downgrading the ratings of European governments, are they even deliberately providing the ammunition for American euro speculators?
"The accusation of American influence on European ratings is absurd," counters Alexander Kockerbeck, who is charge of analyzing two major economies, Germany and Italy, at Moody's in Frankfurt. According to Kockerbeck, a rating committee that decides whether to downgrade a country's debt by majority decision consists of "about 15 analysts from all regions of the world."
Economists like Kockerbeck can only partly understand the criticism of the ratings agencies they work for. They want nothing to do with their counterparts from the toxic assets departments, who were singing the praises of packaged subprime mortgages before the financial crisis. They like to point out that country specialists use fundamental analyses and not fly-by-night models to arrive at their assessments. They also have fewer conflicts of interests with which to contend. For image reasons, the agencies usually prepare country ratings at their own expense. Only a few governments, including some in Eastern Europe, commission ratings.

The whole link to this paper is as below: http://www.spiegel.de/international/business/0,1518,699564,00.html